(State or other (Primary Standard (IRS Employer jurisdiction of Industrial Identification No.) incorporation or Classification Code organization) Number) ---------------- 24 FRANK LLOYD WRIGHT DRIVE P.O. BOX 376 ANN ARBOR, MICHIGAN 48106 (313) 930-5555 |
COPIES TO:
T. KNOX BELL, ESQ. RICHARD R. PLUMRIDGE, ESQ. DOUGLAS J. REIN, ESQ. MICHAEL A. CONZA, ESQ. MATT KIRMAYER, ESQ. BROBECK PHLEGER & HARRISON LLP DAYNA J. PINEDA, ESQ. 1301 AVENUE OF THE AMERICAS GRAY CARY WARE & FREIDENRICH NEW YORK, NEW YORK 10019 4365 EXECUTIVE DRIVE, SUITE 1600 SAN DIEGO, CALIFORNIA 92121 ---------------- |
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
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 delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF PROPOSED MAXIMUM SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) AMOUNT OF REGISTRATION FEE - -------------------------------------------------------------------------------------------------- Common Stock, No Par Value................. $37,375,000 $11,326 |
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+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + |
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PROSPECTUS (Subject to Completion)
Dated November 1, 1996
3,250,000 Shares
[LOGO] AASTROM BIOSCIENCES INC
Common Stock
All of the shares of Common Stock, no par value per share (the "Common Stock"), offered are being sold by Aastrom Biosciences, Inc. ("Aastrom" or the "Company").
Prior to this offering, there has been no public market for the Common Stock of the Company. It is currently estimated that the initial public offering price will be between $8.00 and $10.00 per share. See "Underwriting" for a discussion of the factors considered in determining the initial public offering price. Application will be made for quotation of the Common Stock on the Nasdaq National Market under the symbol "ASTM."
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 5 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Underwriting Price to Discounts and Proceeds to Public Commissions(1) Company(2) - ------------------------------------------------------------------------------------------ Per Share........................ $ $ $ Total(3)......................... $ $ $ - ------------------------------------------------------------------------------------------ |
COWEN & COMPANY J.P. MORGAN & CO.
, 1996
[COLOR FLOW CHART DEPICTING "STEM CELL THERAPY METHODS"
DESCRIBING STEM CELL THERAPY UTILIZING BONE MARROW HARVEST,
PROGENITOR BLOOD CELL MOBILIZATION AND THE AASTROM CPS]
[COLOR PHOTOGRAPH OF A PROTOTYPE OF THE AASTROM CPS WITH A
CLINICIAN INNOCULATING CELLS]
A prototype of the Aastrom CPS is currently being used in a clinical trial and ongoing development activities are directed at completing production level components of the Aastrom CPS. The Company may not market the Aastrom CPS unless and until FDA and other necessary regulatory approvals are received.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. 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.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed information and financial statements, including the notes thereto, appearing elsewhere in this Prospectus. Prospective investors should carefully consider the information set forth under the heading "Risk Factors."
THE COMPANY
Aastrom Biosciences, Inc. is developing proprietary process technologies and devices for a range of cell therapy applications, including stem cell therapies and gene therapy. The Company's lead product under development, the Aastrom Cell Production System (the "Aastrom CPS") consists of a clinical cell culture system with disposable cassettes and reagents for use in the rapidly growing stem cell therapy market. The Company believes that the Aastrom CPS method will be less costly, less invasive and less time consuming than currently available stem cell collection methods. The Aastrom CPS is designed as a platform product which implements the Company's pioneering stem cell replication technology and which the Company believes can be modified to produce a wide variety of cell types for emerging therapies. The Aastrom CPS is currently in a pre-pivotal clinical trial under an Investigational Device Exemption for autologous stem cell therapy. The Company has entered into a strategic collaboration for the development of the Aastrom CPS in stem cell therapy with Cobe BCT, Inc., a subsidiary of Gambro AB and a world leader in blood cell processing products. In ex vivo gene therapy, the Company is developing a proprietary directed motion gene transfer process (the "Aastrom Gene Loader") and the Aastrom CPS to enable high efficiency genetic modification and production of cells.
Stem cell therapy is a rapidly growing form of cell therapy used to restore blood and immune system function to cancer patients following chemotherapy or radiation therapy. The Company estimates that over 35,000 stem cell therapy procedures were completed worldwide in 1995 and that the number of such procedures is growing at a compound annual rate of over 20%. Other novel cell therapies are under development by third parties, including stem cell therapy for the treatment of autoimmune diseases and for augmenting recipient acceptance of organ transplants. Current stem cell therapy methods, including bone marrow harvest and peripheral blood progenitor cell mobilization, are costly, invasive and time-consuming for both medical personnel and patients. Technologies which facilitate a more readily available source of cells may contribute to additional growth in cell therapy procedures. Umbilical cord blood ("UCB") is emerging as a new source of cells for stem cell therapy, offering additional market opportunity, although the more widespread use of UCB transplants has been restricted by cell quantity limitations.
The Company believes that the Aastrom CPS will offer significant advantages over traditional cell collection methods. Compared with current stem cell collection methods, the Aastrom CPS is expected to involve one patient visit rather than approximately five to seven visits, less than two hours of procedure time rather than in excess of twenty hours of procedure time and approximately four to ten patient needle sticks rather than twenty-five or more patient needle sticks. The Aastrom CPS may permit higher and more frequent doses of chemotherapy to be administered to cancer patients by enabling the production of multiple doses of therapeutic stem cells from patient samples taken at the initial collection.
Aastrom is currently conducting a pre-pivotal autologous stem cell therapy trial. The trial is designed to show that cells produced in the Aastrom CPS can by themselves safely enable recovery of bone marrow and cells of the blood and immune systems in accordance with trial endpoints in patients who have received ablative chemotherapy. Based on the outcome of this and other related trials, the Company intends to seek FDA approval to begin a multi-center pivotal trial for use of the Aastrom CPS in stem cell therapy. It is anticipated that the results of this pivotal trial will be used to support the Company's Pre-Market Approval ("PMA") submission to the FDA. In the near future, the Company plans to initiate a stem cell therapy clinical trial in France, the results of which are expected to be used for the CE Mark registration necessary to market the Aastrom CPS in Europe.
The Company's business strategy is to: (i) establish a consumable-based business model; (ii) focus initially on the currently-reimbursed stem cell therapy market; (iii) leverage Aastrom's cell production technology across multiple cell therapy market opportunities; and (iv) market through collaborative relationships.
Aastrom has entered into a strategic collaboration with Cobe BCT to support the development and marketing of the Aastrom CPS in the field of stem cell therapy. In 1993, the Company entered into a series of agreements in which Cobe BCT purchased $15,000,000 of the Company's equity securities and acquired the worldwide distribution rights to the Aastrom CPS for stem cell therapy. Under the terms of the collaboration, Aastrom retains manufacturing rights as well as the majority share of all revenue generated by Cobe BCT's sale of the Aastrom CPS. Aastrom also retains all marketing and distribution rights to the Aastrom CPS for other cell types and ex vivo gene therapy applications, including stem cells.
The Company's patent portfolio includes patents relating to both stem and progenitor cell production, processes for the genetic modification of stem and other cell types, and cell culture devices for human cells. As of September 30, 1996, the Company had exclusive rights to five issued U.S. and three foreign patents, and a number of U.S. patent applications and certain corresponding foreign applications.
THE OFFERING
Common Stock offered...... 3,250,000 shares Common Stock to be out- 13,235,734 shares(1) standing after this of- fering................... Use of proceeds........... For clinical trials, the development and manufacture of the Aastrom CPS, research and development of other product candidates, working capital and other general corporate purposes. Proposed Nasdaq National ASTM Market symbol............ |
SUMMARY FINANCIAL DATA
THREE MONTHS YEAR ENDED JUNE 30, ENDED SEPTEMBER 30, --------------------------------------------------------------- --------------------------- 1992 1993 1994 1995 1996 1995 1996 ----------- ----------- ----------- ----------- ----------- ----------- -------------- STATEMENT OF OPERATIONS DATA: Total revenues.......... $ -- $ 784,000 $ 872,000 $ 517,000 $ 1,609,000 $ 211,000 $ 224,000 Costs and expenses: Research and development........... 1,090,000 2,600,000 5,627,000 4,889,000 10,075,000 1,195,000 3,160,000 General and administrative........ 272,000 1,153,000 1,565,000 1,558,000 2,067,000 446,000 452,000 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total costs and expenses............. 1,362,000 3,753,000 7,192,000 6,447,000 12,142,000 1,641,000 3,612,000 Other income, net....... 94,000 122,000 180,000 213,000 616,000 131,000 115,000 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net loss................ $(1,268,000) $(2,847,000) $(6,140,000) $(5,717,000) $(9,917,000) $(1,299,000) $(3,273,000) =========== =========== =========== =========== =========== =========== =========== Pro forma net loss per share(2)............... $ (.32) $ (.49) $ (.82) $ (.66) $ (.98) $ (.13) $ (.32) =========== =========== =========== =========== =========== =========== =========== Pro forma weighted average number of shares outstanding(2).. 3,919,000 5,840,000 7,461,000 8,644,000 10,103,000 10,094,000 10,107,000 =========== =========== =========== =========== =========== =========== =========== SEPTEMBER 30, 1996 --------------------------- ACTUAL AS ADJUSTED(3) ----------- -------------- BALANCE SHEET DATA: Cash, cash equivalents and short-term investments.................................. $ 7,108,000 $33,410,500 Working capital.................................................................... 6,540,000 32,842,500 Total assets....................................................................... 8,931,000 35,233,500 Deficit accumulated during the development stage................................... (30,298,000) (30,298,000) Total stockholders' equity......................................................... 7,618,000 33,920,500 |
Unless otherwise indicated, all information contained in this Prospectus (i) gives effect to a two-for-three reverse stock split to be effected prior to the closing of this offering, (ii) gives effect to the conversion of all outstanding shares of the Company's Preferred Stock into 8,098,422 shares of Common Stock upon the closing of this offering, (iii) gives effect to the filing of an Amended and Restated Articles of Incorporation upon the closing of this offering to, among other things, create a new class of undesignated preferred stock and (iv) assumes no exercise of the Underwriters' over- allotment option. See "Description of Capital Stock" and "Underwriting." This Prospectus contains forward-looking statements which involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in "Risk Factors."
RISK FACTORS
In addition to the other information in this Prospectus, prospective investors should consider the following risk factors in evaluating the Company and its business before purchasing any of the Common Stock offered hereby.
UNCERTAINTIES RELATED TO PRODUCT DEVELOPMENT AND MARKETABILITY
The Company has not completed the development or clinical trials of any of its cell culture technologies or product candidates and, accordingly, has not begun to market or generate revenue from their commercialization. Furthermore, the Company's technologies and product candidates are based on cell culture processes and methodologies which are not widely employed. Commercialization of the Company's lead product candidate, the Aastrom CPS, will require substantial additional research and development by the Company as well as substantial clinical trials. There can be no assurance that the Company will successfully complete development of the Aastrom CPS or its other product candidates, or successfully market its technologies or product candidates, which lack of success would have a material adverse effect on the Company's business, financial condition and results of operations.
The Company or its collaborators may encounter problems and delays relating to research and development, regulatory approval and intellectual property rights of the Company's technologies and product candidates. There can be no assurance that the Company's research and development programs will be successful, that its cell culture technologies and product candidates will facilitate the ex vivo production of cells with the expected biological activities in humans, that its technologies and product candidates, if successfully developed, will prove to be safe and efficacious in clinical trials, that the necessary regulatory approvals for any of the Company's technologies or product candidates and the cells produced in such products will be obtained or, if obtained, will be as broad as sought, that patents will issue on the Company's patent applications or that the Company's intellectual property protections will be adequate. The Company's product development efforts are primarily directed toward obtaining regulatory approval to market the Aastrom CPS as an alternative to the bone marrow harvest and peripheral blood progenitor cell ("PBPC") stem cell collection methods. These stem cell collection methods have been widely practiced for a number of years, and there can be no assurance that any of the Company's technologies or product candidates will be accepted by the marketplace as readily as these or other competing processes and methodologies, or at all. The failure by the Company to achieve any of the foregoing would have a material adverse effect on the Company's business, financial condition and results of operations.
UNCERTAINTIES RELATED TO CLINICAL TRIALS
The approval of the United States Food and Drug Administration (the "FDA") will be required before any commercial sales of the Company's product candidates may commence in the United States, and approvals from foreign regulatory authorities will be required before international sales may commence. Prior to obtaining necessary regulatory approvals, the Company will be required to demonstrate the safety and efficacy of its processes and product candidates and the cells produced by such processes and in such products for application in the treatment of humans through extensive preclinical studies and clinical trials. To date, the Company has only tested the safety of cells produced in the cell culture chamber predecessor of the Aastrom CPS, and only in a limited numbers of patients. The Company is currently conducting a pre-pivotal clinical trial to demonstrate the safety and biological activity of patient-derived cells produced in the Company's cell culture chamber in a limited number of patients with breast cancer and, if the results from this pre-pivotal trial are successful, the Company intends to seek clearance from the FDA to commence its pivotal clinical trial. The results of preclinical studies and clinical trials of the Company's product candidates, however, may not necessarily be predictive of results that will be obtained from subsequent or more extensive clinical trials. Further, there can be no assurance that pre-pivotal or pivotal clinical trials of any of the Company's product candidates will demonstrate the safety and efficacy of such products, or of the cells produced in such products, to the extent necessary to obtain required regulatory approvals or market acceptance.
The ability of the Company to complete its clinical trials in a timely manner is dependent upon many factors, including the rate of patient enrollment. Patient enrollment is a function of many factors, including the size of the patient population, the proximity of suitable patients to clinical sites and the eligibility criteria for the
study. The Company has experienced delays in patient accrual in its current pre-pivotal clinical trial. Further delays in patient accrual, in the Company's current pre-pivotal clinical trial or in future clinical trials, could result in increased costs associated with clinical trials or delays in receiving regulatory approvals and commercialization, if any. Furthermore, the progress of clinical investigations with the Aastrom CPS and the Company's other product candidates will be monitored by the FDA, which has the authority to cease clinical investigations, at any time, due to patient safety or other considerations. Any of the foregoing would have a material adverse effect on the Company's business, financial condition and results of operations. See "-- Uncertainty of Regulatory Approval" and "--Extensive Government Regulation."
The Company's current pre-pivotal trial is designed to demonstrate specific biological safety and activity of cells produced in the Aastrom CPS, but is not designed to demonstrate long-term sustained engraftment of such cells. The patients enrolled in this pre-pivotal trial will have undergone extensive chemotherapy treatment prior to the infusion of cells produced in the Aastrom CPS. Such treatments will have substantially weakened these patients and may have irreparably damaged their hematopoietic systems. Due to these and other factors, there is risk that one or more of these patients may die or suffer severe complications during the course of the pre-pivotal trial. Further, there can be no assurance that patients receiving cells produced with the Company's technologies and product candidates will demonstrate long-term engraftment in a manner comparable to cells obtained from current stem cell therapy procedures, or at all. The failure to adequately demonstrate the safety or efficacy of the Company's technologies and product candidates, including long-term sustained engraftment, or the death of, or occurrence of severe complications in, one or more patients could substantially delay, or prevent, regulatory approval of such product candidates and have a material adverse effect on the Company's business, financial condition and results of operations.
MANUFACTURING AND SUPPLY UNCERTAINTIES; DEPENDENCE ON THIRD PARTIES
The Company does not operate and has no current intention to operate manufacturing facilities for the production of its product candidates. The Company currently arranges for the manufacturing of its product candidates and their components with third parties, and expects to continue to do so in the forseeable future. The Company has entered into collaborative product development agreements with SeaMED Corporation ("SeaMED") and Ethox Corporation ("Ethox") for the collaborative development and manufacture of certain components of the Aastrom CPS. The Company is also dependent upon Immunex Corporation ("Immunex"), Life Technologies, Inc., Biowhittaker and Anchor Advanced Products for the supply of certain cytokines, serum, media and injection molded materials, respectively, to be used in conjunction with, or as components of, the Aastrom CPS. With regard to cytokines that are not commercially available from other sources, Immunex is currently the Company's sole supplier and few alternative supply sources exist. Apart from SeaMED, Ethox and Immunex, the Company currently does not have contractual commitments from any of these manufacturers or suppliers. There can be no assurance that the Company's supply of such key cytokines, components and other materials will not become limited, be interrupted or become restricted to certain geographic regions. Furthermore, the Company currently only has the right to distribute cytokines obtained from Immunex in the United States and there can be no assurance that the Company will be able to obtain the worldwide right to distribute such cytokines or manufacture such cytokines by or for itself in the event that the Company's agreement with Immunex is terminated. There can also be no assurance that the Company will be able to obtain alternative components and materials from other manufacturers on terms or in quantities acceptable to the Company or that the Company will not require additional cytokines, components and other materials to manufacture or use its product candidates. In the event that any of the Company's key manufacturers or suppliers fail to perform their respective obligations or the Company's supply of such cytokines, components or other materials become limited or interrupted, the Company would not be able to market its product candidates on a timely and cost-competitive basis, if at all which would have a material adverse effect on the Company's business, financial condition and results of operations.
Like SeaMED and Ethox, other suppliers would need to meet FDA manufacturing requirements and undergo rigorous facility and process validation tests required by federal and state regulatory authorities. Any significant delays in the completion and validation of such facilities could have a material adverse effect on the
ability of the Company to complete clinical trials and to market its products on a timely and profitable basis, which in turn would have a material adverse effect on the Company's business, financial condition and results of operations.
There can also be no assurance that the Company will be able to continue its present arrangements with its suppliers, supplement existing relationships or establish new relationships or that the Company will be able to identify and obtain the ancillary materials that are necessary to develop its product candidates in the future. The Company's dependence upon third parties for the supply and manufacture of such items could adversely affect the Company's ability to develop and deliver commercially feasible products on a timely and competitive basis.
HISTORY OF OPERATING LOSSES; ANTICIPATION OF FUTURE LOSSES
The Company is a development stage company and there can be no assurance that its product applications for cell therapy will be successful. The Company has not yet completed the development and clinical trials of any of its product candidates and, accordingly, has not yet begun to generate revenues from the commercialization of any of its product candidates. Aastrom was incorporated in 1989 and has experienced substantial operating losses since inception. As of September 30, 1996, the Company has incurred net operating losses totaling approximately $30.3 million. Such losses have resulted principally from costs incurred in the research and development of the Company's cell culture technologies and the Aastrom CPS, general and administrative expenses, and the prosecution of patent applications. The Company expects to incur significant and increasing operating losses for at least the next several years, primarily owing to the expansion of its research and development programs, including preclinical studies and clinical trials. The amount of future losses and when, if ever, the Company achieves profitability are uncertain. The Company's ability to achieve profitability will depend, among other things, on successfully completing the development of its product candidates, obtaining regulatory approvals, establishing manufacturing, sales and marketing arrangements with third parties, and raising sufficient funds to finance its activities. No assurance can be given that the Company's product development efforts will be successful, that required regulatory approvals will be obtained, that any of the Company's product candidates will be manufactured at a competitive cost and will be of acceptable quality, or that the Company will be able to achieve profitability or that profitability, if achieved, can be sustained.
LIMITED SALES AND MARKETING CAPABILITIES; DEPENDENCE ON COLLABORATIVE RELATIONSHIPS
The Company has limited internal sales, marketing and distribution capabilities. If any of the Company's product candidates are successfully developed and the necessary regulatory approvals are obtained, the Company intends to market such products through collaborative relationships with companies that have established sales, marketing and distribution capabilities. The Company has established a strategic alliance with Cobe Laboratories, Inc. and Cobe BCT, Inc. (collectively, "Cobe") for the worldwide distribution of the Aastrom CPS for stem cell therapy and related uses. Cobe has the right to terminate its Distribution Agreement with the Company upon twelve month's notice upon a change of control of the Company, other than to Cobe, or at any time after December 31, 1997, if Cobe determines that commercialization of the Aastrom CPS for stem cell therapy on or prior to December 31, 1998 is unlikely. See "--Consequences of Cobe Relationship."
The amount and timing of resources that Cobe commits to its strategic alliance activities with the Company are, to a significant extent, outside of the control of the Company. There can be no assurance that Cobe will pursue the marketing and distribution of the Company's products, continue to perform its obligations under its agreements with the Company or that the Company's strategic alliance with Cobe will result in the successful commercialization and distribution of the Company's technologies and product candidates. There can also be no assurance that Cobe will be successful in its efforts to market and distribute the Company's products for stem cell therapy. The suspension or termination of the Company's strategic alliance with Cobe or the failure of the strategic alliance to be successful would have a material adverse effect on the Company's business, financial condition and results of operations.
Subject to the contractual requirements of the Cobe relationship, the Company will seek to enter into other agreements relating to the development and marketing of product candidates and in connection with such
agreements may rely upon corporate partners to conduct clinical trials, seek regulatory approvals for, manufacture and market its potential products. There can be no assurance that the Company will be able to establish collaborative relationships for the development or marketing of the Company's product candidates on acceptable terms, if at all. The inability of the Company to establish such collaborative relationships may require the Company to curtail its development or marketing activities with regard to its potential products which would have a material adverse effect on the Company's business, financial condition and results of operations.
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING
To date, Aastrom has funded its operations primarily through the sale of equity securities and corporate collaborations. The Company anticipates that the net proceeds of this offering, together with the Company's available cash and expected interest income thereon, will be sufficient to finance its research and development and other working capital requirements for 18 months or less. This estimate is based on certain assumptions which could be negatively impacted by the matters discussed under this heading and elsewhere under the caption "Risk Factors." In order to grow and expand its business, and to introduce its product candidates into the marketplace, the Company will need, among other things, to raise additional funds.
The Company's future capital requirements will depend upon many factors, including, but not limited to, continued scientific progress in its research and development programs, costs and timing of conducting clinical trials and seeking regulatory approvals and patent prosecutions, competing technological and market developments, possible changes in existing collaborative relationships, the ability of the Company to establish additional collaborative relationships, and effective commercialization activities and facilities expansions if and as required. Because of the Company's potential long-term funding requirements, it may attempt to access the public or private equity markets if and whenever conditions are favorable, even if it does not have an immediate need for additional capital at that time. There can be no assurance that any such additional funding will be available to the Company on reasonable terms, or at all. If adequate funds are not available, the Company may be required to delay or terminate research and development programs, curtail capital expenditures, and reduce business development and other operating activities. If the Company is not successful in finding, entering into and maintaining arrangements with collaborative partners, its development efforts could be delayed. Furthermore, there can be no assurance that the Company will be able to implement collaborative development agreements under acceptable terms. Any of the foregoing capital constraints would have a material adverse effect on the Company's business, financial condition and results of operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources."
UNCERTAINTY OF REGULATORY APPROVAL; EXTENSIVE GOVERNMENT REGULATION
The Company's research and development activities, preclinical studies, clinical trials, and the anticipated manufacturing and marketing of its product candidates are subject to extensive regulation by the FDA and other regulatory authorities in the United States. These activities are also regulated in other countries where the Company intends to test and market its product candidates. The approval of the FDA will be required before any commercial sales of the Company's product candidates may commence in the United States. Additionally, the Company will be required to obtain approvals from foreign regulatory authorities before international sales may commence.
The Company's products are potentially subject to regulation as medical devices under the Federal Food, Drug, and Cosmetic Act, or as biological products under the Public Health Service Act, or both. Different regulatory requirements may apply to the Company's products depending on how they are categorized by the FDA under these laws. To date, the FDA has indicated that it intends to regulate the Aastrom CPS for stem cell therapy as a Class III medical device through the Center for Biologics Evaluation and Research. However, there can be no assurance that the FDA will ultimately regulate the Aastrom CPS for stem cell therapy as a medical device or that regulatory approval for such product will be obtained in a timely fashion or at all.
Further, it is unclear whether the FDA will separately regulate the cell therapies derived from the Aastrom CPS. The FDA is in the process of developing its requirements with respect to somatic cell therapy and gene cell therapy products, and recently proposed a new type of license for autologous cells manipulated ex vivo and
intended for structural repair or reconstruction; autologous cells are cells obtained from, and administered to, the same patient. This proposal may indicate that the FDA will impose a similar approval requirement on other types of autologous cellular therapies, such as autologous cells for stem cell therapy. Any such additional regulatory or approval requirement could significantly delay the introduction of the Company's product candidates to the market, and have a material adverse effect on the Company's business, financial condition and results of operations. Until the FDA issues definitive regulations covering the Company's product candidates, the regulatory requirements for approval of such product candidates will continue to be subject to significant uncertainty.
Before marketing, the Aastrom CPS or other product candidates developed by the Company must undergo an extensive regulatory approval process. The regulatory process, which includes preclinical studies and clinical trials to establish safety and efficacy, takes many years and requires the expenditure of substantial resources. Data obtained from preclinical and clinical activities are susceptible to varying interpretations which could delay, limit or prevent FDA approval. In addition, delays or rejections may be encountered based upon changes in FDA policy for medical product approvals during the period of product development and FDA regulatory review of applications submitted by the Company for product approval. Similar delays may also be encountered in foreign countries. There can be no assurance that, even after the expenditures of substantial time and financial resources, regulatory approval will be obtained for any products developed by the Company. Moreover, if regulatory approval of a product is obtained, such approval may be subject to limitations on the indicated uses for which it may be marketed. Further, even if such regulatory approval is obtained, a marketed product, its manufacturer and its manufacturing facilities are subject to continual review and periodic inspections by the FDA, and later discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions on such product or manufacturer, including a withdrawal of the product from the market. Failure to comply with the applicable regulatory requirements can, among other things, result in fines, suspensions of regulatory approvals, product recalls, operating restrictions and criminal prosecution. Further, additional government regulation may be established which could prevent or delay regulatory approval of the Company's products. See "Business--Government Regulation."
CONSEQUENCES OF COBE RELATIONSHIP
Following the completion of this offering, Cobe will be the largest single shareholder of the Company, beneficially owning approximately 19% of the outstanding Common Stock. In addition, Cobe has certain preemptive rights to maintain its relative percentage ownership and voting interest in the Company following this offering, and has the right, for a period of three years following this offering, to purchase from the Company an amount of Common Stock equal to 30% of the Company's fully diluted shares after the exercise of such option, at a purchase price equal to 120% of the public market trading price of the Company's Common Stock. If such option is exercised, Cobe would significantly increase its ownership interest in the Company and, as a consequence of such share ownership, obtain effective control of the Company. Such effective control would include the ability to influence the outcome of shareholder votes, including votes concerning the election of directors, the amendment of provisions of the Company's Restated Articles of Incorporation or Bylaws, and the approval of mergers and other significant transactions. Cobe also has been granted a "right of first negotiation" in the event that the Company determines to sell all, or any material portion, of its assets to another company or to merge with another company. Furthermore, the Company has agreed to use reasonable and good faith efforts to cause a nominee designated by Cobe to be elected to the Board of Directors for as long as Cobe owns at least 15% of the outstanding Common Stock. In addition, Edward C. Wood, Jr., the President of Cobe BCT, is a director of the Company. The existence of the foregoing rights or the exercise of such control by Cobe could have the effect of delaying, deterring or preventing certain takeovers or changes in control of the management of the Company, including transactions in which shareholders might otherwise receive a premium for their shares over then-current market prices. See "Description of Capital Stock--Rights of Cobe."
UNCERTAINTY REGARDING PATENTS AND PROPRIETARY RIGHTS
Aastrom's success depends in part on its ability, and the ability of its licensors, to obtain patent protection for its products and processes, preserve its trade secrets, defend and enforce its rights against infringement and
operate without infringing the proprietary rights of third parties, both in the United States and in other countries. The validity and breadth of claims in medical technology patents involve complex legal and factual questions and, therefore, may be highly uncertain. No assurance can be given that any patents based on pending patent applications or any future patent applications of the Company or its licensors will be issued, that the scope of any patent protection will exclude competitors or provide competitive advantages to the Company, that any of the patents that have been or may be issued to the Company or its licensors will be held valid if subsequently challenged or that others will not claim rights in or ownership of the patents and other proprietary rights held or licensed by the Company. Furthermore, there can be no assurance that others have not developed or will not develop similar products, duplicate any of the Company's products or design around any patents that have been or may be issued to the Company or its licensors. Since patent applications in the United States are maintained in secrecy until patents issue, the Company also cannot be certain that others did not first file applications for inventions covered by the Company's and its licensors' pending patent applications, nor can the Company be certain that it will not infringe any patents that may issue to others on such applications. The Company relies on certain licenses granted by the University of Michigan and Dr. Cremonese for the majority of its patent rights. If the Company breaches such agreements or otherwise fails to comply with such agreements, or if such agreements expire or are otherwise terminated, the Company may lose its rights under the patents held by the University of Michigan and Dr. Cremonese, which would have a material adverse effect on the Company's business, financial condition and results of operation. See "Business--Patents and Proprietary Rights--University of Michigan Research Agreement and License Agreement" and "Business--Patents and Proprietary Rights--License Agreement with J.G. Cremonese." The Company also relies on trade secrets and unpatentable know-how which it seeks to protect, in part, by confidentiality agreements with its employees, consultants, suppliers and licensees. There can be no assurance that these agreements will not be breached, that the Company would have adequate remedies for any breach, or that the Company's trade secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors.
The Company's success will also depend in part on its ability to develop commercially viable products without infringing the proprietary rights of others. The Company has not conducted freedom of use patent searches and no assurance can be given that patents do not exist or could not be filed which would have an adverse effect on the Company's ability to market its products or maintain its competitive position with respect to its products. If the Company's technology components, devices, designs, products, processes or other subject matter are claimed under other existing United States or foreign patents or are otherwise protected by third party proprietary rights, the Company may be subject to infringement actions. In such event, the Company may challenge the validity of such patents or other proprietary rights or be required to obtain licenses from such companies in order to develop, manufacture or market its products. There can be no assurance that the Company would be able to obtain such licenses or that such licenses, if available, could be obtained on commercially reasonable terms. Furthermore, the failure to either develop a commercially viable alternative or obtain such licenses could result in delays in marketing the Company's proposed products or the inability to proceed with the development, manufacture or sale of products requiring such licenses, which could have a material adverse effect on the Company's business, financial condition and results of operations. If the Company is required to defend itself against charges of patent infringement or to protect its own proprietary rights against third parties, substantial costs will be incurred regardless of whether the Company is successful. Such proceedings are typically protracted with no certainty of success. An adverse outcome could subject the Company to significant liabilities to third parties, and force the Company to curtail or cease its development and sale of its products and processes. See "Business--Patents and Proprietary Rights."
NO ASSURANCE OF THIRD PARTY REIMBURSEMENT
The Company's ability to successfully commercialize its product candidates will depend in part on the extent to which payment for the Company's products and related treatments will be available from government healthcare programs, such as Medicare and Medicaid, as well as private health insurers, health maintenance organizations and other third party payors. Government and other third-party payors are increasingly attempting to contain health care costs, in part by challenging the price of medical products and services. Reimbursement by third-party payors depend on a number of factors, including the payor's determination that use of the product
is safe and effective, not experimental or investigational, medically necessary, appropriate for the specific patient and cost-effective. Since reimbursement approval is required from each payor individually, seeking such approvals is a time-consuming and costly process which will require the Company to provide scientific and clinical support for the use of each of the Company's products to each payor separately. Significant uncertainty exists as to the payment status of newly approved medical products, and there can be no assurance that adequate third-party payments will be available to enable the Company to establish or maintain price levels sufficient to realize an appropriate return on its investment in product development. If adequate payment levels are not provided by government and third-party payors for use of the Company's products, the market acceptance of those products will be adversely affected.
There can be no assurance that reimbursement in the United States or foreign countries will be available for any of the Company's product candidates, that any reimbursement granted will be maintained, or that limits on reimbursement available from third-party payors will not reduce the demand for, or negatively affect the price of, the Company's products. The unavailability or inadequacy of third-party reimbursement for the Company's product candidates would have a material adverse effect on the Company. Finally, the Company is unable to forecast what additional legislation or regulation relating to the healthcare industry or third-party coverage and reimbursement may be enacted in the future, or what effect such legislation or regulation would have on the Company's business.
COMPETITION AND TECHNOLOGICAL CHANGE
The Company is engaged in the development of medical products and processes which will face competition in a marketplace characterized by rapid technological change. Many of the Company's competitors have significantly greater resources than the Company, and have developed and may develop product candidates and processes that directly compete with the Company's products. Moreover, competitors that are able to achieve patent protection, obtain regulatory approvals and commence commercial sales of their products before the Company, and competitors that have already done so, may enjoy a significant competitive advantage. The Company's product development efforts are primarily directed toward obtaining regulatory approval to market the Aastrom CPS for stem cell therapy. That market is currently dominated by the bone marrow harvest and PBPC collection methods. The Company's clinical data, although early, is inconclusive as to whether or not cells expanded in the Aastrom CPS will enable hematopoietic recovery within the time frames currently achieved by the bone marrow harvest and PBPC collection methods. In addition, the bone marrow harvest and PBPC collection methods have been widely practiced for a number of years and, recently, the patient costs associated with these procedures have begun to decline. There can be no assurance that the Aastrom CPS method, if approved for marketing, will prove to be competitive with these established collection methods on the basis of hematopoietic recovery time, cost or otherwise. The Company also is aware of certain other products manufactured or under development by competitors that are used for the prevention or treatment of certain diseases and health conditions which the Company has targeted for product development. In particular, the Company is aware that competitors such as Amgen, Inc., CellPro, Incorporated, Systemix, Inc., Baxter Healthcare Corp. and Rhone- Poulenc Rorer Inc. ("RPR") are in advanced stages of development of technologies and products for use in stem cell therapy and other market applications currently being pursued by the Company. In addition, Cobe, a significant shareholder of the Company, is a market leader in the blood cell processing products industry and, accordingly, a potential competitor of the Company. There can be no assurance that developments by others will not render the Company's product candidates or technologies obsolete or noncompetitive, that the Company will be able to keep pace with new technological developments or that the Company's product candidates will be able to supplant established products and methodologies in the therapeutic areas that are targeted by the Company. The foregoing factors could have a material adverse effect on the Company's business, financial condition and results of operations.
HAZARDOUS MATERIALS
The Company's research and development activities involve the controlled use of hazardous materials, chemicals and various radioactive compounds. The Company is subject to federal, state and local laws and
regulations governing the use, manufacture, storage, handling and disposal of such materials and certain waste products. In the event of any contamination or injury from these materials, the Company could be held liable for any damages that result and any such liability could exceed the resources of the Company. Furthermore, the failure to comply with current or future regulations could result in the imposition of substantial fines against the Company, suspension of production, alteration of its manufacturing processes or cessation of operations. There can be no assurance that the Company will not be required to incur significant costs to comply with any such laws and regulations in the future, or that such laws or regulations will not have a material adverse effect on the Company's business, financial condition and results of operations. Any failure by the Company to control the use, disposal, removal or storage of, or to adequately restrict the discharge of, or assist in the cleanup of, hazardous chemicals or hazardous, infectious or toxic substances could subject the Company to significant liabilities, including joint and several liability under certain statutes. The imposition of such liabilities would have a material adverse effect on the Company's business, financial condition and results of operations.
POTENTIAL PRODUCT LIABILITY; AVAILABILITY OF INSURANCE
The Company is, and will continue to be, subject to the risk of product liability claims alleging that the use of its products has adverse effects on patients. This risk exists for product candidates tested in human clinical trials as well as products that are sold commercially, if any. Further, given the medical conditions for which the Aastrom CPS is expected to be utilized, any product liability claim could entail substantial compensatory and punitive damages. The assertion of product liability claims against the Company could result in a substantial cost to, and diversion of efforts by, the Company. There can be no assurance that the Company would prevail in any such litigation or that product liability claims, if made, would not result in a recall of the Company's products or a change in the indications for which they may be used. The Company maintains product liability insurance coverage in the aggregate of $5,000,000 for claims arising from the use of its product candidates in clinical trials. There can be no assurance that the Company will be able to maintain such insurance or obtain product liability insurance in the future to cover any of its product candidates which are commercialized or that such existing or any future insurance and the resources of the Company would be sufficient to satisfy any liability resulting from product liability claims. Consequently, a product liability claim or other claim with respect to uninsured or underinsured liabilities could have a material adverse effect on the Company's business, financial condition and results of operations.
DEPENDENCE ON KEY PERSONNEL
The success of the Company depends in large part upon the Company's ability to attract and retain highly qualified scientific and management personnel. The Company faces competition for such personnel from other companies, research and academic institutions and other entities. There can be no assurance that the Company will be successful in hiring or retaining key personnel. See "Business--Employees" and "Management."
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Common Stock in the public market following
this offering could adversely affect the prevailing market price of the Common
Stock and the Company's ability to raise capital in the future. Upon
completion of this offering, the Company will have a total of 13,235,734
shares of Common Stock outstanding, of which the 3,250,000 shares offered
hereby will be freely tradeable without restriction under the Securities Act
of 1933, as amended (the "Securities Act") by persons other than "affiliates"
of the Company, as defined under the Securities Act. The remaining 9,985,734
shares of Common Stock outstanding are "restricted securities" as the term is
defined by Rule 144 promulgated under the Securities Act (the "Restricted
Shares"). Of the 9,985,734 Restricted Shares, 6,996,920 shares may be sold
under Rule 144, subject in some cases to certain volume restrictions and other
conditions imposed thereby. An additional 152,056 shares will become eligible
for sale 90 days after completion of the offering pursuant to Rule 144 and
701. The remaining 2,836,758 shares will be eligible for sale upon the
expiration of their respective holding periods as set forth in Rule 144. The
Securities and Exchange Commission has proposed certain amendments to Rule 144
that would reduce by one year the holding periods required for shares subject
to Rule 144 to become eligible for resale in
the public market. This proposal, if adopted, would permit earlier resale of shares of Common Stock currently subject to holding periods under Rule 144. No assurance can be given concerning whether or when the proposal will be adopted by the Securities and Exchange Commission. Furthermore, 9,810,503 of the Restricted Shares are subject to lock-up agreements expiring 180 days following the date of this Prospectus. Such agreements provide that Cowen & Company may, in its sole discretion and at any time without notice, release all or a portion of the shares subject to these lock-up agreements. Upon the expiration of the lock-up agreements, 7,148,976 of the 9,985,734 Restricted Shares may be sold pursuant to Rule 144 or 701, subject in some cases to certain volume restrictions imposed thereby. Certain existing stockholders have rights to include shares of Common Stock owned by them in future registration by the Company for the sale of Common Stock or to request that the Company register their shares under the Securities Act. See "Description of Capital Stock--Registration Rights." Following the date of this Prospectus, the Company intends to register on one or more registration statements on Form S-8 approximately 1,837,160 shares of Common Stock issuable under its stock option and stock purchase plans. Of the 1,837,160 shares issuable under its stock option and stock purchase plans, 336,254 shares are subject to outstanding options as of September 30, 1996, 318,920 of which shares are subject to lock-up agreements. Shares covered by such registration statements will immediately be eligible for sale in the public market upon the filing of such registration statements. In addition, the Company has issued warrants to purchase 69,444 shares of Common Stock which become exercisable 90 days after the closing of this offering and, upon the effective date of this offering, will grant an immediately exercisable option to purchase 333,333 shares of Common Stock, which shares are subject to a lock-up agreement. See "Management--Benefit Plans," "Certain Transactions" and "Shares Eligible for Future Sale."
CONTROL BY EXISTING MANAGEMENT AND SHAREHOLDERS
Upon completion of this offering, the Company's directors, executive officers, and certain principal shareholders, including Cobe, affiliated with members of the Board of Directors and their affiliates will beneficially own approximately 39% of the Common Stock (approximately 38% if the Underwriters' over-allotment option is exercised in full). Accordingly, such shareholders, acting together, may have the ability to exert significant influence over the election of the Company's Board of Directors and other matters submitted to the Company's shareholders for approval. The voting power of these holders may discourage or prevent certain takeovers or changes in control of the management of the Company unless the terms are approved by such holders. See "Principal Shareholders."
NO PRIOR PUBLIC MARKET; POSSIBLE STOCK PRICE VOLATILITY
Prior to this offering there has been no public market for the Common Stock, and an active public market for the Common Stock may not develop or be sustained. The initial public offering price will be determined through negotiation between the Company and the Representatives of the Underwriters based on several factors that may not be indicative of future market prices. See "Underwriting" for a discussion of the factors considered in determining the initial public offering price. The trading price of the Common Stock and the price at which the Company may sell securities in the future could be subject to wide fluctuations in response to announcements of clinical results, research activities, technological innovations or new products by the Company or competitors, changes in government regulation, developments concerning proprietary rights, variations in the Company's operating results, announcements by the Company of regulatory developments, litigation, disputes concerning patents or proprietary rights or public concern regarding the safety, efficacy or other implications of the products or methodologies to be developed by the Company or its collaborators or enabled by the Company's technology, general market conditions, the liquidity of the Company or its ability to raise additional funds, and other factors or events. In addition, the stock market has experienced extreme fluctuations in price and volume. This volatility has significantly affected the market prices for securities of emerging biotechnology companies for reasons frequently unrelated to or disproportionate to the operating performance of the specific companies. These market fluctuations as well as general fluctuations in the stock markets may adversely affect the market price of the Common Stock.
ANTI-TAKEOVER EFFECT OF CHARTER AND BY-LAW PROVISIONS AND MICHIGAN LAW
The Company's Restated Articles of Incorporation authorize the Board of Directors to issue, without shareholder approval, 5,000,000 shares of Preferred Stock with voting, conversion, and other rights and
preferences that could materially and adversely affect the voting power or other rights of the holders of Common Stock. The issuance of Preferred Stock or of rights to purchase Preferred Stock could be used to discourage an unsolicited acquisition proposal. The Company's Bylaws contain procedural restrictions on director nominations by shareholders and the submission of other proposals for consideration at shareholder meetings. The possible issuance of Preferred Stock and the procedures required for director nominations and shareholder proposals could discourage a proxy contest, make more difficult the acquisition of a substantial block of Common Stock, or limit the price that investors might be willing to pay in the future for shares of Common Stock. In addition, certain provisions of Michigan law applicable to the Company could also delay or make more difficult a merger, tender offer, or proxy contest involving the Company. See "Description of Capital Stock."
IMMEDIATE AND SUBSTANTIAL DILUTION; ABSENCE OF DIVIDENDS
Purchasers of the Common Stock in this offering will experience immediate and substantial dilution in the net tangible book value of the Common Stock. Additional dilution is likely to occur upon the exercise of outstanding options granted by the Company. The Company has never paid cash dividends and does not anticipate paying any cash dividends in the foreseeable future. See "Dilution" and "Dividend Policy."
THE COMPANY
Aastrom was incorporated in Michigan in March 1989 under the name Ann Arbor
Stromal, Inc. In 1991, the Company changed its name to Aastrom Biosciences,
Inc. The Company's principal executive offices are located at 24 Frank Lloyd
Wright Drive, P.O. Box 376, Ann Arbor, Michigan 48106 and its telephone number
is
(313) 930-5555. Aastrom(TM) and the Company's stylized logo are trademarks of
the Company. Leukine and Neupogen are registered trademarks of Immunex
Corporation and Amgen, Inc., respectively.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 3,250,000 shares of Common Stock offered hereby are estimated to be $26,302,500 ($30,382,875 if the Underwriters exercise their over-allotment option in full), at an assumed initial public offering price of $9.00 per share and after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
The net proceeds from this offering are expected to be used to fund product development of the Aastrom CPS, other research and development activities, including pre-pivotal and pivotal clinical trials of the Aastrom CPS, and for working capital and other general corporate purposes, including scheduled repayments of obligations under equipment leases. The Company has $339,000 of outstanding equipment lease commitments as of September 30, 1996 with final payments due between November 1996 and May 1999 and bear interest ranging from 9.7% to 12.1%.
The Company anticipates that the net proceeds of this offering, together with the Company's available cash and expected interest income thereon, should be sufficient to finance the Company's research and development and other working capital requirements for approximately 18 months. This estimate is based on certain assumptions which could be negatively impacted by the matters discussed in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources." Pending such uses, the net proceeds will be invested in short- term, interest bearing investment grade securities.
DIVIDEND POLICY
The Company has never declared or paid any cash dividends on its Common Stock and does not anticipate paying such cash dividends in the foreseeable future. The Company currently anticipates that it will retain all future earnings, if any, for use in the development of its business.
CAPITALIZATION
The following table sets forth the capitalization of the Company (i) as of September 30,1996, and (ii) on a pro forma as adjusted basis to reflect the conversion of all outstanding shares of Preferred Stock into Common Stock upon the closing of this offering and the receipt of the estimated net proceeds from the Company's sale of 3,250,000 shares of Common Stock pursuant to this offering. See "Use of Proceeds" and "Certain Transactions."
SEPTEMBER 30, 1996 ------------------------- PRO FORMA ACTUAL AS ADJUSTED ----------- ------------ Long-term portion of capital lease obligations(1).... $ 147,000 $ 147,000 Stockholders' equity(2): Preferred stock, no par value: 10,157,647 shares au- thorized, 9,657,648 shares issued and outstand- ing, actual; 5,000,000 shares authorized, no shares issued and outstanding, as adjusted....... 37,718,000 -- Common stock, no par value: 18,500,000 shares autho- rized, 1,887,312 shares issued and outstanding, actual; 40,000,000 shares authorized, 13,235,734 issued and outstanding, as adjusted, in each case net of stockholder notes receivable.............. 198,000 64,218,500 Deficit accumulated during the development stage..... (30,298,000) (30,298,000) ----------- ------------ Total stockholders' equity........................... 7,618,000 33,920,500 ----------- ------------ Total capitalization................................. $ 7,765,000 $ 34,067,500 =========== ============ |
DILUTION
The Company's pro forma net tangible book value at September 30, 1996 was approximately $7,618,000 or $.76 per share. Pro forma net tangible book value per share represents the amount of the Company's shareholders' equity, less intangible assets, divided by 9,985,734, the number of shares of Common Stock outstanding as of September 30, 1996, after giving effect to the automatic conversion of all Preferred Stock into Common Stock upon the closing of this offering.
After giving effect to the sale of 3,250,000 shares of Common Stock in this offering at an assumed initial public offering price of $9.00 per share and after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, the pro forma net tangible book value of the Company as of September 30, 1996 would have been $33,920,500, or $2.56 per share. This represents an immediate increase in pro forma net tangible book value of $1.80 per share to existing stockholders and an immediate dilution in pro forma net tangible book value of $6.44 per share to purchasers of Common Stock in this offering, as illustrated in the following table:
Assumed initial public offering price per share............... $9.00 Pro forma net tangible book value per share as of September 30, 1996.................................................... $ .76 Increase per share attributable to new investors............. 1.80 ----- Pro forma net tangible book value per share after this offer- ing.......................................................... 2.56 ----- Dilution per share to new investors........................... $6.44 ===== |
Utilizing the foregoing assumptions, the following table summarizes the total consideration paid to the Company and the average price per share paid by the existing stockholders and by purchasers of shares of Common Stock in this offering:
SHARES PURCHASED TOTAL CONSIDERATION --------------------- ---------------------- AVERAGE PRICE NUMBER PERCENTAGE AMOUNT PERCENTAGE PER SHARE ---------- ---------- ----------- ---------- ------------- Existing stockholders... 9,985,734 75% $38,083,000 57% $3.81 New investors........... 3,250,000 25% 29,250,000 43% 9.00 ---------- --- ----------- --- Total................. 13,235,734 100% $67,333,000 100% ========== === =========== === |
SELECTED FINANCIAL DATA
The statement of operations data for the fiscal years ended June 1994, 1995 and 1996, and the balance sheet data at June 30, 1995 and 1996, are derived from, and are qualified by reference to, the audited financial statements included elsewhere in the Prospectus and should be read in conjunction with those financial statements and notes thereto. The statement of operations data for the fiscal years ended June 30, 1992 and 1993, and the balance sheet data at June 30, 1992, 1993 and 1994, are derived from audited financial statements not included herein. The information presented below for the three-month periods ended September 30, 1995 and 1996, and as of September 30, 1996, have been derived from the unaudited financial statements of the Company. In the opinion of the Company's management, the unaudited financial statements have been prepared by the Company on a basis consistent with the Company's audited financial statements and include all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation of the financial position and the results of operations for those periods. Operating results for the three-month period ended September 30, 1996 are not necessarily indicative of the results that will be achieved for the entire year ended June 30, 1997. The data set forth below are qualified by reference to, and should be read in conjunction with, the financial statements and notes thereto, and Management's Discussion and Analysis of Financial Condition and Results of Operations.
THREE MONTHS YEAR ENDED JUNE 30, ENDED SEPTEMBER 30, --------------------------------------------------------------- ------------------------ 1992 1993 1994 1995 1996 1995 1996 ----------- ----------- ----------- ----------- ----------- ----------- ----------- STATEMENT OF OPERATIONS DATA: Revenues: Research and development agreements................. $ -- $ -- $ 49,000 $ 396,000 $ 1,342,000 $ 172,000 $ 195,000 Grants...................... -- 784,000 823,000 121,000 267,000 39,000 29,000 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total revenues.............. -- 784,000 872,000 517,000 1,609,000 211,000 224,000 Costs and expenses: Research and development.... 1,090,000 2,600,000 5,627,000 4,889,000 10,075,000 1,195,000 3,160,000 General and administrative.. 272,000 1,153,000 1,565,000 1,558,000 2,067,000 446,000 452,000 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total costs and expenses.... 1,362,000 3,753,000 7,192,000 6,447,000 12,142,000 1,641,000 3,612,000 Loss before other income and expense..................... (1,362,000) (2,969,000) (6,320,000) (5,930,000) (10,533,000) (1,430,000) (3,388,000) Other income (expense): Interest income............. 94,000 148,000 245,000 279,000 678,000 149,000 126,000 Interest expense............ -- (26,000) (65,000) (66,000) (62,000) (18,000) (11,000) ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net loss..................... $(1,268,000) $(2,847,000) $(6,140,000) $(5,717,000) $(9,917,000) $(1,299,000) $(3,273,000) =========== =========== =========== =========== =========== =========== =========== Pro forma net loss per share(1).................... $ (.32) $ (.49) $ (.82) $ (.66) $ (.98) $ (.13) $ (.32) =========== =========== =========== =========== =========== =========== =========== Pro forma weighted average number of shares outstanding(1).............. 3,919,000 5,840,000 7,461,000 8,644,000 10,103,000 10,094,000 10,107,000 =========== =========== =========== =========== =========== =========== =========== |
JUNE 30, SEPTEMBER 30, ------------------------------------------------------------- ------------- 1992 1993 1994 1995 1996 1996 ---------- ---------- ----------- ----------- ----------- ------------- BALANCE SHEET DATA: Cash, cash equivalents and short-term invest- ments................. $5,640,000 $3,085,000 $ 6,730,000 $11,068,000 $10,967,000 $ 7,108,000 Working capital........ 5,399,000 2,744,000 6,187,000 10,319,000 9,851,000 6,540,000 Total assets........... 6,414,000 4,156,000 8,227,000 12,551,000 12,673,000 8,931,000 Deficit accumulated during the development stage..... (2,404,000) (5,251,000) (11,391,000) (17,108,000) (27,025,000) (30,298,000) Total stockholders' eq- uity.................. 6,104,000 3,268,000 6,985,000 11,186,000 10,850,000 7,618,000 |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Since inception, the Company has been in the development stage and engaged in research and product development, conducted both on its own behalf and in connection with various collaborative research and development agreements with other entities. The Company expects that its revenue sources for at least the next several years will continue to be limited to grant revenues and research funding, milestone payments and licensing fees from potential future corporate collaborators. The timing and amount of such future revenues, if any, will be subject to significant fluctuations, based in part on the success of the Company's research activities and the timing of the achievement of certain milestones. Substantially all of the Company's revenues from product sales, if any, will be subject to royalty payments ranging from 2% to 5%. Further, under the Company's Distribution Agreement with Cobe, Cobe will perform marketing and distribution activities and in exchange will receive from 38% to 42% of the Company's product sales in the area of stem cell therapy, subject to negotiated discounts and volume-based adjustments. Research and development expenses may fluctuate due to the timing of expenditures for the varying stages of the Company's research and clinical development programs. Research and development expenses will increase as product development programs and applications of the Company's products progress through research and development stages. Under the Company's License Agreement with Immunex, annual renewal fees of $1,000,000 are payable in each of the next four years. Under the Company's Distribution Agreement with Cobe, regulatory approval activities for the Company's products for stem cell therapies outside of the United States will be conducted, and paid for, by Cobe. As a result of these factors, the Company's results of operations have, and are expected to continue to, fluctuate significantly from year to year and from quarter to quarter and therefore may not be comparable to or indicative of the results of operations for other periods.
Over the past several years, the Company's net loss has primarily increased, consistent with the growth in the Company's scope and size of operations. In the near term, the Company plans additional moderate growth in employee headcount necessary to address increasing requirements in the areas of product development, research, clinical and regulatory affairs and administration. Assuming capital is available to finance such growth, the Company's operating expenses will continue to increase as a result. At least until such time as the Company enters into arrangements providing research and development funding, the net loss will continue to increase as well. The Company has been unprofitable since its inception and does not anticipate having net income for several years. Through September 30, 1996, the Company had an accumulated deficit of $30,298,000. There can be no assurance that the Company will be able to achieve profitability on a sustained basis, if at all.
This Prospectus contains, in addition to historical information, forward- looking statements that involve risks and uncertainties. The Company's actual results could differ materially from the results discussed in the forward- looking statements. Factors that could cause or contribute to such differences include those discussed under this caption, as well as those discussed under the caption "Risk Factors" and elsewhere in this Prospectus.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Total revenues were $224,000 for the three months ended September 30, 1996 compared to $211,000 for the same period in 1995. These revenues consist primarily of research and development revenue under the Company's research collaboration with RPR, which was terminated in September 1996. See "Certain Transactions."
Total costs and expenses were $3,612,000 for the three months ended September 30, 1996 compared to $1,641,000 for the same period in 1995. The increase in costs and expenses in 1996 is primarily the result of an increase in research and development expenses to $3,160,000 in 1996 from $1,195,000 in 1995 and to a lesser extent by general and administrative expenses, which increased to $452,000 for the three months ended September 30, 1996 from $446,000 for the same period in 1995.
Interest income was $126,000 for the three months ended September 30, 1996 compared to $149,000 for the same period in 1995 and reflects a decrease in the levels of cash, cash equivalents and short-term investments in 1996.
The Company's net loss increased to $3,273,000 for the three months ended September 30, 1996 from $1,299,000 for the same period in 1995, primarily as a result of increased costs and expenses in 1996.
YEARS ENDED JUNE 30, 1996, 1995 AND 1994
Total revenues were $1,609,000 in 1996, $517,000 in 1995, and $872,000 in 1994. Grant revenues increased to $267,000 in 1996 from $121,000 in 1995, which had decreased from $823,000 in 1994, reflecting the timing of grant awards and related research activities and funding under the grants. Grant revenues accounted for 17%, 23% and 94% of total revenues for the years ended June 30, 1996, 1995 and 1994, respectively. Revenues from research and development agreements totaled $1,342,000 in 1996, $396,000 in 1995 and $49,000 in 1994, reflecting research funding received by the Company under its collaboration with RPR which commenced in September 1995. Revenues from RPR accounted for 83% and 48% of such revenue in 1996 and 1995, respectively. In September 1996, the Company's research collaboration with RPR terminated.
Total costs and expenses were $12,142,000 in 1996, $6,447,000 in 1995, and $7,192,000 in 1994. The increase in 1996 costs and expenses, compared with 1995, is primarily the result of an increase in research and development expense to $10,075,000 in 1996 from $4,889,000 in 1995. The increase in research and development expense reflects an increase in research, clinical development and product development activities. The decrease in costs and expenses in 1995, compared with 1994, is primarily the result of a decrease in research and development expense to $4,889,000 in 1995 from $5,627,000 in 1994. General and administrative expenses were $2,067,000 in 1996, $1,558,000 in 1995 and $1,565,000 in 1994. The increase in general and administrative expenses in 1996 is the result of increasing finance, legal and other administrative and marketing expenses which are expected to continue to increase in support of the Company's increasing product development and research activities. The decrease in general and administrative expense in 1995 is reflective of generally lower spending in 1995 as compared to 1994.
Interest income was $678,000 in 1996, $279,000 in 1995, and $245,000 in 1994. The increases in interest income in 1996 and 1995 are due primarily to corresponding increases in the levels of cash, cash equivalents and short-term investments for such periods. Interest expense was $62,000 in 1996, $66,000 in 1995, and $65,000 in 1994, reflecting varying amounts outstanding under capital leases during the periods.
The Company's net loss was $9,917,000 in 1996, $5,717,000 in 1995, and $6,140,000 in 1994. The Company expects to report substantial net losses for at least the next several years.
The Company has not generated any net income to date and therefore has not paid any federal income taxes since inception. At June 30, 1996, the Company had deferred tax assets totaling $9,650,000 consisting primarily of net operating loss and research tax credits that begin to expire from 2004 through 2011, if not utilized. A full valuation allowance for deferred tax assets has been provided. Utilization of federal income tax carryforwards is subject to certain limitations under Section 382 of the Internal Revenue Code of 1986, as amended. The completion of this offering is likely to limit the Company's ability to utilize federal income tax carryforwards under Section 382. The annual limitation could result in expiration of net operating losses and research and development credits before their complete utilization.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through private placements of Preferred Stock and other equity investments, which from inception, have totaled approximately $37,916,000, and to a lesser degree, through grant funding, payments received under research agreements and collaborations, interest
earned on cash, cash equivalents, and short-term investments, and funding under equipment leasing agreements. These financing sources have historically allowed the Company to maintain adequate levels of cash and other liquid investments.
The Company's combined cash, cash equivalents and short-term investments totaled $10,967,000 at June 30, 1996, a decrease of $101,000 from June 30, 1995. The primary uses of cash, cash equivalents and short-term investments during the year ended June 30, 1996 included $8,967,000 to finance the Company's operations and working capital requirements, $445,000 in capital equipment additions and $270,000 in scheduled debt payments. During the year ended June 30, 1996, the Company received $3,500,000 in equity payments from RPR and $5,965,000 in net proceeds from the sale of Series E Convertible Preferred Stock. The Company plans to continue its policy of investing excess funds in short-term, investment-grade, interest-bearing instruments.
The Company's combined cash, cash equivalents and short-term investments totaled $7,108,000 as of September 30, 1996 compared to $10,967,000 at June 30, 1996. The decrease was primarily attributable to the use of $3,614,000 to fund operations and working capital requirements during the period and to a lesser degree by $173,000 in capital equipment purchases and $73,000 in scheduled debt payments.
In October 1996, the Company executed a financing commitment to provide the Company with up to $5,000,000 in additional equity funding from Cobe and $5,000,000 under a convertible loan agreement with another current investor. In connection with the convertible loan agreement, the Company has issued warrants to purchase 69,444 shares of Common Stock for securing the commitment. The warrants expire on October 15, 2000 if not exercised, and may be exercised, in whole or in part, at a price equal to the lesser of (a) $9.00 per share, which price increases by $3.00 per share on each anniversary of the closing of the offering being made hereby; or (b) 85% of the fair market value of the Company's Common Stock at the time of exercise. As of the date of this Prospectus, the Company has not obtained any financing under these commitments. These funding commitments expire upon the closing of this offering.
The Company's future cash requirements will depend on many factors, including continued scientific progress in its research and development programs, the scope and results of clinical trials, the time and costs involved in obtaining regulatory approvals, the costs involved in filing, prosecuting and enforcing patents, competing technological and market developments and the cost of product commercialization. The Company does not expect to generate a positive cash flow from operations for several years, if at all, due to the expected increase in spending for research and development programs and the expected cost of commercializing its product candidates. The Company may seek additional funding through research and development agreements with suitable corporate collaborators and through public or private financing transactions. The Company anticipates that the net proceeds of this offering, together with the Company's available cash and expected interest income thereon, will be sufficient to finance its research and development and other working capital requirements for 18 months or less. This estimate is based on certain assumptions which could be negatively impacted by the matters discussed under this heading and elsewhere under the caption "Risk Factors." The Company expects that its primary sources of capital for the foreseeable future will be through collaborative arrangements and through the public or private sale of its equity securities. There can be no assurance that such collaboration arrangements, or any public or private financing transaction, will be available on acceptable terms, if at all, or can be sustained on a long-term basis. If adequate funds are not available, the Company may be required to delay, reduce the scope of, or eliminate one or more of its research and development programs, which may have a material adverse effect on the Company's business. See "Risk Factors--Future Capital Needs; Uncertainty of Additional Funding" and Notes to Financial Statements.
RECENT PRONOUNCEMENTS
During October 1995, the Financial Accounting Standards Board issued Statement No. 123, "Accounting for Stock-Based Compensation," which establishes a fair value based method of accounting for stock-based compensation and incentive plans and requires additional disclosures for those companies that elect not to adopt
the new method of accounting. Adoption of the new accounting pronouncement is required for the Company's fiscal year beginning July 1, 1996 and the Company intends to provide the additional disclosures required by the pronouncement in its financial statements for the year ended June 30, 1997.
During March 1995, the Financial Accounting Standards Board issued Statement No. 121, ("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which requires the Company to review for impairment of long-lived assets, certain identifiable intangibles, and goodwill related to those assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. In certain situations, an impairment loss would be recognized. SFAS 121 will become effective for the Company's fiscal year beginning July 1, 1996. Management has studied the effect of implementing SFAS 121 and, based upon its initial evaluation, does not expect it to have a significant impact on the Company's financial condition or results of operations.
BUSINESS
OVERVIEW
Aastrom is developing proprietary process technologies and devices for a range of cell therapy applications, including stem cell therapies and gene therapy. The Company's lead product under development, the Aastrom Cell Production System (the "Aastrom CPS"), consists of a clinical cell culture system with disposable cassettes and reagents for use in the rapidly growing stem cell therapy market. The Company believes that the Aastrom CPS method will be less costly, less invasive and less time consuming than currently available stem cell collection methods. The Aastrom CPS is designed as a platform product which implements the Company's pioneering stem cell replication technology and which the Company believes can be modified to produce a wide variety of cell types for emerging therapies. The Aastrom CPS is currently in a pre-pivotal clinical trial under an IDE for autologous stem cell therapy. The Company has entered into a strategic collaboration for the development of the Aastrom CPS in stem cell therapy with Cobe BCT, Inc., a subsidiary of Gambro AB and a world leader in blood cell processing products. Additionally, Aastrom is developing products and processes for the delivery of ex vivo gene therapy that are designed to address the production of gene- modified cells.
CELL THERAPY
Cell therapy is the use of human cells to treat a medical disorder. The most common types of cell therapy, blood and platelet transfusions, have been widely used for many decades. More recently, bone marrow-derived cells have been used to restore the bone marrow and the blood and immune system cells which are damaged by chemotherapy and radiation therapy during the treatment of many cancers. Transplantation of these cells is known as stem cell therapy. Other cell therapies have recently been used for generating skin and cartilage tissue and additional cell therapies are being developed by various companies and researchers to restore immune system cells as well as bone, kidney, liver, vascular and neuronal tissues.
Cell therapies require the collection of cells, either from the patient or a suitably matched donor. These cells are typically processed and stored for administration to the patient. Although cell therapy is being developed for use in an increasing number of diseases, widespread application of new cell therapies remains limited by the difficulties and expense associated with current cell collection and processing procedures. The problems of current cell collection techniques are exemplified in the area of stem cell therapy where the patient or donor undergoes invasive, time-consuming and costly procedures to collect the large volume of cells currently required for effective treatment. The Company believes an alternative to collecting the required therapeutic dose of cells is to grow these cells ex vivo from a small starting volume. However, ex vivo cell expansion, when biologically possible, has typically required costly techniques, facilities and operations to comply with FDA good manufacturing practices ("GMP"), which are not generally available in hospitals. As a result, cells needed for such therapies often require specialized cell production facilities which use labor-intensive, manual cell culture techniques.
There are numerous forms of cell therapy at an early stage of development. One such example is ex vivo gene therapy, in which genes are introduced into target cells in order to selectively correct or modulate disease conditions, or to modify cells for production of a therapeutic protein. The Company believes that the successful practice of ex vivo gene therapy will require the development of processes and products for the reliable, high-efficiency transfer of genes into cells and a means to produce the necessary dose of the genetically modified cells under GMP conditions.
STEM CELL THERAPY
Stem cell therapy is used to treat cancer patients who undergo chemotherapy or radiation therapy at dose levels that are toxic to the hematopoietic system, which is comprised of the bone marrow and cells of the blood and immune systems. The objective of stem cell therapy is to restore the hematopoietic system via the infusion and subsequent engraftment of healthy cells to replace bone marrow and result in the rapid recovery of neutrophils and platelets that have been destroyed by chemotherapy and radiation therapy. Stem cell therapy
reduces the risk of life-threatening infections and bleeding episodes following cancer treatments. In order to treat many cancers, high intensity chemotherapy or radiation is often required, which may severely destroy ("myeloablation") or partially destroy ("myelosuppression") the patient's hematopoietic system.
Cells required for effective stem cell therapy include stem cells, to replenish depleted bone marrow and provide a long-term ongoing source of the multilineage progenitor cells of the blood and immune systems, and early and late stage hematopoietic progenitor cells, to provide for rapid neutrophil and platelet recoveries. Stromal accessory cells are believed to further augment the growth of bone marrow. In the adult, all of these cell types originate in the bone marrow. These cells are currently collected from the donor or patient directly through multiple syringe aspirations under anesthesia, known as bone marrow collection, or through blood apheresis following treatment with drugs which cause cells to be released or mobilized from the bone marrow into the blood. This latter technique is known as a peripheral blood progenitor cell ("PBPC") collection. See "--Current Stem Cell Collection Methods." Recently, it has been demonstrated that the blood cells found in the umbilical cord of newborn infants include cells effective for stem cell therapy. This source of cells is being explored by physicians as a major new direction in stem cell therapy, but is currently limited by difficulties in obtaining sufficient quantities of these cells.
Once collected, the stem cell mixture is infused intravenously and the stem and stromal accessory cells migrate into the bone cavity where they engraft to form a new marrow. The hematopoietic progenitor cell components of the cell mixture provide early restoration of circulating white blood cells and platelets. The replenished bone marrow will normally provide long-term hematopoietic function, but complete restoration of bone marrow may take years following myeloablative cancer therapy. When the patient's hematopoietic system is malignant, such as in the case of leukemia, cells from a suitable donor are generally required in order to avoid reintroducing the disease during cell infusion. Such donor derived transplants are termed "allogeneic" transplants. Procedures using cells derived from the patient are termed "autologous" transplants.
STEM CELL THERAPY MARKET OPPORTUNITY
The benefits of stem cell therapy in the treatment of cancer patients have been well established over the past two decades. Stem cell therapy, in the form of bone marrow transplantation, was originally used in patients who had received treatment for blood and bone marrow cancers such as leukemia, and genetic diseases of the blood. However, because stem cell therapy has been shown to promote the rapid recovery of hematopoietic function, it is now being increasingly used to enable patients with other forms of cancer to receive high dose or multicycle chemotherapy and radiation treatments. These high intensity therapies have a greater probability of eradicating dose sensitive cancers but, because of their hematopoietic toxicity, cannot generally be given without stem cell therapy. As a result, some patients are treated with lower and less effective doses, and fewer cycles, of therapy than might otherwise be used.
The Company estimates that over 35,000 stem cell therapy procedures were completed worldwide in 1995, and that the number of such procedures is growing at a compound annual rate of over 20%. This growth has been driven by encouraging clinical results in the treatment of dose-sensitive solid tumors, such as breast and ovarian cancers. The Company expects that stem cell therapy procedures will continue to grow due to increased incidence and prevalence of cancer, continued clinical demand for myelotoxic cancer treatment, and the increased cost effectiveness of stem cell therapy treatments.
Stem cell therapy may also enhance the effectiveness of blood cell growth factors. The timing and extent of additional cycles of chemotherapy is often limited by the recovery of a patient's white blood cells and platelets because a delayed recovery of these cells can leave the patient susceptible to life- threatening infection and bleeding episodes, and this limitation may allow for the regrowth of residual tumor cells. Many cancer patients are routinely treated with growth factors including G-CSF, such as Neupogen and GM-CSF, such as Leukine, which enhance the development of mature circulating white blood cells and platelets from the early progenitor bone-marrow derived cells, thereby decreasing the time between cycles of therapy and the probability of infection. However, during high dose or multi-cycle therapy, the stem and progenitor cells on which these growth
factors act are often depleted. Without these cells, growth factors have a limited or negligible effect. Stem cell therapy generally enhances the effectiveness of growth factors by introducing target stem and progenitor cells for growth factors to act upon such that patients generally exhibit a more rapid and consistent hematopoietic recovery.
CURRENT STEM CELL COLLECTION METHODS
Currently, the bone marrow-derived cells required for stem cell therapy are collected primarily either through the bone marrow harvest method or the PBPC collection method.
Bone Marrow Harvest
A traditional bone marrow harvest is a costly and invasive surgical procedure in which a physician removes approximately one liter of bone marrow from a patient or donor. This volume of bone marrow is removed using needles inserted into the cavity of the hip bone. The bone marrow harvest procedure typically requires between two to four hours of operating room time, with the physician often making more than 100 separate puncture sites in the hip bone to collect the necessary amount of bone marrow. Due to the length of the procedure and the trauma to the patient, general surgical anesthesia is administered and the patient is typically hospitalized for a day. Frequently, the patient suffers pain from the procedure for several days after being discharged from the hospital. Furthermore, complications resulting from the general anesthesia or invasive nature of the procedure occur in a small percentage of patients. Bone marrow harvest provides a reliable source of stem and stromal accessory cells and has been the preferred source of cells in allogeneic transplants.
PBPC Mobilization and Collection
PBPC mobilization is a newer technique in which bone marrow-derived cells are harvested from a patient's or donor's circulating blood, rather than from bone marrow. In a PBPC mobilization procedure, the patient receives multiple injections of growth factors or cytotoxic drugs, or both, over the course of a week or more, which cause stem and progenitor cells resident in the bone marrow to mobilize into the circulating blood. The mobilized cells are then collected by connecting the patient to a blood apheresis device, which draws and returns large volumes of the patient's or donor's blood in order to selectively remove the therapeutic volume of stem and progenitor cells. Each collection procedure typically lasts for two to six hours and is typically repeated on two to eight consecutive days. Specialized laboratory testing over the period of mobilization and cell harvesting is necessary to determine that a sufficient quantity of desired cells has been collected, adding to the cost of the procedure. The PBPC process has become the predominant procedure in autologous stem cell therapy.
Procedure Considerations
Although stem cell therapy is being utilized to treat more patients for a broader range of diseases, its availability continues to be limited by the high costs of procuring cells, the invasive nature of traditional cell procurement techniques, and by the technical difficulties related to those collection procedures. The Company estimates that current costs for bone marrow harvest and processing are approximately $10,000 to $15,000 per procedure, with considerable variability between institutions. The Company estimates that current costs for PBPC collection, including mobilization with growth factors, are approximately $12,000 to $20,000 for a two to three cycle procedure, with considerable variability between institutions depending on the total volume, time and number of aphereses required.
Overall costs of stem cell therapy include the costs of the cell collection procedure, and the costs associated with supporting the patient during post- transplant recovery. Post-transplant costs include hospitalization time, antibiotic support, management of adverse reactions to the large volume cell infusions, and infusions of platelets and red blood cells. Any new stem cell therapy process will generally need to provide similar recovery endpoints to be competitive with the current procedures. In this regard, PBPC procedures have gained popularity compared with bone marrow harvests because the number of platelet transfusions is reduced for some patients.
Recently, products to implement a cell isolation method known as CD34 selection have been developed by other companies in conjunction with bone marrow harvest and PBPC collections. CD34 selection is a process designed to isolate specific types of cells in order to decrease storage and infusion problems associated with the large volume of fluids collected in bone marrow or multiple apheresis procedures. CD34 selection is used after the initial collection of stem and progenitor cells and, therefore, does not address the difficulties or costs associated with the basic cell collection procedures. To date, the CD34 selection procedure has demonstrated limited therapeutic benefit to the patient, but substantially increases the costs of the procedure. A future objective of CD34 selection is to assist in depleting tumor cells from the transplant cells collected, thereby expanding the availability of stem cell therapy to new patient populations.
UMBILICAL CORD BLOOD
Umbilical cord blood ("UCB"), which is collected directly from the umbilical cord after delivery, without pain or risk to the infant or the mother, is emerging as a new source of cells for stem cell therapy. UCB has been reported to have stem cell concentrations that are much higher than that typically obtained from traditional bone marrow and PBPC collection methods. After collection, UCB is typically frozen for later use in a stem cell therapy procedure. Storage of UCB samples involves small volumes of cells, compared to typical bone marrow or PBPC storage. Accordingly, the costs of collection and storage of UCB cells are comparatively low. This source of cells is also "tumor-free," such that UCB would be preferred for many current stem cell therapy procedures in metastatic cancer patients. Before UCB can become a major supply source for stem cell therapy, a coordinated UCB banking system must emerge. In this regard, several organized UCB banking institutions have been established to date, and the group is growing in both number and size.
One current disadvantage of UCB is the relatively low number of available cells. Unlike bone marrow or PBPC harvest, where the collection of more cells to meet a particular treatment is typically achievable, the number of cells available from a UCB donor is limited. This problem is exacerbated by the required cryopreservation of the cells, which causes a significant cell loss. The resultant low cell number is believed to be responsible for the longer hematopoietic recovery times observed with UCB transplants, as compared with bone marrow or PBPC transplants. Further, because of the low cell number, UCB transplants are typically restricted to small patients. Therefore, increasing the number of therapeutic cells from a UCB sample would facilitate the more widespread use of UCB transplants. Aastrom believes that providing the transplant site with the capability to carry out the UCB cell expansion will be a major factor in the increased use of UCB for stem cell therapy and a significant business opportunity.
AASTROM TECHNOLOGY
Aastrom is developing proprietary process technologies that are pioneering the ex vivo production of human stem and progenitor cells. The Company has also developed a proprietary cell culture device that mimics the biological and physical environment necessary for the growth of certain human cells and tissues, including bone marrow. The Company's initial product candidate, the Aastrom CPS, utilizes the Company's process technology and is designed to enable the ex vivo production of human stem and progenitor cells as an alternative to the bone marrow harvest and PBPC mobilization methods and as an enhancement to the UCB collection method. The Company believes that the Aastrom CPS may be used for other cell production processes which are being developed by third parties and, in combination with the Company's proprietary gene transfer process, may have application in the developing field of ex vivo gene therapy.
CORE TECHNOLOGY
Stem Cell Growth Process
Aastrom has developed proprietary process technologies for ex vivo production of therapeutic stem and progenitor cells as well as other key cells found in human bone marrow. The Company's proprietary process entails the placement of a stem cell mixture in a culture environment that mimics the biology and physiology of
natural bone marrow. This process enables the stem and early and late-stage progenitor cells needed for an effective stem cell therapy procedure to be concurrently expanded. Growth factors can be added to stimulate specific cell lineages to grow or to increase cell growth to meet a particular therapeutic objective. The stem cell growth process can best be completed with little or no additional stem cell selection or purification procedures. This stem cell replication process can also enable or augment the genetic modification of cells by providing the cell division step needed for new genes to integrate into the stem cell DNA. Currently available cell culture methods tend to result in a loss of stem cells, either through death or through differentiation into mature cells. The Company has exclusive license to two U.S. patents and additional applications that cover these processes. See "-- Additional Stem Cell and Other Cell Therapies."
Aastrom Cell Culture Chamber
Aastrom has developed a proprietary cell culture chamber to implement the Company's process technology. The culture chamber produces cells on a clinical scale, and allow for simple, sterile recovery of the cells for therapeutic use. The Company believes that the Aastrom cell culture chamber may also be used for growing other human therapeutic cells, such as T-Cells used for lymphocyte therapies, chondrocytes for cartilage replacement, and mesenchymal tissues for bone and cartilage replacement. The Company holds exclusive licenses to two U.S. patents and additional applications for its cell culture chamber device technology. See "--Additional Stem Cell and Other Cell Therapies."
Efficient Gene Transfer
Aastrom has developed proprietary processes and device technology that enables increased efficiency of vector-mediated gene transfer into cells as compared to conventional procedures. This directed-motion gene transfer or gene loading technology is intended to have applications for most cell and tissue types and most vector technologies. The Company intends to develop products based upon its gene loading technology that it believes will facilitate the advancement of numerous gene therapy protocols into the clinic and ultimately the market. The Company has received a U.S. Patent and has additional applications for this technology. See "Aastrom Product Candidates For Ex Vivo Gene Therapy."
THE AASTROM CPS
The Aastrom CPS is the Company's lead product under development for multiple cell therapy applications, including stem cell therapy. The Aastrom CPS is a proprietary system that the Company believes will enable the large scale ex vivo production of a variety of therapeutic cells at health care facilities, independent laboratories, transplant centers and blood banks, and has been designed to implement Aastrom's stem cell growth process as well as processes for the production of other cell types.
The Aastrom CPS is comprised of several components, including single-use disposable cassettes and reagents and microprocessor-controlled instruments, which are at various stages of development. The Cell Cassette is a single-use disposable cartridge which contains the Aastrom cell culture chamber and the related media supply waste reservoirs and harvest bag. The microprocessor- controlled instruments include the Incubator which controls the culture conditions for the operation of the Cell Cassette, and the Processor which automates the priming and harvesting of the cells from the cell cassette. The System Manager is a user interface computer that is being developed to simultaneously track and monitor the cell production process in over thirty CPS Incubators and record relevant process variables and operator actions. Prototype components of the Aastrom CPS are currently being used in a clinical trial and ongoing development activities are directed at completing other production level components of the Aastrom CPS.
The Aastrom CPS is designed to be operated with minimal operator activity by a medical or laboratory technician and can implement clinical scale cell production at the patient care site. The end product of the Aastrom process is a sterile bag of cells. The control and documentation features of the Aastrom CPS have been designed to meet GMP requirements for the therapeutic production of cells.
AASTROM CPS FOR STEM CELL THERAPY
The Company's initial application for the Aastrom CPS is expected to be in the growing field of stem cell therapy, where the Company believes that the Aastrom CPS may address many of the limitations of existing procedures. The Aastrom CPS is based on a comparatively simple process in which a small volume of bone marrow cells are collected from the patient or donor using a needle aspiration procedure under a local anesthetic or sedative. This cell mixture is quantified, and an appropriate volume of cells is then inoculated into one or more cell cassettes with the necessary growth media. Therapeutic growth- factor-stimulated cells are produced using the Aastrom CPS in approximately 12 to 13 days, with no further patient involvement. Depending upon the cell quantity necessary for a therapeutic application, single or multiple cell cassettes may be required, with a different volume requirement of starting cells. The Aastrom CPS has been designed to minimize operator involvement during the cell production process, and the steps required before and after the Aastrom CPS are standard laboratory procedures.
Advantages of Aastrom CPS
The Company believes that the Aastrom CPS, if approved for commercial sale by the FDA and foreign regulatory agencies, will provide improvements and efficiencies over traditional cell collection processes. The following table illustrates some potential advantages of the Aastrom CPS compared to approximated patient visits, procedure time and needle sticks in connection with currently established cell collection techniques:
CELL SOURCE VISITS(1) PROCEDURE TIME (HOURS) NEEDLE STICKS(2) ----------- --------- ---------------------- ---------------- Bone Marrow Harvest(3)..... 6 22 100+ PBPC Mobilization and Col- lection(4)................ 5-7 23-27 20-30 Aastrom CPS(5)............. 1 1-2 4-10 |
Reduced Cost. The Company believes the Aastrom CPS has the potential to replace more costly, labor intensive and invasive cell collection procedures currently employed for stem cell therapy and to reduce physician, staff and patient time requirements.
Reduced Patient and Physician Burden. Cell production with the Aastrom CPS is expected to require the collection of a small volume of starting material compared to current collection procedures, eliminating the requirement for general surgical anesthesia, multiple drug injections and blood apheresis. Patient benefits include fewer needle sticks than with current cell collection methods and a reduction in overall patient procedure time. Additionally, Aastrom's process for cell expansion is expected to minimize the time requirement for physicians compared with bone marrow harvest.
Enhanced Multicycle High-Dose Chemotherapy. The long restoration period for the hematopoietic system following myeloablative therapy effectively limits patients to one opportunity for cell collection prior to cancer therapy. The Aastrom CPS may enhance the practice of multi-cycle, high-dose chemotherapy by providing the ability to produce a therapeutic dose of cells from a small starting volume. The initial cell collection can be divided into multiple samples and stored frozen until expansion at a later time is required.
Reduced Quantity of Lymphocytes. The Company believes its approach to stem cell therapy may provide an additional benefit over current methods by depleting potentially harmful cells such as T-cells and B-cells. These cells are believed to be primarily responsible for graft-versus-host disease, a common manifestation of allogeneic transplants in which the grafted donor's cells attack the host's tissues and organs.
Tumor Cell Purging. Cancer patients with tumor metastases, in which the cancer has spread to the blood and bone marrow, have not traditionally been candidates for autologous stem cell transplants because transplant may reintroduce cancer cells into the patient. Additionally patients may have undetected tumor cells in their marrow or PBPC transplant, which can reestablish the cancer in the patient following transplant. The Aastrom CPS process may offer benefits for these groups of patients. The Company and other investigators have shown that some primary human tumor cells die or do not grow during hematopoietic cell culture. Further, the smaller volume of starting cells used for the Aastrom CPS compared with BMT or PBPC transplants shall provide approximately 10 to 70 fold less tumor cells in a transplant. This combination of passive depletion during culture with the lower starting volume of tumor cells may result in a tumor-free or tumor-reduced cell product for transplant. The benefit of such tumor depletion, if any, will vary depending upon the type of cancer and state of disease.
CLINICAL DEVELOPMENT
The Company's clinical development plan is initially to obtain regulatory approval in the United States to market the Aastrom CPS for autologous stem cell therapy and in Europe for more general cell therapy applications. The Company also intends to pursue approval of the Aastrom CPS for additional clinical indications.
The Company believes that the Aastrom CPS for stem cell therapy will be regulated as a medical device and that the Company will be required to submit a PMA application to, and obtain approval from, the FDA to allow it to market this product in the United States. In order to obtain PMA approval, the Company will be required to complete clinical trials under an IDE. See "-- Government Regulation--Devices."
In a dose-ranging study conducted by the University of Michigan (the "University") in 1993, ex vivo produced cells utilizing the Company's proprietary cell production technology were infused into seven patients with non-Hodgkin's lymphoma after they received myeloablative chemotherapy. These patients also received cells obtained from either an autologous bone marrow harvest or PBPC procedure. No safety issues attributable to the infused cells were observed in this trial and the patients exhibited recovery profiles consistent with traditional transplantation techniques.
Aastrom completed the first feasibility trial of its cell production system technology under an IDE at the MD Anderson Cancer Center in October 1995. In this trial, ten breast cancer patients, who were subjected to myeloablative chemotherapy, were treated with cells obtained from a bone marrow harvest and with cells produced from a sample of such cells with a predecessor of the Aastrom CPS. The patients exhibited standard clinical recoveries, providing evidence of the clinical safety of cells obtained from the Company's cell production process and of the feasibility of cell production with a predecessor of the Aastrom CPS by clinical personnel at an investigational site.
Aastrom is currently conducting a pre-pivotal stem cell therapy clinical trial under an IDE reviewed with the FDA. This clinical trial is designed to demonstrate that cells produced using the Aastrom CPS can provide hematopoietic recovery in accordance with trial endpoints in breast cancer patients who have received myeloablative chemotherapy. Bone marrow obtained from the patient by traditional methods will be available for precautionary reasons at defined clinical stages. The results from the five patients accrued at the first trial site have provided evidence of the clinical safety of the Aastrom CPS-produced cells in patients and that the hematopoietic recovery endpoints specified for the trial are achievable. The patients at this trial site were Stage IV breast cancer patients who had received significant prior cytotoxic therapies for their cancer. Four of these five patients received the precautionary back-up marrow pursuant to the trial protocol. Preliminary results from the first trial site were reviewed with the FDA, and the IDE was amended to expand the trial to a second site. The amended IDE provided for the enrollment of Stage II, III and IV patients, and a delayed use of the precautionary back-up bone marrow. As of the date of this Prospectus, patient accrual is ongoing and patient data from this site provides further evidence that the hematopoietic recovery endpoints specified for the trial are achievable.
The objective of the current and anticipated future trials is to establish the protocol for the pivotal trial of the Aastrom CPS in autologous stem cell therapy. Provided that these pre-pivotal trials provide evidence of feasibility and safety of the cells produced in the Aastrom CPS, the Company anticipates initiating a pivotal clinical trial at multiple sites, with the patient enrollment typical to support a PMA filing. See "Risk Factors-- Uncertainties Related to Preclinical and Clinical Testing."
Aastrom, in partnership with Cobe, intends to initiate a clinical trial in France in early 1997 to evaluate the use of Aastrom CPS cells to promote hematopoietic recovery in breast cancer patients undergoing aggressive myelosuppressive chemotherapy. The Company intends to seek approval to market the Aastrom CPS in Europe through CE Mark Registration. See "--Government Regulation--Regulatory Process in Europe."
The preliminary results of the Company's pre-pivotal trial may not be predictive of results that will be obtained from subsequent patients in the trial or from more extensive trials. Further, there can be no assurance that the Company's pre-pivotal or pivotal trial will be successful, or that PMA approval or required foreign regulatory approvals for the Aastrom CPS will be obtained in a timely fashion, or at all.
BUSINESS STRATEGY
Aastrom's objective is to build a leadership position in cell therapy process technology. The primary elements of the Company's business strategy are as follows:
Establish Consumable Based Business Model. Aastrom's strategy is to sell the Aastrom CPS to institutions, hospitals, and other clinical care or commercial cell production facilities that are administering cell therapy. The Company plans to obtain ongoing revenue from the sale of single-use disposable Cell Cassettes and related cell culture media and reagents, which are utilized in individual cell therapy applications. After cells are cultured in the Cell Cassette, the cassette is discarded and a new cassette is utilized for a subsequent patient. Along with ongoing revenue from the sale of instruments and disposables for cell therapy applications, the Company believes it will be able to obtain license revenue from its stem cell therapy applications for its proprietary stem cell processes.
Focus Initially on Established and Reimbursed Therapies. Aastrom will seek to establish the use of the Aastrom CPS in the field of stem cell therapy for the treatment of toxicity resulting from many cancer therapies, including those for breast cancer, lymphoma, ovarian cancer, germ cell cancers, leukemias and aplastic anemias. Stem cell therapy is a well-established and growing treatment modality in cancer therapy, and current cell collection procedures are widely reimbursed by third party payors.
Leverage Platform Technology Across Multiple Market Opportunities. In addition to stem cell therapy applications, the Company believes that the Aastrom CPS may serve as a platform product that can be used to produce a variety of other cells for multiple therapeutic applications, such as T-cells for use in lymphocyte therapies, chondrocytes for cartilage replacement, and mesenchymal cells for use in certain solid tissue therapies. The Company believes that if the Aastrom CPS is well established as a method for cell production for use in stem cell therapy, the system will be positioned for commercialization of new cell and ex vivo gene therapies that are under development.
Market Through Collaborative Relationships. The Company plans to reach end user markets through collaborative relationships with companies that have established positions in those markets. In 1993, the Company formed a strategic partnership with Cobe, a world leader in the marketing and distribution of blood cell processing equipment and disposables. Cobe is the Company's exclusive, worldwide distributor of the Aastrom CPS for stem cell therapy applications, not including stem cell gene therapy. The Company will seek to establish additional collaborations for other cell therapies as those therapies and the Company's product lines develop. See "Business--Strategic Relationships."
ADDITIONAL STEM CELL AND OTHER CELL THERAPIES
The Company believes that the Aastrom CPS hardware and disposables may be developed to serve as platform products for application in a variety of other cell therapies in addition to stem cell therapy. The Company believes that the Aastrom CPS has the potential to supplant current manual cell culture methods to produce therapeutic quantities of cell types such as T-cells, chondrocytes, mesenchymal cells, keratinocytes, neuronal cells and dendritic cells. Currently such cells are often produced in specialized facilities generally using manual cell culture techniques which limit the effective commercialization of these cell types for therapy. Potential advantages of the Aastrom CPS in these therapies may include: (i) reducing labor and capital costs; (ii) enhancing process reliability; (iii) automating quality assurance; and (iv) reducing the need for environmentally controlled facilities.
Modification of such processes and application of the Company's products to the expansion of other cell types may require substantial additional development of specialized culture environments and which may need to be incorporated within the Company's existing cell cassettes. There can be no assurances that the Company will be able to successfully modify or develop existing or future products to enable such additional cell production processes. Furthermore, other than a limited application of chondrocyte therapy, novel cell therapies are still in early stages of development by third parties. The Company's business opportunity is dependent upon successful development and regulatory approval of these novel cell therapies. No assurance can be given that such novel therapies will be developed or approved or that the Company's processes or product candidates will find successful application in such therapies. See "--Business Strategy" and "--Clinical Development" and "Use of Proceeds."
Immunotherapies
Immunotherapy involves using cells of the immune system to eradicate a disease target. T-cell lymphocytes and dendritic cells are being actively investigated by other companies for this purpose, and these procedures require ex vivo cell production.
T-cells, a class of lymphocyte white blood cells, play a critical role in the human immune system and are responsible for the human immune response in a broad spectrum of diseases, including cancers and infectious diseases. Cytotoxic T-lymphocytes ("CTLs") is a new process that involves collecting T- cells from a patient and culturing them in an environment resulting in T-cells with specificity for a particular disease target. Clinical trials by third parties have been completed demonstrating CTL effectiveness for certain diseases. The ex vivo production of these cells under conditions for use in medical treatment represents a critical step in the advancement of this therapy.
Dendritic cells (the potent antigen presenting cells) are believed to play an important role in the function of the immune system. Researchers believe that cultured dendritic cells could augment the natural ability of a patient to present antigens from the infectious agents to the immune system and aid in the generation of a cytotoxic T-cell response to the infectious agent. The Company intends to explore application of its products and processes for the expansion of dendritic cells.
Solid Tissue Cell Therapies
One of the newest areas of cell therapy involves the production of chondrocytes for the restoration of cartilage. Chondrocyte therapy involves the surgical removal of a small amount of tissue from the patient's knee and a therapeutic quantity of chondrocytes is produced from this surgical biopsy. The cells are then implanted into the patient's knee. Published reports indicate that such cells then reestablish mature articular cartilage. Currently, this cell production process is completed in highly specialized laboratory facilities using trained scientists and manual laboratory procedures. The Aastrom CPS has the potential to reduce costs associated with the cell production procedure and may eventually facilitate the transfer of the cell production capability away from specialized facilities directly to the clinical care sites.
Other Stem Cell Therapies
Autoimmune Diseases. Stem cell therapy is under clinical investigation for the treatment of other diseases. Clinical studies have suggested a potential role for stem cell therapy in treatment of autoimmune diseases such as rheumatoid arthritis, multiple sclerosis and lupus erythematosus. The generic cause of these diseases is a malfunctioning immune system, including T- lymphocytes. Clinical trials in which the patient receives treatment resulting in immune ablation (usually involving myelotoxic cancer drugs or radiation), followed by stem cell therapy to restore the bone marrow and cells of the blood and immune system, have demonstrated remission of the autoimmune disease in some patients.
Organ Transplantation. Recently, a number of academic and corporate researchers and companies have identified the potential use of stem cell therapy to facilitate successful solid organ and tissue transplants between human donors and recipients, as well as using organs from non-human species for transplantation into humans. These proposed applications are based on the observation that donor-specific bone marrow, infused concurrent with or prior to the organ transplant, can provide for reduction of the normal immune rejection response by the transplant recipient (e.g. heart, lung, liver or kidney transplants).
A major limitation to the use of stem cell therapy in solid organ transplant is the limited availability of sufficient amounts of bone marrow to obtain a desired therapeutic response of immune tolerization. This limitation is particularly problematic when cadaveric donor organs are available, which has traditionally been the source of cells for these procedures. Bone marrow is also often available from the cadaveric donor, but only in a limited amount. Normally this amount may be sufficient for one transplant, but a donor might provide multiple organs for transplant into multiple recipients. Aastrom believes that the ability to expand the available bone marrow ex vivo will enhance the use of stem cell therapy for such transplant procedures.
AASTROM PRODUCT CANDIDATES FOR EX VIVO GENE THERAPY
A novel form of cell therapy is ex vivo gene therapy. For this type of cell therapy, cells procured from the patient or a donor are genetically modified prior to their infusion into the patient. Analogous to other cell therapies, the ability to produce a therapeutic dose of these gene-modified cells is a major limitation to the commercialization of these cell therapies. This limitation is further exacerbated by the additional requirement that the cells be genetically modified under conditions that are sterile and comply with GMP.
Gene therapy is a therapeutic modality that holds the potential to significantly impact the delivery of healthcare and the delivery of therapeutically useful protein-based drugs within the body. Gene therapies are generally targeted at the introduction of a missing normal gene into otherwise defective human tissue, or the introduction of novel biologic capability into the body via the introduction of a gene not ordinarily present (for example, genes providing for the enhanced recognition and destruction or inhibition of the HIV-1 virus). The major developmental focus of the ex vivo gene therapy industry has been to identify the therapeutic gene of interest, insert it into a suitable vector that can be used to transport and integrate the gene into the DNA of the target cell, and then cause the gene to become expressed. For gene therapy to progress to clinical applications, a process to produce a sufficient quantity of therapeutic cells is required as is an efficient means to insert the gene vector into target cells. Gene therapy is still in an early stage of development by third parties. The Company's business opportunity is dependent upon the successful development and regulatory approval of individual gene therapy applications. No assurance can be given that such applications will be developed or approved or that the Company's processes or product candidates will find successful applications in such therapies.
THE AASTROM CPS FOR GENE THERAPY (GT-CPS)
The Aastrom CPS has been developed to produce cells for therapy. Clinical cell production is a limiting requirement for gene therapy to effectively move into medical practice, and as such, the Company believes that the Aastrom CPS may be useful in many potential ex vivo gene therapy applications.
Further, the Company's proprietary stem cell production process technology implemented by the Aastrom CPS provides the conditions for clinical scale stem cell division, and enables or enhances the introduction of therapeutic genes into stem cell DNA. The Company believes that its technology may also enable expansion of more mature progeny of these stem cells to create a gene therapy cell product with potential short and long term therapeutic effect.
The Company has two principal objectives for the development of Aastrom GT- CPS: (i) the enablement of stem cell gene therapies for a variety of hematologic and other disorders, based on the GT-CPS's ability to enable large scale stem cell division ex vivo; and (ii) the enablement of gene transfer and therapeutic cell production by local and regional primary patient care facilities and ancillary service laboratories.
THE AASTROM GENE LOADER
The Aastrom Gene Loader product technology, which is under development, is being designed to transfer new therapeutic genes, which are carried by vectors into the target cell. This process, which is typically inefficient in many human cells, has represented a major hurdle preventing many ex vivo gene therapies from moving forward in the clinic. The Aastrom Gene Loader will incorporate the Company's proprietary directed motion gene transfer technology and is expected to incorporate single-use sterile disposables, operated by dedicated instrumentation.
A major product objective of the Aastrom Gene Loader is the enhancement of gene transfer efficiencies and reliability. Improving gene vector efficiencies may enable a wide spectrum of gene therapies currently unable to realize clinical application.
The Company believes that these issues represent a general bottleneck for other companies pursuing ex vivo gene therapy clinical applications. The Company's technology may favorably influence these gene therapy applications, the development of which are impeded due to low transduction efficiencies and the resultant need for use of extreme quantities of gene vectors and/or target "delivery" tissues.
STRATEGIC RELATIONSHIPS
On October 22, 1993, the Company entered into a Distribution Agreement (the "Distribution Agreement") with Cobe, a subsidiary of Gambro AB, for Cobe to be the Company's exclusive, worldwide distributor of the Aastrom CPS for stem cell therapy applications (the "Stem Cell Therapy Applications"). The Company has retained the right to market the Aastrom CPS for uses outside the Stem Cell Therapy Applications, such as for all gene therapy applications and for production of other cells and tissues. The initial term of the Distribution Agreement expires on October 22, 2003, and Cobe has the option to extend the term for an additional ten-year period. The Company is responsible for the expenses to obtain FDA and other regulatory approval in the United States, while Cobe is responsible for the expenses to obtain regulatory approval in foreign countries to allow for worldwide marketing of the Aastrom CPS for Stem Cell Therapy Applications. See "Risk Factors--Consequences of Cobe Relationship."
Under the terms of the Distribution Agreement, the Company will realize approximately 60% and 58% of the net sales price at which Cobe ultimately sells the Aastrom CPS in the United States and Europe, respectively, for Stem Cell Therapy Applications, subject to certain negotiated discounts and volume- based adjustments. The Company is also entitled to a premium on United States sales in any year in which worldwide sales exceed specified levels.
The Distribution Agreement may be terminated by Cobe upon twelve (12) months prior notice to the Company in the event that any person or entity other that Cobe beneficially owns more than 50% of the Company's outstanding Common Stock or voting securities. The Distribution Agreement may also be terminated by Cobe at any time after December 31, 1997 if Cobe determines that commercialization of the Aastrom CPS for stem cell therapy on or prior to December 31, 1998 is unlikely.
In conjunction with the Distribution Agreement, the Company also entered into a Stock Purchase Agreement with Cobe, whereby Cobe acquired certain option, registration, preemptive and other rights pertaining to shares of the Company's stock. See "Description of Capital Stock--Rights of Cobe."
MANUFACTURING
The Company has no current intention of internally manufacturing its product candidates and accordingly is developing relationships with third party manufacturers which are FDA registered as suppliers for the manufacture of medical products.
On May 10, 1994, the Company entered into a Collaborative Product Development Agreement with SeaMED Corporation, ("SeaMED"). Pursuant to this agreement, the Company and SeaMED will collaborate on the further design of certain instrument components in the Aastrom CPS, and enable SeaMED to manufacture pre-production units of the instrument components for laboratory and clinical evaluation. The Company is paying SeaMED for its design and pre- production work on a "time and materials" basis, utilizing SeaMED's customary hourly billing rates and actual costs for materials. Subject to certain conditions, the Company has committed to enter into a manufacturing agreement with SeaMED for commercial manufacture of the instrument components for three years after shipment by SeaMED of the first commercial unit pursuant to a pricing formula set forth in the agreement. The Company retains all proprietary rights to its intellectual property which is utilized by SeaMED pursuant to this agreement.
On November 8, 1994, the Company entered into a Collaborative Product Development Agreement with Ethox Corporation ("Ethox"). Pursuant to this Agreement, the Company and Ethox will collaborate on the further design of certain bioreactor assembly and custom tubing kit components of the Aastrom CPS, and enable Ethox to manufacture pre-production units of such components for laboratory and clinical evaluation. The Company is paying Ethox for its design and production work on a "time and materials" basis, utilizing Ethox's customary hourly billing rates and actual costs for materials. The Company retains all proprietary rights to its intellectual property which are utilized by Ethox pursuant to this Agreement.
In April 1996, the Company entered into a five-year License and Supply Agreement with Immunex to purchase and resell certain cytokines and ancillary materials for use in conjunction with the Aastrom CPS. The agreement required the Company to pay Immunex an initial up-front fee of $1,500,000 to be followed by subsequent annual fee payments equal to $1,000,000 per year during the term of the agreement in addition to payment for supplies purchased by the Company. The agreement may be terminated by the Company at any time subject to the payment to Immunex of a specified amount for liquidated damages. Immunex may terminate the agreement in the event that the Company fails to purchase a minimum amount of its forecasted annual needs.
There can be no assurance that the Company will be able to continue its present arrangements with its suppliers, supplement existing relationships or establish new relationships or that the Company will be able to identify and obtain the ancillary materials that are necessary to develop its product candidates in the future. The Company's dependence upon third parties for the supply and manufacture of such items could adversely affect the Company's ability to develop and deliver commercially feasible products on a timely and competitive basis. See "Risk Factors--Manufacturing and Supply Uncertainties; Dependence on Third Parties."
PATENTS AND PROPRIETARY RIGHTS
The Company's success depends in part on its ability, and the ability of its licensors, to obtain patent protection for its products and processes. The Company and its licensors are seeking patent protection for technologies related to (i) human stem and progenitor cell production processes; (ii) bioreactors and systems for stem and progenitor cell production and production of other cells; and (iii) gene transfer devices and processes. The Company has exclusive license rights to five issued United States patents that together claim (i) certain methods for ex vivo stem cell division and stable genetic transformation, optimization of hematopoietic progenitor cell cultures and increasing the metabolism or growth factor secretion of stromal cells, in a
continuously or periodically perfused liquid culture medium; (ii) certain devices for the simultaneous culture of stem cells and hematopoietic cells; and (iii) certain methods of infecting or transfecting target cells with genetic vectors. Patents equivalent to two of these United States patents have also been issued in other jurisdictions: one in Australia and another in Canada and under the European Patent Convention. These eight issued patents are due to expire beginning in 2006, through 2013. In addition, the Company and its exclusive licensors have filed applications for patents in the United States and equivalent applications in certain other countries claiming other aspects of the Company's products and processes, including five United States patent applications and corresponding applications in other countries related to various components of the Aastrom CPS. Of these pending patent applications, the Company has received notices of allowance for certain claims in a United States application relating to methods for obtaining ex vivo stem cell division, and claims in a European Patent Convention application and in a United States application relating to methods for efficient proliferation of hematopoietic cells in culture.
The validity and breadth of claims in medical technology patents involve complex legal and factual questions and, therefore, may be highly uncertain. No assurance can be given that any patents based on pending patent applications or any future patent applications of the Company or its licensors will be issued, that the scope of any patent protection will exclude competitors or provide competitive advantages to the Company, that any of the patents that have been or may be issued to the Company or its licensors will be held valid if subsequently challenged or that others will not claim rights in or ownership of the patents and other proprietary rights held or licensed by the Company. Furthermore, there can be no assurance that others have not developed or will not develop similar products, duplicate any of the Company's products or design around any patents that have been or may be issued to the Company or its licensors. Since patent applications in the United States are maintained in secrecy until patents issue, the Company also cannot be certain that others did not first file applications for inventions covered by the Company's and its licensors' pending patent applications, nor can the Company be certain that it will not infringe any patents that may issue to others on such applications.
The Company relies on certain licenses granted by the University of Michigan and Dr. Cremonese for the majority of its patent rights. If the Company breaches such agreements or otherwise fails to comply with such agreements, or if such agreements expire or are otherwise terminated, the Company may lose its rights under the patents held by the University of Michigan and Dr. Cremonese, which would have a material adverse effect on the Company's business, financial condition and results of operation. See "--University of Michigan Research Agreement and License Agreement" and "--License Agreement with J.G. Cremonese."
The Company also relies on trade secrets and unpatentable know-how which it seeks to protect, in part, by confidentiality agreements. It is the Company's policy to require its employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers, and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with the Company. These agreements provide that all confidential information developed or made known to the individual during the course of the individual's relationship with the Company is to be kept confidential and not disclosed to third parties except in specific limited circumstances. The Company also requires signed confidentiality or material transfer agreements from any company that is to receive its confidential data. In the case of employees, consultants and contractors, the agreements generally provide that all inventions conceived by the individual while rendering services to the Company shall be assigned to the Company as the exclusive property of the Company. There can be no assurance, however, that these agreements will not be breached, that the Company would have adequate remedies for any breach, or that the Company's trade secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors.
The Company's success will also depend in part on its ability to develop commercially viable products without infringing the proprietary rights of others. The Company has not conducted freedom of use patent searches and no assurance can be given that patents do not exist or could not be filed which would have an adverse effect on the Company's ability to market its products or maintain its competitive position with respect to its products. If the Company's technology components, devices, designs, products, processes or other subject matter are claimed under other existing United States or foreign patents or are otherwise protected by third party
proprietary rights, the Company may be subject to infringement actions. In such event, the Company may challenge the validity of such patents or other proprietary rights or be required to obtain licenses from such companies in order to develop, manufacture or market its products. There can be no assurances that the Company would be able to obtain such licenses or that such licenses, if available, could be obtained on commercially reasonable terms. Furthermore, the failure to either develop a commercially viable alternative or obtain such licenses could result in delays in marketing the Company's proposed products or the inability to proceed with the development, manufacture or sale of products requiring such licenses, which could have a material adverse effect on the Company's business, financial condition and results of operations. If the Company is required to defend itself against charges of patent infringement or to protect its own proprietary rights against third parties, substantial costs will be incurred regardless of whether the Company is successful. Such proceedings are typically protracted with no certainty of success. An adverse outcome could subject the Company to significant liabilities to third parties and force the Company to curtail or cease its development and sale of its products and processes.
Certain of the Company's and its licensors' research has been or is being funded in part by the Department of Commerce and by a Small Business Innovation Research Grant obtained from the Department of Health and Human Services. As a result of such funding, the United States Government has certain rights in the technology developed with the funding. These rights include a non-exclusive, paid-up, worldwide license under such inventions for any governmental purpose. In addition, the government has the right to require the Company to grant an exclusive license under any of such inventions to a third party if the government determines that (i) adequate steps have not been taken to commercialize such inventions, (ii) such action is necessary to meet public health or safety needs or (iii) such action is necessary to meet requirements for public use under federal regulations. Additionally, under the federal Bayh Dole Act, a party which acquires an exclusive license for an invention that was partially funded by a federal research grant is subject to the following government rights: (i) products using the invention which are sold in the U.S. are to be manufactured substantially in the U.S., unless a waiver is obtained; (ii) if the licensee does not pursue reasonable commercialization of a needed product using the invention, the government may force the granting of a license to a third party who will make and sell the needed product; and (iii) the U.S. government may use the invention for its own needs.
UNIVERSITY OF MICHIGAN RESEARCH AGREEMENT AND LICENSE AGREEMENT
In August 1989, the Company entered into a Research Agreement ("Research Agreement") with the University, pursuant to which the Company funded a research project at the University under the direction of Stephen G. Emerson, M.D., Ph.D., as the principal inventor, together with Michael F. Clarke, M.D., and Bernhard O. Palsson, Ph.D., as co-inventors. Pursuant to this Research Agreement, the Company was granted the right to acquire an exclusive, worldwide license to utilize all inventions, know-how and technology derived from the research project. By Extension Agreements, the Company and the University extended the scope and term of Research Agreement through December, 1994.
On March 13, 1992, the Company and the University entered into the License Agreement, as contemplated by the Research Agreement. There have been clarifying amendments to the License Agreement, dated March 13, 1992, October 8, 1993 and June 21, 1995. Pursuant to this License Agreement, (i) the Company acquired exclusive worldwide license rights to the patents and know-how for the production of blood cells and bone marrow cells as described in the University's research project or which resulted from certain further research conducted through December 31, 1994, and (ii) the Company is obligated to pay to the University a royalty equal to 2% of the net sales of products which are covered by the University's patents. Unless it is terminated earlier at the Company's option or due to a material breach by the Company, the License Agreement will continue in effect until the latest expiration date of the patents to which the License Agreement applies.
LICENSE AGREEMENT WITH J. G. CREMONESE
In July 1992, the Company entered into a License Agreement with Joseph G. Cremonese pursuant to which the Company obtained exclusive worldwide license rights for all fields of use, to utilize U.S. Patent No. 4,839,292, entitled "Cell Culture Flask Utilizing a Membrane Barrier," which patent was issued to
Dr. Cremonese on June 13, 1989, and to utilize any other related patents that might be issued to Dr. Cremonese. Pursuant to this License Agreement, the Company has reimbursed Dr. Cremonese for $25,000 of his patent costs. Under the terms of the License Agreement, the Company is to pay to Dr. Cremonese a royalty of 3% of net sales of the products which are covered by said patent, subject to specified minimum royalty payments ranging from $20,000 to $50,000 per year, commencing in calendar year 1997. Unless it is terminated earlier at the Company's option or due to default by the Company, the License Agreement will continue in effect until the latest expiration date of the patents to which the License Agreement applies.
GOVERNMENT REGULATION
The Company's research and development activities and the manufacturing and marketing of the Company's products are subject to the laws and regulations of governmental authorities in the United States and other countries in which its products will be marketed. Specifically, in the United States the FDA, among other activities, regulates new product approvals to establish safety and efficacy of these products. Governments in other countries have similar requirements for testing and marketing. In the U.S., in addition to meeting FDA regulations, the Company is also subject to other federal laws, such as the Occupational Safety and Health Act and the Environmental Protection Act, as well as certain state laws.
REGULATORY PROCESS IN THE UNITED STATES
To the Company's knowledge, it is the first to develop a culture system for ex vivo human cell production to be sold for therapeutic applications. Therefore, to a certain degree, the manner in which the FDA will regulate the Company's products is uncertain.
The Company's products are potentially subject to regulation as medical devices under the Federal Food, Drug, and Cosmetic Act, and as biological products under the Public Health Service Act, or both. Different regulatory requirements may apply to the Company's products depending on how they are categorized by the FDA under these laws. To date, the FDA has indicated that it intends to regulate the Aastrom CPS product for stem cell therapy as a Class III medical device through the Center for Biologics Evaluation and Research. However, there can be no assurance that FDA will ultimately regulate the Aastrom CPS as a medical device.
Further, it is unclear whether the FDA will separately regulate the cell therapies derived from the Aastrom CPS. The FDA is still in the process of developing its requirements with respect to somatic cell therapy and gene cell therapy products and has recently issued a draft document concerning the regulation of umbilical cord blood stem cell products. If the FDA adopts the regulatory approach set forth in the draft document, the FDA may require separate regulatory approval for such cells in some cases. The FDA also recently proposed a new type of license, called a biologic license application ("BLA"), for autologous cells manipulated ex vivo and intended for structural repair or reconstruction. This proposal may indicate that the FDA will extend a similar approval requirement to other types of autologous cellular therapies, such as autologous cells for stem cell therapy. Any such additional regulatory or approval requirements could significantly delay the introduction of the Company's product candidates to the market, and have a material adverse impact on the Company.
Approval of new medical devices and biological products is a lengthy procedure leading from development of a new product through preclinical and clinical testing. This process takes a number of years and the expenditure of significant resources. There can be no assurance that the Company's product candidates will ultimately receive regulatory approval.
Regardless of how the Company's product candidates are regulated, the Federal Food, Drug, and Cosmetic Act and other Federal statutes and regulations govern or influence the research, testing, manufacture, safety, labeling, storage, recordkeeping, approval, distribution, use, reporting, advertising and promotion of such products. Noncompliance with applicable requirements can result in civil penalties, recall, injunction or seizure of products, refusal of the government to approve or clear product approval applications or to allow the Company to enter into government supply contracts, withdrawal of previously approved applications and criminal prosecution.
DEVICES
In order to obtain FDA approval of a new medical device sponsors must generally submit proof of safety and efficacy. In some cases, such proof entails extensive clinical and preclinical laboratory tests. The testing, preparation of necessary applications and processing of those applications by the FDA is expensive and may take several years to complete. There can be no assurance that the FDA will act favorably or in a timely manner in reviewing submitted applications, and the Company may encounter significant difficulties or costs in its efforts to obtain FDA approvals which could delay or preclude the Company from marketing any products it may develop. The FDA may also require postmarketing testing and surveillance of approved products, or place other conditions on the approvals. These requirements could cause it to be more difficult or expensive to sell the products, and could therefore restrict the commercial applications of such products. Product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems occur following initial marketing. For patented technologies, delays imposed by the governmental approval process may materially reduce the period during which the Company will have the exclusive right to exploit such technologies.
If human clinical trials of a proposed device are required and the device presents significant risk, the manufacturer or distributor of the device will have to file an IDE application with the FDA prior to commencing human clinical trials. The IDE application must be supported by data, typically including the results of pre-clinical and laboratory testing. If the IDE application is approved, human clinical trials may commence at a specified number of investigational sites with the number of patients approved by the FDA.
The FDA categorizes devices into three regulatory classifications subject to varying degrees of regulatory control. In general, Class I devices require compliance with labeling and recordkeeping regulations, GMPs, 510(k) pre- market notification, and are subject to other general controls. Class II devices may be subject to additional regulatory controls, including performance standards and other special controls, such as postmarket surveillance. Class III devices, which are either invasive or life-sustaining products, or new products never before marketed (for example, non- "substantially equivalent" devices), require clinical testing to demonstrate safety and effectiveness and FDA approval prior to marketing and distribution. The FDA also has the authority to require clinical testing of Class I and Class II devices.
If a manufacturer or distributor of medical devices cannot establish that a proposed device is substantially equivalent, the manufacturer or distributor must submit a PMA application to the FDA. A PMA application must be supported by extensive data, including preclinical and human clinical trial data, to prove the safety and efficacy of the device. Upon receipt, the FDA conducts a preliminary review of the PMA application. If sufficiently complete, the submission is declared filed by the FDA. By regulation, the FDA has 180 days to review a PMA application once it is filed, although PMA application reviews more often occur over a significantly protracted time period, and may take approximately one year or more from the date of filing to complete.
Some of the Company's products may be classified as Class II or Class III medical devices. The Company has submitted and obtained FDA approval for several IDEs for the Aastrom CPS, and is currently conducting clinical studies under these IDEs. The Company believes that the Aastrom CPS product will be regulated by the FDA as a Class III device, although there can be no assurance that the FDA will not choose to regulate this product in a different manner.
The Company and any contract manufacturer are required to be registered as a medical device manufacturer with the FDA. As such, they will be inspected on a routine basis by the FDA for compliance with the FDA's GMP regulations. These regulations will require that the Company and any contract manufacturer manufacture products and maintain documents in a prescribed manner with respect to manufacturing, testing, distribution, storage, design control and service activities, and that adequate design and service controls are implemented. The Medical Device Reporting regulation requires that the Company provide information to the FDA on deaths or serious injuries alleged to be associated with the use of its devices, as well as product malfunctions that are
likely to cause or contribute to death or serious injury if the malfunction were to recur. In addition, the FDA prohibits a company form promoting an approved device for unapproved applications and reviews company labeling for accuracy.
BIOLOGICAL PRODUCTS
For certain of the Company's new products which may be regulated as
biologics, the FDA requires (i) preclinical laboratory and animal testing,
(ii) submission to the FDA of an investigational new drug ("IND") application
which must be effective prior to the initiation of human clinical studies,
(iii) adequate and well-controlled clinical trials to establish safety and
efficacy of the product for its intended use, (iv) submission to the FDA of a
product license application ("PLA") and establishment license application
("ELA") and (v) review and approval of the PLA and ELA as well as inspections
of the manufacturing facility by the FDA prior to commercial marketing of the
product.
Preclinical testing covers laboratory evaluation of product chemistry and formulation as well as animal studies to assess the safety and efficacy of the product. The results of these tests are submitted to the FDA as part of the IND. Following the submission of an IND, the FDA has 30 days to review the application and raise safety and other clinical trial issues. If the Company is not notified of objections within that period, clinical trials may be initiated. Clinical trials are typically conducted in three sequential phases. Phase I represents the initial administration of the drug or biologic to a small group of humans, either healthy volunteers or patients, to test for safety and other relevant factors. Phase II involves studies in a small number of patients to assess the efficacy of the product, to ascertain dose tolerance and the optimal dose range and to gather additional data relating to safety and potential adverse effects. Once an investigational drug is found to have some efficacy and an acceptable safety profile in the targeted patient population, multi-center Phase III studies are initiated to establish safety and efficacy in an expanded patient population and multiple clinical study sites. The FDA reviews both the clinical plans and the results of the trials and may request the Company to discontinue the trials at any time if there are significant safety issues.
The results of the preclinical tests and clinical trials are submitted to the FDA in the form of a PLA for marketing approval. The testing and approval process is likely to require substantial time and effort and there can be no assurance that any approval will be granted on a timely basis, if at all. Additional animal studies or clinical trials may be requested during the FDA review period that may delay marketing approval. After FDA approval for the initial indications, further clinical trials may be necessary to gain approval for the use of the product for additional indications. The FDA requires that adverse effects be reported to the FDA and may also require post-marketing testing to monitor for adverse effects, which can involve significant expense.
Under current requirements, facilities manufacturing biological products must be licensed. To accomplish this, an ELA must be filed with the FDA. The ELA describes the facilities, equipment and personnel involved in the manufacturing process. An establishment license is granted on the basis of inspections of the applicant's facilities in which the primary focus is on compliance with GMP and the ability to consistently manufacture the product in the facility in accordance with the PLA. If the FDA finds the inspection unsatisfactory, it may decline to approve the ELA, resulting in a delay in production of products. Although reviewed separately, approval of both the PLA and ELA must be received prior to commercial marketing of a cellular biologic.
As part of the approval process for human biological products, each manufacturing facility must be registered and inspected by FDA prior to marketing approval. In addition, state agency inspections and approvals may also be required for a biological product to be shipped out of state.
REGULATORY PROCESS IN EUROPE
The Company believes that the Aastrom CPS will be regulated in Europe as a Class IIb medical device, under the authority of the new Medical Device Directives ("MDD") being implemented by European Union ("EU") member countries. This classification applies to medical laboratory equipment and supplies including,
among other products, many devices that are used for the collection and processing of blood for patient therapy. Certain ancillary products (e.g., biological reagents) used with the Aastrom CPS may be considered Class III medical devices.
The MDD regulations vest the authority to permit affixing of the "CE Mark" with various "Notified Bodies." These are private and state organizations which operate under license from the EU to certify that appropriate quality assurance standards and compliance procedures are followed by developers and manufacturers of medical device products or, alternatively, that a manufactured medical product meets a more limited set of requirements. Notified Bodies are also charged with responsibility for determination of the appropriate standards to apply to a medical product. Receipt of permission to affix the CE Mark enables a company to sell a medical device in all EU member countries. Other registration requirements may also need to be satisfied in certain countries, although there is a general trend among EU member countries not to impose additional requirements beyond those specified for CE Mark certification.
COMPETITION
The biotechnology and medical device industries are characterized by rapidly evolving technology and intense competition. The Company's competitors include major pharmaceutical, medical device, medical products, chemical and specialized biotechnology companies, many of which have financial, technical and marketing resources significantly greater than those of the Company. In addition, many biotechnology companies have formed collaborations with large, established companies to support research, development and commercialization of products that may be competitive with those of the Company. Academic institutions, governmental agencies and other public and private research organizations are also conducting research activities and seeking patent protection and may commercialize products on their own or through joint ventures. The Company's product development efforts are primarily directed toward obtaining regulatory approval to market the Aastrom CPS for stem cell therapy. That market is currently dominated by the bone marrow harvest and PBPC collection methods. The Company's clinical data, although early, is inconclusive as to whether or not cells expanded in the Aastrom CPS will enable hematopoietic recovery within the time frames currently achieved by the bone marrow harvest and PBPC collection methods. In addition, the bone marrow harvest and PBPC collection methods have been widely practiced for a number of years and, recently, the patient costs associated with these procedures have begun to decline. There can be no assurance that the Aastrom CPS method, if approved for marketing, will prove to be competitive with these established collection methods on the basis of hematopoietic recovery time, cost or otherwise. The Company is aware of certain other products manufactured or under development by competitors that are used for the prevention or treatment of certain diseases and health conditions which the Company has targeted for product development. In particular, the Company is aware that competitors such as Amgen, Inc., CellPro, Incorporated, Systemix, Inc., Baxter Healthcare Corp. and RPR are in advanced stages of development of technologies and products for use in stem cell therapy and other market applications currently being pursued by the Company. In addition, Cobe, a significant stockholder of the Company, is a market leader in the blood cell processing products industry and, accordingly, a potential competitor of the Company. There can be no assurance that developments by others will not render the Company's product candidates or technologies obsolete or noncompetitive, that the Company will be able to keep pace with new technological developments or that the Company's product candidates will be able to supplant established products and methodologies in the therapeutic areas that are targeted by the Company. The foregoing factors could have a material adverse effect on the Company's business, financial condition and results of operations.
The Company's products under development are expected to address a broad range of existing and new markets. The Company believes that its stem cell therapy products will, in large part, face competition by existing procedures rather than novel new products. The Company's competition will be determined in part by the potential indications for which the Company's products are developed and ultimately approved by regulatory authorities. In addition, the first product to reach the market in a therapeutic or preventive area is often at a significant competitive advantage relative to later entrants to the market. Accordingly, the relative speed with
which the Company or its corporate partners can develop products, complete the clinical trials and approval processes and supply commercial quantities of the products to the market are expected to be important competitive factors. The Company's competitive position will also depend on its ability to attract and retain qualified scientific and other personnel, develop effective proprietary products, develop and implement production and marketing plans, obtain and maintain patent protection and secure adequate capital resources. The Company expects its products, if approved for sale, to compete primarily on the basis of product efficacy, safety, patient convenience, reliability, value and patent position.
FACILITIES
The Company leases approximately 20,000 square feet of office and research and development space in Ann Arbor, Michigan under a lease agreement expiring in May 1998. The lease is renewable at the option of the Company for up to an additional five-year term. The Company believes that its facilities will be adequate for its currently anticipated needs. Contract manufacturing or additional facilities will be required in the future to support expansion of research and development and to manufacture products.
EMPLOYEES
As of September 30, 1996, the Company employed approximately 61 individuals full-time. A significant number of the Company's management and professional employees have had prior experience with pharmaceutical, biotechnology or medical product companies. None of the Company's employees are covered by collective bargaining agreements, and management considers relations with its employees to be good.
LEGAL PROCEEDINGS
The Company is not party to any material legal proceedings, although from time to time it may become involved in disputes in connection with the operation of its business.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table provides information concerning directors and executive officers of the Company:
NAME AGE POSITION ---- --- -------- Robert J. Kunze(2)(3)............ 61 Chairman of the Board; Director R. Douglas Armstrong, Ph.D.(3)... 43 President and Chief Executive Officer; Director James Maluta..................... 49 Vice President, Product Development Todd E. Simpson.................. 35 Vice President, Finance & Administration; Chief Financial Officer; Secretary; and Treasurer Walter C. Ogier.................. 39 Vice President, Marketing Thomas E. Muller, Ph.D........... 61 Vice President, Regulatory Affairs Alan K. Smith, Ph.D.............. 41 Vice President, Research Stephen G. Emerson, M.D., Ph.D... 42 Director; Scientific Advisor Albert B. Deisseroth, M.D., Ph.D.(2)........................ 55 Director; Scientific Advisor G. Bradford Jones(1)(3).......... 41 Director Horst R. Witzel, Dr.-Ing......... 69 Director Edward C. Wood, Jr.(1)(3)........ 51 Director |
All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified. The Company's Bylaws provide that the Board of Directors will consist of between five and nine members, and the number of directors is currently set at seven members. The Bylaws also provide that the Board of Directors will serve staggered three-year terms, or until their successors are elected and qualified. The terms of office of the Company's current directors expire as follows: Mr. Jones, Dr. Deisseroth and Mr. Wood, 1999; Mr. Kunze and Dr. Emerson, 1998; and Dr. Armstrong and Dr. Witzel, 1997. Officers are elected by and serve at the discretion of the Board of Directors. There are no family relationships among the directors or officers of the Company.
Robert J. Kunze a director of the Company since its inception in 1989, is a founder of the Company and served as its President and Chief Executive Officer through May 1991. Since 1987, he has been a General Partner of H&Q Life Science Venture Partners, a venture capital fund specializing in medical products and biotechnology investments. Previous to that, Mr. Kunze was Managing Partner of Hambrecht & Quist Venture Partners. Prior to that he served as a senior executive with W.R. Grace & Co. and General Electric. Mr. Kunze also serves on the Board of Directors of Escalon Medical Corporation.
R. Douglas Armstrong, Ph.D. joined the Company in June 1991 as a director and as its President and Chief Executive Officer. From 1987 to 1991, Dr. Armstrong served in different capacities, including as Executive Vice President and a Trustee of the La Jolla Cancer Research Foundation ("LJCRF"), a 250-employee scientific research institute located in San Diego, California. Dr. Armstrong received his doctorate in Pharmacology and Toxicology from the Medical College of Virginia, and has held faculty and staff positions at Yale University, University of California, San Francisco, LJCRF and University of Michigan. Dr. Armstrong also serves on the Board of Directors of Nephros Therapeutics, Inc.
James Maluta joined the Company in August 1992 as Vice President, Product Development. Mr. Maluta has a broad background in the development and manufacturing of medical devices, with 25 years of experience in the industry, principally with OHMEDA and with Cobe BCT, Inc. While with Cobe BCT, Inc., Mr. Maluta was Program Manager for the Cobe Spectra Apheresis System, a device for blood cell processing and apheresis. Mr. Maluta held other engineering management positions and also was director of Quality Assurance for Cobe BCT. Mr. Maluta received his degree in electrical engineering from the University of Wisconsin.
Todd E. Simpson joined the Company in January 1996 as Vice President, Finance and Administration and Chief Financial Officer and is also the Company's Secretary and Treasurer. Prior to that, Mr. Simpson was Treasurer of Integra LifeSciences Corporation ("Integra"), a biotechnology company, which acquired Telios Pharmaceuticals, Inc. ("Telios") in August 1995 in connection with the reorganization of Telios under Chapter 11 of the U.S. Bankruptcy Code. Mr. Simpson served as Vice President of Finance and Chief Financial Officer of Telios up until its acquisition by Integra and held various other financial positions at Telios after joining that company in February 1992. Telios was a publicly-held company engaged in the development of pharmaceutical products for the treatment of dermal and ophthalmic wounds, fibrotic disease, vascular disease, and osteoporosis. From August 1983 through February 1992, Mr. Simpson practiced public accounting with the firm of Ernst & Young, LLP. Mr. Simpson is a Certified Public Accountant and received his B.S. degree in Accounting and Computer Science from Oregon State University.
Walter C. Ogier joined the Company in March 1994 as Director of Marketing and was promoted to Vice President, Marketing during 1995. Prior to that, Mr. Ogier was at Baxter Healthcare Corporation's Immunotherapy Division, where he served as Director, Business Development from 1992 to 1994 and as Manager, Marketing and Business Development in charge of the company's cell therapy product lines from 1990 to 1992. Mr. Ogier previously held positions with Ibbottson Associates and with the Business Intelligence Center at SRI International (formerly Stanford Research Institute). Mr. Ogier received his B.A. degree in Chemistry from Williams College in 1979 and his Masters of Management degree from the Yale School of Management in 1987.
Thomas E. Muller, Ph.D. joined the Company in May 1994 as Vice President, Regulatory Affairs. Prior to that, Dr. Muller was Director, Biomedical Systems with W.R. Grace & Company in Lexington, Massachusetts. Prior to this, Dr. Muller was Vice President, Engineering and Director of Research and Development with the Renal Division of Baxter Healthcare in Deerfield, Illinois. Dr. Muller has also served as Adjunct Professor at Columbia University and as Visiting Professor at the University of Gent, Belgium. Dr. Muller graduated from the Technical University in Budapest, Hungary, in 1956 with a B.S. in Chemical Engineering. Dr. Muller received his M.S. degree in 1959 and was awarded a Ph.D. in 1964, both in Polymer Chemistry, from McGill University.
Alan K. Smith, Ph.D. joined the Company in November 1995 as Vice President, Research. Previously, Dr. Smith was Vice President of Research and Development at Genetic Sciences, Inc., a developmental stage bone marrow transplantation company. Prior to that, Dr. Smith held the position of Director, Cell Separations Research and Development of the Immunotherapy Division of Baxter Healthcare Corporation. In this capacity, he was responsible for the research and development activities for a stem cell concentration system approved for clinical use in Europe and currently in pivotal clinical trials in the United States. Dr. Smith has also held positions as Research and Development Manager at BioSpecific Technologies, as Director of Biochemistry at HyClone Laboratories and as a member of the Board of Directors of Dallas Biomedical. Dr. Smith received his B.S. degree in Chemistry from Southern Utah State College in 1976 and a Ph.D. in Biochemistry from Utah State University in 1983.
Stephen G. Emerson, M.D., Ph.D. a director since the inception of the Company in 1989, is a scientific founder of the Company and has been an active advisor of the Company since that time. Dr. Emerson has been a Professor of Medicine at the University of Pennsylvania since 1994 where he serves as head of Hematology and Oncology. From 1991 to 1994, Dr. Emerson was an Associate Professor of Medicine at the University of Michigan. Dr. Emerson received his doctorate degrees in Medicine and Cell Biology/Immunology from Yale University. He completed his internship and residency at Massachusetts General Hospital and his clinical and research fellowship in hematology at the Brigham and Women's Hospital, the Dana-Farber Cancer Institute and Children's Hospital Medical Center.
Albert B. Deisseroth, M.D., Ph.D. a director since August 1991, currently serves as an Ensign Professor of Medicine and the Chief, Section of Medical Oncology at Yale University and is a professor at both the University of Texas Graduate School of Biomedical Sciences and the University of Texas Health Science Center Medical
School in Houston, Texas. Prior to that, Dr. Deisseroth had been Chairman of the Department of Hematology and a Professor of Medicine and Cancer Treatment and Research at the University of Texas, M.D. Anderson Cancer Center in Houston, Texas. Previous to this, Dr. Deisseroth served as Professor of Medicine at the University of California, San Francisco, and Chief, Hematology/Oncology at the San Francisco Veteran's Administration Medical Center. Dr. Deisseroth received his doctorate degrees in Medicine and Biochemistry from the University of Rochester. Dr. Deisseroth is currently a member of the Scientific Advisory Boards of Ingenex, Inc., Genvec, Inc. and Incell.
G. Bradford Jones a director since April 1992, is a general partner of Brentwood V Ventures, L.P., the general partner of Brentwood Associates V, L.P. Brentwood Associates V, L.P. is a partnership organized by the firm Brentwood Venture Capital, which Mr. Jones joined in 1981. Mr. Jones was elected to the Board of Directors of the Company pursuant to the terms of the Series B Preferred Stock Purchase Agreement dated April 7, 1992 with the Company, of which Brentwood Associates V, L.P. is a party. Mr. Jones received a B.A. degree in Chemistry and an M.A. degree in Physics from Harvard University and M.B.A. and J.D. degrees from Stanford University. Mr. Jones also serves on the Board of Directors of Interpore International, ISOCOR, Onyx Acceptance Corporation, Plasma & Materials Technologies, and several privately-held companies.
Horst R. Witzel, Dr.-Ing. a director since June 1994, served as Chairman of the Board of Executive Directors of Schering AG in Berlin, Germany from 1986 until his retirement in 1989, whereupon he became a member of the Supervisory Board of Schering AG until 1994. Prior to that, Dr. Witzel held various leadership positions in research and development with Schering AG where he was responsible for worldwide production and technical services. Dr. Witzel received his doctorate in chemistry from the Technical University of West Berlin. Dr. Witzel also serves on the Board of Directors of The Liposome Company, Inc. and Cephalon, Inc. and is a member of the Supervisory Board of Brau and Brunnen AG.
Edward C. Wood, Jr. a director since August 1994, has served as president of Cobe BCT, Inc., a division of Cobe Laboratories, Inc., since 1991. Cobe is a subsidiary of Gambro AB, a Swedish company, a world leader in blood cell processing products. Prior to that, Mr. Wood held various positions in manufacturing, research and development, and marketing with Cobe. Mr. Wood received degrees in chemistry from Harvey Mudd College and in management from the University of Colorado.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
The Company has adopted provisions in its Restated Articles of Incorporation that limit the liability of its directors for monetary damages arising from a breach of their fiduciary duty as directors, except under certain circumstances which include breach of the director's duty of loyalty to the Company or its shareholders, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of the law.
The Company's Bylaws provide that the Company shall indemnify its directors to the fullest extent authorized or permitted by the Michigan Business Corporation Act. Additionally, the Company has entered into an Indemnification Agreement, originally dated as of December 14, 1993 (the "Indemnification Agreement"), with certain of its directors, officers and other key personnel, which may, in certain cases, be broader than the specific indemnification provisions contained under applicable law. The Indemnification Agreement may require the Company, among other things, to indemnify such officers, directors and key personnel against certain liabilities that may arise by reason of their status or service as directors, officers or employees of the Company, to advance the expenses incurred by such parties as a result of any threatened claims or proceedings brought against them as to which they could be indemnified, and to cover such officers, directors and key employees under the Company's directors' and officers' liability insurance policies to the maximum extent that insurance coverage is maintained.
At present, there is no pending litigation or proceeding involving a director, officer, employee or agent of the Company where indemnification by the Company will be required or permitted. The Company is not aware of any threatened litigation or proceeding which may result in a claim for such indemnification.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to or earned by the Company's Chief Executive Officer and all other executive officers of the Company whose salary and bonus for services rendered in all capacities to the Company during the fiscal year ended June 30, 1996 exceeded $100,000 (the "named executive officers"):
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION ------------------------------------- NAME AND 1996 OTHER ANNUAL ALL OTHER PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) COMPENSATION ($) ------------------ ---- ---------- --------- ---------------- ---------------- R. Douglas Armstrong, 1996 $156,962 $55,000 -- $8,885(1) Ph.D................... President and Chief Ex- ecutive Officer James Maluta............ 1996 $118,942 $10,000 -- -- Vice President, Product Development Thomas E. Muller, Ph.D.. 1996 $118,560 -- -- -- Vice President, Regula- tory Affairs Walter C. Ogier......... 1996 $106,250 $ 7,500 -- -- Vice President, Market- ing |
1996 Option Grants
The following table contains information about the stock option grants to the named executive officers in 1996:
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZED VALUE AT ASSUMED ANNUAL RATES OF STOCK PRICE APPRECIATION INDIVIDUAL GRANTS FOR OPTION TERM(1) ------------------------------------------------------------ ------------------- NUMBER OF % OF TOTAL SECURITIES OPTIONS GRANTED TO EXERCISE OR UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($) ---- ------------------ ------------------ ----------- ---------- -------- --------- R. Douglas Armstrong, Ph.D. ................. -- -- -- -- -- -- James Maluta............ -- -- -- -- -- -- Thomas E. Muller, Ph.D.. 6,667 4.3% 1.20 02/14/06 5,000 12,734 Walter C. Ogier......... 6,667 4.3% 1.20 02/14/06 5,000 12,734 |
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(1) The 5% and the 10% assumed rates of appreciation are established by the rules of the Securities and Exchange Commission and do not represent the Company's estimate or projection of the future Common Stock price. If the Common Stock price of $1.20 on the date of grant for the options granted in 1996 were to appreciate at the rates indicated, it would be $1.95 per share (at a 5% compounded appreciation) and $3.11 per share (at a 10% compounded appreciation) on the date of expiration of those options.
Option Exercises and Year-End Values
The following table provides information about the number of shares issued upon option exercise by the named executive officers during 1996, and the value realized by the named executive officers. The table also provides information about the number and value of options held by the named executive officers at June 30, 1996:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)(1) ------------------------- ------------------------- SHARES ACQUIRED ON VALUE NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ------------ ----------- ----------- ------------- ----------- ------------- R. Douglas Armstrong, Ph.D................... -- -- -- -- -- -- James Maluta............ 29,999 86,847 16,668 -- $48,254 -- Thomas E. Muller, Ph.D.. -- -- 15,000 18,334 29,925 $36,576 Walter C. Ogier......... 5,000 9,975 13,750 21,250 27,431 42,394 |
No compensation intended to serve as incentive for performance to occur over a period longer than one fiscal year was paid pursuant to a long-term incentive plan during the last fiscal year to any of the persons named in the Summary Compensation Table. The Company does not have any defined benefit or actuarial plan with any of the persons named in the Summary Compensation Table under which benefits are determined primarily by final compensation or average final compensation and years of service.
EMPLOYMENT AGREEMENTS
The Company has a policy of entering into employment agreements with all of its employees, and has entered into such agreements with all of its executive officers other than Dr. Armstrong. Such employment agreements generally establish salary levels (which are subject to periodic review) and provide for customary fringe benefits such as vacation leave, sick leave and health insurance. The agreements also generally provide for the protection of confidential information and the assignment to the Company of inventions conceived by the employee during his or her employment and permit the termination of the employment relationship by either party upon fourteen days prior written notice. The following is a summary of the employment agreements between the Company and its executive officers.
The Company entered into employment agreements with no defined terms with James Maluta, Walter C. Ogier, Thomas E. Muller, Ph.D., Alan K. Smith, Ph.D. and Todd E. Simpson in June 1992, February 1994, April 1994, October 1995 and December 1995, respectively. Pursuant to these agreements, the Company agreed to pay Messrs. Maluta, Ogier, Muller, Smith and Simpson annual base salaries of $90,000, $87,500, $110,000, $122,500 and $122,500, certain of which base salaries have been increased by the Board of Directors and are subject to annual review and adjustment. Pursuant to the terms of the foregoing employment agreements, either party may generally terminate the employment relationship without cause at any time upon 14 days prior written notice to the other party or immediately with cause upon notice.
STOCK OPTION AND EMPLOYEE BENEFIT PLANS
1989 STOCK OPTION PLAN
In 1989, the Company established the 1989 Stock Option Plan. As of September 30, 1996, options to purchase an aggregate of 932,266 shares of Common Stock have been exercised at $0.15 per share. Options to purchase 13,127 shares of Common Stock at $0.15 per share were cancelled unexercised. No additional shares remain available for grant under the 1989 Stock Option Plan.
ANCILLARY PLAN
In 1991, the Company established an Ancillary Plan to grant options to individuals who were not eligible to receive options under the 1989 Stock Option Plan. Options to purchase an aggregate of 7,498 shares of the Company's Common Stock were granted under the Ancillary Plan, of which options to purchase 4,328 shares have been exercised at $0.15 per share and the remaining options to purchase 3,170 shares have been cancelled. No additional shares remain available for grant under the Ancillary Plan.
AMENDED AND RESTATED 1992 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN
In 1992, the Company adopted the 1992 Incentive and Non-Qualified Stock Option Plan (the "1992 Plan"), providing for the grant of options to purchase 666,667 shares of Common Stock. The Company allocated an additional 100,000 shares of Common Stock during 1992, an additional 333,333 shares of Common Stock in 1994 and an additional 800,000 shares of Common Stock in 1996 to the 1992 Plan, resulting in a total share reserve of 1,900,000 shares. The 1992 Plan was amended and restated to its current form in 1996. Options under the 1992 Plan for a total of 462,840 shares have been exercised as of September 30, 1996. As of September 30, 1996, options to purchase 336,254 shares of Common Stock were outstanding with a weighted average exercise price of $1.27 per share.
The 1992 Plan provides for grants to employees and officers of "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, provided that such employee or officer is an employee on the date of grant. The 1992 Plan also provides for grants to employees, officers, consultants or service providers of nonqualified stock options. The 1992 Plan previously has been administered by the Board of Directors, but is currently administered by the Compensation Committee of the Board of Directors (the "Committee"). Each option granted pursuant to the 1992 Plan is authorized by the Committee and evidenced by a notice in such form as the Committee may from time to time determine.
The exercise price of each incentive stock option granted under the 1992 Plan must be at least equal to the fair market value of a share of Common Stock on the date of grant, except for incentive stock options granted to individuals who, at the time of grant, own stock possessing more than 10% of the total combined voting power of the Company, which options must have an exercise price of at least 110% of the fair market value of a share of Common Stock on the date of grant and must expire five years from the date of grant. The exercise price of each nonqualified stock option granted under the 1992 Plan must be at least 85% of the fair market value of the shares on the date of grant. No option shall be treated as an incentive stock option to the extent that such option would cause the aggregate fair market value (determined as of the date of grant of such option) of the shares with respect to which incentive stock options are exercisable by such optionee for the first time during any calendar year to exceed $100,000. The terms of all incentive stock options and nonqualified stock options granted under the 1992 Plan may not exceed ten years. The exercise price may be paid in cash or, at the Committee's discretion, by delivery of previously owned shares of the Company's Common Stock, by a combination of cash and shares, or any other form of legal consideration acceptable to the Committee. Options under the 1992 Plan generally may not be granted after April 2006.
The 1992 Plan provides that if the Company is a party to any merger in which the Company is not the surviving entity, any consolidation or dissolution (other than the merger or consolidation of the Company with one or more of its wholly-owned subsidiaries), the Company must cause any successor corporation to assume the options or substitute similar options for outstanding option or continue such options in effect. In the event that any successor to the Company in a merger, consolidation or dissolution will not assume the options or substitute similar options, then with respect to options held by optionees performing services for the Company, the time for exercising such options will be accelerated and such options will be terminated if not exercised prior to such merger, consolidation or dissolution.
1996 OUTSIDE DIRECTORS STOCK OPTION PLAN
A total of 150,000 shares of Common Stock have been reserved for issuance under the Company's 1996 Outside Directors Stock Option Plan (the "Directors Plan"). As of the effective date of this offering, no options have been granted under the Directors Plan. The Directors Plan provides for the automatic granting of non-qualified stock options to directors of the Company who are not employees of the Company ("Outside Directors"). Under the Directors Plan, each Outside Director serving on the effective date of this Offering or elected after the date of this offering will automatically be granted an option to purchase 5,000 shares of Common Stock on the effective date of this offering or on the date of his or her election or appointment. In addition, each serving Outside Director will thereafter automatically be granted an option to purchase 5,000 shares of Common Stock following each annual meeting of stockholders after their election, provided that the Outside Director continues to serve in such capacity and that the Outside Director has served continuously as a director for at least six months. The exercise price of the options in all cases will be equal to the fair market value of the Common Stock on the date of grant. Options granted under the Directors Plan generally vest over a one-year period in equal monthly installments and must be exercised within ten years from the date of grant.
1996 EMPLOYEE STOCK PURCHASE PLAN
A total of 250,000 shares of the Company's Common Stock have been reserved for issuance under the Company's 1996 Employee Stock Purchase Plan (the "Purchase Plan"), none of which have been issued. The Purchase Plan permits eligible employees to purchase Common Stock at a discount through payroll deductions, during sequential 24-month offering periods. Each offering period is divided into four consecutive six-month purchase periods. Unless otherwise provided by the Board of Directors prior to the commencement of an offering period, the price at which stock is purchased under the Purchase Plan for such offering period is equal to 85% of the lesser of the fair market value of the Common Stock on the first day of such offering period or the last day of the purchase period of such offering period. The initial offering period will commence on the effective date of this offering.
SECTION 401(K) PLAN
Effective January 1, 1994, the Company adopted the Aastrom Biosciences, Inc.
401(k) Plan (the "Plan"). The Plan is intended to be a qualified retirement
plan under the Internal Revenue Code. Employees of the Company are eligible to
participate in the Plan upon the completion of three consecutive months of
employment. Participants may make salary deferral contributions to the Plan of
up to 15% of compensation, subject to the limitations imposed under the
Internal Revenue Code. The Company may, but is not required to, make matching
contributions to the Plan based on the participants' salary-defined
contributions. Employer contributions are subject to a graduated vesting
schedule based upon an employee's years of service with the Company. It is not
anticipated that the Company will make any contributions to the Plan for the
1997 Plan Year. All contributions to the Plan are held in a trust which is
intended to be exempt from income tax under Section 501(a) of the Internal
Revenue Code. The Plan's trustees are R. Douglas Armstrong and Todd E.
Simpson. Participants may direct the investment of their contributions among
specified Merrill Lynch investment funds. The Plan may be amended or
terminated by the Company at any time, subject to certain restrictions imposed
by the Internal Revenue Code and the Employee Retirement Income Security Act
of 1974.
COMPENSATION OF DIRECTORS
Directors of the Company do not receive cash for services provided as a director, however, directors who are not employees of the Company will receive annual grants of options to purchase Common Stock in accordance with the Directors Plan. No stock options nor any other form of non-cash compensation was granted to directors of the Company during the Company's fiscal year ending June 30, 1996. See "Stock Option and Employee Benefit Plans--1996 Outside Directors Stock Option Plan."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS
During the fiscal year ended June 30, 1996, Robert J. Kunze, formerly an officer of the Company until 1991, R. Douglas Armstrong, President and Chief Executive Officer of the Company, and G. Bradford Jones were the members of the Compensation Committee of the Board of Directors. Dr. Armstrong resigned from the Compensation Committee and was replaced by Albert B. Deisseroth, M.D., Ph.D. on April 30, 1996, however, Mr. Kunze continues to be a member of this committee.
CERTAIN TRANSACTIONS
During the last three fiscal years, the Company sold Preferred Stock to certain holders of more than 5% of the outstanding shares of the Company, or to their affiliates, as described below.
In April 1995, the Company sold 775,001 shares of Series D Preferred Stock
at a price per share of $4.00 to the following investors: (i) H&Q Life Science
Technology Fund I purchased 167,001 shares for a purchase price of $668,004,
(ii) H&Q London Ventures purchased 100,000 shares for a purchase price of
$400,000, (iii) Brentwood Associates V, L.P. ("Brentwood") purchased 231,250
shares for a purchase price of $925,000, (iv) Windpoint Partners II, L.P.
purchased 89,250 shares for a purchase price of $357,000, and (v) the State
Treasurer of the State of Michigan ("Michigan") purchased 187,500 shares for a
purchase price of $750,000. In May 1995, Cobe purchased 1,250,000 shares of
Series D Preferred Stock for a purchase price of $5,000,000. Upon the closing
of this offering, each outstanding share of Series D Preferred Stock will be
converted into two-thirds of a share of Common Stock.
In April 1995, Dr. Armstrong and Dr. Emerson agreed to grant to Brentwood an option to purchase up to 28,000 shares and 14,667 shares of Common Stock, respectively, and, together with two other shareholders of the Company, an aggregate of up to 66,667 shares of Common Stock at a purchase price of $100,000. Brentwood exercised this option in April, 1996 purchasing an aggregate of 66,667 shares of Common Stock at a purchase price of $100,000 from such shareholders.
In September 1995, the Company and RPR entered into a collaborative relationship for use of the Aastrom CPS as a component of its lymphoid cell therapy program. On September 6, 1996, RPR notified the Company that it would not exercise its option to continue the collaboration. As a result, $3,500,000 million of option payments previously paid to the Company by RPR were converted into 205,882 shares of the Company's Series E Preferred Stock.
In October 1995, the Company repurchased 62,500 shares of Series D Preferred Stock from Brentwood at the original purchase price of $250,000 and in December 1995 resold these shares to Northwest Ohio Venture Fund, a shareholder of the Company, for a total purchase price of $250,000.
In January 1996, the Company sold 1,411,765 shares of Series E Preferred Stock at a price per share of $4.25 to the following investors: (i) Michigan purchased 470,588 shares for a total purchase price of $1,999,999, and (ii) SBIC Partners, L.P. purchased 941,777 shares for a total purchase price of $4,000,002. Upon the closing of this offering, each share of Series E Preferred Stock will be converted into two-thirds of a share of Common Stock.
On November 18, 1993, in connection with the purchase of Common Stock upon exercise of stock options granted to R. Douglas Armstrong under the 1989 Stock Option Plan, the Company loaned to Dr. Armstrong $120,000 at an interest rate of 4% per annum pursuant to a full recourse promissory note. Interest on the note is payable on an annual basis and principal and accrued but unpaid interest is due on June 30, 1997. Dr. Armstrong is the President and Chief Executive Officer and is a director of the Company.
On October 20, 1993, in connection with the purchase of Common Stock upon exercise of stock options granted to Stephen G. Emerson under the 1989 Stock Option Plan, the Company loaned to Dr. Emerson $47,303 at an interest rate of 6% per annum pursuant to a full recourse promissory note. Interest on the note is payable on an annual basis and principal and accrued but unpaid interest is due June 30, 1997. The loan is secured by 258,687 shares of Common Stock held by Dr. Emerson. Dr. Emerson is a director of the Company.
In October 1996, the Company executed a financing commitment with Cobe to provide the Company with up to $5,000,000 (the "Equity Commitment") and up to $5,000,000 in funding from Michigan under a convertible loan commitment agreement ("Convertible Loan Commitment"). As of the date of this Prospectus, the Company has not obtained any financing under these commitments. Both the Equity Commitment and the Convertible Loan Commitment will terminate upon the consummation of this offering.
Under the terms of the Equity Commitment, the Company has an option to sell up to $5,000,000 of Series F Preferred Stock at a price of $6.00 per share to Cobe upon at least ninety days notice, which notice may be given at any time until September 1, 1997. Cobe's obligation to purchase such shares will terminate upon the closing of this offering. Although no shares of Series F Preferred Stock are outstanding, any outstanding shares of Series F Preferred Stock would convert upon the closing of this offering into Common Stock based upon a conversion price of 80% of the price of two-thirds of a share of Common Stock sold in this offering. To the extent shares are sold to Cobe under the Equity Commitment, Cobe's preemptive right in the Company's next financing and the Company's Put Option to Cobe would be reduced.
Upon the sale of $5,000,000 of Series F Preferred Stock under the Equity Commitment, the Company becomes entitled to borrow funds from Michigan under the Convertible Loan Commitment. The Company may borrow such funds upon at least 45 days notice, which notice may be given during a period commencing on October 15, 1996 and ending on November 1, 1997. Upon the completion by the Company of a Qualifying Financing (as defined in the Convertible Loan Commitment), the Company has the option to repay outstanding principal and interest under the Convertible Loan Commitment in cash or to convert such borrowings into convertible Preferred Stock at a conversion price equivalent to 90% of the price per share in such financing. Under certain circumstances, the Convertible Loan Commitment converts or is convertible into Series G Preferred Stock. Interest accrues at an annual rate of 10% under the Convertible Loan Commitment, and the Company may repay such principal and interest at any time without penalty.
The Company has issued warrants to Michigan to purchase 69,444 shares of Common Stock as consideration for securing the Convertible Loan Commitment and has agreed to issue additional warrants to purchase 8,333 shares of Common Stock for each $1,000,000 borrowed under the Convertible Loan Commitment, as adjusted to the level of borrowing. The warrants become exercisable 90 days after the closing of this offering. The warrants expire on October 15, 2000 if not exercised, and may be exercised, in whole or in part, at a price equal to the lesser of (a) $9.00 per share, which price increases by $3.00 per share upon each anniversary of the closing of the offering made hereby; and (b) 85% of the fair market value of the Company's Common Stock at the time of exercise.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the shares of the Company's Common Stock as of September 30,
1996, and as adjusted to give effect to the sale of 3,250,000 shares of Common
Stock in this offering assuming (a) conversion of all of the Company's
outstanding shares of Preferred Stock into Common Stock and (b) no exercise of
the Underwriters' over-allotment option, and as adjusted to reflect the sale
of shares offered in this offering, (i) by each person the Company knows to be
the beneficial owner of 5% or more of the outstanding shares of Common Stock,
(ii) each named executive officer listed in the Summary Compensation Table,
(iii) each director of the Company, and (iv) all executive officers and
directors of the Company as a group.
PERCENTAGE BENEFICIALLY OWNED(1) --------------------------- SHARES BENEFICIALLY BEFORE THE AFTER THE BENEFICIAL OWNER OWNED(1) OFFERING OFFERING - ---------------- ------------------- ------------ ----------- H&Q Life Science(2)......... 1,061,334 10.6% 8.0% Technology Fund I One Bush Street, 18th Floor San Francisco, CA 94104 H&Q London Ventures......... 816,666 8.2% 6.2% One Bush Street, 18th Floor San Francisco, CA 94104 State Treasurer of the State 1,338,724 13.4% 10.1% of Michigan,(3)............ Custodian of certain re- tirement systems c/o Venture Capital Divi- sion 430 West Allegan Lansing, MI 48992 SBIC Partners, L.P.......... 627,451 6.3% 4.7% 201 Main Street, Suite 2302 Fort Worth, TX 76102 Brentwood Associates V, 745,831 7.5% 5.6% L.P.(4).................... 11150 Santa Monica Blvd., Suite 1200 Los Angeles, CA 90025 Wind Point Partners II, 559,500 5.6% 4.2% L.P........................ 676 N. Michigan Ave., Suite 3300 Chicago, IL 60611 Cobe Laboratories, Inc.(5).. 2,499,999 25.0% 18.9% 1185 Oak Street Lakewood, CO 80215 R. Douglas Armstrong, 501,555 5.0% 3.8% Ph.D.(6)................... Albert B. Deisseroth, M.D., 25,000 * * Ph.D. ..................... Stephen G. Emerson, M.D., 256,789 2.6% 1.9% Ph.D. ..................... G. Bradford Jones(7)........ 745,831 7.5% 5.6% Robert J. Kunze(8).......... 1,061,334 10.6% 8.0% James Maluta(9)............. 83,333 * * Thomas E. Muller, Ph.D.(10). 15,000 * * Walter C. Ogier(11)......... 20,833 * * Horst R. Witzel, Dr.- 8,237 * * Ing.(12)................... Edward C. Wood, Jr.(13)..... 2,499,999 25.0% 18.9% All officers and directors 5,237,911 52.1% 39.4% as a group (12 per- sons)(14).................. |
(1) Shares beneficially owned and percentage of ownership are based on
9,985,734 shares of Common Stock outstanding before this offering and
13,235,734 shares of Common Stock outstanding after the closing,
Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or disposition power with respect to
securities.
(2) Robert J. Kunze, Chairman of the Board of the Company, is a general
partner of H&Q Life Science Venture Partners. See footnote 8, below.
(3) Does not include 69,444 shares issuable upon exercise of warrants held by
Michigan that are exercisable 90 days after the closing of this offering.
(4) G. Bradford Jones, a director of the Company, is a general partner of
Brentwood Associates V Ventures, L.P., which is the general partner of
Brentwood Associates V, L.P. See footnote 7, below.
(5) In addition, pursuant to a Stock Purchase Agreement dated October 22, 1993
between Cobe and the Company, Cobe has an option to purchase from the
Company an amount of Common Stock equal to 30% of the Company's fully
diluted shares after the exercise of such option, at a purchase price
equal to 120% of the public market trading price of the Company's Common
Stock for a three-year period following the closing of this offering. Cobe
also has a right of first negotiation in the event the Company receives
any proposal concerning, or otherwise decides to pursue, a merger,
consolidation or other transaction in which all or a majority of the
Company's equity securities or all or substantially all of the Company's
assets, or any material portion of the assets of the Company used by the
Company in performing its obligations under the Distribution Agreement
would be acquired by a third party outside of the ordinary course of
business. Edward C. Wood, Jr., a director of the Company, is the President
of Cobe BCT, Inc., an affiliate of Cobe. See footnote 13, below.
(6) Does not include 333,333 shares issuable upon exercise of options held by
Dr. Armstrong that are exercisable upon the effective date of this
offering.
(7) Consists of 745,831 shares held by Brentwood Associates V, L.P. See
footnote 4, above. Mr. Jones, as a general partner of Brentwood Associates
V Ventures, L.P., which is the general partner of Brentwood Associates V,
L.P., may be deemed to beneficially own such shares, but Mr. Jones
disclaims beneficial ownership of all such shares except to the extent of
his pecuniary interest therein.
(8) Consists of 1,061,334 shares held by H&Q Life Science Technology Fund I.
See footnote 2, above. Mr. Kunze, as a general partner of H&Q Life Science
Venture Partners, may be deemed to beneficially own such shares, but Mr.
Kunze disclaims beneficial ownership of all such shares except to the
extent of his pecuniary interest therein.
(9) Includes 16,668 shares issuable upon exercise of options held by Mr.
Maluta that are exercisable within the 60-day period following September
30, 1996. Also includes 66,665 shares held of record by James Maluta and
Deborah Vincent, as Trustees, with shared voting and investment power, of
the James Maluta and Deborah Vincent Living Trust dated October 26, 1993.
(10) Consists of 15,000 shares issuable upon exercise of options held by Dr.
Muller that are exercisable within the 60-day period following September
30, 1996.
(11) Includes 15,833 shares issuable upon exercise of options held by Mr.
Ogier that are exercisable within the 60-day period following September
30, 1996.
(12) Includes 2,237 shares issuable upon exercise of options held by Dr.
Witzel that are exercisable within the 60-day period following September
30, 1996.
(13) Consists of 2,499,999 shares held by Cobe. See footnote 5, above. Mr.
Wood, as the President of Cobe BCT, Inc., an affiliate of Cobe, may be
deemed to beneficially own such shares, but Mr. Wood disclaims beneficial
ownership of all such shares.
(14) Includes 69,738 shares issuable upon exercise of options that are
exercisable within the 60-day period following September 30, 1996. Does
not include 333,333 shares issuable upon exercise of options that are
exercisable upon the effective date of this offering.
DESCRIPTION OF CAPITAL STOCK
Upon the closing of this offering, the authorized capital stock of the Company will consist of 40,000,000 shares of Common Stock, no par value per share, and 5,000,000 shares of Preferred Stock, no par value per share.
COMMON STOCK
As of September 30, 1996, without giving effect to the conversion of each share of Preferred Stock into Common Stock upon the closing of this offering, there were 1,887,312 shares of Common Stock outstanding held of record by 32 shareholders.
The holders of Common Stock are entitled to one vote per share on all matters to be voted upon by the shareholders. Subject to preferences that may be applicable to outstanding shares of Preferred Stock, the holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available therefor. See "Dividend Policy." In the event of liquidation, dissolution or winding up of the Company, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior liquidation rights of holders of Preferred Stock then outstanding. The Common Stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Common Stock. All outstanding shares of Common Stock are fully paid and nonassessable. 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 any shares of any Preferred Stock which the Company may designate and issue in the future.
PREFERRED STOCK
As of the closing of the offering, no shares of Preferred Stock will be outstanding. Thereafter, the Board of Directors will be authorized, without further shareholder approval, to issue up to 5,000,000 shares of Preferred Stock in one or more series and to fix the rights, preferences, privileges and restrictions granted or imposed upon any unissued shares of Preferred Stock and to fix the number of shares constituting any series and the designations of such series.
The issuance of Preferred Stock may have the effect of delaying or preventing a change in control of the Company. The issuance of Preferred Stock could decrease the amount of earnings and assets available for distribution to the holders of Common Stock or could adversely affect the rights and powers, including voting rights, of the holders of the Common Stock. In certain circumstances, such issuance could have the effect of decreasing the market price of the Common Stock. The Company currently has no plans to issue any shares of Preferred Stock.
MICHIGAN LAW AND CERTAIN CHARTER PROVISIONS
The Company is a Michigan corporation and is subject to certain anti- takeover provisions of the Michigan Business Corporation Act (the "MBCA") which could delay or make more difficult a merger or tender offer involving the Company. Chapter 7A of the MBCA prevents, in general, an "interested shareholder" (defined generally as a person owning 10% or more of a corporation's outstanding voting shares) from engaging in a "business combination" (as defined therein) with a Michigan corporation unless: (a) the Board of Directors issues an advisory statement, holders of 90% of the shares of each class of stock entitled to vote approve the transaction, and holders of two-thirds of the "disinterested" shares of each class of stock approve the transaction; or (b) the interested shareholder has been an interested shareholder for at least five years and has not acquired beneficial ownership of any additional shares of the corporation subsequent to the transaction which resulted in such shareholder being classified as an interested shareholder, and meets certain requirements, including, but not limited to, provisions relating to the fairness of the price and the form of consideration paid; or (c) the Board of Directors, by resolution, exempts a particular interested shareholder from these provisions prior to the interested
shareholder becoming an interested shareholder. The MBCA also contains certain other provisions which could have anti-takeover effects, including, but not limited to, Section 368, which pertains to "greenmail."
The Company's Bylaws provide that the Board of Directors is divided into three classes of directors, with each class serving a staggered three-year term. The classification system of electing directors may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of the Company and may maintain the incumbency of the Board of Directors, as it generally makes it more difficult for shareholders to replace a majority of the directors. The Company's Restated Articles of Incorporation eliminate the right of shareholders to act without a meeting and do not provide for cumulative voting in the election of directors. The amendment of any of these provisions would require approval by holders of at least two- thirds of the shares of outstanding Common Stock.
The foregoing and other statutory provisions and provisions of the Company's Restated Articles of Incorporation could have the effect of deterring certain takeovers or delaying or preventing certain changes in control or management of the Company, including transactions in which shareholders might otherwise receive a premium for their shares over then-current market prices.
REGISTRATION RIGHTS
Pursuant to the Amended and Restated Investors Rights Agreement, dated as of April 7, 1992, as amended (the "Investors Agreement"), certain holders of outstanding shares of Common Stock, including shares of Common Stock issuable upon conversion of the Preferred Stock (the "Registrable Securities"), are entitled to certain demand and incidental registration rights with respect to such shares, subject to certain customary limitations. Under the Investors Agreement, subject to certain exceptions, the holders of at least 50% of the Registrable Securities may require the Company to use its diligent best efforts to register Registrable Securities for public resale on one occasion (so long as such registration includes at least 20% of the Registrable Securities or a lesser percentage if the anticipated aggregate offering price net of underwriting discounts and commissions would exceed $2 million). In addition, whenever the Company proposes to register any of its securities under the Act, holders of Registrable Securities are entitled, subject to certain restrictions (including customary underwriters "cut back" limitations), to include their Registrable Securities in such registration. Subject to certain limitations, the holders of Registrable Securities may also require the Company to register such shares on Form S-3 no more than once every twelve months, provided that the anticipated aggregate proceeds would exceed $500,000. The Company is required to bear all registration and selling expenses (other than underwriter's discounts and commissions and more than a single special counsel to the selling shareholders) in connection with the registration of Registrable Securities in one demand registration and two piggy-back registrations. The participating investors are required to bear all expenses in connection with the registration of Registrable Securities on Form S-3.
Registration rights may be transferred to an assignee or transferee provided that such assignee or transferee acquires at least 66,667 shares of the Registrable Securities held by the transferring holder (13,333 shares in the case of a transfer from the holder of certain stock options). These registration rights may be amended or waived (either generally or in a particular instance) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding.
The registration rights granted under the Investors Agreement shall not be exercisable by a holder during the period in which the holder may sell all of the holder's shares under Rule 144 or Rule 144A during a single 90-day period.
Pursuant to the Stock Purchase Agreement between the Company and Cobe, dated October 22, 1993 (the "Cobe Stock Agreement"), the Company granted to Cobe certain stock registration rights for any and all of the Company's Common Stock which Cobe acquires by conversion or otherwise. Cobe's stock registration rights commence 30 months following an initial public offering, or earlier in the event of any termination of the Distribution Agreement. Pursuant to Cobe's registration rights, Cobe is entitled to two demand registration rights, and an unlimited number of piggyback registration rights. Cobe's stock registration rights are subject to
customary underwriter's "cut back" requirements. The registration rights granted to Cobe shall not be exercisable during the period in which Cobe has the ability to sell all of its shares pursuant to Rule 144 during a single ninety-day period. Subject to certain conditions, these registration rights may be transferred with the transfer of stock to certain affiliates of the transferor or to a transferee who acquires the greater of 66,667 shares or 20% of the transferor's registrable stock.
RIGHTS OF COBE
Pursuant to the Cobe Stock Agreement, Cobe purchased an aggregate of $10,000,000 of shares of the Company's Series C Preferred Stock. Such shares of Series C Preferred Stock will automatically convert into 1,666,666 shares of Common Stock upon consummation of the offering.
Pursuant to the Cobe Stock Agreement, Cobe also has certain preemptive rights to purchase a portion of any new stock issued by the Company, subject to certain exceptions, so as to enable Cobe to maintain its relative percentage ownership and voting power interests in the Company. Under the terms of the Cobe Stock Agreement, the Company also has the right to require Cobe to purchase stock issued by the Company in certain qualifying offerings, under certain circumstances (the "Put Option"). The Put Option may generally require Cobe to purchase up to 25% of the stock issued by the Company in a qualifying offering upon the same terms and conditions as the underwriters or other purchasers participating in the offering provided that Cobe shall not be required to purchase stock having an aggregate purchase price of more than $5 million. If the Company exercises its Put Option with respect to any such qualifying offering, Cobe has the option to purchase the greater of up to 40% of the number of shares to be offered in the qualifying offering or the number of shares necessary to maintain its percentage ownership interest in the Company.
Additionally, for a three-year period following the Company's completion of its initial public offering of stock, Cobe will have an option to purchase from the Company a quantity of new shares of the Company's Common Stock at a price equal to 120% of the public market trading price for the Company's Common Stock. The quantity of Common Stock to be purchased if Cobe exercises this option shall be equal to 30% of the Company's fully diluted shares after the exercise of this option.
In the Cobe Stock Agreement, the Company also granted to Cobe a "right of first negotiation" in the event the Company receives any proposal concerning, or otherwise decides to pursue, a merger, consolidation or other transaction in which all or a majority of the Company's equity securities or all or substantially all of the Company's assets, or any material portion of the assets of the Company used by the Company in performing its obligations under the Distribution Agreement would be acquired by a third party outside of the ordinary course of business.
Pursuant to the Stock Purchase Commitment Agreement with Cobe, dated October 29, 1996, the Company agreed to use reasonable and good faith efforts to cause a nominee of Cobe, who must be deemed by the Board of Directors to be qualified to be elected to the Board of Directors for as long as Cobe owns at least 15% of the outstanding Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have 13,235,734 shares of Common Stock outstanding, assuming no exercise of any outstanding options under any of the Company's option plans after September 30, 1996. Of these shares, the 3,250,000 shares of Common Stock sold in this offering will be freely transferable without restriction under the Securities Act unless they are held by the Company's affiliates as that term is used in Rule 144 under the Securities Act.
The remaining 9,985,734 shares (the "Restricted Shares") were issued and sold by the Company in private transactions in reliance upon exemptions from registration contained in the Act. A total of 6,873 Restricted Shares held for more than three years by shareholders who are not affiliates of the Company and who are not subject to the lock-up agreements described below will be eligible for sale in the public market in reliance upon Rule 144(k) immediately following the commencement of this offering. A total of 8,735,744 additional outstanding shares will be eligible for sale in the public market commencing 180 days from the date of this Prospectus without restriction, other than volume limitations in certain instances, upon the expiration of certain lock-up agreements referred to below. As of the date 90 days after the date of this Prospectus, 31,014 additional shares will be available for sale pursuant to Rule 144 or 701 under the Act, and 1,212,103 Restricted Shares will have been held for less than two years and will not be eligible for sale in the market until they have met the two-year holding period requirements of Rule 144. The executive officers and directors of the Company, and certain other stockholders and optionholders of the Company, have executed 180-day lock-up agreements. Cowen & Company may release some or all of the shares subject to lock-up agreements at any time without notice.
In general, under Rule 144, a person (or persons whose shares are
aggregated), stockholders, including an affiliate, who has beneficially owned
shares for at least two years is entitled to sell in broker transactions,
within any three-month period, commencing 90 days after this offering, a
number of shares that does not exceed the greater of (i) 1% of the then
outstanding Common Stock (approximately 132,357 shares immediately after this
offering assuming no exercise of the Underwriters' over-allotment option) or
(ii) the average weekly trading volume in the Common Stock during the four
calendar weeks preceding the sale, subject to the filing of a Form 144 with
respect to the sale and other limitations. In general, shares issued in
compliance with Rule 701 may be sold by non-affiliates subject to the manner
of sale requirements of Rule 144, but without compliance with the other
requirements of Rule 144. Affiliates may sell shares they acquired under Rule
701 in compliance with the provisions of Rule 144, except that there is no
required holding period. A person who is not an affiliate, has not been an
affiliate within three months prior to sale and has beneficially owned the
Restricted Shares for at least three years, is entitled to sell such shares
under Rule 144 without regard to any of the limitations described above.
The Company intends to file a registration statement under the Securities Act to register Common Stock reserved for issuance under its 1992 Plan, Directors Plan and Purchase Plan. Such registration statement is expected to become effective approximately 90 days after the date of this Prospectus. Shares issued upon exercise of outstanding stock options under such plan after the effective date of such registration statement generally will be available for sale in the public market. As of September 30, 1996, options to purchase a total of 336,254 shares of Common Stock were outstanding and 1,100,906 options remained available for grant under the 1992 Plan. No options have been granted under the Directors Plan.
The Company has also agreed not to offer, sell, contract to sell or otherwise dispose of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or any rights to acquire Common Stock for a period of 180 days after the date of this Prospectus, without the prior written consent of the Underwriters, subject to certain limited exceptions (including exercises of stock options).
Prior to this offering, there has been no public market for the Common Stock of the Company. No prediction can be made regarding the effect, if any, that the sale or availability for sale of shares of additional Common Stock will have on the market price of the Common Stock. Nevertheless, sales of substantial numbers of shares by existing stockholders or by stockholders purchasing in their offering could have a negative effect on the market price of the Common Stock.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the Underwriters named below (the "Underwriters"), through their Representatives, Cowen & Company and J.P. Morgan Securities Inc., have severally agreed to purchase from the Company the following respective number of shares of Common Stock at the initial public offering price less the underwriting discounts and commissions set forth on the cover page of this Prospectus:
NUMBER OF SHARES OF UNDERWRITER COMMON STOCK ----------- ------------ Cowen & Company................................................ J.P. Morgan Securities Inc..................................... --------- Total........................................................ 3,250,000 ========= |
The Underwriting Agreement provides that the obligations of the Underwriters are subject to certain conditions precedent and that the Underwriters will purchase all of the Common Stock offered hereby if any of such shares are purchased.
The Company has been advised by the Representatives of the Underwriters that the Underwriters propose to offer the shares of Common Stock to the public at the initial public offering price set forth on the cover page of this Prospectus and to certain dealers at such price less a concession not in excess of $ per share. The Underwriters may allow, and such dealers may reallot, a concession not in excess of $ per share to certain other dealers. After the initial public offering, the offering price and other selling terms may be changed by the Representatives of the Underwriters.
The Company has granted to the Underwriters an option, exercisable not later than 30 days after the date of this Prospectus, to purchase up to 487,500 additional shares of Common Stock at the initial public offering price less the underwriting discounts and commissions set forth on the cover page of this Prospectus. To the extent that the Underwriters exercise such option, each of the Underwriters will have a firm commitment to purchase approximately the same percentage thereof that the number of shares of Common Stock to be purchased by it shown in the above table bears to 3,250,000, and the Company will be obligated, pursuant to the option, to sell such shares to the Underwriters. The Underwriters may exercise such option only to cover over- allotments made in connection with the sale of the Common Stock offered hereby. If purchased, the Underwriters will offer such additional shares on the same terms as those on which the 3,250,000 shares are being offered.
The Company has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act.
The Company and its directors and officers, and certain of its other stockholders and optionholders, have entered into agreements providing that, for a period of 180 days after the date of this Prospectus, they will not, without the prior written consent of Cowen & Company, offer, sell, contract to sell or otherwise dispose of any shares of Common Stock or any securities convertible into, or exchangeable for, or warrants to purchase, any shares of Common Stock, or grant any option to purchase or right to acquire or acquire any option to dispose of any shares of Common Stock, except in certain limited circumstances. See "Shares Eligible for Future Sale."
The Representatives of the Underwriters have advised the Company that the Underwriters do not intend to confirm sales to any account over which they exercise discretionary authority.
Prior to this offering, there has been no public market for the Common Stock of the Company. Consequently, the initial public offering price for the Common Stock has been determined by negotiations between the Company and the Representatives of the Underwriters. Among the factors considered in such negotiations were prevailing market conditions, the results of operations of the Company in recent periods, the market capitalizations and stages of development of other companies that the Company and the Representatives of the Underwriters believe to be comparable to the Company, estimates of the business potential of the Company, the present state of the Company's development, and other factors deemed relevant.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is . Its telephone number in , is .
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the Company by Pepper, Hamilton & Scheetz, Detroit, Michigan. Michael B. Staebler, a partner at Pepper, Hamilton & Scheetz, is the beneficial owner of 3,333 shares of Common Stock. Gray Cary Ware & Freidenrich, A Professional Corporation, San Diego, California, has acted as special counsel to the Company in connection with the offering. Certain legal matters in connection with this offering will be passed upon for the Underwriters by Brobeck Phleger & Harrison LLP, New York, New York.
EXPERTS
The balance sheets of the Company as of June 30, 1995 and 1996, and the statements of operations, stockholders' equity, and cash flows for the years ended June 30, 1994, 1995 and 1996 and the cumulative period from March 24, 1989 (inception) to June 30, 1996 included in this Prospectus, have been included herein in reliance on the report of Coopers & Lybrand L.L.P., independent accountants, given upon the authority of that firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission, Washington, D.C. 20549, a Registration Statement on Form S-1 under the Securities Act of 1933, as amended, with respect to the Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information with respect to the Company and the Common Stock, reference is made to the Registration Statement and the exhibits and schedules filed as a part thereof. Statements contained in this Prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and, in each instance, if such contract or document is filed as an exhibit, reference is made to the copy of such contract or document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference to such exhibit. The Registration Statement, including exhibits and schedules thereto, may be inspected without charge at the Commission's principal office in Washington, D.C., and copies of all or any part thereof may be obtained from such office after payment of fees prescribed by the Commission.
The Company intends to furnish to its shareholders annual reports containing financial statements audited by its independent certified public accountants and make available to its stockholders quarterly reports containing unaudited financial data for the first three quarters of each fiscal year.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
PAGE ---- Report of Independent Accountants........................................ F-2 Balance Sheets as of June 30, 1995 and 1996 and September 30, 1996 (Unaudited)............................................................. F-3 Statements of Operations for the years ended June 30, 1994, 1995 and 1996, for the period from March 24, 1989 (Inception) to June 30, 1996, for the three months ended September 30, 1995 and 1996 (Unaudited) and for the period from March 24, 1989 (Inception) to September 30, 1996 (Unaudited)............................................................. F-4 Statements of Stockholders' Equity from March 24, 1989 (Inception) to June 30, 1996 and for the three months ended September 30, 1996 (Unaudited)............................................................. F-5 Statements of Cash Flows for the years ended June 30, 1994, 1995 and 1996, for the period from March 24, 1989 (Inception) to June 30, 1996, for the three months ended September 30, 1995 and 1996 (Unaudited) and for the period from March 24, 1989 (Inception) to September 30, 1996 (Unaudited)............................................................. F-6 Notes to Financial Statements............................................ F-7 |
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Aastrom Biosciences, Inc.:
We have audited the accompanying balance sheets of Aastrom Biosciences, Inc. (a Michigan corporation in the development stage) as of June 30, 1995 and 1996, and the related statements of operations, stockholders' equity, and cash flows for the years ended June 30, 1994, 1995 and 1996, and the cumulative period from March 24, 1989 (inception) to June 30, 1996. 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 generally accepted auditing standards. 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 Aastrom Biosciences, Inc. as of June 30, 1995 and 1996, and the results of its operations and its cash flows for the years ended June 30, 1994, 1995 and 1996, and the cumulative period from March 24, 1989 (inception) to June 30, 1996, in conformity with generally accepted accounting principles.
Detroit, Michigan
August 9, 1996
To the Board of Directors of
Aastrom Biosciences, Inc.:
The financial statements herein have been adjusted to give effect to the 2 for 3 reverse stock split of the Company's outstanding Common Shares as described more fully in Note 1 to the financial statements. The above report is in the form that will be signed by Coopers & Lybrand L.L.P. upon the effectiveness of such split assuming that, from October 31, 1996 to the effective date of such split, no other events shall have occurred that would affect the accompanying financial statements or notes thereto.
Coopers & Lybrand L.L.P.
Detroit, Michigan
October 31, 1996
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
PRO FORMA STOCKHOLDERS' JUNE 30, EQUITY AT ------------------------- SEPTEMBER 30, SEPTEMBER 30, 1995 1996 1996 1996 ------------------------- ------------- ------------- (UNAUDITED) (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents........... $ 2,680,000 $10,967,000 $ 5,908,000 Short-term investments. 8,388,000 -- 1,200,000 Receivables............ 99,000 81,000 220,000 Prepaid expenses....... 105,000 437,000 378,000 ------------ ----------- ----------- Total current assets. 11,272,000 11,485,000 7,706,000 PROPERTY, NET............ 1,279,000 1,188,000 1,225,000 ------------ ----------- ----------- Total assets......... $ 12,551,000 $12,673,000 $ 8,931,000 ============ =========== =========== LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses...... $ 328,000 $ 1,192,000 $ 841,000 Accrued employee expenses.............. 130,000 97,000 80,000 Current portion of capital lease obligations........... 270,000 223,000 192,000 Deferred revenue....... 225,000 122,000 53,000 ------------ ----------- ----------- Total current liabilities......... 953,000 1,634,000 1,166,000 CAPITAL LEASE OBLIGATIONS............. 412,000 189,000 147,000 COMMITMENTS (Note 7) STOCKHOLDERS' EQUITY: Preferred Stock, no par value, shares authorized--8,540,000, 9,951,765 and 10,157,647, respectively, issued and outstanding--8,040,001, 9,451,766 and 9,657,648, respectively (none--pro forma), (liquidation preference of $34,560,000 and $35,375,000 at June 30, 1996 and September 30, 1996, respectively)..... 28,253,000 34,218,000 37,718,000 $ -- Common Stock, no par value, shares authorized--17,000,000, 18,500,000 and 18,500,000, respectively, issued and outstanding--1,731,463, 1,886,479 and 1,887,312, respectively (9,985,734--pro forma).. 241,000 324,000 365,000 38,083,000 Deficit accumulated during the development stage................... (17,108,000) (27,025,000) (30,298,000) (30,298,000) Stockholder notes receivable.............. (198,000) (167,000) (167,000) (167,000) Stock purchase rights.... -- 3,500,000 -- -- Unrealized losses on investments............. (2,000) -- -- -- ------------ ----------- ----------- ----------- Total stockholders' equity................ 11,186,000 10,850,000 7,618,000 $ 7,618,000 ------------ ----------- ----------- =========== Total liabilities and stockholders' equity.............. $ 12,551,000 $12,673,000 $ 8,931,000 ============ =========== =========== |
The accompanying notes are an integral part of these financial statements.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
MARCH 24, MARCH 24, 1989 1989 THREE MONTHS ENDED (INCEPTION) YEAR ENDED JUNE 30, (INCEPTION) SEPTEMBER 30, TO -------------------------------------- TO JUNE 30, ------------------------ SEPTEMBER 30, 1994 1995 1996 1996 1995 1996 1996 ----------- ----------- ------------ ------------ ----------- ----------- ------------- (UNAUDITED) (UNAUDITED) REVENUES: Research and development agreements............ $ 49,000 $ 396,000 $ 1,342,000 $ 1,787,000 $ 172,000 $ 195,000 $ 1,982,000 Grants................. 823,000 121,000 267,000 1,995,000 39,000 29,000 2,024,000 ----------- ----------- ------------ ------------ ----------- ----------- ------------ Total revenues....... 872,000 517,000 1,609,000 3,782,000 211,000 224,000 4,006,000 COSTS AND EXPENSES: Research and development........... 5,627,000 4,889,000 10,075,000 25,075,000 1,195,000 3,160,000 28,235,000 General and administrative........ 1,565,000 1,558,000 2,067,000 7,089,000 446,000 452,000 7,541,000 ----------- ----------- ------------ ------------ ----------- ----------- ------------ Total costs and expenses............ 7,192,000 6,447,000 12,142,000 32,164,000 1,641,000 3,612,000 35,776,000 ----------- ----------- ------------ ------------ ----------- ----------- ------------ LOSS BEFORE OTHER INCOME AND EXPENSE............ (6,320,000) (5,930,000) (10,533,000) (28,382,000) (1,430,000) (3,388,000) (31,770,000) ----------- ----------- ------------ ------------ ----------- ----------- ------------ OTHER INCOME (EXPENSE): Interest income........ 245,000 279,000 678,000 1,576,000 149,000 126,000 1,702,000 Interest expense....... (65,000) (66,000) (62,000) (219,000) (18,000) (11,000) (230,000) ----------- ----------- ------------ ------------ ----------- ----------- ------------ Other income......... 180,000 213,000 616,000 1,357,000 131,000 115,000 1,472,000 ----------- ----------- ------------ ------------ ----------- ----------- ------------ NET LOSS................ $(6,140,000) $(5,717,000) $ (9,917,000) $(27,025,000) $(1,299,000) $(3,273,000) $(30,298,000) =========== =========== ============ ============ =========== =========== ============ PRO FORMA NET LOSS PER SHARE.................. $ (.82) $ (.66) $ (.98) $ (.13) $ (.32) =========== =========== ============ =========== =========== Pro forma weighted average number of common and common equivalent shares outstanding............ 7,461,000 8,644,000 10,103,000 10,094,000 10,107,000 =========== =========== ============ =========== =========== |
The accompanying notes are an integral part of these financial statements.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
DEFICIT ACCUMULATED PREFERRED STOCK COMMON STOCK DURING THE STOCKHOLDER STOCK UNREALIZED ---------------------- ------------------- DEVELOPMENT NOTES PURCHASE GAINS (LOSSES) SHARES AMOUNT SHARES AMOUNT STAGE RECEIVABLE RIGHTS ON INVESTMENTS --------- ----------- --------- -------- ------------ ----------- ---------- -------------- Balance, March 24, 1989 (Inception).... -- $ -- -- $ -- $ -- $ -- $ -- $ -- Non-cash issuance of Common Stock... 454,545 -- Issuance of Series A Preferred Stock at $1.00 per share in August 1989........... 1,500,000 1,500,000 Net loss........ (500,000) --------- ----------- --------- -------- ------------ --------- ---------- --------- Balance, June 30, 1990....... 1,500,000 1,500,000 454,545 -- (500,000) -- -- -- Issuance of Series A Preferred Stock in March 1991 at $1.00 per share, net of issuance costs of $5,000...... 1,000,000 995,000 Net loss........ (636,000) --------- ----------- --------- -------- ------------ --------- ---------- --------- Balance, June 30, 1991....... 2,500,000 2,495,000 454,545 -- (1,136,000) -- -- -- Issuance of Series B Preferred Stock in April 1992 at $2.00 per share, net of issuance costs of $46,000..... 3,030,000 6,014,000 Net loss........ (1,268,000) --------- ----------- --------- -------- ------------ --------- ---------- --------- Balance, June 30, 1992....... 5,530,000 8,509,000 454,545 -- (2,404,000) -- -- -- Issuance of Common Stock for services... 33,333 10,000 Exercise of stock option... 6,873 1,000 Net loss........ (2,847,000) --------- ----------- --------- -------- ------------ --------- ---------- --------- Balance, June 30, 1993....... 5,530,000 8,509,000 494,751 11,000 (5,251,000) -- -- -- Issuance of Series C Preferred Stock in October 1993 at $1,000 per share, net of issuance costs of $175,000.... 10,000 9,825,000 Exercise of stock options.. 1,222,609 229,000 (198,000) Net loss........ (6,140,000) --------- ----------- --------- -------- ------------ --------- ---------- --------- Balance, June 30, 1994....... 5,540,000 18,334,000 1,717,360 240,000 (11,391,000) (198,000) -- -- Issuance of Series D Preferred Stock in April and May 1995 at $4.00 per share, net of issuance costs of $81,000..... 2,500,001 9,919,000 Exercise of stock options.. 39,103 8,000 Retirement of Common Shares outstanding.... (25,000) (7,000) Unrealized loss on investments. (2,000) Net loss........ (5,717,000) --------- ----------- --------- -------- ------------ --------- ---------- --------- Balance, June 30, 1995....... 8,040,001 28,253,000 1,731,463 241,000 (17,108,000) (198,000) -- (2,000) Issuance of Series E Preferred Stock in January 1996 at $4.25 per share, net of issuance costs of $35,000..... 1,411,765 5,965,000 Exercise of stock options.. 130,016 53,000 Issuance of Common Stock at $1.20 per share.......... 25,000 30,000 Issuance of Stock Purchase Rights for cash in September 1995 and March 1996........... 3,500,000 Repurchase of Series D Preferred Stock at $4.00 per share.......... (62,500) (250,000) Sale of Series D Preferred Stock at $4.00 per share.......... 62,500 250,000 Principal payment received under stockholder note receivable..... 31,000 Unrealized gain on investments. 2,000 Net loss........ (9,917,000) --------- ----------- --------- -------- ------------ --------- ---------- --------- Balance, June 30, 1996....... 9,451,766 34,218,000 1,886,479 324,000 (27,025,000) (167,000) 3,500,000 -- Unaudited: Exercise of stock options.. 833 1,000 Issuance of Series E Preferred Stock to RPR at $17.00 per share.......... 205,882 3,500,000 (3,500,000) Compensation expense related to stock options granted........ 40,000 Net loss........ (3,273,000) --------- ----------- --------- -------- ------------ --------- ---------- --------- Balance, September 30, 1996 (Unaudited).... 9,657,648 $37,718,000 1,887,312 $365,000 $(30,298,000) $(167,000) $ -- $ -- ========= =========== ========= ======== ============ ========= ========== ========= TOTAL STOCKHOLDERS' EQUITY ------------- Balance, March 24, 1989 (Inception).... $ -- Non-cash issuance of Common Stock... -- Issuance of Series A Preferred Stock at $1.00 per share in August 1989........... 1,500,000 Net loss........ (500,000) ------------- Balance, June 30, 1990....... 1,000,000 Issuance of Series A Preferred Stock in March 1991 at $1.00 per share, net of issuance costs of $5,000...... 995,000 Net loss........ (636,000) ------------- Balance, June 30, 1991....... 1,359,000 Issuance of Series B Preferred Stock in April 1992 at $2.00 per share, net of issuance costs of $46,000..... 6,014,000 Net loss........ (1,268,000) ------------- Balance, June 30, 1992....... 6,105,000 Issuance of Common Stock for services... 10,000 Exercise of stock option... 1,000 Net loss........ (2,847,000) ------------- Balance, June 30, 1993....... 3,269,000 Issuance of Series C Preferred Stock in October 1993 at $1,000 per share, net of issuance costs of $175,000.... 9,825,000 Exercise of stock options.. 31,000 Net loss........ (6,140,000) ------------- Balance, June 30, 1994....... 6,985,000 Issuance of Series D Preferred Stock in April and May 1995 at $4.00 per share, net of issuance costs of $81,000..... 9,919,000 Exercise of stock options.. 8,000 Retirement of Common Shares outstanding.... (7,000) Unrealized loss on investments. (2,000) Net loss........ (5,717,000) ------------- Balance, June 30, 1995....... 11,186,000 Issuance of Series E Preferred Stock in January 1996 at $4.25 per share, net of issuance costs of $35,000..... 5,965,000 Exercise of stock options.. 53,000 Issuance of Common Stock at $1.20 per share.......... 30,000 Issuance of Stock Purchase Rights for cash in September 1995 and March 1996........... 3,500,000 Repurchase of Series D Preferred Stock at $4.00 per share.......... (250,000) Sale of Series D Preferred Stock at $4.00 per share.......... 250,000 Principal payment received under stockholder note receivable..... 31,000 Unrealized gain on investments. 2,000 Net loss........ (9,917,000) ------------- Balance, June 30, 1996....... 10,850,000 Unaudited: Exercise of stock options.. 1,000 Issuance of Series E Preferred Stock to RPR at $17.00 per share.......... -- Compensation expense related to stock options granted........ 40,000 Net loss........ (3,273,000) ------------- Balance, September 30, 1996 (Unaudited).... $7,618,000 ============= |
The accompanying notes are an integral part of these financial statements.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
MARCH 24, MARCH 24, 1989 1989 THREE MONTHS ENDED (INCEPTION) YEAR ENDED JUNE 30, (INCEPTION) SEPTEMBER 30, TO ------------------------------------- TO JUNE 30, ------------------------ SEPTEMBER 30, 1994 1995 1996 1996 1995 1996 1996 ----------- ----------- ----------- ------------ ----------- ----------- ------------- (UNAUDITED) (UNAUDITED) OPERATING ACTIVITIES: Net loss............... $(6,140,000) $(5,717,000) $(9,917,000) $(27,025,000) $(1,299,000) $(3,273,000) $(30,298,000) Adjustments to reconcile net loss to net cash used for operating activities: Depreciation and amortization........ 248,000 329,000 536,000 1,267,000 91,000 136,000 1,403,000 Loss on property held for resale.......... -- -- -- 110,000 -- -- 110,000 Amortization of discounts and premiums on investments......... -- (9,000) (110,000) (119,000) (48,000) -- (119,000) Expense related to stock and stock options granted..... -- -- -- 10,000 -- 40,000 50,000 Changes in assets and liabilities: Receivables........ 11,000 132,000 18,000 (81,000) 4,000 (139,000) (220,000) Prepaid expenses... (17,000) (59,000) (332,000) (437,000) 27,000 59,000 (378,000) Accounts payable and accrued expenses.......... (45,000) (40,000) 864,000 1,192,000 (35,000) (351,000) 841,000 Accrued employee expenses.......... 53,000 28,000 (33,000) 97,000 (58,000) (17,000) 80,000 Deferred revenue... 146,000 79,000 (103,000) 122,000 (172,000) (69,000) 53,000 ----------- ----------- ----------- ------------ ----------- ----------- ------------ Net cash used for operating activities.. (5,744,000) (5,257,000) (9,077,000) (24,864,000) (1,490,000) (3,614,000) (28,478,000) INVESTING ACTIVITIES: Organizational costs... -- -- -- (73,000) -- -- (73,000) Purchase of short-term investments........... (967,000) (10,981,000) -- (11,948,000) -- (1,200,000) (13,148,000) Maturities of short- term investments...... -- 3,567,000 8,500,000 12,067,000 2,500,000 -- 12,067,000 Capital purchases...... (320,000) (118,000) (445,000) (1,718,000) (15,000) (173,000) (1,891,000) Proceeds from sale of property held for resale................ -- -- -- 400,000 -- -- 400,000 ----------- ----------- ----------- ------------ ----------- ----------- ------------ Net cash provided by (used for) investing activities............ (1,287,000) (7,532,000) 8,055,000 (1,272,000) 2,485,000 (1,373,000) (2,645,000) FINANCING ACTIVITIES: Issuance of Preferred Stock................. 9,825,000 9,919,000 5,965,000 34,218,000 -- -- 34,218,000 Issuance of Common Stock................. 31,000 1,000 83,000 116,000 3,000 1,000 117,000 Payments received for stock purchase rights. -- -- 3,500,000 3,500,000 1,500,000 -- 3,500,000 Payments received under stockholder notes..... -- -- 31,000 31,000 -- -- 31,000 Principal payments under capital lease obligations........... (147,000) (214,000) (270,000) (762,000) (65,000) (73,000) (835,000) ----------- ----------- ----------- ------------ ----------- ----------- ------------ Net cash provided by (used for) financing activities............ 9,709,000 9,706,000 9,309,000 37,103,000 1,438,000 (72,000) 37,031,000 ----------- ----------- ----------- ------------ ----------- ----------- ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............ 2,678,000 (3,083,000) 8,287,000 10,967,000 2,433,000 (5,059,000) 5,908,000 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.... 3,085,000 5,763,000 2,680,000 -- 2,680,000 10,967,000 -- ----------- ----------- ----------- ------------ ----------- ----------- ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD................. $ 5,763,000 $ 2,680,000 $10,967,000 $ 10,967,000 $ 5,113,000 $ 5,908,000 $ 5,908,000 =========== =========== =========== ============ =========== =========== ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid.......... $ 65,000 $ 66,000 $ 62,000 $ 219,000 $ 18,000 $ 11,000 $ 230,000 =========== =========== =========== ============ =========== =========== ============ SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Additions to capital lease obligations..... $ 348,000 $ 270,000 $ -- $ 1,174,000 $ -- $ -- $ 1,174,000 =========== =========== =========== ============ =========== =========== ============ |
The accompanying notes are an integral part of these financial statements.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Overview--Aastrom Biosciences, Inc. (the "Company") was incorporated in March 1989 ("Inception") under the name Ann Arbor Stromal, Inc. The Company changed its name in 1991 concurrent with the commencement of employee-based operations. The Company is in the development stage with its principal business activities being research and product development, conducted both on its own behalf and in connection with various collaborative research and development agreements with other companies, involving the development of processes and instrumentation for the ex-vivo production of human stem cells and their progeny, and hematopoetic and other tissues. Successful future operations are subject to several technical and business risks, including satisfactory product development and obtaining regulatory approval and market acceptance for its products.
Significant Revenue Relationships--Two companies accounted for 77% of total revenues for the year ended June 30, 1995 and one company accounted for 83% of total revenues for the year ended June 30, 1996. These two companies have accounted for 47% of total revenues for the period from Inception to June 30, 1996. One company accounted for 82% and 87% of total revenues for the three months ended September 30, 1995 and 1996, respectively, and two companies accounted for 49% of total revenues for the period from Inception to September 30, 1996. Grant revenues consist of grants sponsored by the U.S. government.
Cash and Cash Equivalents--Cash and cash equivalents include cash and short- term investments with original maturities of three months or less.
Short-Term Investments--Short-term investments consist of U.S. government securities and commercial paper with original maturities of over three months but less than one year. Short-term investments are classified as available- for-sale, and are carried at market value, in accordance with Financial Accounting Standards Board Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities," which was adopted July 1, 1994. Application of this pronouncement results in the inclusion of unrealized gains and losses on investments in stockholders' equity. Application of this accounting treatment in prior periods would not have materially changed the amounts as presented.
Diversity of Credit Risk--The Company invests its excess cash in U.S. government securities and commercial paper, maintained in U.S. financial institutions, and has established guidelines relative to diversification and maturities in an effort to maintain safety and liquidity. The Company plans to continue to invest its excess funds in short-term, investment grade, interest- bearing instruments. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates. The Company has not experienced any significant losses on its cash equivalents or short-term investments.
Property--Property is recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset (primarily five years) or the remaining lease term, if shorter, with respect to leasehold improvements and certain capital lease assets.
Revenue Recognition--Revenue from grants and research agreements is recognized on a cost reimbursement basis consistent with the performance requirements of the related agreement. Funding received in advance of costs incurred is presented as deferred revenue in the accompanying financial statements.
Research and Development Costs--Research and development costs are expensed as incurred. Such costs and expenses related to programs under collaborative agreements with other companies totaled $49,000, $146,000 and $1,294,000 for the years ended June 30, 1994, 1995 and 1996, respectively, and $1,489,000 for the period from Inception to June 30, 1996 and $158,000, $117,000 and $1,606,000 for the three months ended September 30, 1995 and 1996 and for the period from Inception to September 30, 1996, respectively.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
Restatement of Common Stock Information--The Company's Board of Directors authorized a two-for-three reverse stock split of the Company's Common Stock ("Reverse Stock Split") to be effected prior to the closing of the proposed IPO. Accordingly, all references in the accompanying financial statements to common share or per common share information have been restated to reflect the Reverse Stock Split.
Pro Forma Information (Unaudited)--Pro forma net loss per share is computed using the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares are not included in the per-share calculation where the effect of their inclusion would be anti- dilutive, except that common and common equivalent shares issued during the 12 month period preceding the filing of the registration statement for the proposed initial public offering ("IPO"), contemplated in the Prospectus in which these financial statements are included, at a price below $8.00 per share (the lowest expected selling price in the proposed IPO) are considered to be cheap stock and have been included in the calculation as if they were outstanding for all periods using the treasury stock method, if applicable, even though their inclusion is anti-dilutive. Upon the completion of the Company's proposed IPO, all 9,657,648 shares of the Company's outstanding Preferred Stock will automatically convert into 8,098,422 shares of Common Stock. As a result, all outstanding shares of Preferred Stock are assumed to have been converted to Common Stock at the time of issuance, except for those shares considered to be cheap stock which are treated as outstanding for all periods presented. The pro forma effect of these conversions has been reflected in the accompanying balance sheet assuming the conversion had occurred on September 30, 1996.
Historical net loss per share information is not considered meaningful due to the significant changes in the Company's capital structure which will occur upon the closing of the proposed IPO; accordingly, such per-share data information is not presented.
Use of Estimates--The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to financial statements. Actual results could differ from those estimates.
Financial Instruments--Management evaluates the fair value of those assets and liabilities identified as financial instruments under Statement of Financial Accounting Standards No. 107 and estimates that the fair value of such financial instruments generally approximates the carrying value in the accompanying financial statements. Fair values have been determined through information obtained from market sources and management estimates.
Recent Pronouncements--During October 1995, the Financial Accounting Standards Board issued Statement No. 123, "Accounting for Stock-Based Compensation," which establishes a fair value based method of accounting for stock-based compensation and incentive plans and requires additional disclosures for those companies that elect not to adopt the new method of accounting. Adoption of this pronouncement is required for the Company's fiscal year beginning July 1, 1996 and the Company intends to provide the additional disclosures required by the pronouncement in its financial statements for the year ended June 30, 1997.
During March 1995, the Financial Accounting Standards Board issued Statement No. 121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which requires the Company to review for impairment of long-lived assets, certain identifiable intangibles, and goodwill related to those assets whenever events or changes in circumstances indicate that the carrying amount of an asset
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED) might not be recoverable. In certain situations, an impairment loss would be recognized. SFAS 121 will become effective for the Company's fiscal year beginning July 1, 1996. Management has studied the effect of implementing SFAS 121 and, based upon its initial evaluation, does not expect it to have a significant impact on the Company's financial condition or results of operations.
Unaudited Financial Information--The financial information as of September 30, 1996, and for the three-month periods ended September 30, 1995 and 1996, and for the period from Inception to September 30, 1996, is unaudited. In the opinion of management, such information contains all adjustments, consisting only of normal recurring accruals, necessary for a fair statement of the results of operations for the interim periods. The results of operations for the three months ended September 30, 1996, are not necessarily indicative of the results to be expected for the full year.
2. SHORT-TERM INVESTMENTS
All short-term investments are available-for-sale, and have maturities of one year or less and are summarized as follows:
GROSS GROSS UNREALIZED UNREALIZED ESTIMATED COST GAINS LOSSES FAIR VALUE ---------- ---------- ---------- ---------- June 30, 1995: U.S. Government Securities.... $4,890,000 $ -- $ (2,000) $4,888,000 Commercial Paper.............. 3,500,000 -- -- 3,500,000 ---------- -------- -------- ---------- $8,390,000 $ -- $ (2,000) $8,388,000 ========== ======== ======== ========== GROSS GROSS UNREALIZED UNREALIZED ESTIMATED COST GAINS LOSSES FAIR VALUE ---------- ---------- ---------- ---------- September 30, 1996 (Unaudited): U.S. Government Securities.... $1,200,000 $ -- $ -- $1,200,000 ========== ======== ======== ========== |
3. PROPERTY
Property consists of the following:
JUNE 30, ---------------------- SEPTEMBER 30, 1995 1996 1996 ---------- ---------- ------------- (UNAUDITED) Machinery and equipment............... $1,140,000 $1,337,000 $1,341,000 Office equipment...................... 405,000 482,000 604,000 Leasehold improvements................ 380,000 520,000 567,000 ---------- ---------- ---------- 1,925,000 2,339,000 2,512,000 Less accumulated depreciation and amortization......................... (646,000) (1,151,000) (1,287,000) ---------- ---------- ---------- $1,279,000 $1,188,000 $1,225,000 ========== ========== ========== |
Equipment under capital leases totaled $1,162,000, $1,131,000 and $1,131,000 at June 30, 1995 and 1996 and September 30, 1996, respectively, with related accumulated amortization of $407,000, $622,000 and $679,000, respectively (Note 7).
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
4. STOCKHOLDERS' EQUITY:
Preferred Stock--The Company has the following outstanding Convertible Preferred Stock:
SHARES SHARES ISSUED AND OUTSTANDING LIQUIDATION PREFERENCE AT AUTHORIZED --------------------------------- ------------------------- SEPTEMBER 30, JUNE 30, JUNE 30, SEPTEMBER 30, JUNE 30, SEPTEMBER 30, 1996 1995 1996 1996 1996 1996 ------------- --------- --------- ------------- ----------- ------------- (Unaudited) (Unaudited) (Unaudited) Series A................ 2,500,000 2,500,000 2,500,000 2,500,000 $ 2,500,000 $ 2,500,000 Series B................ 3,030,000 3,030,000 3,030,000 3,030,000 6,060,000 6,000,000 Series C................ 10,000 10,000 10,000 10,000 10,000,000 10,000,000 Series D................ 3,000,000 2,500,001 2,500,001 2,500,001 10,000,000 10,000,000 Series E................ 1,617,647 -- 1,411,765 1,617,647 6,000,000 6,875,000 ---------- --------- --------- --------- ----------- ----------- 10,157,647 8,040,001 9,451,766 9,657,648 $34,560,000 $35,375,000 ========== ========= ========= ========= =========== =========== |
All preferred shares have voting rights equal to the equivalent number of common shares into which they are convertible. Conversion rights on all outstanding classes of preferred stock are on a two-for-three basis to give effect for the Reverse Stock Split, except for the Series C Preferred Stock, each share of which is convertible into approximately 250 shares of Common Stock. Conversion rights on certain classes of preferred stock are subject to anti-dilution adjustments. Dividends accrue annually at 8% on all series of Preferred Stock, but do not accumulate. No cash dividends have been declared or paid through September 30, 1996. Dividends and liquidation preferences on the Series B, Series C and Series D Preferred Stock are senior to those of the Series A Preferred Stock. Dividends and liquidation preferences on the Series E Preferred Stock are senior to those of all other outstanding series of preferred stock. Conversion of preferred stock is automatic in the event of the closing of an underwritten public stock offering meeting certain minimum requirements such as the offering contemplated by the Prospectus in which these financial statements are included.
Cobe Laboratories, Inc. Stock Purchase Rights--In connection with the purchase of the Series C Preferred Stock by Cobe Laboratories, Inc. ("Cobe") in October 1993, Cobe received a preemptive right to purchase a pro-rata portion of any newly issued shares of stock by the Company in order to maintain its then current percentage ownership interest. Any such purchase of newly issued shares shall be at the net price to the Company after deducting underwriters' discounts and commissions, if any. Cobe has waived its right to such discount on its intended purchase of shares in the proposed IPO. The Company has an option ("Put Option") to require Cobe to purchase the lesser of 20%, or $5,000,000, in an offering of equity securities meeting certain minimum requirements. In the event that the Company exercises the Put Option, Cobe then has the option to purchase up to 40% of that offering.
During the three-year period following the completion of an initial public offering of Common Stock by the Company, Cobe has an option to purchase additional shares from the Company equal to 30% of the total number of shares outstanding assuming exercise of the option. Such option, if exercised, must be exercised in full with the purchase price of the shares being established at 120% of the public market trading price as determined by the 30-day average market price preceding the date of exercise of the option.
The Company has granted Cobe a right of first negotiation in the event the Company receives any proposal concerning, or otherwise decides to pursue, a merger, consolidation or other transaction in which all or a majority
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED) of the Company's equity securities or all or substantially all of the Company's assets, or any material portion of the assets of the Company used by the Company in performing its obligations under the Distribution Agreement (Note 6) would be acquired by a third party outside of the ordinary course of business.
Stock Option Plans--The Company has various stock option plans which provide for the issuance of nonqualified and incentive stock options to acquire up to 2,836,594 shares of Common Stock. Such options may be granted by the Company's Board of Directors to certain of the Company's founders, employees, directors and consultants. The exercise price of incentive stock options shall not be less than the fair market value of the shares on the date of grant. In the case of individuals who are also holders of 10% or more of the outstanding shares of Common Stock, the exercise price of incentive stock options shall not be less than 110% of the fair market value of the shares on the date of grant. The exercise price of non-qualified stock options shall not be less than 85% of the fair market value on the date of grant. Options granted under these plans expire no later than ten years from the date of grant and generally become exercisable ratably over a four-year period following the date of grant.
For certain options granted, the Company recognizes compensation expense for the difference between the deemed value for accounting purposes and the option exercise price on the date of grant. During the three-month period ended September 30, 1996, compensation expense totaling approximately $40,000 has been charged with respect to these options. Additional future compensation expense with respect to the issuance of such options totals approximately $130,000 and will be recognized through October 2000.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
The following table summarizes option activity under the Company's stock
option plans:
OPTIONS OPTIONS AVAILABLE EXERCISE PRICE OUTSTANDING FOR GRANT PER SHARE ----------- ---------- -------------- March 24, 1989(Inception) Options authorized................. -- 1,703,261 Options granted.................... 1,528,778 (1,528,778) $ .15 - $ .30 Options exercised.................. (6,873) -- $ .15 - $ .15 Options canceled................... (13,793) 13,793 $ .15 - $ .15 ---------- ---------- Balance, June 30, 1993............... 1,508,112 188,276 $ .15 - $ .30 Options granted.................... 198,333 (198,333) $ .30 - $1.20 Options exercised.................. (1,222,609) -- $ .15 - $ .30 Options canceled................... (90,171) 90,171 $ .15 - $1.20 ---------- ---------- Balance, June 30, 1994............... 393,665 80,114 $ .15 - $1.20 Options authorized................. -- 333,333 Options granted.................... 55,333 (55,333) $ 1.20 - $1.20 Options exercised.................. (39,103) -- $ .30 - $ .30 Options canceled................... (60,230) 60,230 $ .30 - $1.20 ---------- ---------- Balance, June 30, 1995............... 349,665 418,344 $ .15 - $1.20 Options authorized................. -- 800,000 Options granted.................... 155,337 (155,337) $ 1.20 - $3.20 Options exercised.................. (130,016) -- $ .15 - $1.20 Options canceled................... (44,690) 44,690 $ .30 - $1.20 ---------- ---------- Balance, June 30, 1996............... 330,296 1,107,697 $ .30 - $3.20 Unaudited: Options granted.................... 13,334 (13,334) $ 3.20 - $3.20 Options exercised.................. (833) -- $ 1.20 - $1.20 Options canceled................... (6,543) 6,543 $ 1.20 - $1.20 ---------- ---------- Balance, September 30, 1996 (Unaudited)......................... 336,254 1,100,906 $ .30 - $3.20 ========== ========== Options Exercisable, 101,021 June 30, 1996....................... ========== $ .30 - $1.20 September 30, 1996 (Unaudited)...... 122,612 $ .30 - $1.20 ========== |
Common Shares Reserved--The Company has reserved shares of Common Stock for future issuance as follows:
JUNE 30, SEPTEMBER 30, 1996 1996 --------- ------------- (Unaudited) Issuance under 1992 Stock Option Plan................ 1,437,993 1,437,160 Conversion of preferred stock........................ 7,961,168 8,098,422 --------- --------- 9,399,161 9,535,582 ========= ========= |
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
5. FEDERAL INCOME TAXES
Deferred tax assets consist of the following:
JUNE 30, ------------------------ 1995 1996 ----------- ----------- Net operating loss carryforwards................... $ 5,280,000 $ 9,210,000 Tax credits and other.............................. 360,000 440,000 ----------- ----------- Gross deferred tax assets.......................... 5,640,000 9,650,000 Deferred tax assets valuation allowance............ (5,640,000) (9,650,000) ----------- ----------- $ -- $ -- =========== =========== |
Due to the historical losses incurred by the Company, a full valuation allowance for deferred tax assets has been provided. If the Company achieves profitability, these deferred tax assets may be available to offset income taxes. The Company's net operating loss and tax credit carryforwards will expire from 2004 through 2011, if not utilized.
The Company's ability to utilize its net operating loss and tax credit carryforwards would be limited in the event of a future change in ownership for tax purposes. Such a change in ownership may likely occur upon the completion of an initial public offering of the Company's Common Stock.
6. LICENSES, ROYALTIES AND COLLABORATIVE AGREEMENTS
University of Michigan--In March 1989, the Company entered into a research agreement with the University of Michigan (the "University") for the development of an adaptable, high-efficiency blood cell factory and to conduct related research. Under the terms of this research agreement, as amended, the Company agreed to reimburse the University for research costs in this regard through the date of its expiration in December 1994. Payments made to the University under the aforementioned agreements totaled $316,000, $121,000 and $2,521,000 for the years ended June 30, 1994, 1995, for the period from Inception to June 30, 1996. As part of this relationship, the Company issued to the University 454,545 shares of Common Stock in August 1989. No value has been assigned to these shares in the accompanying financial statements. In March 1992, the Company entered into a license agreement for the technology developed under the research agreement. The license agreement, as amended, provides for a royalty to be paid to the University equal to 2% of net sales of products containing the licensed technology sold by the Company.
Cobe BCT, Inc.--In connection with the issuance of the Series C Preferred Stock to Cobe in October 1993, the Company and Cobe BCT, Inc. ("Cobe BCT"), an affiliate of Cobe, entered into an agreement which grants to Cobe BCT exclusive worldwide distribution and marketing rights to the Company's Cell Production System ("CPS") for stem cell therapy applications ("Distribution Agreement"). The term of the Distribution Agreement is ten years, with an option, exercisable by Cobe BCT, to extend the term for an additional ten years. Pursuant to the Distribution Agreement, Cobe BCT will perform worldwide marketing and distribution activities of the CPS for use in stem cell therapy and will receive a share of the resulting net sales, as defined, ranging from 38% to 42%, subject to certain negotiated discounts and volume-based adjustments.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
The agreements establishing this collaboration provided for payments totaling $5,000,000 to be made by Cobe BCT upon the Company meeting certain development milestones. In May 1995, the Company accepted, as part of the sale of the Series D Preferred Stock, an equity investment of $5,000,000 from Cobe in lieu of those future milestone payments.
M.D. Anderson Cancer Center--In December 1992, the Company entered into a research agreement with the University of Texas, M.D. Anderson Cancer Center ("M.D. Anderson"). Under this agreement, the Company funded certain research being conducted at M.D. Anderson and issued to M.D. Anderson 33,333 shares of its Common Stock subject to vesting rights over the succeeding four year period. In November 1994, the Company and M.D. Anderson terminated the collaboration and 25,000 shares of Common Stock held by M.D. Anderson were returned to the Company.
License and Royalty Agreements--In July 1992, the Company licensed certain cell culture technology under which it obtained an exclusive worldwide license to the technology in exchange for a royalty of up to 3% of net sales on products utilizing the licensed technology.
In March 1996, the Company executed a license agreement which provides for the use of licensed products in the CPS. Pursuant to this license agreement, the Company recorded a charge to research and development expense of $1,500,000 representing the license fee payable upon execution of the agreement. The license agreement provides for annual renewal fees of $1,000,000 over the five year license term and can be extended at the Company's option for an additional five years.
Rhone-Poulenc Rorer Inc.--In September 1995, the Company entered into a research and development collaboration with Rhone-Poulenc Rorer Inc. ("RPR"), granting RPR a right to license the Company's CPS for Lymphoid cell applications. Prior to the establishment of this collaboration, the Company received a option fee of $250,000 and a development deposit of $225,000 to initiate the preliminary research and development plan. Pursuant to the agreements establishing this collaboration, RPR was obligated to fund certain costs associated with the development of the CPS for Lymphoid cell applications and was entitled to make equity purchases of up to $12,500,000 subject to the Company's satisfaction of certain milestones and RPR's decision to exercise certain options. As of June 30, 1996, the Company has received $3,500,000 in equity payments and recognized $1,342,000 in research revenue through June 30, 1996 and $1,537,000 through September 30, 1996. The remaining $9,000,000 equity payment was to be paid by RPR by October 1996 pending RPR's evaluation of the research efforts for Lymphoid cell applications and its decision to proceed with the collaboration (Note 9).
7. COMMITMENTS
The Company leases certain machinery and equipment and office equipment under capital leases. Obligations under these leasing arrangements bear interest at rates ranging from 9.7% to 12.1% and mature at dates ranging from November 1996 to May 1999. Additionally, the Company leases its facilities under an operating lease which expires in May 1998, at which time the Company has the option to renew the lease for an additional period of up to five years.
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
Future minimum payments under capital leases and non-cancelable operating leases are as follows:
CAPITAL OPERATING LEASES LEASES -------- --------- Year Ended June 30, 1997................................................ $255,000 $453,000 1998................................................ 138,000 435,000 1999................................................ 69,000 -- -------- -------- Total minimum lease payments.......................... 462,000 $888,000 ======== Less amount representing interest..................... (50,000) -------- Obligations under capital lease....................... $412,000 ======== |
Certain of the Company's capital lease agreements contain restrictive provisions which require that the Company's total assets exceed its total liabilities by at least $1,000,000. Should the Company fall out of compliance with this provision, and a waiver cannot be obtained from the lessor, remaining amounts due under the leases become immediately due and payable.
Rent expense for the years ended June 30, 1994, 1995 and 1996, was $176,000, $241,000 and $338,000, respectively, and for the period from Inception to June 30, 1996 was $822,000. Rent expense for the three months ended September 30, 1995 and 1996, was $83,000 and $107,000, respectively, and for the period from Inception to September 30, 1996 was $929,000.
8. EMPLOYEE SAVINGS PLAN
The Company has a 401(k) plan that became effective in January 1994. The plan allows participating employees to contribute up to 15% of their salary, subject to annual limits and minimum qualifications. The Board may, at its sole discretion, approve Company contributions. Through June 30, 1996, the Company has made no contributions to the plan.
9. SUBSEQUENT EVENTS (UNAUDITED)
In September 1996, RPR notified the Company of its intent to terminate its collaboration with the Company. This notification was made after RPR had determined that for strategic reasons its support for the development of the technologies being pursued under the collaboration would be discontinued. As a result of this termination, no further equity payments or research funding is due from RPR and RPR's license rights to the Company's CPS for Lymphoid cell applications are terminated. Upon termination of the collaboration, RPR became entitled to receive shares of the Company's Series E Preferred Stock at $17.00 per share for the $3,500,000 in equity payments made by RPR under the collaboration. Accordingly, the accompanying financial statements as of September 30, 1996 reflect the issuance of 205,882 shares of Series E Preferred Stock issuable to RPR in this regard.
In October 1996, the Company executed a financing commitment for up to $5,000,000 in additional equity funding from Cobe ("Equity Commitment") and $5,000,000 in funding under a convertible loan agreement ("Convertible Loan Commitment") with another current investor. Under the terms of the Equity Commitment,
AASTROM BIOSCIENCES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED) the Company may sell up to $5,000,000 of preferred stock at $6.00 per share during a funding period that extends from January 1997 to December 1997. The conversion rights of such preferred stock will be adjusted to provide for a conversion at 80% of the per share price in the Company's next financing, as adjusted for the Reverse Stock Split, and provided that such financing meets certain minimum requirements ("Qualifying Financing"), such as the proposed IPO in which these financial statements appear. If such a financing is not completed by December 1997, then the conversion rights of this class of preferred stock into Common Stock will be set at $6.98 per share of Common Stock. To the extent shares are sold to Cobe under the Equity Commitment, its preemptive right in the Company's next Qualifying Financing and the Company's Put Option to Cobe is reduced to the extent of its purchase.
Upon the sale of $5,000,000 in preferred stock under the Equity Commitment, the Company becomes entitled to borrow funds under the Convertible Loan Commitment. Such funds may be borrowed by the Company during a funding period that extends from January 1997 to September 1997. Upon the completion of a Qualifying Financing by the Company, the Company has the option to repay outstanding borrowings under the Convertible Loan Commitment, in cash, or to convert such borrowings into preferred stock. The conversion rights of such class of preferred stock will be adjusted to provide for a conversion at 90% of the per share price in the Company's next Qualifying Financing, as adjusted for the Reverse Stock Split. If such financing is not completed by December 1997, then the conversion rights of this class of preferred stock will be set at $6.98 per share of Common Stock. Interest accrues at 10% on amounts borrowed under the Convertible Loan Commitment, which is due at maturity, and may be retired in a manner consistent with principal. The Company may repay borrowed amounts at anytime prior to the maturity date which is established for all amounts borrowed as one year from the date of the first borrowing.
In connection with the Convertible Loan Commitment, the Company has issued warrants to purchase 69,444 shares of Common Stock for securing the commitment. The Company will issue additional warrants to purchase 8,333 shares of Common Stock for each $1,000,000 borrowed under the Convertible Loan Commitment, with such additional warrants to be prorated to the level of borrowing. The warrants expire on October 15, 2000 if not exercised, and may be exercised, in whole or in part, at a price equal to the lesser of (a) $9.00 per share, which price increases by $3.00 per share on each anniversary of the closing of the offering being made in the Prospectus to which these financial statements are included; or (b) 85% of the fair market value of the Company's Common Stock at the time of exercise.
The Equity Commitment and the Convertible Loan Commitment expire upon the closing of an initial public offering by the Company.
No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this Prospectus, and, if given or made, such information or representation must not be relied upon as having been authorized by the Company or any of the Underwriters or any other person. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the shares of Common Stock offered, nor does it constitute an offer to sell or a solicitation of an offer to buy any of the securities offered to any person in any jurisdiction or in which it is unlawful to make such offer or solicitation to such person. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances create an implication that the information contained herein is correct as of any date subsequent to the date hereof.
TABLE OF CONTENTS
PAGE ---- Prospectus Summary........................................................ 3 Risk Factors.............................................................. 5 The Company............................................................... 14 Use of Proceeds........................................................... 14 Dividend Policy........................................................... 14 Capitalization............................................................ 15 Dilution.................................................................. 16 Selected Financial Data................................................... 17 Management's Discussion and Analysis of Financial Condition and Results of Operations............................................................... 18 Business.................................................................. 22 Management................................................................ 41 Certain Transactions...................................................... 49 Principal Stockholders.................................................... 51 Description of Capital Stock.............................................. 53 Shares Eligible for Future Sale........................................... 56 Underwriting.............................................................. 57 Legal Matters............................................................. 58 Experts................................................................... 58 Additional Information.................................................... 58 Index to Financial Statements............................................. F-1 |
Until , 1997 (25 days after the date of this Prospectus), all dealers effecting transactions in the Common Stock offered, whether or not participating in this distribution, may be required to deliver a Prospectus. This is in addition to the obligation of dealers to deliver a Prospectus when acting as Underwriters and with respect to their unsold allotments or subscriptions.
3,250,000 Shares
[LOGO] AASTROM BIOSCIENCES INC
Common Stock
COWEN & COMPANY
J.P. MORGAN & CO.
, 1996
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Other expenses in connection with the registration of the securities hereunder, which will be paid by the Company, will be substantially as follows:
ITEM AMOUNT ---- -------- Securities and Exchange Commission registration fee................ $ 11,326 NASD filing fee.................................................... 4,238 Nasdaq National Market fee......................................... 50,000 Blue sky qualification fees and expenses........................... 20,000 Accounting fees and expenses....................................... 85,000 Legal fees and expenses............................................ 350,000 Printing and engraving expenses.................................... 115,000 Transfer agent and registrar fees.................................. 7,500 Officers' and Directors' Insurance................................. 200,000 Miscellaneous expenses............................................. 56,936 -------- Total............................................................ $900,000 ======== |
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 1561 through 1565 of the Michigan Business Corporation Act (the "MBCA") authorize a corporation to grant or a court to award, indemnity to directors, officers, employees and agents 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.
The Bylaws of the Company (see Exhibit 3.4), provide that the Company shall, to the fullest extent authorized or permitted by the MBCA, or other applicable law, indemnify a director or officer who was or is a party or is threatened to be made a party to any proceeding by or in the right of the Company to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the Company, against expenses, including actual and reasonable attorneys' fees, and amounts paid in settlement incurred in connection with the action or suit, if the indemnitee acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of the Company or its shareholders. This section also authorizes the Company to advance expenses incurred by any agent of the Company in defending any proceeding prior to the final disposition of such proceeding upon receipt of an undertaking by or on behalf of the agent to repay such amount unless it shall be determined ultimately that the agent is entitled to be indemnified.
The Bylaws also authorize the Company to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company against any liability asserted against or incurred by such person in such capacity or arising out of such person's status as such, regardless of whether the Company would have the power to indemnify such person against such liability under the provisions of the MBCA.
The Company has entered into an indemnification agreement with certain of its directors, officers and other key personnel, which contains provisions that may in some respects be broader than the specific indemnification provisions contained under applicable law. The indemnification agreement may require the Company, among other things, to indemnify such directors, officers and key personnel against certain liabilities that may arise by reason of their status or service as directors, officers or employees of the Company, to advance the expenses incurred by such parties as a result of any threatened claims or proceedings brought against them as to which
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they could be indemnified, and, to the maximum extent that insurance coverage of such directors, officers and key employees under the Company's directors' and officers' liability insurance policies is maintained.
Section 1209 of the MBCA permits a Michigan corporation to include in its Articles of Incorporation a provision eliminating or limiting a director's liability to a corporation or its shareholders for monetary damages for breaches of fiduciary duty. The enabling statute provides, however, that liability for breaches of the duty of loyalty, acts or omissions not in good faith or involving intentional misconduct or knowing violation of the law, or the receipt of improper personal benefits cannot be eliminated or limited in this manner. The Company's Restated Articles of Incorporation include a provision which eliminates, to the fullest extent permitted by the MBCA director liability for monetary damages for breaches of fiduciary duty.
Section 6 of the Underwriting Agreement filed as Exhibit 1.1 hereto sets forth certain provisions with respect to the indemnification of certain controlling persons, directors and officers against certain losses and liabilities, including certain liabilities under the Securities Act.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
(a)ISSUANCES OF COMMON STOCK
Since October 1, 1993, the Company has sold the following shares of Common Stock:
In October 1995, the registrant issued 37,500 shares of Common Stock to Albert B. Deisseroth at a price of $.80 per share.
(b) ISSUANCES OF SHARES OF PREFERRED STOCK
Since October 1, 1993, the Company has sold the following shares of Preferred Stock:
In October 1993, the registrant issued 10,000 shares of Series C Preferred Stock to Cobe at a price of $1,000 per share.
In April and May 1995, the registrant issued an aggregate of 2,500,001 shares of Series D Preferred Stock to 11 accredited investors at a price of $4.00 per share.
In December 1995, the registrant issued 62,500 shares of Series D Preferred Stock to Northwest Ohio Venture Fund, L.P. at a purchase price of $4.00 per share.
In January 1996, the registrant issued an aggregate of 1,411,765 shares of Series E Preferred Stock to SBIC Partners, L.P. and the State Treasurer of the State of Michigan at a purchase price of $4.25 per share.
Pursuant to a Governance Agreement between the Company and Rhone-Poulenc Rorer Inc. ("RPR"), dated September 15,1995, RPR terminated its contractual relationship with the Company on September 6, 1996. As a result of such termination, the Company became obligated to issue 205,882 shares of Series E Preferred Stock to RPR at a purchase price of $17.00 per share.
The Company believes that each such sale and issuance of securities was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.
(c) OPTION ISSUANCES TO, AND EXERCISES BY, EMPLOYEES AND DIRECTORS
From January 18, 1990 to the present, the registrant has granted options to purchase a total of 2,945,174 shares of Common Stock at exercise prices ranging from $.10 to $2.13 per share to 95 employees and one non-employee director. No consideration was paid to the Registrant by any recipient of any of the foregoing options for the grant of any such options. From October 30, 1992 to the present, the Registrant issued a total of 2,829,735 shares of Common Stock to 26 employees and one non-employee director upon exercise of stock options at exercise prices ranging from $.10 to $2.13 per share.
There were no underwriters employed in connection with any of the transactions set forth in Item 15.
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The issuances described in Items 15(a) were exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act as transactions by an issuer not involving a public offering. The issuances described in Item 15(b) were exempt from registration under the Securities Act in reliance on Rule 701 promulgated thereunder as transactions pursuant to compensatory benefit plans and contracts relating to compensation. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates and other instruments issued in such transactions.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
1.1* Form of Underwriting Agreement. 3.1 Restated Articles of Incorporation. 3.2* Form of Restated Articles of Incorporation (to be filed with the Secretary of State of the State of Michigan prior to the closing of this offering). 3.3 Bylaws, as amended. 4.1* Specimen Common Stock Certificate. 4.2 Amended and Restated Investors' Rights Agreement dated April 7, 1992. 5.1* Opinion of Pepper, Hamilton & Scheetz, counsel to the Company, with respect to the legality of the securities being registered, including their consent to being named in the Registration Statement. 10.1 Form of Indemnification Agreement. 10.2 1989 Stock Option Plan and form of agreement thereunder. 10.3 Ancillary Stock Option Plan and form of agreement thereunder. 10.4 401(k) Plan. 10.5 Amended and Restated 1992 Incentive and Non-Qualified Stock Option Plan and forms of agreements thereunder. 10.6 1996 Outside Directors Stock Option Plan and forms of agreements thereunder. 10.7 1996 Employee Stock Purchase Plan and form of agreement thereunder. 10.8 Form of Employment Agreement. 10.9 Stock Purchase Agreement dated October 22, 1993 between Cobe Laboratories, Inc. and the Company and amendment thereto dated October 29, 1996. 10.10** Distribution Agreement dated October 22, 1993 between Cobe BCT, Inc. and the Company and amendments thereto dated March 29, 1995, September 11, 1995 and October 29, 1996. 10.11 License Agreement dated July 17, 1992 between J.G. Cremonese and the Company and related addenda thereto dated July 14, 1992 and July 7, 1993. 10.12** Collaborative Product Development Agreement dated May 10, 1994 between SeaMED Corporation and the Company. 10.13** Collaborative Product Development Agreement dated November 8, 1994 between Ethox Corporation and the Company. |
II-3
10.14** License and Supply Agreement dated April 1, 1996 between Immunex Corporation and the Company.
10.15 Lease Agreement dated May 18, 1992 between Domino's Farms Holding, L.P. and the Company and amendments thereto dated February 26, 1993, October 3, 1994, November 16, 1994 and July 29, 1996.
10.16 Clinical Trial Agreement dated April 19, 1996 between the Company and the University of Texas M.D. Anderson Cancer Center.
10.17 License Agreement dated March 13, 1992 between the Company and the University of Michigan and amendments thereto dated March 13, 1992, October 8, 1993 and June 21, 1995.
10.18 Employee Proprietary Information and Invention Agreement effective June 1, 1991 between the Company and R. Douglas Armstrong.
10.19 Employment Agreement dated June 19, 1992 between the Company and James Maluta.
10.20 Employment Agreement dated December 8, 1995 between the Company and Todd E. Simpson, C.P.A.
10.21 Employment Agreement dated February 10, 1994 between the Company and Walter C. Ogier.
10.22 Employment Agreement dated April 19, 1994 between the Company and Thomas E. Muller, Ph.D.
10.23 Employment Agreement dated October 26, 1995 between the Company and Alan K. Smith, Ph.D.
10.24 Promissory Note dated November 18, 1993 for $120,000 loan by the Company to R. Douglas Armstrong and amendment thereto dated October 30, 1996.
10.25 Promissory Note dated October 20, 1993 for $47,303 loan by the Company to Stephen G. Emerson, M.D., Ph.D and amendment thereto dated October 30, 1996.
10.26 Consulting Agreement dated June 1, 1995 between the Company and Stephen G. Emerson, M.D., Ph.D.
10.27 Clinical Trial Agreement dated August 28, 1996 between the Company and Loyola University Medical Center Cancer Center.
10.28 Stock Purchase Commitment Agreement dated October 29, 1996 between Cobe Laboratories, Inc. and the Company.
10.29 Convertible Loan Commitment Agreement dated October 15, 1996 between the State Treasurer of the State of Michigan and the Company.
10.30* Forms of Subscription Agreement for the purchase of Series D Preferred Stock. 10.31* Stock Purchase Agreement dated January 8, 1996 among the Company, SBIC Partners, L.P. and the State Treasurer of the State of Michigan. 11.1 Computation of earnings per share. 23.1 The consent of Coopers & Lybrand, L.L.P. 23.2* The consent of Pepper, Hamilton & Scheetz is contained in their opinion filed as Exhibit 5.1 of the Registration Statement. II-4 |
24.1 Power of Attorney is contained on the signature page of this Registration Statement (see page II-6). 27.1 Financial Data Schedule. 27.2 Financial Data Schedule. 27.3 Financial Data Schedule. 27.4 Financial Data Schedule. 27.5 Financial Data Schedule. 27.6 Financial Data Schedule. - -------- |
*To be filed by Amendment.
**The Company has applied for confidential treatment with respect to certain
portions of these documents.
(b)Financial Statement Schedules
Schedules other than those referred to above have been omitted because they are not applicable or not required under the instructions contained in Regulation S-X or because the information is included elsewhere in the Financial Statements or the notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the Underwriters 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 Securities and Exchange Commission 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 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 its 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-5
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 the City of Ann Arbor, State of Michigan, on the 1st day of November, 1996.
AASTROM BIOSCIENCES, INC.
/s/ R. Douglas Armstrong By: ___________________________________ R. Douglas Armstrong, Ph.D. President and Chief Executive Officer (Principal Executive Officer) |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints R. Douglas Armstrong and Todd E. Simpson, or either of them, as his attorney-in-fact, each with full power of substitution for him in any and all capacities, to sign any and all amendments to this Registration Statement, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorney-in- fact or his substitute or substitutes may do or cause to be done by virtue hereof.
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 DATE --------- ----- ---- /s/ R. Douglas Armstrong ____________________________________ President, Chief Executive Officer, November 1, 1996 R. Douglas Armstrong, Ph.D. and Director (Principal Executive Officer) /s/ Todd E. Simpson ____________________________________ Vice President, Finance & Administration November 1, 1996 Todd E. Simpson and Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Robert J. Kunze ____________________________________ Chairman of the Board and Director November 1, 1996 Robert J. Kunze /s/ Albert B. Deisseroth ____________________________________ Director November 1, 1996 Albert B. Deisseroth, M.D., Ph.D. /s/ Stephen G. Emerson ____________________________________ Director November 1, 1996 Stephen G. Emerson, M.D., Ph.D. /s/ G. Bradford Jones ____________________________________ Director November 1, 1996 G. Bradford Jones /s/ Horst R. Witzel ____________________________________ Director November 1, 1996 Horst R. Witzel, Dr.-Ing. /s/ Edward C. Wood ____________________________________ Director November 1, 1996 Edward C. Wood, Jr. |
II-6
EXHIBIT INDEX
1.1* Form of Underwriting Agreement. 3.1 Restated Articles of Incorporation. 3.2* Form of Restated Articles of Incorporation (to be filed with the Secretary of State of the State of Michigan prior to the closing of this offering). 3.3 Bylaws, as amended. 4.1* Specimen Common Stock Certificate. 4.2 Amended and Restated Investors' Rights Agreement dated April 7, 1992. 5.1* Opinion of Pepper, Hamilton & Scheetz, counsel to the Company, with respect to the legality of the securities being registered, including their consent to being named in the Registration Statement. 10.1 Form of Indemnification Agreement. 10.2 1989 Stock Option Plan and form of agreement thereunder. 10.3 Ancillary Stock Option Plan and form of agreement thereunder. 10.4 401(k) Plan. 10.5 Amended and Restated 1992 Incentive and Non-Qualified Stock Option Plan and forms of agreements thereunder. 10.6 1996 Outside Directors Stock Option Plan and forms of agreements thereunder. 10.7 1996 Employee Stock Purchase Plan and form of agreement thereunder. 10.8 Form of Employment Agreement. 10.9 Stock Purchase Agreement dated October 22, 1993 between Cobe Laboratories, Inc. and the Company and amendment thereto dated October 29, 1996. 10.10** Distribution Agreement dated October 22, 1993 between Cobe BCT, Inc. and the Company and amendments thereto dated March 29, 1995, September 11, 1995 and October 29, 1996. 10.11 License Agreement dated July 17, 1992 between J.G. Cremonese and the Company and related addenda thereto dated July 14, 1992 and July 7, 1993. 10.12** Collaborative Product Development Agreement dated May 10, 1994 between SeaMED Corporation and the Company. 10.13** Collaborative Product Development Agreement dated November 8, 1994 between Ethox Corporation and the Company. 10.14** License and Supply Agreement dated April 1, 1996 between Immunex Corporation and the Company. |
10.15 Lease Agreement dated May 18, 1992 between Domino's Farms Holding, L.P. and the Company and amendments thereto dated February 26, 1993, October 3, 1994, November 16, 1994 and July 29, 1996.
10.16 Clinical Trial Agreement dated April 19, 1996 between the Company and the University of Texas M.D. Anderson Cancer Center.
10.17 License Agreement dated March 13, 1992 between the Company and the University of Michigan and amendments thereto dated March 13, 1992, October 8, 1993 and June 21, 1995.
10.18 Employee Proprietary Information and Invention Agreement effective June 1, 1991 between the Company and R. Douglas Armstrong.
10.19 Employment Agreement dated June 19, 1992 between the Company and James Maluta.
10.20 Employment Agreement dated December 8, 1995 between the Company and Todd E. Simpson, C.P.A.
10.21 Employment Agreement dated February 10, 1994 between the Company and Walter C. Ogier.
10.22 Employment Agreement dated April 19, 1994 between the Company and Thomas E. Muller, Ph.D.
10.23 Employment Agreement dated October 26, 1995 between the Company and Alan K. Smith, Ph.D.
10.24 Promissory Note dated November 18, 1993 for $120,000 loan by the Company to R. Douglas Armstrong and amendment thereto dated October 30, 1996.
10.25 Promissory Note dated October 20, 1993 for $47,303 loan by the Company to Stephen G. Emerson, M.D., Ph.D and amendment thereto dated October 30, 1996.
10.26 Consulting Agreement dated June 1, 1995 between the Company and Stephen G. Emerson, M.D., Ph.D.
10.27 Clinical Trial Agreement dated August 28, 1996 between the Company and Loyola University Medical Center Cancer Center.
10.28 Stock Purchase Commitment Agreement dated October 29, 1996 between Cobe Laboratories, Inc. and the Company.
10.29 Convertible Loan Commitment Agreement dated October 15, 1996 between the State Treasurer of the State of Michigan and the Company.
10.30* Forms of Subscription Agreement for the purchase of Series D Preferred Stock. 10.31* Stock Purchase Agreement dated January 8, 1996 among the Company, SBIC Partners, L.P. and the State Treasurer of the State of Michigan. 11.1 Computation of earnings per share. 23.1 The consent of Coopers & Lybrand, L.L.P. 23.2* The consent of Pepper, Hamilton & Scheetz is contained in their opinion filed as Exhibit 5.1 of the Registration Statement. 24.1 Power of Attorney is contained on the signature page of this Registration Statement (see page II-6). 27.1 Financial Data Schedule. 27.2 Financial Data Schedule. 27.3 Financial Data Schedule. 27.4 Financial Data Schedule. 27.5 Financial Data Schedule. 27.6 Financial Data Schedule. - -------- |
*To be filed by Amendment.
**The Company has applied for confidential treatment with respect to certain
portions of these documents.
[COLOR DIAGRAM OF CELL LINEAGES OF HUMAN BONE MARROW STEM CELLS]
- ----------------------------- - ------------------------------------------------- Name T. Knox Bell, Esq. - ------------------------------------------------- Address Gray Cary Ware & Freidenrich 4365 Executive Drive, Suite 1600 - ------------------------------------------------- City State Zip Code San Diego CA 92121 EFFECTIVE DATE - ------------------------------------------------- ----------------------------- |
Document will be returned to the name and address you enter above
RESTATED ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC PROFIT CORPORATIONS
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972, the undersigned corporation executes the following Articles:
Ann Arbor Stromal, Inc.
The following Restated Articles of Incorporation supersede the Articles of Incorporation as amended and shall be the Articles of Incorporation for the corporation:
ARTICLE I
Aastrom Biosciences, Inc.
ARTICLE III - -------------------------------------------------------------------------------- The total authorized shares: Common shares 20,300,000 Preferred shares 10,990,980 -------------------------- -------------------- |
A statement of all or any of the relative rights, preferences and limitations of the shares of each class is as follow:
See Rider attached hereto and made a part hereof.
ARTICLE IV
36th Floor, 100 Renaissance Center, Detroit, Michigan 48243 ---------------------------------------------- --------------------- (Street Address) (Zip Code) |
2. The mailing address of the current registered office, if different than above:
Michigan
----------------------------------------------, ---------------------
(Street Address or P.O. Box) (City) (Zip Code)
ARTICLE V (Optional. Delete if not applicable)
ARTICLE VI (Optional. Delete if not applicable)
Article VII. (Additional provisions, if any, may be inserted here; attach additional pages if needed.)
See Rider attached hereto and made a part hereof.
5. COMPLETE SECTION (a) IF THE RESTATED ARTICLES WERE ADOPTED BY THE UNANIMOUS CONSENT OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF DIRECTORS; OTHERWISE, COMPLETE SECTION (b). DO NOT COMPLETE BOTH.
a. [ ] These Restated Articles of Incorporation were duly adopted on the ____________ day of
____________, 19 __________ in accordance with the provisions of
Section 642 of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the Board of Directors.
Signed this ________ day of ___________________, 19 ___________.
______________________________________ ______________________________ ______________________________________ ______________________________ (Signatures of Incorporators: Type or Print Name Under Each Signature) |
b. [X] These Restated Articles of Incorporation were duly adopted on the
31st day of October, 1996 in accordance with the provisions of
Section 642 of the Act and: (check one of the following)
[ ] were duly adopted by the Board of Directors without a vote of the shareholders. These Restated Articles of Incorporation only restate and integrate and do not further amend the provisions of the Articles of Incorporation as heretofore amended and there is no material discrepancy between those provisions and the provisions of these Restated Articles.
[ ] were duly adopted by the shareholders. The necessary number of shares as required by statute we voted in favor of these Restated Articles.
[X] were duly adopted by the written consent of the shareholders having not less than the minimum number of votes required by statute in accordance with Section 407(1) of the Act. Written notice to shareholders who have not consented in writing has been given. (Note: Written consent by less than all of the shareholders is permitted only if such provision appears in the Articles of Incorporation.)
[ ] were duly adopted by the written consent of all the shareholders entitled to vote in accordance with section 407(2) of the Act.
Signed this 31st day of October, 1996.
By /s/ R. Douglas Armstrong ---------------------------------------------------------- (Only Signature of President, Vice-President, Chairperson, or Vice-Chairperson) |
Name of person or organization Preparer's name and business remitting fees: telephone number: - ---------------------------------- ---------------------------------- ( ) - ---------------------------------- ---------------------------------- |
INFORMATION AND INSTRUCTIONS
1. The articles of incorporation cannot be restated until this form, or a comparable document, is submitted.
2. Submit one original of this document. Upon filing, the document will be added to the records of the Corporation and Securities Bureau. The original will be returned to the address appearing in the box on the front as evidence of filing.
Since this document will be maintained on optical disk media, it is important that the filing be legible. Documents with poor black and white contrast, or otherwise illegible, will be rejected.
3. This document is to be used pursuant to sections 641 through 643 of the Act for the purpose of restating the articles of incorporation of a domestic profit corporation. Restated articles of incorporation are an integration into a single instrument of the current provisions of the corporation's articles of incorporation, along with any desired amendments to those articles.
4. Restated articles of incorporation which do not amend the articles of incorporation may be adopted by the board of directors without a vote of the shareholders. Restated articles of incorporation which amend the articles of incorporation require adoption by the shareholders. Restated articles of incorporation submitted before the first meeting of the board of directors require adoption by all of the incorporators.
5. Item 2 - Enter the identification number previously assigned by the Bureau. If this number is unknown, leave it blank.
6. The duration of the corporation should be stated in the restated articles of incorporation only if it is not perpetual.
7. This document is effective on the date endorsed "filed" by the Bureau. A later effective date, no more than 90 days after the date of delivery, may be stated as an additional article.
8. If the restated articles are adopted before the first meeting of the board of directors, item 5(a) must be completed and signed in ink by a majority of the incorporators. Other restated articles must be signed by the president, vice-president, chairperson or vice-chairperson.
9. FEES: Make remittance payable to the State of Michigan. Include corporation name and identification number on check or money order.
NONREFUNDABLE FEE.................................................... $10.00 TOTAL MINUMUM FEE.................................................... $10.00 ADDITIONAL FEES DUE FOR INCREASED AUTHORIZED SHARES ARE: each additional 20,000 authorized shares or portion thereof. $30.00 maximum fee for first 10,000,000 authorized shares....... $5,000.00 each additional 20,000 authorized shares or portion thereof in excess of 10,000,000 shares.................... $30.00 maximum fee per filing for authorized shares in excess of 10,000,000 shares.................................... $200,000.00 10. Mail form and fee to: The office is located at: Michigan Department of Commerce 6546 Mercantile Way Corporation and Securities Bureau Lansing, MI 48910 Corporation Division Telephone: (517) 334-6302 P.O. Box 30054 Lansing, MI 48909-7554 - -------------------------------------------------------------------------------- |
PART A: COMMON STOCK
Section 1. Voting Rights. The holders of shares of Common Stock shall be entitled to one vote for each share so held with respect to all matters voted on by the shareholders of the corporation, subject in all cases to Section 4 of
Part B of this Article III.
Section 2. Liquidation Rights. The rights of the holders of Common Stock upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation shall be as set forth in Section 3 of Part B of this Article III. However, all distributions made or funds paid to the holders of Common Stock upon the occurrence of such an event shall be made on the basis of the number of shares of Common Stock held by each of them.
Section 3. Dividends. Dividends may be paid on the Common Stock as and when declared by the Board of Directors, subject in all cases to Section 2 of Part B of this Article III.
PART B: PREFERRED STOCK
Section 1. Designation. The Preferred Stock shall consist of six series to
be designated and known as "Series A Preferred Stock" (or "Series A"), "Series
B Preferred Stock" (or "Series B"), "Series C Preferred Stock" (or "Series C"),
"Series D Preferred Stock" (or "Series D"), "Series E Preferred Stock" (or
"Series E") and "Series F Preferred Stock" (or "Series F"). All series of
Preferred Stock shall be identical with each other in all respects except as
otherwise provided herein. As used herein, the term "Preferred Stock" without
designation shall refer to shares of Series A, Series B, Series C, Series D,
Series E and Series F Preferred Stock, or to shares of any series. The number
of shares constituting each such series of Preferred Stock shall be as set
forth below:
. Series A Preferred Stock: 2,500,000 shares.
. Series B Preferred Stock: 3,030,000 shares.
. Series C Preferred Stock: 10,000 shares.
. Series D Preferred Stock: 3,000,000 shares.
. Series E Preferred Stock: 1,617,647 shares.
. Series F Preferred Stock: 833,333 shares.
Section 2. Dividends. Dividends are payable when and as declared by the Board of Directors subject to the restrictions imposed by the Michigan Business Corporation Act. Dividends on the Preferred Stock shall not be cumulative and no right to such dividends shall accrue to holders of Preferred Stock unless declared by the Board of Directors. Holders of outstanding shares of certain series of Preferred Stock
shall be entitled to receive dividends in preference to any dividend (whether in cash, securities of the Corporation or other property) on certain other shares of capital stock of the Corporation, as set forth below in terms of four "Levels," to be designated and known as "Level 1," "Level 2," "Level 3" and "Level 4." No dividends or other distributions shall be made with respect to a particular Level until all dividends on the preceding Levels have been paid on or set apart for payment. For example, dividends on Level 3 shall not be paid or set apart for payment until full dividends on Level 1 and Level 2 have been paid or set apart for payment. Dividends, if paid, must be paid on, or, if declared and set apart for payment on, must be declared and set apart for payment on, all outstanding shares of capital stock on a particular Level contemporaneously, and if less than full dividends are paid on or if declared and set apart for payment on a particular Level, then the same percentage of the respective dividend rate on all shares on such Level shall be paid or declared and set apart for payment.
. Level 1: $0.48 per share of Series F Preferred Stock; and $0.34 per share of Series E Preferred Stock
. Level 2: $0.32 per share of Series D Preferred Stock; $80.00 per share of Series C Preferred Stock; and $0.16 per share of Series B Preferred Stock.
. Level 3: $0.08 per share of Series A Preferred Stock.
. Level 4: If a dividend is declared with respect to the Common Stock, then a contemporaneous dividend must be declared with respect to the Series E and Series F Preferred Stock in an amount equal to that which would be received if the Series E and Series F Preferred Stock had been converted to Common Stock on the declaration date of such dividend.
Section 3. Liquidation Preference.
3.1 Preferential Amounts. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, any distribution of the assets or surplus funds of the Corporation to holders of shares of capital stock of the Corporation by reason of their ownership thereof must take place as set herein. Holders of shares of certain series of Preferred Stock shall be entitled to receive such distributions prior and in preference to any such distributions on certain other shares of capital stock of the Corporation, as set forth below in terms of four "Tiers," to be designated and known as "Tier 1," "Tier 2," "Tier 3" and "Tier 4." No such distributions shall be made with respect to a particular Tier until all such preferential distributions on the preceding Tiers have been made. For example, such distributions on Tier 3 shall not be made until the full preferential distributions on Tier 1 and Tier 2 have been made. If the assets or surplus funds of the Corporation available for distribution to stockholders are insufficient to permit payment in full of amounts to which the holders of the outstanding
shares on a particular Tier are entitled pursuant to this Section 3, then such available assets and funds shall be distributed ratably among the holders of the outstanding shares on such Tier in proportion to the full preferential distribution each such holder is otherwise entitled to receive. The preferential amounts set forth below shall be adjusted for any stock dividends, combinations or splits with respect to such shares.
. Tier One: $6.00 per share of Series F Preferred Stock, plus all accrued or declared but unpaid dividends thereon (the "Series F Preferential Amount"); and $4.25 per share of Series E Preferred Stock, plus all accrued or declared but unpaid dividends thereon (the "Series E Preferential Amount").
. Tier Two: $4.00 per share of Series D Preferred Stock, plus all accrued or declared but unpaid dividends thereon (the "Series D Preferential Amount"); $1,000.00 per share of Series C Preferred Stock, plus all accrued or declared but unpaid dividends thereon (the "Series C Preferential Amount"); and $2.00 per share of Series B Preferred Stock, plus all accrued or declared but unpaid dividends thereon (the "Series B Preferential Amount").
. Tier Three: $1.00 per share of Series A Preferred Stock, plus all accrued or declared but unpaid dividends thereon (the "Series A Preferential Amount").
3.2 Participation of Preferred Stock. After the payment or setting apart for payment of the Series A Preferential Amount, the Series B Preferential Amount, the Series C Preferential Amount, the Series D Preferential Amount, the Series E Preferential Amount and the Series F Preferential Amount, the remaining assets or surplus funds of the Corporation available for distribution upon such liquidation, dissolution or winding up shall be divided pro rata among the holders of Common Stock and Preferred Stock, treating the Preferred Stock as if converted to Common Stock on the date of such liquidation, dissolution or winding up.
3.3 Limits on Participation. In the event of such distribution upon a liquidation, dissolution or winding up of the Corporation, the amount otherwise payable to a holder of Preferred Stock shall not exceed the amount per share set forth opposite the name of the particular series of Preferred Stock, as set forth below and as adjusted for any stock dividends, combinations or splits with respect to such shares.
. Series A Preferred Stock: $5.00 per share.
. Series B Preferred Stock: $6.00 per share.
. Series C Preferred Stock: $2,500.00 per share.
. Series D Preferred Stock: $6.00 per share.
. Series E Preferred Stock: $6.00 per share.
. Series F Preferred Stock : $9.00 per share.
3.4 Consolidation or Merger. A consolidation or merger of the Corporation with or into another corporation or entity shall be regarded as a liquidation, dissolution or winding up of the Corporation with respect to the Preferred Stock within the meaning of this Section 3 unless such consolidation or merger is not intended to effect a change in the ownership or control of the Corporation or of its assets and is not intended to alter materially the business or assets of the Corporation, including, by way of example and without limiting the generality of the foregoing: (i) a consolidation or merger which merely changes the identity, form or place of organization of the Corporation, or which is between or among the Corporation and any of its direct or indirect subsidiaries, or (ii) following such merger or consolidation, shareholders of the Corporation immediately prior to such event own not less than 51% of the voting power of such corporation immediately after such merger or consolidation on a pro rata basis.
Section 4. Voting Rights.
4.1 General. Except as otherwise required by law, the holder of each share of Preferred Stock issued and outstanding shall have the number of votes equal to the number of shares of Common Stock into which such shares of Preferred Stock could be converted at the record date for determination of the shareholders entitled to vote on such matters, or, if no such record date is established, at the date such vote is taken or any written consent of shareholders is solicited, such votes to be counted together with all other shares of stock of the Corporation having general voting power and not separately as a class.
4.2 Merger or Sale of Assets. Consent of the holders of at least the percentage or ratio of the outstanding shares of the class or series set forth opposite the name of such particular class or series of capital stock of the Corporation, as set forth below, shall be required for any action which results in a consolidation or merger which would be treated as a liquidation, dissolution or winding up of the Corporation under Section 3.4, or the liquidation, sale or assignment of all or substantially all of the assets of the Corporation.
. Common Stock and Preferred Stock, with the exception of Series C Preferred Stock: 2/3. . Series A Preferred Stock: 2/3. . Series B Preferred Stock: 2/3. . Series D Preferred Stock: 2/3. . Series E Preferred Stock: 51%. . Series F Preferred Stock: 51%. |
4.3 Changes Affecting a Particular Series. Consent of the holders of at least the percentage or ratio of the outstanding shares of a particular series of Preferred Stock set forth opposite the name of such series, as set forth below, with only the affected series
voting and with each such affected series voting as a separate class, shall be required for any action which: (a) alters the rights, preferences, privileges or restrictions of such series; (b) increases or decreases the authorized number of shares of such series; or (c) creates any new class or series of capital stock of the Corporation having rights, preferences or privileges senior to or on a parity with such series.
. Series A Preferred Stock: 2/3.
. Series B Preferred Stock: 2/3.
. Series C Preferred Stock: Majority.
. Series D Preferred Stock: 2/3.
. Series E Preferred Stock: 51%.
. Series F Preferred Stock: 51%.
4.4 Other Actions. Consent of the holders of at least the percentage or ratio of the outstanding shares of a particular series of Preferred Stock set forth opposite the name of such series, as set forth below, with each such series voting as a separate class, shall be required for: (a) any purchase or redemption by the Corporation of any shares of Preferred Stock; (b) any repurchase by the Corporation of any shares of Common Stock, other than repurchases from directors, employees and consultants of the Corporation which do not in any consecutive twelve-month period exceed One Hundred Thousand Dollars ($100,000); (c) any declaration or payment by the Corporation of a dividend or distribution on account of the Common Stock prior to the conversion of all shares of Preferred Stock, other than a dividend or distribution payable in shares of Common Stock or otherwise taken into account by the anti-dilution provisions set forth in these Articles of Incorporation for the benefit of the Preferred Stock; (d) the sale by any wholly-owned subsidiary of the Corporation of any shares of its stock to a third person; and (e) any amendment to these Articles of Incorporation.
. Series A Preferred Stock: 2/3.
. Series B Preferred Stock: 2/3.
. Series D Preferred Stock: 2/3.
. Series E Preferred Stock: 51%.
. Series F Preferred Stock: 51%.
4.5 Series C Quorum Requirement. At any meeting of the holders of all outstanding shares of Preferred Stock to vote as a class, the presence in person or by proxy of the holders of a majority of the outstanding shares of Series C Preferred Stock shall be required to constitute a quorum; in the absence of a quorum a majority of the holders present in person or by proxy shall have the power to adjourn the meeting from time to time without notice, other than announcement at the meeting, until a quorum shall be present.
Section 5. Redemption. The Preferred Stock is not redeemable.
Section 6. Conversion of Preferred Stock. The holders of Preferred Stock shall have conversion rights as follows (the "Conversion Rights"):
6.1 Conversion Prices.
6.1.1 Series A, Series B, Series C, Series D and Series E Preferred Stock.
Upon any conversion of Series A, Series B, Series C, Series D and Series E Preferred Stock into Common Stock pursuant to this Section 6, each such share of such series of Preferred Stock shall be converted into such number of fully paid and nonassessable shares of Common Stock as is determined by taking the respective preferential amount for such series of Preferred Stock, as set forth below:
. Series A Preferred Stock: $1.00;
. Series B Preferred Stock: $2.00;
. Series C Preferred Stock: $1,000.00;
. Series D Preferred Stock: $4.00;
. Series E Preferred Stock: $4.25;
and dividing such preferential amount set forth above by the respective conversion price for such series of Preferred Stock, as set forth below:
. "Series A Conversion Price": $1.00;
. "Series B Conversion Price": $2.00;
. "Series C Conversion Price": $4.00;
. "Series D Conversion Price": $4.00;
. "Series E Conversion Price": $4.25.
The Applicable Conversion Price (as defined below in Section 6.1.3) for each such series shall be subject to adjustment as provided below in Section 6.5.
6.1.2 Series F Preferred Stock. Upon any conversion of Series F Preferred Stock into Common Stock pursuant to this Section 6, each such share of Series F Preferred Stock shall be converted into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing $6.00 by the Series F Conversion Price, as such Series F Conversion Price is determined pursuant to Section 6.3.4.
6.1.3 Applicable Conversion Price. The term "Applicable Conversion Price" shall refer to the Series A Conversion Price with respect to the Series A Preferred Stock, the Series B Conversion Price with respect to the Series B Preferred Stock, the Series C Conversion Price with respect to the Series C Preferred Stock, the Series D Conversion Price with respect to the Series D Preferred Stock, the Series E Conversion Price with respect to the Series E Preferred Stock and the Series F Conversion price with respect to the Series F Preferred Stock, subject to adjustment as provided below in Section 6.5.
6.2 Voluntary Conversion.
6.2.1 Series A, Series B, Series D and Series E Preferred Stock. Each share of Series A, Series B, Series D, and Series E Preferred Stock shall be convertible into Common Stock, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Corporation or any transfer agent for such stock.
6.2.2 Series C Preferred Stock. Each share of Series C Preferred Stock shall be convertible into Common Stock, at the option of the holder thereof, at any time after April 1, 1998, at the office of the Corporation or any transfer agent for such stock.
6.3 Automatic Conversion.
6.3.1 Series A, Series B and Series D Preferred Stock. Each share of Series A, Series B and Series D Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Applicable Conversion Price immediately upon the closing of the sale of the Corporation's Common Stock in a firm commitment, underwritten public offering registered under the Securities Act of 1933, as amended (the "Securities Act") (other than a registration relating solely to a transaction under Rule 145 under the Securities Act or any successor thereto or to an employee benefit plan of the Corporation) at a public offering price (prior to underwriter commissions and expenses) equal to or exceeding $4.26 per share of Common Stock, as adjusted for any stock dividends, combinations or splits with respect to such shares, and the gross proceeds of which exceed $10,000,000. In addition, each share of Series A, Series B and Series D Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Applicable Conversion Price for such particular series upon the conversion of a majority of the shares of such particular series then outstanding.
6.3.2 Series C Preferred Stock. Each share of Series C Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Series C Conversion Price immediately upon the closing of the sale of the Corporation's Common Stock in a firm commitment, underwritten public offering registered under the Securities Act (other than a registration relating solely to a transaction under Rule 145 under the Securities Act or any successor thereto or to an employee benefit plan of the Corporation).
6.3.3 Series E Preferred Stock. Each share of Series E Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Series E Conversion Price immediately upon the closing of the sale of the Corporation's Common Stock in a firm commitment, underwritten public offering registered under the Securities Act (other than a registration relating solely to a transaction under Rule 145 under the Securities Act or any successor thereto or to an employee benefit plan of the Corporation) at a public offering price (prior to underwriter commissions and expenses) equal to or exceeding $4.26 per share of Common Stock, as adjusted for any stock dividends, combinations or splits with respect to such shares, and the gross proceeds of which exceed $12,500,000. In addition, each share of Series E Preferred Stock shall
automatically be converted into shares of Common Stock at the then effective Series E Conversion Price upon the conversion of a majority of the shares of Series E Preferred Stock then outstanding.
6.3.4 Series F Preferred Stock. Each share of Series F Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Series F Conversion Price as follows:
(a) Initial Public Offering. Each share of Series F Preferred
Stock shall automatically be converted into shares of Common Stock at the then
effective Series F Conversion Price immediately upon the closing of the sale of
the Corporation's Common Stock in a firm commitment, underwritten public
offering registered under the Securities Act (other than a registration relating
solely to a transaction under Rule 145 under the Securities Act of any successor
thereto or to an employee benefit plan of the Corporation). In the event that
the conversion of Series F Preferred Stock shall occur pursuant to this Section
6.3.4(a), the Series F Conversion Price shall equal eighty percent (80%) of the
price per share of the Common Stock sold in such initial public offering (prior
to any underwriter commissions, fees or discounts), and such conversion shall
occur following any adjustment to the Series F Conversion Price pursuant to
Section 6.5.
(b) Qualifying Financing. Each share of Series F Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Series F Conversion Price immediately upon the closing of a non-public equity financing (including a transaction with multiple closings for the sale of shares of the same class at the same price per share within any twelve-month period) wherein the aggregate consideration for such issuance received by the Corporation is at least $10,000,000, of which at least $1,000,000 is from new investors, and the Corporation is not subjected to any restrictions imposed by the investors in such equity financing upon the use of such funds. In the event that the conversion of the Series F Preferred Stock into shares of Common Stock shall occur pursuant to this Section 6.3.4(b), the Series F Conversion Price shall equal eighty percent (80%) of the price per share (on an "as converted" into Common Stock basis) paid in said non-public equity financing, and such conversion shall occur following any adjustment to the Series F Conversion Price pursuant to Section 6.5.
(c) Merger, etc.. Each share of Series F Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Series F Conversion Price immediately prior to the closing of a consolidation or merger of the Corporation with or into another corporation which would be treated as a liquidation, dissolution or winding up pursuant to Section 3.4 or the sale or conveyance to another corporation of all or substantially all of the assets of the Corporation, which results in aggregate consideration to the Corporation or its shareholders with a fair market value of at least $85,000,000, as determined in good faith by the Board of Directors of the Corporation. In the event that the conversion of the Series F Preferred Stock into shares of Common Stock shall occur pursuant to this Section 6.3.4(c), the Series F Conversion Price shall equal eighty percent (80%) of the value per share (on an "as
converted" into Common Stock basis) realized by the Company's shareholders from the consideration received in said consolidation or merger, which value shall be determined by the mutual agreement between the Company and the Purchaser. If the Company and the Purchaser do not reach mutual agreement as to said value, then said value shall be determined by a nationally recognized investment banking firm which is mutually selected by the Company and the Purchaser, with the fees for obtaining said valuation determination to be borne equally by the Company and the Purchaser. Such conversion shall occur following any adjustment to the Series F Conversion Price pursuant to Section 6.5.
(d) Operational Plan. Each share of Series F Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Series F Conversion Price immediately upon the adoption by resolution of the Corporation's Board of Directors of an operational plan for the Corporation which provides for the Corporation to continue its operations in the ordinary course of business through revenues, working capital or other resources through at least December 31, 1998 without any further infusion of capital from investors through debt or equity investment in the Corporation; provided, however, that any such operational plan, as determined in good faith by the Corporation's Board of Directors, must be consistent with the intent of the then current annual Product Development Plan pursuant to the Distribution Agreement by and between the Corporation and Cobe BCT, Inc., dated October 22, 1993. In the event that the conversion of the Series F Preferred Stock into shares of Common Stock shall occur pursuant to this Section 6.3.4(d), the Series F Conversion Price shall equal eighty percent (80%) of the fair market value of a share of Series F Preferred Stock, as determined by the mutual agreement of the Company and the Purchaser. If the Company and the Purchaser do not reach mutual agreement as to said value, then said value shall be determined by a nationally recognized investment banking firm which is mutually selected by the Company and the Purchaser, with the fees for obtaining said valuation determination to be borne equally by the Company and the Purchaser. Such conversion shall occur following any adjustment to the Series F Conversion Price pursuant to Section 6.5.
(e) December 1, 1997. If not earlier converted pursuant to this
Section 6.3.4, each share of Series F Preferred Stock shall automatically be
converted into shares of Common Stock at the then effective Series F Conversion
Price on December 1, 1997; provided, however, that in the event that prior to
December 1, 1997, the Corporation has entered into a letter of intent (whether
or not such letter of intent is intended to be binding or non-binding on the
Corporation) which contemplates a transaction which would trigger automatic
conversion of the Series F Preferred Stock into Common Stock pursuant to
paragraph (a), (b) or (c) of this Section 6.3.4 and contemplates the
consummation of the closing of such transaction on or before February 1, 1998,
then each share of Series F Preferred Stock shall automatically be converted
into shares of Common Stock at then effective Series F Conversion Price on
February 2, 1998. In the event that the conversion of the Series F Preferred
Stock into shares of Common Stock shall occur pursuant to this Section 6.3.4(e),
the Series F Conversion Price shall be $4.65, as adjusted pursuant to Section
6.5.
6.4 Mechanics of Conversion. No fractional shares of Common Stock shall be issued upon conversion of shares of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then effective Applicable Conversion Price for the series. Before any holder of Preferred Stock shall be entitled to convert the same into shares of Common Stock pursuant to Section 6.2, such holder shall surrender the certificate or certificates therefor at the principal office of the Corporation or of any transfer agent for such stock and shall give written notice to the Corporation at such office that such holder elects to convert the same and shall state therein the name or names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Preferred Stock, or to their respective nominee or nominees, a certificate or certificates for the number of shares of Common Stock to which such holder or nominee shall be entitled as aforesaid, together with cash in lieu of any fraction of a share. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.
6.5 Adjustments to Conversion Prices.
6.5.1 Special Definitions. For purposes of this Section 6.5, the following definitions shall apply:
(a) "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities (defined below).
(b) "Original Issue Date" shall mean the date on which a share of a particular series of Preferred Stock was first issued.
(c) "Convertible Securities" shall mean any evidence of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock.
(d) "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Section 6(D)(3) deemed to be issued) by the Corporation after the Original Issue Date, other than shares of Common Stock issued or issuable:
(i) upon conversion of shares of Preferred Stock;
(ii) to the University of Michigan, Stephen G. Emerson, Bernhard O. Palsson, Michael F. Clarke, or to the officers, employees, consultants or directors of the Corporation pursuant to any stock purchase plan or arrangement, stock
option plan, or other stock incentive plan or agreement approved by the Corporation's Board of Directors; or
(iii) by way of dividend or other distribution on shares excluded from the definition of Additional Shares of Common Stock by the foregoing clauses (i) or (ii), or this clause (iii).
6.5.2 No Adjustment of Applicable Conversion Price. No adjustment in the Applicable Conversion Prices for the series of Preferred Stock shall be made with respect to the issuance of Additional Shares of Common Stock or otherwise, unless the consideration per share (determined pursuant to Section 6.5.5 hereof) for an Additional Share of Common Stock issued or deemed to be issued by the Corporation is less than the Applicable Conversion Price for such series in effect on the date of, and immediately prior to, the issue of such Additional Share of Common Stock.
6.5.3 Deemed Issuances of Additional Shares of Common Stock.
(a) Options and Convertible Securities. In the event the Corporation at any time or from time to time after the Original Issue Date of a particular series shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number) of Common Stock issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued with respect to the Preferred Stock unless the consideration per share (determined pursuant to Section 6.5.5 hereof) of such Additional Shares of Common Stock would be less than the Applicable Conversion Price of such series in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any case in which Additional shares of Common Stock are deemed to be issued the following provisions shall apply:
(i) Exercise or Conversion. No further adjustment in the Applicable Conversion Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities.
(ii) Increase or Decrease. If such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Applicable Conversion Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities.
(iii) Expiration. Upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities which shall not have been exercised, the Applicable Conversion Prices computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as follows:
(A) Underlying Common Stock. In the case of Convertible Securities or Options for Common Stock, any such subsequent adjustments shall be recomputed as if the only Additional Shares of Common Stock issued were the shares of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration actually received by the Corporation upon such exercise, or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange.
(B) Underlying Convertible Securities. In the case of Options for Convertible Securities, any such subsequent adjustments shall be recomputed as if only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Corporation for the Additional Shares of Common Stock deemed to have been then issued was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration deemed to have been received by the Corporation (determined pursuant to Section 6.5.5 upon the issue of the Convertible Securities with respect to which such Options were actually exercised.
(iv) Limitation. No readjustment pursuant to clause (ii) or
(iii) above shall have the effect of increasing the Applicable Conversion Price
to an amount which exceeds the lower of (A) such Applicable Conversion Price on
the original adjustment date, or (B) such Applicable Conversion Price that would
have resulted from any issuance of Additional Shares of Common Stock between the
original adjustment date and such readjustment date (nor shall any shares issued
upon conversion prior to such readjustment be affected by such readjustment).
(v) Short-Term Options. In the case of any Options that expire by their terms not more than thirty (30) days after the date of issue thereof, no adjustment of the Applicable Conversion Price shall be made until the expiration or exercise of all such Options, whereupon such adjustment shall be made in the same manner as provided in clause (iii) above.
(vi) Date of Issuance. If such record date shall have been fixed and such Options or Convertible Securities are not issued on the date fixed therefor, the adjustment previously made in the Applicable Conversion Price which became effective on such record date shall be cancelled as of the close of business on such record date, and thereafter the Applicable Conversion Price shall be adjusted pursuant to this Section 6.5.3 as of the actual date of their issuance.
(b) Stock Dividends, Stock Distributions and Subdivisions. In the event the Corporation at any time or from time to time after the Original Issue Date shall declare or pay any dividend or make any other distribution on the Common Stock payable in Common Stock, or effect a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in Common Stock), then and in any such event, Additional Shares of Common Stock shall be deemed to have been issued as follows:
(i) Dividend or Distribution. In the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of any class of securities entitled to receive such dividend or distribution.
(ii) Subdivision. In the case of any such subdivision, at the close of business on the date immediately prior to the date upon which such corporate action becomes effective.
If such record date shall have been fixed and such dividend shall not
have been fully paid on the date fixed therefor, the adjustment previously made
in the Applicable Conversion Price which became effective on such record date
shall be cancelled as of the close of business on such record date, and
thereafter the Applicable Conversion Price shall be adjusted pursuant to this
Section 6.5.3 as of the time of actual payment of such dividend.
6.5.4 Anti-Dilution Adjustment of Applicable Conversion Price Upon Issuance of Additional Shares of Common Stock.
(a) Series A, Series B and Series E Preferred Stock. In the event
the Corporation, at any time after the Original Issue Date, shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 6.5.3 but excluding Additional Shares of
Common Stock issued pursuant to Section 6.5.3(b) which event is dealt with in
Section 6.5.6 hereof) without consideration or for a consideration per share
less than the Series A Conversion Price, Series B Conversion Price or Series E
Conversion Price in effect on the date of and immediately prior to such
issuance, then and in such event, the Applicable Conversion Price for the
affected Series A, Series B and Series E Preferred Stock, respectively, shall be
reduced, concurrently with such issuance, in order to increase the number of
shares of Common Stock into which shares of such series of Preferred Stock is
convertible, to a price (calculated to the nearest cent) determined by the
following formula:
where:
CP(O) = the Applicable Conversion Price for Series A, Series B or Series E Preferred Stock in effect on the date of and immediately prior to such issuance;
CP(1) = the Applicable Conversion Price for Series A, Series B or Series E Preferred Stock as so adjusted;
CS = the number of shares of Common Stock outstanding immediately prior to such issuance (including shares of Common Stock issuable upon conversion or exercise of any Convertible Securities or Options);
C = the aggregate consideration received by the Corporation for the total number of Additional Shares of Common Stock so issued; and
AS = the number of such Additional Shares of Common Stock so issued.
Notwithstanding the foregoing, the Applicable Conversion Price for Series A, Series B or Series E Preferred Stock shall not be so reduced if the amount of such reduction would be an amount less than $0.01, but any such amount shall be carried forward and applied toward any subsequent reduction which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or more.
(b) Series D Preferred Stock.
(i) Ratchet Adjustment. In the event the Corporation shall
issue Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 6.5.3, but excluding Series D
Preferred Stock and Additional Shares of Common Stock issued pursuant to Section
6.5.3(b) (which event is dealt with in Section 6.5.6 hereof)), either without
consideration or for a consideration per share less than the Series D Conversion
Price in effect on the date of and immediately prior to such issuance, wherein
the aggregate consideration for such issuance received by the Corporation is at
least $2,000,000, the following will be applicable:
(A) Single Transaction. In a private financing transaction (including a transaction with multiple closings for the sale of shares of the same class at the same price per share within any twelve-month period), the Series D Conversion Price shall be reduced concurrently with such issuance to a price equal to the consideration per share (as determined pursuant to Section 6.5.5 hereof) received by
the Corporation for such Additional Shares of Common Stock; provided, however, that in no event shall the Series D Conversion Price be reduced to less than $3.00.
(B) Multiple Transactions. In multiple transactions at different per share prices during any twelve-month period, the Series D Conversion Price shall be reduced to an amount equal to the weighted average consideration received by the Corporation for such Additional Shares of Common Stock during such twelve-month period (but in no event shall the Series D Conversion Price be reduced to less than $3.00. Such weighted average consideration shall be determined by dividing the aggregate consideration received by the Corporation for the Additional Shares of Common Stock over such twelve-month period by the aggregate number of Additional Shares of Common Stock issued over the same period.
(ii) Formula Adjustment. In the event the Corporation shall
issue Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 6.5.3 but excluding Series D
Preferred Stock and Additional Shares of Common Stock issued pursuant to Section
6.5.3(b), which event is dealt with in Section 6.5.6 for a per share
consideration less than the Series D Conversion Price in effect on the date of
and immediately prior to such issuance, in a single transaction or in a series
of transactions, and for aggregate consideration less than $2,000,000 during any
twelve-month period, then the Series D Conversion Price shall be adjusted for
such Additional Shares of Common Stock pursuant to the formula provided in
Section 6.5.4(a) as if the Series D Preferred Stock were Series B Preferred
Stock (except for the Applicable Conversion Price which shall be the Series D
Conversion Price).
(iii) Single Adjustment. For purposes of this Section 6.5.4(b) any issuance of Additional Shares of Common Stock shall be included in only one twelve-month period (and in only one adjustment of the Series D Conversion Price), which period shall be the earliest twelve-month period which may be applicable (and which adjustment shall be the adjustment to be made with respect to the earliest applicable twelve-month period). After the first twelve- month period with respect to which an adjustment is made to the Series D Conversion Price, any new twelve-month period shall be deemed to commence on the date of issuance of Additional Shares of Common Stock first occurring more than twelve months following the date of issuance of Additional Shares of Common Stock which caused the most recent prior twelve-month period to begin.
(c) Series F Preferred Stock. In the event the Corporation shall issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 6.5.3, but excluding Series F Preferred Stock and Additional Shares of Common Stock issued pursuant to Section 6.5.3(b), which event is dealt with in Section 6.5.6, either without consideration or for a consideration per share less than the Series F Conversion Price in effect on the date of and immediately prior to such issuance, in a private financing transaction (including a transaction with multiple closings for the sale of shares of the same class at the same
price per share within any twelve-month period), wherein the aggregate consideration for such issuance received by the Corporation is at least $1,000,000, then the Series F Conversion Price shall be adjusted for such Additional Shares of Common Stock pursuant to the formula provided in Section 6.5.4(a) as if the Series F Preferred Stock were Series B Preferred Stock (except the Applicable Conversion Price shall be the Series F Conversion Price); provided, however, that the adjustment to the Series F Conversion Price provided for in this Section 6.5.4(c) shall apply only to the Corporation's first such private financing following the Original Issue Date of the Series F Preferred Stock.
6.5.5 Determination of Consideration. For purposes of this Section 6.5 the consideration received by the Corporation for the issue of any Additional Shares of Common Stock shall be computed as follows:
(a) Cash and Property. Such consideration shall be computed as follows:
(i) Cash. Insofar as it consists of cash, such consideration shall be computed at the aggregate amount of cash received by the Corporation;
(ii) Property. Insofar as it consists of property other than cash, such consideration shall be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board of Directors; and
(iii) Combination. In the event Additional Shares of Common
Stock are issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, such consideration shall be the
proportion of such consideration so received, computed as provided in clauses
(i) and (ii) above, as determined in good faith by the Board of Directors.
(b) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Section 6.5.3(a), relating to Options and Convertible Securities, shall be determined by dividing:
(i) the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities; by
(ii) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.
6.5.6 Adjustment for Dividends or Combinations.
(a) Stock Dividends, Distributions or Subdivisions. In the event the Corporation shall issue Common Stock pursuant to Section 6.5.3(b) in a stock dividend, stock distribution or subdivision, the Applicable Conversion Price in effect immediately prior to such stock dividend, stock distribution or subdivision shall, concurrently with the effectiveness of such stock dividend, stock distribution or subdivision, be proportionately decreased.
(b) Combinations or Consolidations. In the event the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, the Applicable Conversion Price in effect immediately prior to such combination or consolidation shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased.
6.5.7 Adjustment for Merger or Reorganization. In the event of any consolidation or merger of the Corporation with or into another corporation or the sale or conveyance of all or substantially all of the assets of the Corporation to another corporation, each share of Series A, Series B, Series C, Series D and Series E Preferred Stock shall thereafter be convertible into the number of shares of stock or other securities or property to which a holder of the number of shares of Common Stock of the Corporation deliverable upon conversion of such series would have been entitled upon such consolidation, merger or conveyance, and, in any such case, appropriate adjustment (as determined by the Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interest thereafter of the holders of the series, in order that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the Applicable Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the conversion of that series of Preferred Stock. However, in the case of any merger or consolidation which is treated as a liquidation, dissolution or winding up of the affairs of the Corporation pursuant to Section 3.4, each share of Series A, Series B, Series C, Series D and Series E Preferred Stock shall not be converted into shares of stock or other securities or property of the resulting corporation, but shall be cancelled and surrendered to the Corporation upon distribution to the holders of Series A, Series B, Series C, Series D and Series E Preferred Stock of all cash or other property to which they are entitled pursuant to Section 3 as a result of such transaction being treated as a liquidation, dissolution, or winding up under Section 3.4.
6.5.8 Adjustment to Series C Conversion Price for Distributions to Holders of Common Stock. In the event that the Corporation shall distribute to the holders of its Common Stock (whether pursuant to a reclassification, merger or consolidation or
otherwise) evidences of its indebtedness or assets (including cash, securities, intangible assets or other property), then the Series C Conversion Price shall be adjusted so that the number of shares of Common Stock into which a share of Series C Preferred Stock is convertible equals the number of shares of Common Stock determined as follows: multiply the number of shares of Common Stock into which each share of Series C Preferred Stock is convertible at the then effective Series C Conversion Price by a fraction, the numerator of which shall be the Series C Conversion Price effective on the record date for determination of shareholders entitled to receive such distribution, and the denominator of which shall be such Series C Conversion Price less the fair market value of such property, as determined in good faith by the Board of Directors of the Corporation, distributed with respect to each share of Common Stock. Such adjustment to the Series C Conversion Price shall be made whenever any such distribution is made.
6.6 No Impairment. The Corporation will not, by amendment of these Restated Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation but will at all times in good faith assist in the carrying out of all the provisions of this Section 6 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Preferred Stock against impairment.
6.7 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Applicable Conversion Prices pursuant to this Section 6, the Corporation at its expense shall promptly compute such adjustments or readjustments in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time from any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Applicable Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of such holder's shares of Preferred Stock.
6.8 Notices of Record Date. In the event of any taking by the Corporation of a record of the holders of any class of securities (other than Preferred Stock) for the purposes of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Corporation shall mail to each holder of Preferred Stock at least ten (10) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.
6.9 Common Stock Reserved. The Corporation shall reserve and keep available out of its authorized but unissued Common Stock such number of shares of Common
Stock as shall from time to time be sufficient to effect conversion of the Preferred Stock. The Corporation shall not take any corporate action which would require an adjustment in the number of shares of Common Stock into which any share of Preferred Stock is convertible unless either (i) immediately after such corporate action is taken and the transactions contemplated thereby are consummated, the number of authorized and unissued shares of Common Stock would be sufficient to effect the conversion of all outstanding shares of Preferred Stock at the Applicable Conversion Prices then in effect, or (ii) concurrently with the taking of such corporate action, the Corporation shall take such corporate action as, in the opinion of its counsel, may be necessary to increase its authorized and unissued shares of Common Stock to such number as shall be sufficient to provide for such conversion.
6.10 Taxes Upon Conversion of Series C Preferred Stock. The Corporation shall pay any and all taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of shares of Series C Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series C Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.
ARTICLE VII
1. Director Liability. A director of the Corporation shall not be personally liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. However, this provision does not eliminate or limit the liability of a director for any of the following:
(a) any breach of the director's duty of loyalty to the Corporation or its shareholders;
(b) any acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
(c) a violation of Section 551(1) of the Michigan Business Corporation Act, as amended (the "MBCA");
(d) a transaction from which the director derived an improper personal benefit; or
(e) an act or omission occurring before the date these Articles of Incorporation became effective in accordance with the pertinent provisions of the MBCA.
Any repeal, amendment or other modification of this Article VII shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal, amendment or other modification.
If the MBCA is amended, after this Article becomes effective, to authorize corporate action further eliminating or limiting personal liability of directors, then the liability of directors shall be eliminated or limited to the fullest extent permitted by the MBCA as so amended.
2. Control Share Acquisitions. Chapter 7B of the MBCA, known as the "Stacey, Bennett, and Randall shareholder equity act," does not apply to control share acquisitions of shares of the Corporation.
EXHIBIT 3.3
BYLAWS
OF
AASTROM BIOSCIENCES, INC.
BYLAWS
OF
AASTROM BIOSCIENCES, INC.
Section 1.1 The name, location of principal office, and purposes of the Corporation shall be as set forth in the Articles of Incorporation. The powers of the Corporation and of its directors and shareholders, and all matters concerning the conduct and regulation of the business of the Corporation, shall be subject to such provisions in regard thereto, if any, as are set forth in said Articles of Incorporation.
Section 1.2 All references in these Bylaws to the Articles of Incorporation shall be construed to mean the Articles of Incorporation of the Corporation as amended from time to time.
Section 1.3 The registered office of the Corporation may be the same as the principal office of the Corporation, but in any event must be located in the State of Michigan, and must be the business office of the registered agent, as required by the Michigan Business Corporation Act (the "MBCA"). The Corporation may have business offices at such other places, either within or without the State of Michigan, as the Board of Directors may designate or as the business of the Corporation may require from time to time.
pursuant to a firmly underwritten registered public offering (the "IPO"), special meetings of the shareholders may be called only by the President and shall be called by the President at the request in writing of a majority of the Directors then in office, and shall be held at such place, on such date, and at such time as the President or shall fix. Business transacted at special meetings shall be confined to the purpose or purposes stated in the notice.
clearly stated at the commencement of the meeting, by reason of a claim that a meeting was not lawfully called or convened.
to all shareholders. On request of the person presiding at the meeting or a shareholder entitled to vote thereat, the inspectors shall make and execute a written report to the person presiding at the meeting of any of the facts found by them and matters determined by them. The report shall be prima facie evidence of the facts stated and of the vote as certified.
(1) Any officer of the Corporation authorized so to do by the Bylaws of that Corporation.
(2) Any person authorized so to do by resolution of the Board of Directors or a duly authorized committee of the Board of Directors of that Corporation.
(3) Any person authorized so to do by proxy or power of attorney duly executed by the President or Vice President and Secretary or Assistant Secretary of that Corporation.
However, such shares may be voted or represented by the persons described in any subdivision only in the absence of vote or representation by the persons described in a preceding subdivision of this subparagraph.
Board of Directors shall be within the range of five to nine directors, with the exact size to be fixed from time to time by resolution of the Board of Directors.
such action with the person acting as Secretary of the meeting before the adjournment thereof, or by registered mail to such Secretary immediately after the adjournment thereof. This shall not apply to a Director who voted in favor of such action.
present, preside at all meetings of the Board of Directors and shall exercise and perform such other powers and duties as may be assigned to him from time to time by the Board of Directors or prescribed by these Bylaws.
representing shares issued by a corporation which is authorized to issue shares of more than one class shall set forth on its face or back or state that the Corporation will furnish to a shareholder upon request and without charge a full statement of the designation, relative rights, preferences and limitations of the shares of each class authorized to be issued, and if the Corporation is authorized to issue any class of shares in series, the designation, relative rights, preferences and limitations of each series so far as the same have been prescribed and the authority of the Board to designate and prescribe the relative rights, preferences and limitations of other series.
regulating the issue, transfer and registration of certificates for shares of this Corporation.
(a) By a majority vote of a quorum of the Board consisting of Directors who were not parties to the action, suit, or proceeding.
(b) If the quorum described in subdivision (a) is not obtainable, then by a majority vote of it committee of Directors who are not parties to the action. The committee shall consist of not less than two (2) disinterested Directors.
(c) By independent legal counsel in a written opinion.
(d) By the shareholders.
or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be considered to have acted in a manner "not opposed to the best interests of the corporation or its shareholders" as referred to in Sections 6.1 and 6.2.
Article VI shall be construed in all respects as if the invalid or unenforceable matter had been omitted.
The officers of the Corporation may sell any or all of its holdings of stock, bonds, or securities of other corporations, or government securities; sign all deeds, mortgages, assignments of mortgages, discharges of mortgages, bills of sale, leases and other conveyances and transactions of any interest in property, real, personal or mixed, to the extent that the Board of Directors of the Corporation may from time to time specify in resolutions approved by the Board. The Board may in any instance designate the officers and agents who shall have authority to execute any contract, conveyance or other instrument on behalf of the Corporation, and may also ratify and affirm such execution. Any such instrument or document shall be binding on the Corporation if executed by the President or a Vice President. In addition, any such instrument or document shall be binding on the Corporation if signed by any other officer designated by the Board on behalf of the Corporation.
shall be subject to checks drawn as authorized by resolution of the Board of Directors.
Unless otherwise ordered by the Board of Directors, the President shall have full power and authority on behalf of the Corporation to attend and to act and to vote at any meetings of shareholders of any corporation in which this Corporation may hold stock, and at any such meeting shall possess and may exercise any and all of the rights and powers incident to the ownership of such stock, PROVIDED, HOWEVER, that such rights shall be exercised in the best interests of this Corporation. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons, but the same shall not be effective unless actually received by such other corporation prior to the meeting of shareholders in which such other person is to act. The President, or in his absence or disability, a Vice President of the Corporation, may authorize from time to time the signature and issuance of proxies to vote such stock of other corporations owned by this Corporation, and all such proxies shall be signed in the name of this Corporation by the President or Vice President and the Secretary or Assistant Secretary, or by any two officers authorized by the Board of Directors.
The Board of Directors may establish, reorganize and/or dissolve wholly- or partly-owned subsidiaries of the Corporation. The Articles of Incorporation and Bylaws of any such subsidiary shall not, without approval of the shareholders of this Corporation, substantially differ from the Articles of Incorporation and Bylaws, respectively, of this Corporation.
Except as from time to time otherwise provided by the Board of Directors, the fiscal year of the Corporation shall end on the last day of June.
The Corporation shall keep books and records of account and minutes of the proceedings of its shareholders, Board of Directors and executive committees, if any. The books, records and minutes may be kept outside this state. The Corporation shall keep at its registered office, or at the office of its
transfer agent within or without this state, records containing the names and addresses of all shareholders, the number, class and series of shares held by each and the dates when they respectively became holders of record thereof. Any of such books, records or minutes may be in written form or in any other form capable of being converted into written form within a reasonable time. The Corporation shall convert into written form without charge any such record not in such form, upon written request of a person entitled to inspect them.
Except as otherwise expressly provided in the Articles of
Incorporation or in these Bylaws, these Bylaws may be altered, amended or
repealed by any duly adopted resolution of the Board of Directors or at any
annual or special meeting of the shareholders. The Board of Directors, however,
shall not adopt or alter any Bylaws fixing the number, qualifications,
classifications or term of office of Directors. If the amendment is to be
adopted at a special meeting of the shareholders, the notice thereof shall
specify the subject matter of the proposed alteration, amendment or repeal and
the Articles of these Bylaws to be affected thereby. Bylaws adopted by the
Directors may be altered or repealed by the Directors or shareholders.
Provided, further, that neither the time nor the place for the election of
Directors shall be changed within sixty (60) days next preceding the day on
which any election of Directors is to be held, and provided further that a
notice of any such change shall be given to each shareholder at least twenty
(20) days before the next election is held, in person or by letter mailed to his
last known post office address.
ATTEST:
/s/ TODD E. SIMPSON __________________________ TODD E. SIMPSON, SECRETARY |
Includes amendments approved through April 30, 1996
EXHIBIT 4.2
AASTROM BIOSCIENCES, INC.
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
April 7, 1992
TABLE OF CONTENTS
Page ---- SECTION 1 - Definitions.................................. 2 1.1 Certain Definitions.......................... 2 SECTION 2 - Restrictions on Transferability of Securities; Compliance with Securities Act... 4 2.1 Restrictions on Transferability.............. 4 2.2 Restrictive Legend........................... 4 2.3 Notice of Proposed Transfers................. 5 2.4 Requested Registration....................... 6 2.5 Company Registration......................... 9 2.6 Registrations on Form S-3.................... 10 2.7 Expenses of Registration..................... 11 2.8 Registration Procedures...................... 12 2.9 Indemnification.............................. 12 2.10 Information by Holder........................ 14 2.11 Rule 144 Reporting........................... 14 2.12 "Market Stand-off" Agreement................. 15 2.13 Transfer of Registration Rights.............. 15 2.14 Suspension of Registration Rights............ 16 2.15 Certain Limitations in Connection with Future Grants of Registration Rights............... 16 SECTION 3 - Affirmative Covenants........................ 16 3.1 Financial Information........................ 16 3.2 Other Information............................ 17 3.3 Inspection Rights............................ 18 3.4 Assignment of Rights to Information.......... 18 3.5 Confidentiality.............................. 18 3.7 Insurance 19 3.8 Board of Directors........................... 19 SECTION 4 - Right of First Refusal....................... 19 4.1 Right of First Refusal....................... 19 4.2 Waiver 20 SECTION 5 - University Warrants.......................... 21 5.1 Termination of Warrant Rights................ 21 SECTION 6 - Miscellaneous................................ 21 6.1 Amendment of Investors' Rights Agreement..... 21 6.2 Governing Law................................ 21 6.3 Successors and Assigns....................... 21 6.4 Notices 21 6.5 Delays or Omissions.......................... 22 6.6 Counterparts................................. 22 |
i.
6.7 Severability................................. 22 6.8 Amendments................................... 22 |
ii.
AASTROM BIOSCIENCES, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the "Agreement") is entered into as of April 7, 1992, by and among AASTROM BioSciences, Inc., a Michigan corporation formerly doing business as Ann Arbor Stromal, Inc. (the "Company"), the investors listed on the Schedule of Investors attached hereto as Exhibit A (individually, an "Investor" and collectively, the "Investors"), as that exhibit may be amended from time to time, Stephen G. Emerson, Bernhard O. Palsson and Michael F. Clarke (individually, a "Founder" and collectively, the "Founders"), Dr. R. Douglas Armstrong ("Armstrong") and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (the "University"). For the purposes of this Agreement, the Founders and Armstrong shall be collectively referred to as the "Option Holders."
A. The Company has issued shares of its Common Stock to the University and has granted, and may, in the future, grant, stock options to the Founders pursuant to the Company's Stock Option Plans.
B. The Company has issued two million five hundred thousand (2,500,000) shares of its Series A Preferred Stock to certain of the Investors (the "Series A Investors") pursuant to that certain Series A Preferred Stock Purchase Agreement, dated as of August 17, 1989.
C. Pursuant to that certain Investors' Rights Agreement dated August 17, 1989 among the Company, the Series A Investors, the Founders and the University (the "Investors' Rights Agreement"), the Company granted certain rights and the parties made certain covenants with respect to the Series A Preferred Stock and the Common Stock of the Company.
D. Since the execution of the Investors' Rights Agreement, the Company has engaged Armstrong as its president and has granted, and may, in the future, grant, stock options to Armstrong pursuant to the Company's Stock Option Plans.
E. Certain of the Investors (the "Series B Investors") are purchasing concurrently herewith three million thirty thousand (3,030,000) shares of Series B Preferred Stock and desire to obtain the same rights as are contained in the Investors' Rights Agreement.
F. The Company, the Series A Investors, the Founders and the University desire to grant to the Series B Investors and
Armstrong the same rights as were granted under the Investors' Rights Agreement and to amend and restate such Agreement.
G. The parties intend that this Agreement supersede the Investors' Rights Agreement and, in that regard, the parties to the Investors' Rights Agreement will waive certain rights contained in such Investors' Rights Agreement, specifically (i) the right of first refusal to purchase on a pro rata basis the shares of Series B Preferred Stock being issued concurrently herewith and (ii) the right of the University to obtain certain warrants to purchase Common Stock.
NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth in this Agreement and in the agreements pursuant to which the Investors acquired their securities in the Company, the parties mutually agree as follows:
SECTION 1
or may become, convertible into said Common Stock or Preferred Stock; provided,
however, that "New Securities" does not include (i) securities issuable upon
conversion of or with respect to the Shares; (ii) securities offered to the
public pursuant to a registration statement filed under the Securities Act;
(iii) securities issued pursuant to the acquisition of another corporation by
the Company by merger, purchase of substantially all of the assets, or other
reorganization whereby the Company (or the Company's shareholders immediately
prior to such event) owns (or own, on a pro rata basis) not less than fifty-one
percent (51%) of the voting power of such corporation immediately after such
event; (iv) shares of the Company's Common Stock (or related options) issued to
employees, officers or directors of or consultants to the Company (including,
but not limited to, shares issued to the Option Holders) pursuant to any
employee stock offering, plan, or arrangement approved by the Board of
Directors; or (v) shares of the Company's Common Stock or Preferred Stock issued
in connection with any stock split, stock dividend, or recapitalization by the
Company.
SECTION 2
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR QUALIFICATION PROVISIONS OF SUCH ACT AND APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED, EXCEPT AS PERMITTED PURSUANT TO 17 C.F. R SECTION 230.144, OR THERE IS IN EFFECT A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS COVERING SUCH SECURITIES, OR THE ISSUER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF SUCH SECURITIES REASONABLY SATISFACTORY TO THE ISSUER, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION, QUALIFICATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
SALE OR OTHER TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS ALSO RESTRICTED BY THE TERMS OF STOCK PURCHASE AGREEMENTS BETWEEN THE ISSUER AND THE PURCHASERS LISTED THEREIN AND BY THE TERMS OF THAT CERTAIN AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT BETWEEN THE ISSUER AND THE OTHER PARTIES THERETO. COPIES OF SUCH DOCUMENTS MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF THIS CERTIFICATE TO THE SECRETARY OF THE ISSUER AT ITS PRINCIPAL EXECUTIVE OFFICES.
either (i) an unqualified written opinion of legal counsel who shall be
reasonably satisfactory to the Company addressed to the Company and reasonably
satisfactory in form and substance to the Company's counsel, to the effect that
the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act, (ii) a "no action" letter from the
Commission to the effect that the distribution of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, or (iii) such other showing that may
be reasonably satisfactory to legal counsel to the Company, whereupon the holder
of such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the holder to
the Company. Each certificate evidencing the Restricted Securities transferred
as above provided shall bear the appropriate restrictive legend set forth in
Section 2.2 above, except that such certificate shall not bear such restrictive
legend if in the opinion of counsel for the Company such legend is not required
in order to establish compliance with any provisions of the Securities Act.
(i) promptly give written notice of the proposed registration to all other Holders; and
(ii) as soon as practicable, use its diligent best efforts to effect such registration (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided that prior to the Company's initial public offering, no Initiating Holder may make a written request that the Company effect any registration
unless the aggregate anticipated offering price would exceed, net of underwriting discounts and commissions, $5,000,000; and provided further that the Company shall not be obligated to take any action to effect any such registration, qualification or compliance pursuant to this Section 2.4:
(A) In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act; or
(B) During the period starting with the date sixty (60) days prior to the Company's estimated date of filing of, and ending on a date six (6) months following the effective date of, a registration statement pertaining to an underwritten public offering of securities filed for the account of the Company (other than a registration relating solely to employee benefit plans or a registration relating solely to a Commission Rule 145 transaction), provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective and the Company's estimate of the date of filing such registration statement is made in good faith; or
(C) After the Company has effected one registration pursuant to this Section 2.4 and such registration has been declared or ordered effective.
Subject to the foregoing clauses (A), (B) and (C) and to Section 2.4(c), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request of the Initiating Holders.
approval of a majority in interest of the participating Holders.
Notwithstanding any other provision of this Section 2.4, if the underwriter determines that marketing factors require a limitation of the number of shares to be underwritten or that applicable state law prohibits the registration of any Holders' Registrable Securities because of the failure or lack of obligation of such Holder to contribute to the cost of such registration and so advises the participating Holders in writing, then the Company shall so advise all Holders (except those Holders who have indicated to the Company their decision not to distribute any of their Registrable Securities through such underwriting) and the number of shares of Registrable Securities that may be included in the registration and underwriting shall be allocated among all such Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities owned by such Holders at the time of filing the registration statement. No Registrable Securities excluded from the underwriting by reason of the underwriter's marketing limitation or such state law shall be included in such registration.
If any Holder disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the underwriter and the other Holders. The Registrable Securities and/or other securities so withdrawn from such underwriting shall also be withdrawn from such registration; provided, however, that, if by the withdrawal of such Registrable Securities a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum of any limitation imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration the right to include additional Registrable Securities in the same proportion used above in determining the underwriter limitation.
If the underwriter has not limited the number of Registrable Securities to be underwritten, the Company may include securities for its own account or the account of others in such registration if the underwriter so agrees and if the number of Registrable Securities which would otherwise have been included in such registration and underwriting will not thereby be limited.
and fifty (150) days, such right to delay a request to be exercised by the Company not more than twice in any one-year period.
(a) If at any time or from time to time, the Company shall determine to register any of its Common Stock, for its own account or for the account of others (other than the Holders), other than a registration relating solely to employee benefit plans or a registration relating solely to a Commission Rule 145 transaction or a registration on any registration form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities, the Company will:
(i) promptly give to each Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and
(ii) include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within twenty (20) days after receipt of such written notice from the Company, by any Holder or Holders. The rights of a particular Holder under this Section 2.5 shall terminate five (5) years after the effective date of the Company's initial underwritten public offering.
Notwithstanding any other provision of this Section 2.5, if the underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the underwriter may exclude some or all Registrable Securities from such registration and underwriting. The Company shall so advise
all Holders (except those Holders who have indicated to the Company their decision not to distribute any of their Registrable Securities through such underwriting), and the number of shares of Registrable Securities that may be included in the registration and underwriting shall be allocated among such Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities owned by such Holders at the time of filing the registration statement. No Registrable Securities excluded from the underwriting by reason of the underwriter's marketing limitation shall be included in such registration.
If any Holder disapproves of the terms of any such underwriting, such person may elect to withdraw therefrom by written notice to the Company and the underwriter. The Registrable Securities and/or other securities so withdrawn from such underwriting shall also be withdrawn from such registration; provided, however, that, if by the withdrawal of such Registrable Securities a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum of any limitation imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration the right to include additional Registrable Securities in the same proportion used above in determining the underwriter limitation.
(a) If (i) Holders of Registrable Securities request in writing (specifying that the request is being made pursuant to this Section 2.6) that the Company file a registration statement on Form S-3 (or any successor form to Form S-3 regardless of its designation) for a public offering of shares of Registrable Securities the reasonably anticipated aggregate proceeds of which would exceed $500,000, and (ii) the Company is a registrant entitled to use Form S-3 to register such shares, and (iii) the Company has not filed a registration statement pursuant to this Section 2.6 within the twelve (12) months immediately prior to the requested filing date, then the Company shall cause such shares, and any additional shares included pursuant to Section 2.6(b), to be registered on Form S-3 (or any successor form to Form S-3).
(b) Prior to effecting a registration of Registrable Securities pursuant to Section 2.6(a), the Company shall (i) give to each Holder written notice of the intended registration and (ii) include in such registration any additional Registrable Securities specified in any written request or requests by additional Holders received within fifteen (15) days after such written notice is given.
(c) All expenses incurred in connection with any registrations requested pursuant to this Section 2.6 including, without limitation, all registration, qualification, printing, and accounting fees, and fees and disbursements of counsel for the Company, shall be borne by the Holder or Holders participating in such registration on the basis of the amount of securities so registered.
(d) The Holders' rights to registration under this Section 2.6 are in addition to, and not in lieu of, their rights to registration under Sections 2.4 and 2.5.
(a) All Registration Expenses (exclusive of underwriting discounts and commissions and more than a single special counsel to the selling shareholders) incurred in connection with the first registration pursuant to Section 2.4 shall be borne by the Company. The Company shall not, however, be required to pay for expenses of any registration proceeding begun pursuant to Section 2.4, the request of which has been subsequently withdrawn by the Initiating Holders (unless the withdrawal is based upon material adverse information concerning the Company of which the Initiating Holders were not aware at the time of such request and the Holders of a majority of Registrable Securities agree to forfeit their right to one requested registration pursuant to Section 2.4 in which event such right shall be forfeited by all Holders), in which case such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of shares for which registration was requested and such registration shall not be counted as a registration pursuant to Section 2.4 for purposes of Section 2.4(a)(ii)(B).
(b) All Registration Expenses (exclusive of underwriting discounts and commissions and more than a single special counsel to the selling shareholders) incurred in connection with the first two registrations pursuant to Section 2.5 shall be borne by the Company. In each subsequent registration of Registrable Securities effected pursuant to Section 2.5, the Holders who include Registrable Securities in such registration shall bear any additional registration and qualification fees and expenses (including underwriters' discounts and commissions), and any additional costs and disbursements of counsel for the Company that result from the inclusion of the Registrable Securities in such registration, with such additional expenses of the registration being borne by all such Holders pro rata on the basis of the amount of Registrable Securities so registered; provided, however, that if any such cost or expense is attributable solely to one selling Holder and does not constitute a normal cost or expense of such a
registration, such cost or expense shall be allocated to that selling Holder. In addition, each selling Holder shall bear the fees and costs of its own counsel.
(a) Keep such registration, qualification or compliance effective for a period of one hundred and twenty (120) days or until the Holder or Holders have completed the distribution described in the registration statement relating thereto, whichever first occurs; and
(b) Furnish such number of prospectuses and other documents incident thereto as a Holder from time to time may reasonably request.
(a) The Company will indemnify each Holder, each of its officers,
directors, employees, agents, partners and legal counsel, and each person
controlling such Holder, with respect to which registration, qualification or
compliance has been effected pursuant to this Section 2, and each underwriter,
if any, and each person who controls any underwriter against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on (i) any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other similar document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to skate therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, or (ii) any violation by
the Company of any federal, state or common law rule or regulation applicable to
the Company in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of its officers,
directors, employees, agents, partners and legal counsel, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, as incurred, provided that the Company will not be liable
in any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company
by an instrument duly executed by such Holder or underwriter and specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors, officers, employees and agents each legal counsel and independent accountant of the Company, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of the Securities Act, and each other such Holder, each of its officers, directors, and partners and each person controlling such Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other similar document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and will reimburse the Company, such Holders, such directors, officers, employees, agents, persons, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, as incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder and specifically for use therein; provided, however, that the obligations of such Holders hereunder shall be limited to an amount equal to the proceeds to each such Holder of Registrable Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section 2.9 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has received written notice of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld). The Indemnified Party may participate in such defense at such party's expense; provided, however, that the Indemnifying Party shall bear the expense of such defense of the Indemnified Party if representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of
interest. The failure of any Indemnified Party to give notice as provided herein shall relieve the Indemnifying Party of its obligations under this Section 2 only to the extent that such failure to give notice shall materially adversely prejudice the Indemnifying Party in the defense of any such claim or any such litigation. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation (without any obligation of performance or admission by the Indemnified Party).
(d) Notwithstanding anything contained in this Section 2.9 to the contrary, the Company shall have the right and the ability to provide the necessary undertakings to the Commission in connection with any registration.
(a) Use its best efforts to facilitate the sale of the Restricted Securities to the public, without registration under the Securities Act, pursuant to Rule 144 under the Securities Act, provided that this shall not require the Company to file reports under the Securities Act and the Exchange Act at any time prior to the Company's being otherwise required to file such reports.
(b) Use its best efforts to make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act at all times after ninety (90) days after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;
(c) Use its best efforts to then file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange
Act, as amended (at any time after it has become subject to such reporting requirements);
(d) So long as any Holder holds any Restricted Securities to furnish to the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.
(a) such agreement shall apply only to the first underwritten registered public offering of the Company; and
(b) all officers and directors of the Company and all other holders of at least one percent (1%) of the Company's voting securities enter into similar agreements. The Company may impose stop-transfer instructions with respect to the shares (or securities) subject to the foregoing restriction until the end of such period.
a reasonable time after said transfer, stating the name and address of said transferee and said transferee's agreement to be bound by the provisions of this Agreement.
(a) includes the equivalent of Section 2.12 as a term; and
(b) contains provisions substantially similar to those contained in Sections 2.4(b) and 2.5(b) with respect to the allocation of Registrable Securities to be included in an underwritten public offering if marketing factors require a limitation on the number of such securities to be included.
Notwithstanding the foregoing, from and after the date hereof the Company shall not enter into any agreement with any person or persons providing for the granting to such holder registration rights superior to those granted to Holders pursuant to this Section 2, or of registration rights which might cause a reduction in the number of shares includable by the Holders in any offering pursuant to Section 2.4 or in any offering subject to Section 2.5.
SECTION 3
Notwithstanding any provision of the Company's Bylaws regarding delivery or non-delivery of financial information to shareholders of the Company, the Company hereby covenants and agrees as follows:
(a) As soon as practicable after the end of each fiscal year, and in any event within one hundred and twenty (120) days thereafter, a consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of such fiscal year, and consolidated statements of income, shareholders' equity and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with generally accepted accounting principles and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and with an audit opinion thereon from independent public accountants of recognized national standing selected by the Company.
(b) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) days thereafter, a consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and consolidated statements of income, shareholders' equity and cash flows of the Company and its subsidiaries, if any, for such period and for the current fiscal year to date, prepared in accordance with generally accepted accounting principles, with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made. Said financial statements shall be signed by an officer of the Company who shall state that such financial statements are in accordance with generally accepted accounting principles, with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.
(a) As soon as practicable after the end of each fiscal month, and in any event within thirty (30) days thereafter, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such month, and a consolidated statement of income of the Company and its subsidiaries, if any, for such month, and for the current fiscal year to date, in each case setting forth in comparative form the Company's and its subsidiaries', if any, projected consolidated balance sheets and projected consolidated statements of income for the corresponding periods as set forth in the annual budget (as prepared pursuant to Section 3.2(b)), prepared in accordance with generally accepted accounting principles, all in reasonable detail and certified subject to changes resulting from year-end audit adjustments, by the principal financial officer of the Company; provided, however, that any financial statements provided hereunder need not contain any footnotes. To such
financial statements there shall be appended a discussion and analysis, in reasonable detail, of such financial statements and the general business condition and prospects of the Company by management of the Company so as to assist the recipients in understanding and interpreting such financial statements.
(b) After adoption by the Board of Directors, but not later than thirty (30) days prior to beginning of each fiscal year, an annual budget for such year which shall include monthly capital and operating expense budgets, cash flow statements, projected balance sheets and profit and loss statements for each month and for the end of such year itemized in such detail as the Board of Directors may reasonably determine. Approval of such budgets, statements and projections shall be required by a majority of the Board of Directors.
(c) Within thirty (30) days after a material change has been made in the annual budget specified in Section 3.2(b) previously delivered, revised budgets, statements or projections (as so specified).
(d) Copies of all reports, registration statements and other material filed by the Company or any subsidiary with the Commission or with any national securities exchange on which securities of the Company or any subsidiary may be listed.
(e) The covenants provided in this Section 3.2 shall be suspended for so long as the Company is subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act.
such Holder may obtain from the Company, and which the Company has prominently marked "confidential", "proprietary" or "secret" or has otherwise identified as being such, pursuant to financial statements, reports and other materials submitted by the Company as required hereunder, or pursuant to visitation or inspection rights granted hereunder unless such information is or becomes known to the Holder from a source other than the Company (unless such Holder knows that such information was improperly obtained from the Company) or is or becomes publicly known, or unless the Company gives its written consent to the Holder's release of such information, except that no such written consent shall be required (and Holder shall be free to release such information) if such information is to be provided to Holder's lawyer or accountant, or to an officer, director or partner of a Holder.
SECTION 4
shares of Common Stock (and shares of Common Stock issuable upon conversion of securities convertible into shares of Common Stock), excluding the number of shares of Common Stock which may be issued upon exercise of any Option, actually held by such Holder, to the total number of outstanding shares of Common Stock (calculated on a fully diluted basis) of the Company. This right of first refusal shall be subject to the following provisions:
(a) In the event that the Company proposes to undertake an issuance of New Securities, it shall give each Holder written notice of its intention, describing the type of New Securities, the price, and the general terms upon which the Company proposes to issue the same. Each Holder shall have ten (10) business days from the date of receipt of any such notice to agree to purchase its pro rata share of such New Securities for the price and upon the general terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased. Each Holder shall have a right of over allotment such that if any Holder fails to exercise its right hereunder to purchase its pro rata portion of New Securities, the Company shall so notify the other Holders and the other Holders may purchase the non-purchasing Holder's portion on a pro rata basis, within ten (10) days from the date of such notice.
(b) In the event that a Holder fails to exercise in full the right of first refusal within said ten (10) day period (plus ten (10) day period, if applicable) the Company shall have ninety (90) days thereafter to sell the New Securities respecting which the Holders' rights were not exercised, at a price and upon general terms no more favorable to the purchasers thereof than specified in the Company's notice. In the event the Company has not sold the New Securities within such ninety (90) day period, the Company shall not thereafter issue or sell any New Securities, without first offering such securities to the Holders in the manner provided above.
(c) The right of first refusal granted under this Agreement shall expire upon the closing of the first firmly underwritten public offering of Common Stock of the Company pursuant to a registration statement filed with, and declared effective by, the Commission under the Securities Act, covering the offer and sale of Common Stock to the public at a per-share price (prior to underwriters' commissions and expenses) of at least $5.00 (as adjusted for any combinations, consolidations, stock distributions or stock dividends with the respect to such stock) and at an aggregate offering price of not less than $10,000,000.
(d) This right of first refusal is assignable only in connection with a sale of Shares or Common Stock issued on conversion thereof.
SECTION 5
SECTION 6
or otherwise delivered by hand or by messenger, addressed (a) if to an Investor at such Investor's address set forth on Exhibit A, or at such other address as such Investor shall have furnished to the Company in writing, or (b) if to any other Holder, at such address as such Holder shall have furnished the Company in writing, or, until any such Holder so furnishes an address to the Company, then to and at the address of the last holder of such Registerable Securities who has so furnished an address to the Company, or (c) if to the Company, at such address as the Company shall have furnished to each Holder in writing.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.
COMPANY:
AASTROM BIOSCIENCES, INC.
By /s/ R. DOUGLAS ARMSTRONG ----------------------------------- Dr. R. Douglas Armstrong President |
INVESTORS:
H&Q LIFE SCIENCE TECHNOLOGY FUND I
By /s/ JACKIE BERTERRETCHE -------------------------------- Title Attorney-In-Fact -------------------------------- |
H&Q LONDON VENTURES
By /s/ JACKIE BERTERRETCHE --------------------------------- Title Attorney-In-Fact --------------------------------- |
STATE TREASURER OF THE STATE OF MICHIGAN
CUSTODIAN OF PUBLIC SCHOOL EMPLOYEES'
RETIREMENT SYSTEM; STATE EMPLOYEES'
RETIREMENT SYSTEM; MICHIGAN STATE POLICE
RETIREMENT SYSTEM; JUDGES' RETIREMENT
SYSTEM; AND PROBATE JUDGES' RETIREMENT
SYSTEM
By /s/ PAUL E. RICE --------------------------------- Title Paul E. Rice, Administrator --------------------------------- Venture Capital and LBO Division |
BRENTWOOD ASSOCIATES V, L.P.
By: Brentwood V Ventures, L.P.
Its General Partner
By /s/ G. BRADFORD JONES ------------------------------------ WIND POINT PARTNERS II, L.P. By /s/ ROBERT CUMMINGS ------------------------------------ Title General Partner --------------------------------- |
GC&H PARTNERS
By /s/ EDWIN E. HUDDLESON, JR. ------------------------------------ Title General Partner --------------------------------- /s/ MICHAEL B. STAEBLER --------------------------------------- Michael B. Staebler, Esq. |
OPTION HOLDERS:
/s/ STEPHEN G. EMERSON --------------------------------------- Stephen G. Emerson /s/ BERNHARD O. PALSSON --------------------------------------- Bernhard O. Palsson /s/ MICHAEL F. CLARKE --------------------------------------- Michael F. Clarke /s/ R. DOUGLAS ARMSTRONG --------------------------------------- R. Douglas Armstrong |
THE REGENTS OF THE UNIVERSITY OF MICHIGAN:
By /s/ NORMAN G. HERBERT --------------------------------------- Norman G. Herbert |
By /s/ C.W. MATTHEWS --------------------------------------- C.W. Matthews |
Title Associate Vice President for ------------------------------------ Finance and Controller ------------------------------------ |
Series A Investors Shares - ------------------ --------- H&Q Life Science Technology Fund I 875,000 One Bush Street, 18th Floor San Francisco, CA 94104 H&Q London Ventures 875,000 One Bush Street, 18th Floor San Francisco, CA 94104 State Treasurer of the State of 750,000 Michigan, Custodian of Certain Retirement Systems c/o Venture Capital Division 430 West Allegan, First Floor Treasury Building Lansing, MI 48933 --------- TOTAL 2,500,000 Series B Investors Shares - ------------------- --------- Brentwood Associates, V., L.P. 850,000 11150 Santa Monica, Blvd. Suite 1200 Los Angeles, CA 90025 Attn: Brad Jones Wind Point II, L.P. 750,000 321 North Clark Street Chicago, IL 60610 Attn: Robert Cummings H&Q Life Science Technology Fund I 540,000 One Bush Street, 18th Floor San Francisco, CA 94104 Attn: Robert Kunze H&Q London Ventures 360,000 One Bush Street, 18th Floor San Francisco, CA 94104 Attn: Robert Kunze |
i.
State Treasurer of the State 500,000 of Michigan, Custodian of Certain Retirement Systems c/o Venture Capital Division 430 West Allegan Lansing, Michigan 48992 Attn: Joseph Taylor GC&H Partners 25,000 c/o Cooley Godward Castro Huddleson & Tatum One Maritime Plaza 20th Floor San Francisco, CA 94111 Attn: Jeanne Meyer Michael B. Staebler, Esq. 5,000 c/o Pepper, Hamilton & Scheetz 100 Renaissance Center Suite 3600 Detroit, Michigan 48243 --------- TOTALS 3,030,000 |
ii.
AASTROM BIOSCIENCES, INC.
P.O. Box 130469
Ann Arbor, Michigan 48113-0469
Gentlemen:
1. The following is a complete list of all inventions or improvements relevant to the subject matter of my service as a director of AASTROM BIOSCIENCES, INC. (the "Company") that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my becoming a director of the Company:
_____ No inventions or improvements.
_____ See below:
_____ Due to confidentiality agreements with prior employer, I cannot disclose certain inventions that would otherwise be included on the above-described list.
_____ Additional sheets attached.
2. I propose to bring to my service as a director the following devices, materials and documents of a former employer or other person to whom I have an obligation of confidentiality that are not generally available to the public, which materials and
documents may be used in my service as a director pursuant to the express written authorization of my former employer or such other person (a copy of which is attached hereto):
_____ No materials.
_____ See below.
_____ Additional sheets attached.
Dated: ____________________, 19____.
Very truly yours,
EXHIBIT B
AASTROM BIOSCIENCES, INC.
In consideration of my service as a director or continued service as a director of AASTROM Biosciences, Inc. ("the Company"), I hereby agree as follows:
The term "Proprietary Information" shall mean all of the confidential or proprietary information of the Company, including, but not limited to:
a. inventions, trade secrets, ideas, processes, formulas, source codes, data, programs, other original works or authorship, know-how, improvements, discoveries, developments, designs and techniques, (hereinafter collectively referred to as "Inventions"); and
b. plans for research, development, new products, marketing and selling; financial statements; licenses; prices and costs; information concerning suppliers and customers; and information regarding the skills and compensations of employees of the Company.
a. information which at the time of disclosure to the undersigned is in the public domain,
b. information which was received by the undersigned from a third party having the legal right to transmit the same to the undersigned, or
c. information which was independently developed by the undersigned without reliance on any information received from the Company.
I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information ("Third Party Information") subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of my service as director and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose or use Third Party Information except as permitted by the agreement between the Company and such third party, unless expressly authorized to act otherwise by an officer of the Company.
I also assign to or as directed by the Company all my right, title and interest in and to any and all inventions, full title to which is required to be in the United States by a contract between the Company and the United States or any of its agencies. Inventions assigned to or as directed by the Company by this paragraph 2 are hereinafter referred to as "Company Inventions."
rate after my termination for the time actually spent by me at the Company's request on such assistance.
In the event the Company is unable, after reasonable effort, to secure my signature on any document needed to apply for or prosecute any patent, copyright, or other right or protection relating to a Company Invention, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for an in my behalf to execute, verify and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, and other rights and protections thereon with the same legal force and effect as if executed by me.
entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith.
Such notice shall be deemed given upon personal delivery to the appropriate address or sent by certified or registered mail, three days after the date of mailing.
contracts between Michigan residents made and to be performed within the state of Michigan, which state shall have jurisdiction of the subject matter hereof. This Agreement may not be changed, modified, released, discharged, abandoned, or otherwise amended, in whole or in part, except by an instrument in writing signed by the company and me.
This Agreement shall be effective as of the first day of my service as a director with the company, namely: _____________________, 19_____.
Date: ___________________ ___________________________________________________ ___________________________________________________ Address ___________________________________________________ ___________________________________________________ |
EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
This Agreement is made as of __________, between Aastrom Biosciences, Inc., a Michigan corporation (the "Company"), and those certain officers and directors of the Company designated on the signature page of this Agreement as Indemnitees (hereinafter referred to individually as an "Indemnitee" and collectively as the "Indemnitees").
RECITALS
A. It is essential to the Company to attract and retain as directors and officers the most capable persons available.
B. Both the Company and Indemnitees recognize the increased risk of litigation and other claims being asserted against directors and officers of companies in today's environment.
C. While basic protection against undue risk of personal liability of directors and officers may be provided through insurance coverage, it has become increasingly difficult to obtain such insurance on terms providing reasonable protection at reasonable cost.
D. The Restated Articles of Incorporation and the Bylaws of the Company permit the Company to indemnify and advance expenses to its directors and officers to the full extent permitted by law; and Indemnitees have been serving and continue to serve as directors and officers of the Company in part in reliance on such Restated Articles of Incorporation and Bylaws.
E. In recognition of Indemnitees' need for substantial protection against personal liability, the increasing difficulty in obtaining satisfactory insurance coverage, and Indemnitees' reliance on the aforesaid Restated Articles of Incorporation and Bylaws, and in part to provide Indemnitees with specific contractual assurance that the protection promised by the Restated Articles of Incorporation and Bylaws will be available to Indemnitees (regardless of, among other things, any amendment to or revocation of such Restated Articles of Incorporation or Bylaws or any change in the composition of the Company's Board of Directors), the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitees to the fullest extent permitted by law and as set forth in this Agreement, and, to the extent insurance coverage is maintained, for the continued coverage of Indemnitees under the Company's directors' and officers', liability insurance policies.
NOW, THEREFORE, in consideration of Indemnitees' service to the
Company, or Indemnitees' service to another enterprise at the request of the Company, the parties hereto agree as follows:
under Section 2(a) shall be subject to the condition that a Reviewing Party shall not have determined that Indemnitee would not be permitted to be indemnified under applicable law. Except as provided in Section 2(c), the obligation of the Company under Section 2(a) to make an Expense Advance shall be subject to the condition that, if, when and to the extent a Reviewing Party determines that Indemnitee would not be permitted to be indemnified under applicable law, the Indemnitee shall reimburse the Company for all such Expense Advances theretofore paid. For purposes of this Section 2(b), if the Reviewing Party is Independent Legal Counsel, then any such determination shall be rendered in the form of a written opinion.
written opinion to the Company and Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of Independent Legal Counsel and to fully indemnify such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or such counsel's engagement pursuant hereto.
such belief, prior to the commencement of legal proceedings by Indemnitee as contemplated in Section 2(c), shall be a defense to Indemnitee's claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
AASTROM BIOSCIENCES, INC.
By:________________________________
R. Douglas Armstrong, Ph.D.,
President
The following officers and directors are covered by this Agreement as Indemnitees:
______________________________ ______________________________ Name: Name: Title: Title: ______________________________ ______________________________ Name: Name: Title: Title: ______________________________ ______________________________ Name: Name: |
Title: Title:
EXHIBIT 10.2
ANN ARBOR STROMAL, INC.
1989 STOCK OPTION PLAN
Adopted August 15, 1989
1. PURPOSE.
(a) The purpose of the Plan is to provide a means which selected key employees and directors (if declared eligible under paragraph 4) of and consultants to Ann Arbor Stromal, Inc., a Michigan corporation (the "Company"), and its Affiliates, as defined in subparagraph 1(b), may be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 425(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of persons now employed by or serving as consultants or directors to the Company, to secure and retain the services of new employees/persons capable of filling such positions, and to provide incentives for such persons to exert maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan shall, in the discretion of the Board of Directors of the Company (the "Board") or any committee to which responsibility for administration of the Plan has been delegated
1.
pursuant to subparagraph 2(c), be either incentive stock options as that term is used in Section 422A of the Code ("Incentive Stock Options"), or options which do not qualify as incentive stock options ("Supplemental Stock Options"). All options shall be separately designated Incentive Stock Options or Supplemental Stock Options at the time of grant, and in such form as issued pursuant to paragraph 5, and a separate certificate or certificates shall be issued for shares purchased on exercise of each type of option. An option designated as a Supplemental Stock Option shall not be treated as an incentive stock option.
(a) The Plan shall be administered by the Board unless and until
the Board delegates administration to a committee, as provided in subparagraph
2(c). Whether or not the Board has delegated administration, the Board shall
have the final power to determine all questions of policy and expediency that
may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible under the Plan shall be granted options; when and how the option shall be granted; whether the option will be an Incentive Stock Option or a Supplemental Stock Option; the provisions of each option granted (which need not be identical), including the time or times during the term of each option within which all or portions of such option may be exercised; and the
2.
number of shares for which an option shall be granted to each such person.
(2) To construe and interpret the Plan and options granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any option agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company.
(c) The Board may delegate administration of the Plan to a committee composed of not fewer than three (3) members (the "Committee"), all of the members of which Committee shall be disinterested persons, if required and as defined by the provisions of subparagraph 2(d). If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. Additionally, prior to the date of the first
3.
registration of an equity security of the Company under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and notwithstanding anything to the contrary contained herein, the Board may delegate administration of the Plan to any person or persons and the term "Committee" shall apply to any person or persons to whom such authority has been delegated.
(d) The term "disinterested person," as used in this Plan, shall mean an administrator of the Plan, whether a member of the Board or of any Committee to which responsibility for administration of the Plan has been delegated pursuant to subparagraph 2(c): (i) who is not at the time he or she exercises discretion in administering the Plan eligible and has not at any time within one year prior thereto been eligible for selection as a person to whom stock may be allocated or to whom stock options or stock appreciation rights may be granted pursuant to the Plan or any other plan of the Company or any of its affiliates entitling the participants therein to acquire stock, stock options or stock appreciation rights of the Company or any of its affiliates; or (ii) who is otherwise considered to be a "disinterested person" in accordance with the rules, regulations or interpretations of the Securities and Exchange Commission. Any such person shall otherwise comply with the requirements of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
4.
(e) Any requirement that an administrator of the Plan be a "disinterested person" shall not apply (i) prior to the date of the first registration of an equity security of the Company under Section 12 of the Exchange Act, or (ii) if the Board or the Committee expressly declares that such requirement shall not apply.
(a) Subject to the provisions of paragraph 9 relating to adjustments upon changes in stock, the stock that may be sold pursuant to options granted under the Plan shall not exceed in the aggregate one million three hundred sixty-three thousand six hundred thirty-six (1,363,636) shares of the Company's common stock. If any option granted under the Plan shall for any reason expire or otherwise terminate without having been exercised in full, the stock not purchased under such option shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.
(c) An Incentive Stock Option may be granted to an eligible person under the Plan only if the aggregate fair market value (determined at the time the option is granted) of the stock with respect to which incentive stock options (as defined in the Code) granted after 1986 are exercisable for the first time by such optionee during any calendar year under all incentive stock option plans of the Company and its Affiliates does not exceed one hundred thousand dollars ($100,000). Should it be determined
5.
that an option granted under the Plan exceeds such maximum for any reason other than the failure of a good faith attempt to value the stock subject to the option, such option shall be considered a Supplemental Stock Option to the extent, but only to the extent, of such excess; provided, however, that should it be determined that an entire option or any portion thereof does not qualify for treatment as an incentive stock option by reason of exceeding such maximum, such option or the applicable portion shall be considered a Supplemental Stock Option.
(a) Incentive Stock Options may be granted only to employees (including officers) of the Company or its Affiliates. A director of the Company shall not be eligible to receive Incentive Stock Options unless such director is also an employee (including an officer) of the Company or any Affiliate. Supplemental Stock Options may be granted only to key employees (including officers) of, directors of or consultants to the Company or its Affiliates. A director of the Company shall not be eligible for a Supplemental Stock Option unless such director is also a key employee (including an officer) of or consultant to the Company or any Affiliate.
(b) A director shall in no event be eligible for the benefits of the Plan unless and until such director is expressly declared eligible to participate in the Plan by action of the Board or the Committee, and only if, at any time discretion is exercised by the Board in the selection of a director as a person
6.
to whom options may be granted, or in the determination of the number of shares which may be covered by options granted to a director: (i) a majority of the Board and a majority of the directors acting in such matter are disinterested persons, as defined in subparagraph 2(d); (ii) the Committee consists solely of "disinterested persons" as defined in subparagraph 2(d); or (iii) the Plan otherwise complies with the requirements of Rule 16b-3 promulgated under the Exchange Act, as from time to time in effect. The Board shall otherwise comply with the requirements of Rule 16b-3 promulgated under the Exchange Act, as from time to time in effect. This subparagraph 4(b) shall not apply prior to the date of the first registration of an equity security of the Company under Section 12 of the Exchange Act.
(c) No person shall be eligible for the grant of an option under the Plan if, at the time of grant, such person owns (or is deemed to own pursuant to Section 425(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates unless the exercise price of such option is at least one hundred ten percent (110%) of the fair market value of such stock at the date of grant and the term of the option does not exceed five (5) years from the date of grant.
Each option shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate. The provisions of separate options need not be
7.
identical, but each option shall include (through incorporation of provisions hereof by reference in the option or otherwise) the substance of each of the following provisions:
(a) The term of any option shall not be greater than twelve (12) years from the date it was granted.
(b) The exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the fair market value of the stock subject to the option on the date the option is granted. The exercise price of each Supplemental Stock Option shall be not less than eighty-five percent (85%) of the fair market value of the stock subject to the option on the date the option is granted.
(c) The purchase price of stock acquired pursuant to an option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the option is exercised, or (ii) at the discretion of the Board or the Committee, either at the time of the grant or exercise of the option, (A) by delivery to the Company of other common stock of the Company, (B) according to a deferred payment or other arrangement (which may include, without limiting the generality of the foregoing, the use of other common stock of the Company) with the person to whom the option is granted or to whom the option is transferred pursuant to subparagraph 5(d), or (C) in any other form of legal consideration that may be acceptable to the Board or the Committee.
8.
In the case of any deferred payment arrangement, interest shall be payable at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement.
(d) An option shall not be transferable except by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the person to whom the option is granted only by such person.
(e) The total number of shares of stock subject to an option may, but need not, be allotted in periodic installments (which may, but need not, be equal). From time to time during each of such installment periods, the option may become exercisable ("vest") with respect to some or all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the option was not fully exercised. During the remainder of the term of the option (if its term extends beyond the end of the installment periods), the option may be exercised from time to time with respect to any shares then remaining subject to the option. The provisions of this subparagraph 5(e) are subject to any option provisions governing the minimum number of shares as to which an option may be exercised.
9.
(f) The Company may require any optionee, or any person to whom
an option is transferred under subparagraph 5(d), as a condition of exercising
any such option, (1) to give written assurances satisfactory to the Company as
to the optionee's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters,
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the option; and
(2) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the option for such person's own
account and not with any present intention of selling or otherwise distributing
the stock. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise of the option has been registered under a then currently effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws.
(g) An option shall terminate three (3) months after termination of the optionee's employment or relationship as a consultant or director with the Company or an Affiliate, unless (i) such termination is due to such person's permanent and total
10.
disability, within the meaning of Section 422A(c)(7) of the Code, in which case the option may, but need not, provide that it may be exercised at any time within one (1) year following such termination of employment or relationship as a consultant or director; or (ii) the optionee dies while in the employ of or while serving as a consultant or director to the Company or an Affiliate, or within not more than three (3) months after termination of such relationship, in which case the option may, but need not, provide that it may be exercised at any time within eighteen (18) months following the death of the optionee by the person or persons to whom the optionee's rights under such option pass by will or by the laws of descent and distribution; or (iii) the option by its terms specifies either (a) that it shall terminate sooner than three (3) months after termination of the optionee's employment or relationship as a consultant or director, or (b) that it may be exercised more than three (3) months after termination of the relationship with the Company or an Affiliate. This subparagraph 5(g) shall not be construed to extend the term of any option or to permit anyone to exercise the option after expiration of its term, nor shall it be construed to increase the number of shares as to which any option is exercisable from the amount exercisable on the date of termination of the optionee's employment or relationship as a consultant or director.
(h) The option may, but need not, include a provision whereby the optionee may elect at any time during the term of his
11.
or her employment or relationship as a consultant or director with the Company or any Affiliate to exercise the option as to any part or all of the shares subject to the option prior to the stated vesting date of the option or of any installment or installments specified in the option. Any shares so purchased from any unvested installment or option may be subject to a repurchase right in favor of the Company or to any other restriction the Board or the Committee determines to be appropriate.
(i) To the extent provided by the terms of an option, the optionee may satisfy any federal, state or local tax withholding obligation relating to the exercise of such option by any of the following means or by a combination of such means: (1) tendering a cash payment; (2) authorizing the Company to withhold from the shares of the common stock otherwise issuable to the participant as a result of the exercise of the stock option a number of shares having a fair market value less than or equal to the amount of the withholding tax obligation; or (3) delivering to the Company owned and unencumbered shares of the common stock having a fair market value less than or equal to the amount of the withholding tax obligation.
(a) During the terms of the options granted under the Plan, the Company shall keep available at all times the number of shares of stock required to satisfy such options.
12.
(b) The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of stock upon exercise of the options granted under the Plan; provided, however, that this undertaking shall not require the Company to register under the Securities Act either the Plan, any option granted under the Plan or any stock issued or issuable pursuant to any such option. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such options unless and until such authority is obtained.
Proceeds from the sale of stock pursuant to options granted under the Plan shall constitute general funds of the Company.
(a) The Board or the Committee shall have the power to accelerate the time during which an option may be exercised or the time during which an option or any part thereof will vest pursuant to subparagraph 5(e), notwithstanding the provisions in the option stating the time during which it may be exercised or the time during which it will vest.
13.
(b) Neither an optionee nor any person to whom an option is transferred under subparagraph 5(d) shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such option unless and until such person has satisfied all requirements for exercise of the option pursuant to its terms.
(c) Throughout the term of any option granted pursuant to the Plan, the Company shall make available to the holder of such option, not later than one hundred twenty (120) days after the close of each of the Company's fiscal years during the option term, upon request, such financial and other information regarding the Company as comprises the annual report to the shareholders of the Company provided for in the bylaws of the Company.
(d) Nothing in the Plan or any instrument executed or option granted pursuant thereto shall confer upon any eligible employee or optionee any right to continue in the employ of the Company or any Affiliate (or to continue acting as a consultant or director) or shall affect the right of the Company or any Affiliate to terminate the employment or consulting relationship or directorship of any eligible employee or optionee with or without cause. In the event that an optionee is permitted or otherwise entitled to take a leave of absence, the Company shall have the unilateral right to (i) determine whether such leave of absence will be treated as a termination of employment for purposes of paragraph 5(g) hereof and corresponding provisions of
14.
any outstanding options, and (ii) suspend or otherwise delay the time or times at which the shares subject to the option would otherwise vest.
9. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject to any option granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or otherwise), the Plan and outstanding options will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan and the class(es) and number of shares and price per share of stock subject to outstanding options.
(b) In the event of: (1) a dissolution or liquidation of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation; or (3) a reverse merger in which the Company is the surviving corporation but the shares of the Company's common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise then to the extent permitted by applicable law: (i) any surviving corporation shall assume any options outstanding under the Plan or shall substitute similar options for those outstanding under the Plan, or (ii) such options shall continue in full force and effect. In the event any surviving corporation
15.
refuses to assume or continue such options, or to substitute similar options for those outstanding under the Plan, then, with respect to options held by persons then performing services as employees or as consultants or directors for the Company as the case may be, the time during which such options may be exercised shall be accelerated and the options terminated if not exercised prior to such event.
(a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in paragraph 9 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the shareholders of the Company within twelve (12) months before or after the adoption of the amendment, where the amendment will:
(i) Increase the number of shares reserved for options under the Plan;
(ii) Modify the requirements as to eligibility for participation in the Plan (to the extent such modification requires shareholder approval in order for the Plan to satisfy the requirements of Section 422A(b) of the Code); or
(iii) Modify the Plan in any other way if such modification requires shareholder approval in order for the Plan to satisfy the requirements of Section 422A(b) of the Code or to comply with the requirements of Rule 16b-3 promulgated under the Exchange Act.
16.
(b) It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide optionees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to employee incentive stock options and/or to bring the Plan and/or incentive stock options granted under it into compliance therewith.
(c) Rights and obligations under any option granted before amendment of the Plan shall not be altered or impaired by any amendment of the Plan unless (i) the Company requests the consent of the person to whom the option was granted and (ii) such person consents in writing.
(a) The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate ten (10) years from the date the Plan is adopted by the Board or approved by the shareholders of the Company, whichever is earlier. No options may be granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is in effect shall not be altered or impaired by suspension or termination of the Plan, except with the consent of the person to whom the option was granted.
The Plan shall become effective as determined by the Board, but no options granted under the Plan shall be exercised
17.
unless and until the Plan has been approved by the shareholders of the Company.
18.
INCENTIVE STOCK OPTION AGREEMENT
OPTIONEE:
AASTROM Biosciences, Inc., formerly known as Ann Arbor Stromal, Inc., (the "Company"), pursuant to its 1989 Stock Option Plan (the "Plan"), hereby grants to you, the Optionee named above, an option to purchase shares of the common stock of the Company ("Common Stock"). This option is intended to qualify as an "incentive stock option" within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended from time to time (the "Code"). The date of grant of this option is ____________.
The grant hereunder is in connection with and in furtherance of the Company's compensatory benefit plan for participation of the Company's employees (including officers), directors or consultants and is intended to comply with the provisions of Rule 701 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act").
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option is ___________. Subject to the limitations contained herein, this option shall be exercisable with respect to each installment shown below on or after the date of vesting applicable to such installment, as follows:
Number of Shares Date of Earliest Exercise ---------------- ------------------------- (Installment) (Vesting) |
provided, however, you will be entitled to exercise this option with respect to all of the shares of Common Stock subject to this
Incentive Stock Option Agreement
option is your employment by the Company is terminated upon or at any time within six (6) months after the date of a "change of control" of the Company (as defined below), unless such termination is for cause (as defined below). For purposes of this Agreement, a "change of control" shall be deemed to have occurred if in a single transaction or a series of related transactions occurring within a twelve month period: all or substantially all of the business or assets of the Company is sold, transferred or leased; the Company is merged into or consolidated with another entity and, as a result, the shareholders of the Company immediately prior to the merger own less than 51% of the voting capital stock of the successor corporation; there is a change of control of 51% or more of the outstanding capital stock of the Company on a fully diluted basis; or a new shareholder acquires the right to elect a majority of the board of directors. The date of such "change of control" for purposes of this Agreement shall be the date of the closing of the transaction which is deemed to constitute a change of control under the foregoing sentence, or if a series of related transactions is deemed to constitute a change of control, the date of the closing of the last transaction in the series. For purposes of this Agreement, "cause" shall include disclosure of any proprietary information of the Company or of any third party in violation of the Proprietary Information and Invention Agreement between you and the Company; any commission of a felony; willful misconduct; or any commission of any act or series of acts of dishonesty which are injurious to the best interests of the Company.
2. a. The exercise price of this option is ________ per share, being not less than the fair market value of the Common Stock on the date of grant of this option.
b. Payment of the exercise price per share is due in full in cash (including check) upon exercise of the option with respect to all or any part of each installment which has become exercisable by you. Notwithstanding the foregoing, this option may be exercised pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which results in the receipt of cash (or
Incentive Stock Option Agreement
check) by the Company prior to the issuance of Common Stock.
3. The minimum number of shares with respect to which this option may be exercised at any one time is one hundred (100) except (a) as to an installment subject to exercise, as set forth in paragraph 1, which amounts to fewer than one hundred (100) shares, in which case, as to the exercise of that installment, the number of shares in such installment shall be the minimum number of shares, and (b) with respect to the final exercise of this option this paragraph 3 shall not apply.
4. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Act or if such shares are not then so registered, the Company has determined that such exercise and issuance is exempt from the registration requirements of the Act.
5. The term of this option commences on the date hereof and, unless sooner terminated as set forth below or in the Plan, terminates ten (10) years from the date this option is granted. This option shall terminate prior to the expiration of its term as follows: this option shall terminate three (3) months after the termination of your employment with the Company or an affiliate of the Company (as defined in the Plan) for any reason or for no reason (including without limitation a termination in connection with a "change of control" of the Company, as defined in paragraph 1 hereof) unless:
a. such termination of your employment is due to your permanent and total disability (within the meaning of Section 422A(c)(7) of the Code), in which event the option shall terminate on the earlier of the termination date set forth above or one (1) year following such termination of employment; or
b. such termination of employment is due to your death, in which event the option shall terminate on the earlier of the termination date set forth above or eighteen (18) months after your death; or
c. during any part of such three (3) month period the option is not exercisable solely because of the condition set forth in paragraph 4 above, in which
Incentive Stock Option Agreement
event the option shall not terminate until the earlier of the termination date set forth above or until it shall have been exercisable for an aggregate period of three (3) months after termination of employment; or
d. exercise of the option within three (3) months after termination of your employment with the Company or with an affiliate would result in liability under section 16(b) of the Securities Exchange Act of 1934, in which case the option will terminate on the earlier of (i) the termination date set forth above, (ii) the tenth (10th) day after the last date upon which exercise would result in such liability or (iii) six (6) months and ten (10) days after the termination of your employment with the Company or an affiliate.
However, this option may be exercised following termination of employment only as to that number of shares as to which it was exercisable under the provisions of paragraph 1 of this option on the date of termination of employment.
6. a. This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to subparagraph 5(f) of the Plan.
b. By exercising this option you agree that:
(i) The Company may require you to enter an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of this option; (2) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (3) the disposition of shares acquired upon such exercise;
(ii) you will notify the Company in writing within fifteen (15) days after the date of any
Incentive Stock Option Agreement
disposition of any of the shares of the Common Stock issued upon exercise of this option that occurs within two (2) years after the date of grant of the option hereunder or within one (1) year after such shares of Common Stock are transferred upon exercise of this option; and
(iii) the Company (or a representative of the underwriters) may, in
connection with the first underwritten registration of the
offering of any securities of the Company under the Act, require
that you do not sell or otherwise transfer or dispose of any
shares of Common Stock or other securities of the Company during
such period (not to exceed one hundred fifty (150) days)
following the effective date (the "Effective Date") of the
registration statement of the Company filed under the Act as may
be requested by the Company or the representative of the
underwriters; provided, however, that such restriction shall
apply only if, on the Effective Date, you are an officer,
director, or owner of more than one percent (1%) of the
outstanding securities of the Company. For purposes of this
restriction, you will be deemed to own securities which (i) are
owned directly or indirectly by you, including securities held
for your benefit by nominees, custodians, brokers or pledgees;
(ii) may be acquired by you within sixty (60) days of the
Effective Date; (iii) are owned directly or indirectly, by or for
your brothers or sisters (whether by whole or half blood),
spouse, ancestors and lineal descendants; or (iv) are owned,
directly or indirectly, by or for a corporation, partnership,
estate or trust of which you are a shareholder, partner or
beneficiary but only to the extent of your proportionate interest
therein as a shareholder, partner or beneficiary thereof. You
further agree that the Company may impose stop-transfer
instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
Incentive Stock Option Agreement
7. This option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.
8. This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company.
9. Any notices provided for in this option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company.
10. This option is subject to all the provisions of the Plan, a copy of which is attached hereto and its provisions are hereby made a part of this option, including without limitation the provisions of paragraph 5 of the Plan relating to option provisions, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this option and those of the Plan, the provisions of the Plan shall control; provided, however, that you shall be entitled to receive stock options on additional shares of the Corporation's common stock to protect you against dilution of your share holding to the full extent provided by your Employment Agreement with the Company.
Dated as of the ____ day of ___________, 19__.
Very truly yours,
AASTROM BIOSCIENCES, INC.
Duly authorized on behalf of the Board of Directors.
Incentive Stock Option Agreement
The undersigned:
a. Acknowledges receipt of the foregoing and the attachments referenced therein and understands that all rights and liabilities with respect to this option are set forth in the option and the Plan; and
b. Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned optionee and the Company and its affiliates regarding the acquistion of stock in the Company and supersedes all prior oral and written agreements on that subject.
Address:
Attachment:
1989 Stock Option Plan
Stock Transfer Restriction and Buy-Out Agreement
EXHIBIT 10.3
ANCILLARY STOCK OPTION PLAN
THIS ANCILLARY STOCK OPTION PLAN (the "Ancillary Plan") is made as of August 6, 1991, by Aastrom Biosciences, Inc. (the "Company"), with respect to the facts set forth below.
RECITALS
A. On August 15, 1989, the Company formally approved the 1989 Stock Option Plan (the "1989 Plan"), pursuant to which the Board of Directors of the Company (the "Board") is authorized to grant tax qualified "incentive stock options" to employees of the Company or its affiliates and tax nonqualified "supplemental stock options" to employees, officers, employed directors and consultants of the Company or its affiliates.
B. In order to advance the growth and prosperity of the Company, the Board believes that it is in the best interests of the Company to also grant stock options on certain occasions to certain parties and persons selected by the Board who are not otherwise eligible to receive stock options under the terms of the 1989 Plan.
AGREEMENT
NOW, THEREFORE, Company hereby authorizes and establishes this Ancillary Plan, pursuant to the terms and conditions set forth below.
1. Purpose. The purpose of the Ancillary Plan is to advance the growth and prosperity of the Company and its shareholders by providing incentives to certain parties and persons selected by the Board who are not otherwise eligible to receive stock options under the 1989 Plan. The stock options granted pursuant to this Ancillary Plan shall be treated as "nonqualified tax options" under the U.S. Internal Revenue Code.
2. Term. The term of this Ancillary Plan shall commence on the date set forth above and shall terminate upon resolution by the Board.
3. Shares of Stock Subject to this Ancillary Plan. The shares of Common Stock which may be issued pursuant to the Ancillary Plan upon exercise of stock options shall not exceed in the aggregate Fifty Thousand (50,000) shares of the Company's Common Stock, unless otherwise approved by the Board by vote of not less than two thirds (2/3) of the Board. Such shares of Common Stock shall be authorized and unissued shares. The shares allocated to this Ancillary Plan and the stock options granted pursuant to this Ancillary Plan are in addition to, and not part of, the shares allocated to and granted pursuant to the 1989 Plan.
4. Administration of the Plan. The Board shall administer the Ancillary Plan, select the persons to whom stock options shall be granted, determine the number of shares of Common Stock to be optioned and awarded, determine the purchase price per share of Common Stock deliverable upon the exercise of a stock option, determine the method of payment upon the exercise of an option, and interpret, construe and implement the provisions of this Ancillary Plan. An option may be exercisable at any time from time to time, subject to such timing, performance criteria, conditions and restrictions as determined by the Board on a case by case basis for each option as set forth in the Stock Option Agreements.
5. Stock Option Agreements. The granting of stock options shall be evidenced by a Stock Option Agreement, containing such terms and conditions as the Board of Directors shall deem appropriate. The provisions of the Stock Option Agreements granted pursuant to this Ancillary Plan need not be identical, may be similar to or different from the form of Stock Option Agreements granted under the 1989 Plan, and may be customized as determined by the Board on a case by case basis.
6. Amendment of this Ancillary Plan. This Ancillary Plan may, at any time or from time to time, be terminated, modified or amended by the Board.
7. Approval. Approved by the Board on August 6, 1991.
/s/ R. DOUGLAS ARMSTRONG -------------------------- R. Douglas Armstrong, Ph.D President/CEO |
ANCILLARY STOCK OPTION AGREEMENT
Optionee:
AASTROM Biosciences, Inc., formerly known as Ann Arbor Stromal, Inc., (the "Company"), pursuant to its Ancillary Stock Option Plan dated August 6, 1991 (the "Plan"), has granted to you, the Optionee named above, an option to purchase shares of the common stock of the Company ("Common Stock"). This option is not intended to qualify and will not be treated as an "incentive stock option" within the meaning of Section 422A of the Internal Revenue code of 1986, as amended from time to time (the "Code"). The date of grant of this option is as of _________________, ____.
The grant hereunder is a matter of separate inducement and agreement in connection with your services to the Company and not in lieu of any other compensation for services, and is intended to comply with the provisions of Rule 701 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), and applicable state law exemptions from registration.
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option is _____________________. Subject to the limitations contained herein, including without limitation Section 5 hereof, this option shall be exercisable with respect to each installment shown below on or after the date of vesting applicable to such installment, as follows:
Number of Shares Date of Earliest Exercise ---------------- ------------------------ (Installment) (Vesting) |
Ancillary Stock Option Agreement Page 2 |
2. a. The exercise price of this option is ___________ per share, being not less than the fair market value of the Common Stock on the date of grant of this option.
b. Payment of the exercise price per share is due in full in cash (including check) upon exercise of all or any part of each installment which has become exercisable by you. Notwithstanding the foregoing, this option may be exercised pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which results in the receipt of cash (or check) by the Company prior to the issuance of Common Stock.
3. The minimum number of shares with respect to which this option may be exercised at any one time is one hundred (100) except (a) as to an installment subject to exercise, as set forth in paragraph 1, which amounts to fewer than one hundred (100) shares, in which case, as to the exercise of that installment, the number of shares in such installment shall be the minimum number of shares, and (b) with respect to the final exercise of this option this paragraph 3 shall not apply.
4. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Act or if such shares are not then so registered, the exercise and issuance of such shares would be exempt from the registration requirements of the Act.
5. The term of this option commences on the date hereof and, unless sooner terminated as set forth below, terminates twelve (12) years from the date this option is granted. This option shall terminate prior to the expiration of its term as follows: this option shall terminate three (3) months after the termination of your participation in the University of Michigan ex vivo bone marrow project more fully described in that certain Option Agreement dated March 24, 1989, between the Company, the University of Michigan and H&Q Life Science Technology Fund 1 (hereinafter such participation in the ex vivo bone marrow project
Ancillary Stock Option Agreement
shall be referred to as "Employment") for any reason or for no reason unless:
a. such termination of your Employment is due to your permanent and total disability (within the meaning of Section 422A(c)(7) of the Code), in which event the option shall terminate on the earlier of the termination date set forth above or one (1) year following such termination of Employment; or
b. such termination of Employment is due to your death, in which event the option shall terminate on the earlier of the termination date set forth above or eighteen (18) months after your death; or
c. during any part of such three (3) month period the option is not exercisable solely because of the condition set forth in paragraph 4 above, in which event the option shall not terminate until the earlier of the termination date set forth above or until it shall have been exercisable for an aggregate period of three (3) months after the termination of Employment; or
d. exercise of the option within three (3)
months after termination of your Employment
would result in liability under section 16
(b) of the Securities Exchange Act of 1934,
in which case the option will terminate on
the earlier of (i) the tenth (10th) day after
the last date upon which exercise would
result in such liability or (ii) six (6)
months and ten (10) days after the
termination of your Employment; or
e. such termination of your Employment is a temporary leave of absence occasioned by your resuming studies at the University of Michigan toward a doctorate degree, in which event vesting of installments of this option as set forth in Section 1 scheduled for any date after the date on which the leave of absence commenced (the "Leave Date") will be suspended, and the vesting schedule set forth in Section 1 shall be deemed to have been amended as follows. Should you Employment
Ancillary Stock Option Agreement
resume at any time during the two (2) year period after the Leave Date, vesting of installments of this option will resume, with the first suspended installment vesting on the date that your Employment resumes, the second suspended installment vesting 3 months thereafter, and so on, so that each succeeding suspended installment vests 3 months after the date on which the previous suspended installment vested. If your Employment does not resume during the two (2) year period after the Leave Date, this option will be deemed to have terminated on the Leave Date, and only those shares that vested on or prior to the Leave Date will be exercisable.
f. The termination of this option pursuant to
this Section 5 shall apply only to those
shares not yet vested according to the
schedule contained in Section 1 herein, and
any provision herein or in the Plan
notwithstanding, shall not apply to such
vested shares. Any shares that have vested
hereunder shall remain exercisable for the
twelve (12) year period specified in this
Section 5.
However, this option may be exercised following termination of Employment only as to that number of shares as to which it was exercisable under the provisions of paragraph 1 of this option on the date of termination of Employment.
6. a. This option may be exercised, to the extent specified above, by delivering a notice to exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to subparagraph 5(f) of the Plan.
Ancillary Stock Option Agreement
b. By exercising this option you agree that:
(i) the Company may require you to enter an arrangement providing
for the cash payment by you to the Company of any tax
withholding obligation of the Company arising by reason of
(1) the exercise of this option; (2) the lapse of any
substantial risk of forfeiture to which the shares are
subject at the time of exercise; or (3) the disposition of
shares acquired upon such exercise;
(ii) the Company (or a representative of the underwriters) may, in
connection with the first underwritten registration of the
offering of any securities of the Company under the Act,
require that you not sell or otherwise transfer or dispose of
any shares of Common Stock or other securities of the Company
during such period (not to exceed one hundred fifty (150)
days) following the effective date (the "Effective Date") of
the registration statement of the Company filed under the Act
as may be requested by the Company or the representative of
the underwriters; provided, however, that such restriction
shall apply only if, on the Effective Date, you are an
officer, director, or owner of more than one percent (1%) of
the outstanding securities of the Company. For purposes of
this restriction, you will be deemed to own securities which
(i) are owned directly or indirectly by you, including
securities held for your benefit by nominees, custodians,
brokers or pledgees; (ii) may be acquired by you within sixty
(60) days of the Effective Date; (iii) are owned directly or
indirectly, by or for your brothers or sisters (whether by
whole or half blood), spouse, ancestors and lineal
descendants; or (iv) are owned, directly or indirectly, by or
for a corporation, partnership, estate or trust of which you
are a shareholder, partner or
Ancillary Stock Option Agreement
beneficiary, but only to the extent of your proportionate interest therein as a shareholder, partner or beneficiary thereof. You further agree that the Company may impose stop- transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period.
7. This option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.
8. Upon exercise of the option in whole or in part, you will be required to execute a Stock Transfer Restriction and Buy-Out Agreement substantially in the form attached hereto, which sets forth restrictions on transfer of the Stock and gives the Company the right to purchase the Stock under certain circumstances.
9. This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue Employment, or of the Company to employ you.
10. Any notices provided for in this option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company.
11. This option is subject to all the provisions of the Plan, a copy of which is attached hereto and its provisions are hereby made a part of this option, including without limitation the provisions of paragraph 5 of the Plan relating to stock option agreements, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this option and those of the Plan, the provisions of the Plan shall control.
Ancillary Stock Option Agreement
Dated as of the ____ day of _______________________, 19__.
Very truly yours,
AASTROM BIOSCIENCES, INC.
President/CEO
Duly authorized on behalf of the
Board of Directors
The undersigned:
a. Acknowledges receipt of this Agreement and the attachments referenced therein and understands that all rights and liabilities with respect to this option are set forth in this Agreement and the Plan; and
b. Acknowledges that as of the date of grant of this option, this Agreement sets forth the entire understanding between the undersigned optionee and the Company its affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject.
Attachments:
Ancillary Stock Option Plan dated August 6, 1991
Stock Transfer Restriction and Buy-Out Agreement
MERRILL LYNCH
PROTOTYPE DEFINED
CONTRIBUTION PLAN
401(k) PLAN
EMPLOYEE THRIFT PLAN
PROFIT-SHARING PLAN
ADOPTION AGREEMENT
THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL INSTRUMENTS WITH LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR, MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED DOES NOT ASSUME RESPONSIBILITY. THE EMPLOYER IS URGED TO CONSULT WITH ITS OWN ATTORNEY WITH REGARD TO THE ADOPTION OF THIS PLAN AND ITS SUITABILITY TO ITS CIRCUMSTANCES.
The Employer named below hereby establishes or restates a profit-sharing plan that includes a [X] 401(k), [_] profit-sharing and/or [_] thrift plan feature (the "Plan") by adopting the Merrill Lynch Special Prototype Defined Contribution Plan and Trust as modified by the terms and provisions of this Adoption Agreement.
EMPLOYER AND PLAN INFORMATION - ----------------------------- Employer Name:* Aastrom Biosciences. Inc. ----------------------------- Business Address: P.O. Box 376 ----------------------------- Ann Arbor. MI 48106 ----------------------------- Telephone Number: (313) 930-5555 ----------------------------- |
401(k) PROFIT- THRIFT SHARING Effective Date of Adoption: 01/01/94 -------- ------- ------- Tax Reform Act of 1986 Restatement Date: -------- ------- ------- Original Effective Date: -------- ------- ------- |
IF THIS PLAN IS A CONTINUATION OR AN AMENDMENT OF A PRIOR PLAN, ALL OPTIONAL FORMS OF BENEFITS PROVIDED IN THE PRIOR PLAN MUST BE PROVIDED UNDER THIS PLAN TO ANY PARTICIPANT WHO HAD AN ACCOUNT BALANCE, WHETHER OR NOT VESTED, IN THE PRIOR PLAN.
(1) With respect to each Participant except as provided below, Compensation shall mean the (select all those applicable for each column):
401(k) AND/ PROFIT OR THRIFT SHARING [X] [_] (a) amount reported in the "Wages Tips and Other Compensation" Box on Form W-2 for the applicable period selected in Item 5 below. [_] [_] (b) compensation for Code Section 415 safe-harbor purposes (as defined in section 3.9.1(H)(i) of basic plan document #03) for the applicable period selected in Item 5 below. [_] [_] (c) amount reported pursuant to Code Section 3401 (a) for the applicable period selected in Item 5 below. [_] [_] (d) all amounts received (under either option (a) or (b) above) for personal services rendered to the Employer but excluding (select one): [_] overtime [_] bonuses [_] commissions [_] amounts in excess of $ ---------------------- [_] other (specify) -----------------------------------. |
(2) Treatment of Elective Contributions (select one):
[X] (a) For purposes of contributions, Compensation shall include Elective Deferrals and amounts excludable from the gross income of the Employee under Code Section 125, Code Section 402(e)(3), Code Section 402(h) or Code Section 403(b) ("elective contributions"). [_] (b) For purposes of contributions, Compensation shall not include "elective contributions." |
(3) CODA Compensation (select one):
[X] (a) For purposes of the ADP and ACP Tests, Compensation shall include "elective contributions." [_] (b) For purposes of the ADP and ACP Tests, Compensation shall not include "elective contributions." |
(4) With respect to Contributions to an Employer Contributions Account, Compensation shall include all Compensation (select one):
[_] (a) during tile Plan Year in which the Participant enters the Plan.
[X] (b) after the Participant's Entry Date.
(5) The applicable period for determining Compensation shall be (select one):
[X] (a) the Plan Year.
[_] (b) the Limitation Year.
[_] (c) the consecutive 12-month period ending on _________________.
Disability shall mean a condition which results in the Participant's (select one):
[_] (a) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. [_] (b) total and permanent inability to meet the requirements of the Participant's customary employment which can be expected to last for a continuous period of not less than 12 months. [_] (c) qualification for Social Security disability benefits. [X] (d) qualification for benefits under the Employer's long-term disability plan. |
[X] (a) No contributions to an Employer Contributions Account will be made on behalf of a Participant due to his or her Disability. [_] (b) Contributions to an Employer Contributions Account will be made on behalf of a Participant due to his or her Disability provided that ------------- the Employer elected option (a) or (c) above as the definition of Disability, contributions are not made on behalf of a Highly Compensated Employee, the contribution is based on the Compensation each such Participant would have received for the Limitation Year if the Participant had been paid at the rate of Compensation paid immediately before his or her Disability, and contributions made on behalf of such Participant will be nonforfeitable when made. |
[_] (1) not permitted. [X] (2) permitted if a Participant terminates Employment before Normal Retirement Age and has (select one): [_] (a) attained age . ----- [X] (b) attained age 55 and completed 10 Years of Service. -- -- [_] (c) attained age and completed Years of Service ----- ----- |
as a Participant.
[X] (1) All Employees are eligible to participate in the Plan. [_] (2) The following Employees are not eligible to participate in the Plan (select all those applicable): [_] (a) Employees included in a unit of Employees covered by a collective bargaining agreement between the Employer or a Participating Affiliate and the Employee representatives (not including any organization more than half of whose members are Employees who are owners, officers, or executives of the Employer or Participating Affiliate) in the negotiation of which retirement benefits were the subject of good faith bargaining, unless the bargaining agreement provides for participation in the Plan. [_] (b) non-resident aliens who received no earned income from the Employer or a Participating Affiliate which constitutes income from sources within the United States. [_] (c) Employees of an Affiliate. [_] (d) Employees employed in or by the following specified division, plant, location, job category or other identifiable individual or group of Employees: ----------------------------------------------------- ----------------------------------------------------- |
Entry Date shall mean (select as applicable):
401(k) AND/OR PROFIT- THRIFT SHARING [_] [_] (1) If the initial Plan Year is less than twelve months, the day of and thereafter: ------ ----- [_] [_] (2) the first day of the Plan Year following the date the Employee meets the eligibility requirements. if the Employer elects this option (2) establishing only one Entry Date, the eligibility "age and service" requirements elected in Article II must be no more than age 20-1/2 and 6 months of service. [X] [_] (3) the first day of the month following the date the Employee meets the eligibility requirements. [_] [_] (4) the first day of the Plan Year and the first day of the seventh month of the Plan Year following the date the Employee meets the eligibility requirements. [_] [_] (5) the first day of the Plan Year, the first day of the fourth month of the Plan Year, the first day of the seventh month of the Plan Year, and the first day of the tenth month of the Plan Year following the date the Employee meets the eligibility requirements. [_] [_] (6) other: ------------------------------------------------------ ------------------------------------------------------------- provided that the Entry Date or Dates selected are no later than any of the options above. |
Hours of Service for the purpose of determining a Participant's Period of Severance and Year of Service shall be determined on the basis of the method specified below:
401(k) AND/OR PROFIT- THRIFT SHARING [X] [_] (a) elapsed time method [_] [_] (b) hourly records method |
[_] (a) elapsed time method [X] (b) hourly records method [_] (c) if this item (c) is checked, the Plan only provides for contributions that are always 100% vested and this item (2) will not apply. |
[X] (a) only actual hours for which an Employee is paid or entitled to payment shall be counted. [_] (b) an Employee shall be credited with 45 Hours of Service if such Employee would be credited with at least 1 Hour of Service during the week. |
[X] (1) This Plan is not integrated with Social Security.
[_] (2) This Plan is integrated with Social Security. The Integration Level shall be (select one):
[_] (a) the Taxable Wage Base.
[_] (b) $ (a dollar amount less than the Taxable Wage Base). ------ [_] (c) % of the Taxable Wage Base (not to exceed 100%). ------ |
[_] (d) the greater of $10,000 or 20% of the Taxable Wage Base.
For purposes of Code Section 415, Limitation Compensation shall be compensation as determined for purposes of (select one):
[_] (1) Code Section 415 Safe-Harbor as defined in Section 3.9.1(H)(i) of basic plan document #03.
[X] (2) the "Wages, Tips and Other Compensation" Box on Form W-2.
[_] (3) Code Section 3401(a) Federal Income Tax Withholding.
For purposes of Code Section 415, the Limitation Year shall be (select one):
[X] (1) not necessary for any contribution.
[_] (2) necessary for (select all those applicable):
[_] (a) Profit-Sharing Contributions.
[_] (b) Matching 401(k) Contributions.
[_] (c) Matching Thrift Contributions.
Normal Retirement Age shall be (select one):
[X] (1) attainment of age 65 (not more than 65) by the Participant.
401(k) AND/ PROFIT- OR THRIFT SHARING [X] [_] (1) permitted. [_] [_] (2) not permitted. |
The Plan Year shall end on the 31ST day of DECEMBER.
Predecessor service will be credited (select one):
[X] (1) only as required by the Plan.
Service with such predecessor employer applies [select either or both (a) and/or (b); (c) is only available in addition to (a) and/or (b)]:
Valuation Date shall mean (select one for each column, as applicable):
401(k) AND/ PROFIT- OR THRIFT SHARING [_] [_] (1) the last business day of each month. [_] [_] (2) the last business day of each quarter within the Plan Year. [_] [_] (3) the last business day of each semi-annual period within the Plan Year. [_] [_] (4) the last business day of the Plan Year. [X] [_] (5) other: DAILY. |
401(k) AND/ PROFIT- OR THRIFT SHARING [_] [_] (1) Performance of one Hour of Service. [_] [_] (2) Attainment of age (maximum 20 1/2) and completion of --- (not more than 1/2) Years of Service. If this ----- item is selected, no Hours of Service shall be counted. [X] [_] (3) Attainment of age (maximum 21) and completion of 1/4 --- --- Year(s) of Service. if more than one Year of Service is selected, tile immediate 100% vesting schedule must be selected in Article VII of this Adoption Agreement. |
[_] [_] (4) Attainment of age (maximum 21) and completion of ---- Years of Service. If more than one Year of Service --- is selected, the immediate 100% vesting schedule must be selected in Article VII of this Adoption Agreement. [X] [_] (5) Each Employee who is an Eligible Employee on 01/01/94 -------- will be deemed to have satisfied the participation requirements on the effective date without regard to such Eligible Employee's actual age and/ or service. |
If selected below, a Participant's Elective Deferrals will be (select all applicable):
[X] (1) a dollar amount or a percentage of Compensation, as specified by the Participant on his or her 401(k) Election form, which may not exceed 15% of his or her Compensation.
[_] (2) with respect to bonuses, such dollar amount or percentage as specified by the Participant on his or her 401(k) Election form with respect to such bonus.
[X] (1) Discretionary Formula:
Discretionary Matching 401(k) Contribution equal to such a dollar amount or percentage of Elective Deferrals, as determined by the Employer, which shall be allocated (select one):
[_] (a) based on the ratio of each Participant's Elective Deferral for the Plan Year to the total Elective Deferrals of all Participants for the Plan Year. If inserted, Matching 40l(k) Contributions shall be subject to a maximum amount
of $ for each Participant or % of each --------- ---- Participant's Compensation. 10 |
[X] (b) in an amount not to exceed % of each Participants ---- |
Participant's Compensation.
[_] (2) Nondiscretionary Formula:
A nondiscretionary Matching 40l(k) Contribution for each Plan Year equal to (select one):
[_] (a) % of each Participant's Compensation contributed as ------ Elective Deferrals. If inserted, Matching 40l(k) Contributions shall be subject to a maximum amount of $ for each Participant or % of each Participant's ------ ----- Compensation. [_] (b) % of the first % of the Participant's ----- ------ |
The following Participants shall be eligible for an allocation to their Matching 401(k) Contributions Account (select all those applicable):
[_] (1) Any Participant who makes Elective Deferrals.
[_] (2) Any Participant who satisfies those requirements elected by the Employer for an allocation to his or her Employer Contributions Account as provided in Article IV Section C.
[_] (3) Solely with respect to a Plan in which Matching 40l(k) Contributions are made quarterly (or on any other regular interval that is more frequent than annually) any Participant whose 40l(k) Election is in effect throughout such entire quarter (or other interval).
If selected below, the Employer may make Qualified Matching Contributions for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Matching Contributions on behalf of (select one):
[_] (a) all Participants who make Elective Deferrals in that Plan Year.
[X] (b) only those Participants who are Nonhighly Compensated Employees and who make Elective Deferrals for that Plan Year.
(2) Qualified Matching Contributions will be contributed and allocated to each Participant in an amount equal to:
[_] (a) % of the Participant's Compensation contributed as ---- Elective Deferrals. If inserted, Qualified Matching Contributions shall not exceed % of the Participant's ----- Compensation. |
[X] (b) Such an amount determined by the Employer, which is needed to meet the ACP Test.
(3) In its discretion, the Employer may elect to designate all or any part of Matching 401(k) Contributions as Qualified Matching Contributions that are taken into account as Elective Deferrals -- included in the ADP Test and excluded from the ACP Test -- on behalf of (select one):
[_] (a) all Participants who make Elective Deferrals for that Plan Year.
[X] (b) Only Participants who are Nonhighly Compensated Employees who make Elective Deferrals for that Plan Year.
If selected below, the Employer may make Qualified Nonelective Contributions for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Nonelective Contributions on behalf of (select one):
[_] (a) all Eligible Participants.
[X] (b) only Eligible Participants who are Nonhighly Compensated Employees.
(2) Qualified Nonelective Contributions will be contributed and allocated to each Eligible Participant in an amount equal to (select one):
[X] (b) Such an amount determined by the Employer, which is needed to meet either the ADP Test or ACP Test.
(3) At the discretion of the Employer, as needed and taken into account as Elective Deferrals included in the ADP Test on behalf of (select one):
[_] (a) all Eligible Participants.
[X] (b) only those Eligible Participants who are Nonhighly Compensated Employees.
[X] (1) At the discretion of the Employer, Elective Deferrals may be used to satisfy tile ACP Test.
[_] (2) Elective Deferrals may not be used to satisfy the ACP Test.
An Eligible Employee shall be entitled to increase, decrease or resume his or her Elective Deferral percentage with the following frequency during the Plan Year (select one):
If selected below, the following contributions for each Plan Year will be made:
Contributions to Employer Contributions Accounts (select one):
[_] (1) Non-Integrated Allocation
The Employer Contributions Account of each Participant eligible to share in the allocation for a Plan Year shall be credited with a portion of the contribution, plus any forfeitures if forfeitures are reallocated to Participants, equal to the ratio that the Participant's Compensation for the Plan Year bears to the Compensation for that Plan Year of all Participants entitled to share in the contribution.
[_] (2) Integrated Allocation
Contributions to Employer Contributions Accounts with respect to a Plan Year, plus any forfeitures if forfeitures are reallocated to Participants, shall be allocated to the Employer Contributions Account of each eligible Participant as follows:
(a) First, in the ratio that each such eligible Participant's Compensation for the Plan Year bears to the Compensation for that Plan Year of all eligible Participants but not in excess of 3% of each Participant's Compensation.
(b) Second, any remaining contributions and forfeitures will be allocated in the ratio that each eligible Participant's Compensation for the Plan Year in excess of the Integration Level bears to all such Participants' excess Compensation for the Plan Year but not in excess of 3%.
(c) Third, any remaining contributions and forfeitures will be allocated in the ratio that the sum of each Participant's Compensation and Compensation in excess of the Integration Level bears to the sum of all Participants' Compensation and Compensation in excess of the Integration Level, but not in excess of the Maximum Profit-Sharing Disparity Rate (defined below).
(d) Fourth, any remaining contributions or forfeitures will be allocated in the ratio that each Participant's Compensation for that year bears to all Participants' Compensation for that year.
The Maximum Profit-Sharing Disparity Rate is equal to the lesser of:
(a) 2.7% or
(b) Tile applicable percentage determined in accordance with the following table:
IF THE INTEGRATION LEVEL IS (AS A % OF THE APPLICABLE THE TAXABLE WAGE BASE ("TWB")). PERCENTAGE IS: 20% (or $10,000 if greater) or less of the TWB 2.7% More than 20% (but not less than $10,001 ) but not more than 80% of the TWB 1.3% More than 80% but not less than 100% of the TWB 2.4% 100% of the TWB 2.7% |
The fo11owing Participants shall be eligible for an allocation to their Employer Contributions Account (select all those applicable):
[_] (1) Any Participant who was employed during the Plan Year.
[_] (2) In the case of a Plan using the hourly record method for determining Vesting Service, any Participant who was credited with a Year of Service during the Plan Year.
[_] (3) Any Participant who was employed on the last day of the Plan Year.
[_] (4) Any Participant who was on a leave of absence on the last day of the Plan Year.
[_] (5) Any Participant who during the Plan Year died or became Disabled while an Employee or terminated employment after attaining Normal Retirement Age.
[_] (6) Any Participant who was credited with at least 501 Hours of Service whether or not employed on the last day of the Plan Year.
[_] (7) Any Participant who was credited with at least 1,000 Hours of Service and was employed on the last day of the Plan Year.
THIS ARTICLE IS NOT APPLICABLE
If selected below, Employee Thrift Contributions, which are required for Matching Thrift Contributions, may be made by a Participant in an amount equal to (select one):
[_] (1) A dollar amount or a percentage of the Participant's Compensation
which may not be less than % nor may not exceed % of his or her ---- -- Compensation. [_] (2) An amount not less than % of and not more than % of each --- --- |
Participant's Compensation.
A Participant shall be entitled to increase, decrease or resume his or her Employee Thrift Contribution percentage with the following frequency during the Plan Year (select one):
Any such increase, decrease or resumption shall be effective as of the first payroll period coincident with or next following the first day of each period set forth above. A Participant may completely discontinue making Employee Thrift Contributions at any time effective for the payroll period after written notice is provided to the Administrator.
If selected below, the Employer will make Matching Thrift Contributions for each Plan Year (select one):
[_] (1) Discretionary Formula:
A discretionary Matching Thrift Contribution equal to such a dollar amount or percentage as determined by the Employer, which shall be allocated (select one):
[_] (a) based on the ratio of each Participant's Employee Thrift Contribution for the Plan Year to the total Employee Thrift Contributions of all Participants for the Plan Year. If inserted, Matching Thrift Contributions shall be subject to a maximum
amount of $ for each Participant or % of each ------- ----- Participant's Compensation. [_] (b) in an amount not to exceed % of each Participant's first ----- |
[_] (2) Nondiscretionary Formula:
A nondiscretionary Matching Thrift Contribution for each Plan Year equal to (select one):
[_] (a) % of each Participant's Compensation contributed as ------ Employee Thrift Contributions. If inserted, Matching Thrift Contributions shall be subject to a maximum amount of $ for each Participant or % of each Participant's ------ ---- Compensation. [_] (b) % of the first % of the Participant's Compensation ----- ---- |
If selected below, the Employer may make Qualified Matching Contributions for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Matching Contributions on behalf of (select one):
[_] (a) all Participants who make Employee Thrift Contributions.
[_] (b) only those Participants who are Nonhighly Compensated Employees and who make Employee Thrift Contributions.
(2) Qualified Matching Contributions will be contributed and allocated to each Participant in an amount equal to:
[_] (a) % of the Participant's Employee Thrift Contributions. ---- If inserted, Qualified Matching Contributions shall not |
[_] (b) such an amount, determined by the Employer, which is needed to meet the ACP Test.
[_] (a) permitted.
[X] (b) not permitted.
(1) A Participant shall have a vested percentage in his or her Profit-Sharing Contributions, Matching 401(k) Contributions and/or Matching Thrift Contributions, if applicable, in accordance with the following schedule (Select one):
MATCHING 401(k) AND/OR MATCHING THRIFT PROFIT-SHARING CONTRIBUTIONS CONTRIBUTIONS - ------------- -------------- [_] [_] (a) 100% vesting immediately upon participation. [_] [_] (b) 100% after (not more than 5) years of Vesting --- Service. [X] [X] (c) Graded vesting schedule: 0% 0% after 1 year of Vesting Service; -- -- 20% 20% after 2 years of Vesting Service; -- -- 40% 40% (not less than 20%) after 3 years of Vesting Service; -- -- 60% 60% (not less than 40%) after 4 years of Vesting Service; -- -- 80% 80% (not less than 60%) after 5 years of Vesting Service; -- -- 100% 100% (not less than 80%) after 6 years of Vesting Service; --- --- |
100% after 7 years of Vesting Service.
(2) Top Heavy Plan
MATCHING 401(k) AND/OR MATCHING THRIFT PROFIT-SHARING CONTRIBUTIONS CONTRIBUTIONS - ------------- -------------- Vesting Schedule (Select one): [_] [_] (a) 100% vesting immediately upon participation. [_] [_] (b) 100% after ___ (not more than 3) years of Vesting Service. [X] [X] (c) Graded vesting schedule: 0% 0% after 1 year of Vesting Service; -- -- 20% 20% (not less than 20%) after 2 years of Vesting Service. -- -- 40% 40% (not less than 40%) after 3 years of Vesting Service. -- -- 60% 60% (not less than 60%) after 4 years of Vesting Service. -- -- 80% 80% (not less than 80%) after 5 years of Vesting Service. -- -- |
100% after 6 years of Vesting Service.
Top Heavy Ratio:
(a) If the adopting Employer maintains or has ever maintained a qualified defined benefit plan, for purposes of establishing present value to compute the top-heavy ratio, any benefit shall be discounted only for mortality and interest based on the following:
(b) For purposes of computing the top-heavy ratio, the valuation date shall be the last business day of each Plan Year.
Forfeitures shall be (select one from each applicable column):
MATCHING 401(k) AND/OR MATCHING THRIFT PROFIT-SHARING CONTRIBUTIONS CONTRIBUTIONS - ------------- ------------- [X] [_] (1) used to reduce Employer contributions for succeeding Plan Year. [_] [_] (2) allocated in the succeeding Plan Year in the ratio which the Compensation of each Participant for the Plan Year bears to the total Compensation of all Participants entitled to share in the Contributions. If the Plan is integrated with Social Security, forfeitures shall be allocated in accordance with the formula elected by the Employer. |
For purposes of determining Years of Service for Vesting Service [select (1) or (2) and/or (3)]:
[X] (1) All Years of Service shall be included.
[_] (2) Years of Service before the Participant attained age 18 shall be excluded.
[_] (3) Service with the Employer prior to the effective date of the Plan shall be excluded.
401(k) AND/ PROFIT- OR THRIFT SHARING ----------- ------- [_] [_] If this item is checked, a Participant's vested benefit in his or her Employer Accounts shall be payable as soon as practicable after the earlier of: (1) the date the Participant terminates Employment due to Disability or (2) the end of the Plan Year in which a terminated Participant attains Early Retirement Age, if applicable, or Normal Retirement Age. |
[X] (1) In-service distributions may be made from any of the Participant's vested Accounts, at any time upon or after the occurrence of the following events (select all applicable):
[X] (a) a Participant's attainment of age 59-1/ 2.
[X] (b) due to hardships as defined in Section 5.9 of the Plan.
[_] (2) In-service distributions are not permitted.
401(k) AND/ PROFIT- OR THRIFT SHARING - ----------- ------- [X] [_] (1) permitted. [_] [_] (2) not permitted. |
[_] If this item is checked, the Employer elects to establish a Group Trust consisting of such Plan assets as shall from time to time be transferred to the Trustee pursuant to Article X of the Plan. The Trust Fund shall be a Group Trust consisting of assets of this Plan plus assets of the following plans of the Employer or of an Affiliate:
The Sponsor will inform the adopting Employer of any amendments made to the Plan or the discontinuance or abandonment of the Plan.
This Plan must be registered with the Sponsor, Merrill Lynch, Pierce, Fenner & Smith Incorporated, in order to be considered a Prototype Plan by the Sponsor. Registration is required so that the Sponsor is able to provide the Administrator with documents, forms and announcements relating to the administration of the Plan and with Plan amendments and other documents, all of which relate to administering the Plan in accordance with applicable law and maintaining compliance of the Plan with the law.
The Employer must complete and sign the Adoption Agreement. Upon receipt of the Adoption Agreement, the Plan will be registered as a Prototype Plan of Merrill Lynch, Pierce, Fenner & Smith Incorporated. The Adoption Agreement will be countersigned by an authorized representative and a copy of the countersigned Adoption Agreement will be returned to the Employer.
Annual registration renewal is required in order for the Employer to continue to receive any and all necessary updating documents. There is an annual registration renewal fee in the amount set forth with the initial registration material. The adopting Employer authorizes Merrill Lynch, Pierce, Fenner & Smith Incorporated, to debit the account established for the Plan for payment of agreed upon annual fee; provided, however, if the assets of an account are invested solely in Participant-Directed Assets, a notice for this annual fee will be sent to the Employer annually. The Sponsor reserves the right to change this fee from time to time and will provide written notice in advance of any change.
This Adoption Agreement is a replacement prototype plan for the (1) Merrill Lynch Special Prototype Defined Contribution Plan and Trust - 40l(k) Plan #03-004 and (2) Merrill Lynch Asset Management, Inc., Special Prototype Defined Contribution Plan and Trust - 401 (k) Plan Adoption Agreement #03-004.
The adopting Employer may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Code Section 401. In order to obtain reliance, the Employer must apply to the appropriate date Key District Director of the Internal Revenue Service for a determination letter with respect to the Plan.
EMPLOYER
Dated: 1/3 , 1994 By: /s/ R. Douglas Armstrong -------- -- ------------------------------------------ To be executed by the sole proprietor, an authorized partner or corporate officer, as appropriate. R. DOUGLAS ARMSTRONG ------------------------------------------------- Print Name PRESIDENT and CEO ------------------------------------------------- Title, if a corporate officer ------------------------------------------------- |
Subject to the terms and conditions of the Prototype Plan and this Adoption Agreement, this Adoption Agreement is accepted by Merrill Lynch, Pierce, Fenner & Smith Incorporated as the Prototype Sponsor.
Authorized Signature: /s/ Rebecca Freberg --------------------------------------------------------- |
MERRILL LYNCH TRUST COMPANY IS NOT A TRUSTEE
ACCEPTANCE BY TRUSTEE(S)
A. This Trustee Acceptance is to be completed only if the Employer appoints one or more Trustees and does not appoint a Merrill Lynch Trust Company as Trustee.
The undersigned hereby accept all of the terms, conditions, and obligations of appointment as Trustee under the Plan. If the Employer has elected a Group Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s) of the Group Trust.
as TRUSTEE /s/ R. DOUGLAS R. ARMSTRONG R. DOUGLAS ARMSTRONG --------------------------- -------------------- (Signature) (print or type name) as TRUSTEE /s/ TODD E. SIMPSON TODD E. SIMPSON --------------------------- -------------------- (Signature) (print or type name) as TRUSTEE --------------------------- -------------------- (Signature) (print or type name) as TRUSTEE --------------------------- -------------------- (Signature) (print or type name) Dated: , 19 ------------ -- |
MERRILL LYNCH TRUST COMPANY AS TRUSTEE
This Trustee Acceptance and designation of Investment Committee are to be completed only when a Merrill Lynch Trust Company is appointed as Trustee.
The undersigned hereby accept all of the terms, conditions, and obligations of appointment as Trustee under the Plan, If the Employer has elected a Group Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s) of the Group Trust.
SEAL MERRILL LYNCH TRUST COMPANY ------------------------------ Dated: , 19 By: ----------- -- ------------------------------- |
DESIGNATION OF INVESTMENT COMMITTEE
The Investment Committee for the Plan is (print or type name):
MERRILL LYNCH TRUST COMPANY IS ONE OF THE TRUSTEES
This Trustee Acceptance is to be completed only if, in addition to a Merrill Lynch Trust Company as Trustee, the Employer appoints an additional Trustee of a second trust fund.
The undersigned hereby accept all of the terms, conditions, and obligations of appointment as Trustee under the Plan. If the Employer has elected a Group Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s) of the Group Trust.
as TRUSTEE -------------------------------- ---------------------------------- (Signature) (print or type name) Dated: , 19 ------------ -- SEAL MERRILL LYNCH TRUST COMPANY ---------------------------------- Dated: , 19 By: ----------- --- --------------------------------- |
DESIGNATION OF INVESTMENT COMMITTEE
The Investment Committee for the Plan is (print or type name):
AASTROM BIOSCIENCES, INC.
AMENDED AND RESTATED
1992 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN
(AS AMENDED EFFECTIVE OCTOBER 30, 1996)
Section 1. Purpose.
The purpose of the 1992 Incentive and Non-qualified Stock Option Plan (the "Plan") of Aastrom Biosciences, Inc. (the "Company") is to encourage stock ownership by directors, officers, employees of and consultants to the Company and its Affiliates and others who directly or indirectly provide goods or services to the Company and its Affiliates by issuing options to purchase shares of the Company's stock ("Options," and individually an "Option"), enabling such persons to acquire or increase their proprietary interest in the Company and thereby encouraging them to remain in the employ or remain directors of or consultants to the Company and its Affiliates or continue providing goods or services to the Company and its Affiliates. The term "Affiliates" as used herein shall include any parent corporation or subsidiary corporation as defined in Sections 424(e) and (f) respectively of the Internal Revenue Code of 1986, as amended (the "Code"). The Options issued pursuant to the Plan are intended to constitute either incentive stock options within the meaning of Section 422 of the Code, or non-qualified stock options, at the discretion of the Option Committee (as hereinafter defined) of the board of directors of the Company (the "Board of Directors") at the time of grant. The type of Options granted will be specified in the letter of grant to the person who is granted the Options (the "Optionee"). The terms of this Plan shall be incorporated in the grant letter.
Section 2. Administration.
The Plan will be administered by the Board of Directors or a committee of two or more members of the Board or Directors (such member or the Board of Directors acting as Plan administrators shall be referred to herein as the "Option Committee"). If the Company or an Affiliate is a "publicly held corporation" within the meaning of Section 162(m) of the Code, the Board may establish a Committee of "outside directors" within the meaning of Section 162(m) to approve the grant of any Option which might reasonably be anticipated to result in the payment of employee remuneration that would otherwise exceed the limit on employee remuneration deductible for income tax purposes pursuant to Section 162(m).
The interpretation and construction by the Option Committee of any provision of the Plan will be final. Anything herein to the contrary notwithstanding, no member of the Board of Directors or the Option Committee will be liable for any action or determination made in good faith with respect to the Plan or any Option granted under it.
Section 3. Eligibility.
Directors, officers and employees of the Company and its Affiliates who are
expected to make significant contributions to the long term success of the
Company are eligible to receive incentive stock options under the Plan, as may
be determined from time to time by the Option Committee. Directors, officers and
employees of and consultants to the Company and its Affiliates, and others who
directly or indirectly provide goods or services to the Company and its
Affiliates, are eligible to receive non-qualified options under the Plan, as may
be determined from time to time by the Option Committee. A director, officer,
employee, consultant or other person who is granted an Option is an Optionee
(which term also includes the Optionee's legal representative under Section 5(g)
hereof). An Optionee may be granted more than one Option.
For purposes of the foregoing paragraph, "employees" shall include prospective employees to whom Options are granted in connection with written offers of employment with the Company or one of its Affiliates, and "consultants" shall include prospective consultants to whom Options are granted in connection with written offers of engagement with the Company or one of its Affiliates.
Any person who is not an employee on the date of Option grant may only be granted a non-qualified stock option. A director who is not an employee or officer of or consultant to the Company or its Affiliates, or who does not directly or indirectly provide goods or services to the Company or its Affiliates, shall not be eligible to receive non-qualified stock options.
Notwithstanding the foregoing, no director of the Company who is not also an employee of the Company may be granted an Option at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Section 4. Stock.
The stock subject to an Option will be shares of the Company's authorized but unissued or reacquired Common Stock, no par value (the "Shares"). Options shall not be issued with respect to more than One Million
Nine Hundred Thousand (1,900,000) Shares, after giving effect to the two-for- three reverse stock split approved by the Board of Directors on April 30, 1996, and subject to further adjustment as provided in Section 5(i) hereof. If an outstanding Option for any reason expires or is terminated or canceled or Shares acquired, subject to repurchase, upon the exercise of an Option are repurchased by the Company, the Shares allocable to the unexercised portion of such Option, or such repurchased Shares, shall again be available for issuance under the Plan.
Section 5. Terms and Conditions of Options.
Each Option granted pursuant to the Plan will be authorized by the Option
Committee and will be evidenced by a notice (the "Option Notice") in such form
as the Option Committee may from time to time determine. Each Option Notice will
include the information required in subparagraphs (a), (b) and (c) of this
Section 5 and will be in conformity with and will incorporate by reference all
other terms and conditions of the Plan, including the following terms and
conditions:
(a) Number of Shares. The number of Shares subject to the Option will be stated in the Option Notice.
(b) Exercise Price. In the case of incentive stock options, the price per Share payable on the exercise of the Option will be stated in the Option Notice and will be not less than 100% of the fair market value per share of the outstanding shares of Common Stock of the Company on the date the Option is granted, without regard to any restriction other than a restriction which will never lapse. In the case of a non-qualified stock option, the price per Share payable upon exercise of the Option shall be stated in the Option Notice and will be not less than 85% of the fair market value per share of the outstanding shares of Common Stock of the Company on the date the Option is granted, without regard to any restriction other than a restriction which will never lapse. Unless the Company's Common Stock is quoted on the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or listed on a recognized securities exchange, the fair market value, for purposes of complying with the foregoing sentence with respect to incentive stock options, shall be as determined by the Option Committee in its sole discretion. If the Company's Common Stock is either quoted on NASDAQ or listed on a recognized securities exchange, the fair market value shall be the representative closing price of the stock as obtained from NASDAQ or such recognized securities exchange on the date of the grant of the Option, or if there is no such quotation on the date of the grant of the Option on the preceding business day.
(c) Form of Option. The Option Notice will state whether the Option granted is an incentive stock option or a non-qualified stock
option, and will constitute a binding determination as to the form of Option granted. At the discretion of the Option Committee, the Option Notice may require the Optionee to execute a Stock Transfer Restriction and Buy-Out Agreement, or such other agreements as the Option Committee considers appropriate.
(d) Payment. The price payable on the exercise of the Option in whole or in part will be equal to the Option price multiplied by the number of Shares as to which the Option is exercisable, and shall be paid in full upon exercise of any Option, either (i) in cash, (ii) at the discretion of the Option Committee either at the time the Option is granted or exercised, by delivering to the Company Shares having a fair market value, as of the close of business on the day preceding such delivery, equal to the aggregate exercise price of the Shares being purchased on exercise of the Options, (iii) by a combination of such cash and shares, or (iv) any other form of legal consideration that may be acceptable to the Option Committee. In the case of any deferred payment arrangement, interest shall be payable at least annually at the minimum applicable federal rate under Section 1274(d) of the Code to avoid imputed interest to the Company under the Code.
Anything to the contrary herein notwithstanding, all payments required to be made by the Company hereunder to an Optionee, his legal representative, his heir or devisee, shall be subject to the withholding of such amounts as the Company may determine that it is required to withhold pursuant to any applicable federal, state or local law or regulation. To the extent provided in the terms of the Option, and to the extent allowed under the Exchange Act, the Optionee may satisfy any federal, state or local tax withholding obligation relating to the exercise of such Option by one or more of the following: (1) tender of a cash payment; (2) authorization of the Company to withhold Shares otherwise to be issued pursuant to the Option of a value not in excess of the withholding tax obligation; or (3) delivering to the Company unencumbered Shares owned by the Optionee of a value not in excess of the withholding tax obligation.
(e) Notwithstanding any other provision of this Plan:
(i) No Option shall be granted under this Plan more than ten (10) years after April 30, 1996. Notwithstanding the foregoing, if the maximum number of Shares issuable pursuant to the Plan as provided in Section 4 has been increased at any time (other than pursuant to Section 5(i)), all Options shall be granted, if at all, no later than the last day preceding the tenth (10th) anniversary of the earlier of (a) the date on which the latest such increase in the maximum number of Shares issuable under the Plan was approved by the stockholders of the Company or (b) the date such amendment was adopted by the Board of Directors.
(ii) No incentive stock option granted under this Plan shall be exercisable later than ten (10) years from the date of grant.
(iii) No Option granted to any Optionee shall be treated as an incentive stock option, to the extent such Option would cause the aggregate fair market value (determined as of the date of grant of each such Option) of the Shares with respect to which incentive stock options are exercisable by such Optionee for the first time during any calendar year to exceed $100,000. For purposes of determining whether an incentive stock option would cause the aggregate fair market value of the Shares to exceed the $100,000 limitation, such incentive stock options shall be taken into account in the order granted. For purposes of this subsection, incentive stock options include all incentive stock options under all plans of the Company (or one of its Affiliates) that are incentive stock option plans within the meaning of Section 422 of the Code. If the Code is amended to provide for a different limitation from that set forth in this subsection, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code.
(iv) Options granted pursuant to this Plan may be exercised in any order elected by the Optionee whether or not the Optionee holds any unexercised Options under this Plan or any other Plan of the Company.
(v) Notwithstanding any provision herein to the contrary, no incentive stock option shall be granted under this Plan to any person who, at the time of the grant of such Option, owns stock possessing more than 10% of the total combined voting power of all classes of the stock of the Company or any affiliate, unless the option price at the time the Option is granted is at least 110 percent (110%) of the fair market value of the stock, and subject to the condition that the Option expires five years from the Option grant date.
(vi) No Option granted under this Plan may be transferred except by will or by the laws of descent and distribution.
(f) Term and Exercise of Options.
(i) Subject to the provisions of Section 5(e)(i), (ii) and (v) hereof, Options granted hereunder may be exercisable in whole or in part at such time or times as the Option Committee shall designate when granting such Options. However, no Option granted to a prospective employee or prospective consultant may become exercisable prior to the date on which such person commences service with the Company or one of its Affiliates.
(ii) Unless sooner terminated as provided in this Plan, each
Option shall expire no later than ten years from the date of grant and shall be
void and unexercisable thereafter. An Option may be exercised only by the
Optionee and may not be exercised by any other person except as provided in
Section 5(g) hereof.
(g) Termination of Options Granted to Employees and Directors.
(i) Except as provided herein and unless otherwise specified in the Option Notice, Options shall terminate when the Optionee ceases to be employed by the Company or ceases to be a director of the Company.
(ii) Unless otherwise specified in the Option Notice, upon the death of an Optionee while in the employ of the Company or while a director of the Company, Options held by such Optionee which are exercisable on the date of his or her death shall be exercisable by his or her executor(s) or administrator(s) for a period of eighteen (18) months following the date of such Optionee's death.
(iii) Unless otherwise specified in the Option Notice, upon termination of an Optionee's employment with the Company (or if the Optionee is a director only, upon termination of the Optionee's term of office, or if the Optionee is both an employee and a director, upon termination of both) for any reason other than "Cause," as defined in Section 5(g)(v), or for retirement or permanent disability as set forth in Section 5(g)(iv) with respect to non- qualified stock options, Options exercisable by such Optionee on the date of termination of employment shall be exercisable by the Optionee (or in the case of the Optionee's death subsequent to termination of employment, by the Optionee's executor(s) or administrator(s)) for a period of three (3) months from the date of such Optionee's termination of employment.
(iv) Solely with respect to non-qualified stock options, unless otherwise specified in the Option Notice, upon termination of an Optionee's employment with the Company (or if the Optionee is a director only, upon termination of the Optionee's term of office, or if the Optionee is an employee and a director, upon termination of both) for reasons of retirement or permanent disability, non-qualified stock options exercisable by the Optionee on the date of termination of employment shall be exercisable by such Optionee (or in the case of the Optionee's death subsequent to termination of employment, by the Optionee's executor(s) or administrator(s)) for a period of one (1) year from the date of such Optionee's termination of employment; provided, however, that if such
Optionee shall commence any employment during this one (1) year period with a competitor of the Company (including, but not limited to, full or part-time employment or independent consulting work), as determined solely in the judgment of the Board of Directors, all Options held by such Optionee which have not yet been exercised shall terminate immediately upon commencement thereof.
(v) Unless otherwise specified in the Option Notice, upon the termination of an Optionee's employment (or if the Optionee is a director only, upon termination of the Optionee's term of office, or if the Optionee is both an employee and a director, upon termination of both) for "Cause," as defined in this Section 5(g)(v), all Options held by such Optionee shall terminate concurrently with receipt by the Optionee of oral or written notice that his or her employment has been terminated. For the purposes of this Plan, termination for "Cause" shall include termination by reason of being convicted of any felony or committing willful and gross negligence or willful and gross misconduct in carrying out duties properly assigned to such Optionee by the Company.
(vi) The Option Notice may provide that the Options issued thereunder may be exercised for one year following the "disability" of the Optionee as such term is defined in Section 22(c)(3) of the Code.
(vii) In the case of a leave of absence taken by an Optionee, the Company shall have the unilateral right to (1) determine whether such leave of absence shall be treated as a termination of employment, and (2) suspend or otherwise delay the time or times at which the Shares subject to the Option would otherwise vest.
(viii) Options granted to employees and directors of the Company and its Affiliates may be terminated at any time by agreement between the Company and the Optionee.
(h) Termination of Options Granted to Non-Employees.
(i) With respect to Options granted to persons who are not employees or directors of the Company or its Affiliates, the Option Notice shall state the conditions, if any, under which the Options shall terminate.
(ii) Options granted to persons who are not employees or directors of the Company or its Affiliates may be terminated at any time by agreement between the Company and the Optionee.
(i) Recapitalization.
(i) Subject to any required action by the stockholders, if any, the number of Shares as to which Options may be granted under this Plan and the number of Shares subject to outstanding Options and the Option prices thereto will be adjusted proportionately for any increase or decrease in the number of outstanding shares of Common Stock of the Company resulting from stock splits and reverse stock splits, but not for stock dividends. The number of Shares will be adjusted to the nearest whole share. Any stock dividend resulting in an increase of five percent (5%) or more in the outstanding Common Stock shall be deemed a stock split.
(ii) If the Company is a party to any merger in which the Company is not the surviving entity, any consolidation or dissolution (other than the merger or consolidation of the Company with one or more of its wholly- owned subsidiaries), the Company, in the discretion of the Option Committee and to the extent permitted by law, (1) will cause any successor corporation to assume the Options outstanding hereunder or substitute similar options to those outstanding hereunder, or (2) will continue such Options in full force and effect. In the event that any successor to the Company in a merger, consolidation or dissolution will not assume the Options or substitute similar Options then, with respect to Options held by Optionees then performing services for the Company, the time for exercising such Options will be accelerated and the Options will be terminated if not exercised prior to the merger, consolidation or dissolution.
(iii) Except as expressly provided in this Section 5(i), the Optionee will have no rights by reason of (1) any subdivision or consolidation of shares of stock of any class of the Company; (2) payment of any stock dividend by the Company; (3) any other increase or decrease in the number of shares of stock of any class of the Company; or (4) by reason of any dissolution, liquidation, merger, consolidation or spin-off of assets or stock of another corporation.
(iv) The grant or existence of any Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its stock or assets.
(j) Rights as a Stockholder. The Optionee will have no rights as a stockholder of the Company with respect to any Shares subject to an Option until such Option has been exercised and a certificate with respect to the Shares purchased upon exercise has been issued to him or
her. No adjustment will be made for dividends (ordinary or extraordinary, whether in cash, securities or other property), distributions or other rights for which the record date is prior to the date the Shares so purchased have been issued. Throughout the term of any Option issued hereunder, the Company shall make available to each Optionee, not less than 120 days after the close of each fiscal year of the Company, upon request by the Optionee, any financial or other information contained in the annual report to the shareholders of the Company as provided in the Company's by-laws.
(k) Modification, Extension and Renewal of Option. Subject to the terms and conditions of the Plan, the Option Committee may modify, extend or renew an Option, or accept the surrender of an Option (to the extent not theretofore exercised), provided that no incentive stock option may be modified, extended or renewed if such action would cause it to cease to be an "incentive stock option" under the Code. Notwithstanding the foregoing, no modification of an Option which adversely affects the Optionee shall be made without the consent of the Optionee.
(l) Purchase for Investment. The issuance of Shares on exercise of the Option will be conditioned on obtaining appropriate representations and warranties of the Optionee that the purchase of Shares thereunder will be for investment, and not with a view to the public resale or distribution thereof, unless the Shares subject to the Option are registered under the Securities Act of 1933, as amended (the "Act"), and comply with any other law, regulation or rule applicable thereto. Unless the Shares are registered under the Act, the Optionee shall acknowledge that the Shares purchased on exercise of the Option are not registered under the Act and may not be sold or otherwise transferred unless the Shares have been registered under the Act in connection with the sale or other transfer, or that counsel satisfactory to the Company is of the opinion that the sale or other transfer is exempt from registration under the Act, and unless said sale or transfer is in compliance with any other applicable law, including all applicable state securities laws.
(m) No Rights to Employment. Officers or employees granted Options under this Plan shall not have any right to continue in the employment of the Company or its Affiliates by reason of the existence of such Options and consultants granted Options under this Plan shall not have any right to continue as consultants to the Company or its Affiliates by reason of the existence of such options. Persons who directly or indirectly provide goods or services to the Company or its Affiliates shall not have any right to continue providing such goods and services by reason of the existence of such Options. An Optionee who is not an employee of the Company or its Affiliates shall have no right to become an employee, or to obtain any benefit of employment, by reason of having been granted
Options under this Plan. An Optionee whose employment is terminated shall have no rights against the Company by reason of the termination of such Option whether the termination of the employment be with or without "Cause," as defined in Section 5(g)(iv).
(n) Other Provisions. The Option Notice may contain such other provisions as the Option Committee in its discretion deems advisable and which are not inconsistent with the provisions of this Plan, including, without limitation, restrictions upon the exercise of the Option.
Section 6. Amendment of the Plan.
Insofar as permitted by law and the Plan, the Option Committee may from time to time suspend or discontinue the Plan or revise or amend it in any respect whatsoever with respect to any Shares at the time not subject to an Option; provided, however, that without approval of the stockholders, no such revision or amendment may change the aggregate number of Shares for which Options may be granted hereunder, change the designation of the class of employees eligible to receive Options or decrease the price at which Options may be granted.
Any other provision of this Section 6 notwithstanding, the Option Committee or the Board of Directors specifically is authorized to adopt any amendment to this Plan deemed by the Board of Directors to be necessary or advisable to assure that the incentive stock options or the non-qualified stock options available under the Plan continue to be treated as such, respectively, under the law.
Section 7. Application of Funds.
The proceeds received by the Company from the sale of Shares pursuant to the exercise of Options will be used for general corporate purposes.
Section 8. No Obligation to Exercise Option.
The granting of an Option will impose no obligation upon the Optionee to exercise such Option.
Section 9. Restrictions on Sale of Shares. Optionee may not dispose of any Shares received under the Plan within one hundred and eighty (180) days of the date on which the Company's initial S-1 Registration Statement for registration of the Company's common stock under the Securities Act of 1933, as amended, is declared effective.
Section 10. Indemnification. In addition to such other rights of indemnification as they may have as members of the Board of Directors or officers or employees of the Company or one of its Affiliates, members of the Board of Directors and any officers or employees of the Company or any one of its Affiliates to whom authority to act for the Board of Directors is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.
Section 11. Approval of Stockholders.
This Plan shall become effective on the date that it is adopted by the Board of Directors; provided, however, that it shall become null and void if it is not approved by a majority of the holders of the Company's Common Stock within one year (365 days) of its adoption by the Board of Directors. The Option Committee may grant Options hereunder prior to approval of the Plan or any material amendments thereto by the holders of a majority of the Company's Common Stock; provided, however, that no Option so granted shall be exercisable within 365 days of the date of the adoption or material amendment of the Plan, and all Options so granted shall terminate and become null and void if the Plan is not approved by a majority of the holders of the Company's Common Stock within 365 days of its adoption or material amendment.
AASTROM BIOSCIENCES, INC.
1992 EMPLOYEE INCENTIVE
STOCK OPTION AGREEMENT
AASTROM BIOSCIENCES, INC., a Michigan corporation (the "Company"), hereby grants to __________________ ("Optionee"), an option to purchase a total of _________________ shares (the "Shares") of common stock of the Company, at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the Company's 1992 Incentive and Non-Qualified Stock Option Plan (the "Plan") incorporated herein by reference. Terms which are defined in the Plan shall have the same meanings when used herein.
1. Nature of the Option. This Option is an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
2. Exercise Price. The option price shall be __________________ for each Share (the "Exercise Price"), which is not less than the fair market value of each Share on the date hereof. The Option Price shall be adjusted proportionately for increases or decreases in the number of outstanding Shares resulting from stock splits.
3. Exercise of Option. Subject to Section 6 hereof, this Option shall be exercisable during its term as follows:
(a) Right to Exercise. This Option shall be exercisable with respect to ________________ Shares on ___________ and shall be exercisable with respect to an additional _______________ Shares on the first day of every third month thereafter, as long as Optionee remains an employee or director of the Company.
(b) Method of Exercise. This Option shall be exercisable by written notice in the form of Exhibit A attached hereto. Such written notice shall be signed by Optionee and shall be delivered in person, by certified mail, or by such other means as the Company may permit to the Secretary of the Company. The written notice shall be accompanied by payment of the aggregate Exercise Price.
No Shares will be issued pursuant to the exercise of this Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed.
(c) Number of Shares Exercisable. Each exercise of this Option in part shall reduce, pro tanto, the total number of Shares that may thereafter be purchased under such Option.
4. Optionee's Representations. If the shares which may be purchased pursuant to the exercise of this Option have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), at the time this Option is exercised, Optionee shall, concurrently with the exercise of all or any portion of this Option, deliver to the Company his Investment Representation Statement in the form attached hereto as Exhibit B.
5. Method of Payment. Payment of the Exercise Price, may be in any of the following forms, or a combination thereof, in the discretion of the Company:
(a) cash or check in the full amount of the aggregate Exercise Price; or
(b) surrender to the Company of other shares of Common Stock of the Company having a fair market value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which this Option is being exercised. If the Company's Common Stock is then quoted on the National Association of Securities Dealers Automated Quotation System ("Nasdaq") or listed on a recognized securities exchange, the fair market value of the shares shall be the representative closing price of the stock as obtained from Nasdaq or such recognized securities exchange on the date of the exercise of the Option, or if there is no such quotation on the date of the exercise, on the last trading day prior to the date of exercise. If the Company's Common Stock is not quoted on Nasdaq or listed on a recognized securities exchange, the fair market value of such shares shall be as determined by the Board of Directors in its sole discretion; or
(c) promissory note, bearing a reasonable rate of interest, requiring at least annual payments of accrued interest, maturing in not more than four (4) years, secured by the shares purchased, and being a full recourse obligation of the Optionee. Such recourse promissory note shall be in a form satisfactory to the Company, and the Company may require the Optionee to deposit any shares securing the promissory note with an agent designated by the Company under the terms and conditions of escrow and security agreements approved by the Company. It shall be at the sole and absolute discretion of the Company's Board of Directors as to whether or not the Optionee is allowed to exercise this Option by a
promissory note payment, and the Optionee shall have no right to do so unless the Board of Directors expressly exercises its discretion to allow the use of a promissory note. Any such approval by the Board of Directors shall not constitute a precedent for any subsequent exercise of this Option by the Optionee.
(d) through "Cashless Exercise." A "Cashless Exercise" means the assignment in a form acceptable to the Company of the proceeds of a sale or loan with respect to some or all of the Shares of Common Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to decline to approve or terminate any such program or procedure.
6. Restrictions on Exercise. This Option may not be exercised if the issuance of such Shares upon such exercise or the method of payment of consideration for such Shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require the Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation.
7. Termination of Options.
(a) Except as provided herein, this Option shall terminate at such time as Optionee ceases to be employed by the Company or ceases to be a director of the Company.
(b) Upon the death of Optionee while in the employ of the Company or while a director of the Company, Options held by Optionee which are exercisable on the date of his or her death shall be exercisable by his or her executor(s) or administrator(s) for a period of eighteen (18) months following the date of Optionee's death.
(c) Upon termination of Optionee's employment with the Company (or if Optionee is a director only, upon termination of the Optionee's term of office, or if the Optionee is both an employee and a director, upon termination of both) for any reason other than death,
disability or "Cause," as defined in Section 7(d), Options exercisable by Optionee on the date of termination of employment shall be exercisable by Optionee (or in the case of the Optionee's death subsequent to termination of employment, by the Optionee's executor(s) or administrator(s)) for a period of three (3) months from the date of Optionee's termination of employment.
(d) Upon the termination of Optionee's employment (or if Optionee is a director only, upon termination of Optionee's term of office, or if Optionee is both an employee and a director, upon termination of both) for "Cause," as defined in this Section 7(d), all Options held by Optionee shall terminate concurrently with receipt by the Optionee of oral or written notice that his or her employment has been terminated. Termination for "Cause" shall include termination by reason of being convicted of any felony or committing willful and gross negligence or willful and gross misconduct in carrying out duties properly assigned to Optionee by the Company.
(e) Upon termination of Optionee's employment due to the "disability"
of Optionee as such term is defined in Section 22(c)(3) of the Code an Option
exercisable by Optionee on the date of termination shall be exercisable by
Optionee (or Optionee's legal guardian or representative) for a period of one
(1) year from the date of Optionee's termination of employment.
(f) Notwithstanding the provisions of subsections (b), (c) and (e)
above, if a sale within the applicable time periods set forth in subsections
(b), (c) and (e) of this Section 7 of shares acquired upon the exercise of the
Option would subject the Optionee to suit under Section 16(b) of the Exchange
Act, the Option shall remain exercisable until the earliest to occur of (i) the
tenth (10th) day following the date on which a sale of such shares by the
Optionee would no longer be subject to such suit, (ii) the one hundred and
ninetieth (190th) day after the Optionee's termination of employment or service,
or (iii) the Option term date determined pursuant to Section 8. The Company
makes no representation as to the tax consequences of any such delayed exercise.
The Optionee should consult with the Optionee's own tax advisor as to the tax
consequences to the Optionee of any such delayed exercise.
8. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner during the lifetime of Optionee other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee
only by him or her. The terms of this Option shall be binding upon the executors, administrators, heirs and successors of the Optionee.
9. Term of Option. This Option may not be exercised more than ten (10) years from the date of grant of this Option, and may be exercised during such term only in accordance with the terms of the Plan and this Option.
10. Early Disposition of Stock. Optionee hereby agrees that if he disposes of any Shares received under this Option within one (1) year after such Shares were transferred to him, or within two (2) years of the grant of this Option, he will notify the Company in writing within 30 days after the date of any such disposition.
11. Acknowledgment. The Optionee acknowledges receipt of a copy of the Plan, which is annexed hereto as Exhibit C. The Optionee represents that he has read the terms and provisions of the Plan and accepts this Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan.
12. Entire Agreement. This Agreement, together with the exhibits attached hereto, represents the entire agreement between the parties.
13. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Michigan.
14. Amendment. This Agreement may only be amended by a writing signed by each of the parties hereto.
DATE OF GRANT: ________________________
AASTROM BIOSCIENCES, INC.
By:___________________________
R. Douglas Armstrong, Ph.D.
Its: President and CEO
Agreed to this ___ day of
___________________, 19__
NOTICE OF EXERCISE
AASTROM Biosciences, Inc.
Domino's Farms, Lobby L
P.O. Box 376
Ann Arbor, MI 48106
Attn.: Corporate Secretary
Dear Madam or Sir:
I hereby notify AASTROM Biosciences, Inc. of my intent to exercise ___________ Options granted to me pursuant to a Stock Option Agreement dated _______________ at an exercise price of $______ per share. I have enclosed a check for $________.
I hereby agree that if I dispose of any Shares received upon exercise of the Option within one (1) year after this date of exercise, or within two (2) years after the Date of Grant of this Option, I will notify the Company in writing within 30 days after the date of any such disposition.
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: [ ] COMPANY: Aastrom Biosciences, Inc. SECURITY: COMMON STOCK AMOUNT: [ ] SHARES DATE: [ ] |
In connection with the purchase of the above-listed Securities, I, the Purchaser, represent to the Company, the following:
(a) I am aware of the Company's business affairs and financial condition, and have acquired all such information about the Company as I deem necessary and appropriate to enable me to reach an informed and knowledgeable decision to acquire the Securities. I am purchasing these Securities for my own account for investment and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes for the Securities Act of 1933, as amended ("Securities Act").
(b) I understand that the Securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of my investment intent as expressed herein.
(c) I further understand that the Securities may not be sold publicly and must be held indefinitely unless they are subsequently registered under the Securities Act or unless an exemption from registration is available. I am able, without impairing my financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of my investment. I understand that the Company is under no obligation to register the Securities. In addition, I understand that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions, including, among other things: (1) the availability of certain public information about the Company; (2) the resale occurring not less than two years after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and (3) in the case of an affiliate, or of a non-affiliate who has held the securities less than three years, the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934) and the amount of securities being sold during any three month period not exceeding the specified limitations stated therein, if applicable.
(e) I further understand that at the time I wish to sell the Securities there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public information requirements of Rule 144, and that, in such event, I would be precluded from selling the Securities under Rule 144 even if the two-year minimum holding period had been satisfied. I understand that the Company is not currently required to file reports pursuant to the Securities Exchange Act of 1934, as amended, and is under no obligation to make Rule 144 available.
(f) I further understand that, in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.
Signature of Purchaser:
Date: ____________________
AASTROM BIOSCIENCES, INC.
1992 EMPLOYEE NON-QUALIFIED
STOCK OPTION AGREEMENT
AASTROM BIOSCIENCES, INC., a Michigan corporation (the "Company"), hereby grants to _______________________ ("Optionee"), an option to purchase a total of ____________ shares (the "Shares") of common stock of the Company, at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the Company's 1992 Incentive and Non- Qualified Stock Option Plan (the "Plan") incorporated herein by reference. Terms which are defined in the Plan shall have the same meanings when used herein.
1. Nature of the Option. This Option is a non-qualified stock option and is not intended to qualify for any special tax benefits to the Optionee.
2. Exercise Price. The option price shall be $_______________ for each Share (the "Exercise Price"), which is not less than the fair market value of each Share on the date hereof. The Option Price shall be adjusted proportionately for increases or decreases in the number of outstanding Shares resulting from stock splits.
3. Exercise of Option. Subject to Section 6 hereof, this Option shall be exercisable during its term as follows:
(a) Right to Exercise. This Option shall be exercisable with respect to ______________ Shares on ______________ and shall be exercisable with respect to an additional __________________ Shares on the first day of every third month thereafter, as long as Optionee remains an employee, director or consultant of the Company.
(b) Method of Exercise. This Option shall be exercisable by written notice in the form of Exhibit A attached hereto. Such written notice shall be signed by Optionee and shall be delivered in person, by certified mail, or by such other means as the Company may permit to the Secretary of the Company. The written notice shall be accompanied by payment of the aggregate Exercise Price.
No Shares will be issued pursuant to the exercise of this Option unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the Shares may then be listed.
(c) Number of Shares Exercisable. Each exercise of this Option in part shall reduce, pro tanto, the total number of Shares that may thereafter be purchased under such Option.
4. Optionee's Representations. If the Shares which may be purchased pursuant to the exercise of this Option have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), at the time this Option is exercised, Optionee shall, concurrently with the exercise of all or any portion of this Option, deliver to the Company his Investment Representation Statement in the form attached hereto as Exhibit B.
5. Method of Payment. Payment of the Exercise Price, may be in any of the following forms, or a combination thereof, in the discretion of the Company:
(a) cash or check in the full amount of the aggregate Exercise Price; or
(b) surrender to the Company of other shares of Common Stock of the Company having a fair market value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which this Option is being exercised. If the Company's Common Stock is then quoted on the National Association of Securities Dealers Automated Quotation System ("Nasdaq") or listed on a recognized securities exchange, the fair market value of the shares shall be the representative closing price of the stock as obtained from the Nasdaq or such recognized securities exchange on the date of the exercise of the Option, or if there is no such quotation on the date of the exercise, on the last trading day prior to the date of exercise. If the Company's Common Stock is not quoted on Nasdaq or listed on a recognized securities exchange, the fair market value of such shares shall be as determined by the Board of Directors in its sole discretion; or
(c) promissory note, bearing a reasonable rate of interest, requiring at least annual payments of accrued interest, maturing in not more than four (4) years, secured by the shares purchased, and being a full recourse obligation of the Optionee. Such recourse promissory note shall be in a form satisfactory to the Company, and the Company may require the Optionee to deposit any shares securing the promissory note
with an agent designated by the Company under the terms and conditions of escrow and security agreements approved by the Company. It shall be at the sole and absolute discretion of the Company's Board of Directors as to whether or not the Optionee is allowed to exercise this Option by a promissory note payment, and the Optionee shall have no right to do so unless the Board of Directors expressly exercises its discretion to allow the use of a promissory note. Any such approval by the Board of Directors shall not constitute a precedent for any subsequent exercise of this Option by the Optionee.
(d) through "Cashless Exercise". A "Cashless Exercise" means the assignment in a form acceptable to the Company of the proceeds of a sale or loan with respect to some or all of the Shares of Common Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to decline to approve or terminate any such program or procedure.
6. Restrictions on Exercise. This Option may not be exercised if the issuance of such Shares upon such exercise or the method of payment of consideration for such Shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require the Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation.
7. Termination of Options.
(a) Except as provided herein, this Option shall terminate at such time as Optionee ceases to be employed by the Company or ceases to be a director of or consultant to the Company.
(b) Upon the death of Optionee while in the employ of the Company or while a director of or consultant to the Company, Options held by Optionee which are exercisable on the date of his or her death shall be exercisable by his or her executor(s) or administrator(s) for a period of eighteen (18) months following the date of Optionee's death.
(c) Upon termination of Optionee's employment with or service as a consultant to the Company (or if Optionee is a director only, upon termination of the Optionee's term of office, or if the Optionee is both an employee and a director, upon termination of both) for any reason other than death, disability or "Cause," as defined in Section 7(d), Options exercisable by Optionee on the date of termination of employment or service shall be exercisable by Optionee (or in the case of the Optionee's death subsequent to termination of employment, by the Optionee's executor(s) or administrator(s)) for a period of three (3) months from the date of Optionee's termination of employment or service.
(d) Upon the termination of Optionee's employment or service as a consultant (or if Optionee is a director only, upon termination of Optionee's term of office, or if Optionee is both an employee and a director, upon termination of both) for "Cause," as defined in this Section 7(d), all Options held by Optionee shall terminate concurrently with receipt by the Optionee of oral or written notice that his or her employment or service has been terminated. Termination for "Cause" shall include termination by reason of being convicted of any felony or committing willful and gross negligence or willful and gross misconduct in carrying out duties properly assigned to Optionee by the Company.
(e) Upon termination of Optionee's employment or service as a
consultant due to the "disability" of Optionee as such term is defined in
Section 22(c)(3) of the Code an Option exercisable by Optionee on the date of
termination shall be exercisable by Optionee (or Optionee's legal guardian or
representative) for a period of one (1) year from the date of Optionee's
termination of employment or service.
(f) Notwithstanding the provisions of subsections (b), (c) and (e)
above, if a sale within the applicable time periods set forth in subsections
(b), (c) and (e) of this Section 7 of shares acquired upon the exercise of the
Option would subject the Optionee to suit under Section 16(b) of the Exchange
Act, the Option shall remain exercisable until the earliest to occur of (i) the
tenth (10th) day following the date on which a sale of such shares by the
Optionee would no longer be subject to such suit, (ii) the one hundred and
ninetieth (190th) day after the Optionee's termination of employment or service,
or (iii) the Option term date determined pursuant to Section 8. The Company
makes no representation as to the tax consequences of any such delayed exercise.
The Optionee should consult with the Optionee's own tax advisor as to the tax
consequences to the Optionee of any such delayed exercise.
8. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner during the lifetime of Optionee other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee only by him or her. The terms of this Option shall be binding upon the executors, administrators, heirs and successors of the Optionee.
9. Term of Option. This Option may not be exercised more than ten (10) years from the date of grant of this Option, and may be exercised during such term only in accordance with the terms of the Plan and this Option.
10. Early Disposition of Stock. Optionee hereby agrees that if he disposes of any Shares received under this Option within one (1) year after such Shares were transferred to him, he will notify the Company in writing within 30 days after the date of any such disposition.
11. Acknowledgment. The Optionee acknowledges receipt of a copy of the Plan, which is annexed hereto as Exhibit C. The Optionee represents that he has read the terms and provisions of the Plan and accepts this Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan.
12. Entire Agreement. This Agreement, together with the exhibits attached hereto, represents the entire agreement between the parties.
13. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Michigan.
14. Amendment. This Agreement may only be amended by a writing signed by each of the parties hereto.
DATE OF GRANT: ___________________
AASTROM BIOSCIENCES, INC.
By: _________________________________
R. Douglas Armstrong, Ph.D.
Its: President and CEO
Agreed to this ___ day of
___________________, 19__.
NOTICE OF EXERCISE
AASTROM Biosciences, Inc.
Domino's Farms, Lobby L
P.O. Box 376
Ann Arbor, MI 48106
Attn.: Corporate Secretary
Dear Madam or Sir:
I hereby notify AASTROM Biosciences, Inc. of my intent to exercise ___________ Options granted to me pursuant to a Stock Option Agreement dated _______________ at an exercise price of $______ per share. I have enclosed a check for $________.
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: [ ] COMPANY: Aastrom Biosciences, Inc. SECURITY: COMMON STOCK AMOUNT: [ ] SHARES DATE: [ ] |
In connection with the purchase of the above-listed Securities, I, the Purchaser, represent to the Company, the following:
(a) I am aware of the Company's business affairs and financial condition, and have acquired all such information about the Company as I deem necessary and appropriate to enable me to reach an informed and knowledgeable decision to acquire the Securities. I am purchasing these Securities for my own account for investment and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes for the Securities Act of 1933, as amended ("Securities Act").
(b) I understand that the Securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of my investment intent as expressed herein.
(c) I further understand that the Securities may not be sold publicly and must be held indefinitely unless they are subsequently registered under the Securities Act or unless an exemption from registration is available. I am able, without impairing my financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of my investment. I understand that the Company is under no obligation to register the Securities. In addition, I understand that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof (or
from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions, including, among other things: (1) the availability of certain public information about the Company; (2) the resale occurring not less than two years after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and (3) in the case of an affiliate, or of a non-affiliate who has held the securities less than three years, the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934) and the amount of securities being sold during any three month period not exceeding the specified limitations stated therein, if applicable.
(e) I further understand that at the time I wish to sell the Securities there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public information requirements of Rule 144, and that, in such event, I would be precluded from selling the Securities under Rule 144 even if the two-year minimum holding period had been satisfied. I understand that the Company is not currently required to file reports pursuant to the Securities Exchange Act of 1934, as amended, and is under no obligation to make Rule 144 available.
(f) I further understand that, in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.
Signature of Purchaser:
Date: ____________________
EXHIBIT 10.6
AASTROM BIOSCIENCES, INC.
1996 OUTSIDE DIRECTORS STOCK OPTION PLAN
1.1 ESTABLISHMENT. The Aastrom Biosciences, Inc. 1996 Outside
Directors Stock Option Plan (the "Plan") is hereby established effective as of
the effective date of the initial registration by the Company of its Stock under
Section 12 of the Exchange Act (the "Effective Date").
1.2 PURPOSE. The purpose of the Plan is to advance the interests of the Participating Company Group and its stockholders by providing an incentive to attract and retain highly qualified persons to serve as Outside Directors of the Company and by creating additional incentive for Outside Directors to promote the growth and profitability of the Participating Company Group.
1.3 TERM OF PLAN. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing Options granted under the Plan have lapsed.
2.1 DEFINITIONS. Whenever used herein, the following terms shall have their respective meanings set forth below:
(a) "BOARD" means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administer the Plan, "Board" also means such Committee(s).
(b) "CODE" means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.
(c) "COMMITTEE" means a committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law.
(d) "COMPANY" means Aastrom Biosciences, Inc., a Michigan corporation, or any successor corporation thereto.
(e) "CONSULTANT" means any person, including an advisor, engaged by a Participating Company to render services other than as an Employee or a Director.
(f) "DIRECTOR" means a member of the Board or the board of directors of any other Participating Company.
(g) "EMPLOYEE" means any person treated as an employee (including an officer or a Director who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a Director nor payment of a director's fee shall be sufficient to constitute employment for purposes of the Plan .
(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(i) "FAIR MARKET VALUE" means, as of any date, if there is then a public market for the Stock, the closing price of the Stock (or the mean of the closing bid and asked prices of the Stock if the Stock is so reported instead) as reported on the National Association of Securities Dealers Automated Quotation ("NASDAQ") System, the NASDAQ National Market System or such other national or regional securities exchange or market system constituting the primary market for the Stock. If the relevant date does not fall on a day on which the Stock is trading on NASDAQ, the NASDAQ National Market System or other national or regional securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date. If there is then no public market for the Stock, the Fair Market Value on any relevant date shall be as determined by the Board without regard to any restriction other than a restriction which, by its terms, will never lapse.
(j) "OPTION" means a right to purchase Stock (subject to adjustment as provided in Section 4.2) pursuant to the terms and conditions of the Plan.
(k) "OPTIONEE" means a person who has been granted one or more Options.
(l) "OPTION AGREEMENT" means a written agreement between the Company and an Optionee setting forth the terms, conditions and restrictions of the Option granted to the Optionee.
(m) "OUTSIDE DIRECTOR" means a Director of the Company who is not an Employee.
(n) "PARENT CORPORATION" means any present or future "parent corporation" of the Company, as defined in Section 424(e) of the Code.
(o) "PARTICIPATING COMPANY" means the Company or any Parent Corporation or Subsidiary Corporation.
(p) "PARTICIPATING COMPANY GROUP" means, at any point in time, all corporations collectively which are then Participating Companies.
(q) "RULE 16b-3" means Rule 16b-3 as promulgated under the Exchange Act, as amended from time to time, or any successor rule or regulation.
(r) "SERVICE" means the Optionee's service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. The Optionee's Service shall not be deemed to have terminated merely because of a change in the capacity in which the Optionee renders Service to the Participating Company Group or a change in the Participating Company for which the Optionee renders such Service, provided that there is no interruption or termination of the Optionee's Service. The Optionee's Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service ceasing to be a Participating Company.
(s) "STOCK" means the common stock, no par value, of the Company, as adjusted from time to time in accordance with Section 4.2.
(t) "SUBSIDIARY CORPORATION" means any present or future "subsidiary corporation" of the Company, as defined in Section 424(f) of the Code.
2.2 CONSTRUCTION. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural, the plural shall include the singular, and use of the term "or" shall include the conjunctive as well as the disjunctive.
3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered by the Board, including any duly appointed Committee of the Board. All questions of interpretation of the Plan or of any Option shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Option. Any officer of a Participating Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is
allocated to the Company herein, provided the officer has apparent authority with respect to such matter, right, obligation, determination or election.
3.2 LIMITATIONS ON AUTHORITY OF THE BOARD. Notwithstanding any other provision herein to the contrary, the Board shall have no authority, discretion, or power to select the Outside Directors who will receive Options, to set the exercise price of the Options, to determine the number of shares of Stock to be subject to an Option or the time at which an Option shall be granted, to establish the duration of an Option, or to alter any other terms or conditions specified in the Plan, except in the sense of administering the Plan subject to the provisions of the Plan.
4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be one hundred fifty thousand (150,000) (on a post-split basis following the two-for-three reverse stock split of the Stock approved by the Board on April 30, 1996) and shall consist of authorized but unissued shares or reacquired shares of Stock or any combination thereof. If an outstanding Option for any reason expires or is terminated or canceled or shares of Stock acquired, subject to repurchase, upon the exercise of an Option are repurchased by the Company, the shares of Stock allocable to the unexercised portion of such Option, or such repurchased shares of Stock, shall again be available for issuance under the Plan.
4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of
any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number and class of shares
subject to the Plan, to the "Initial Option" and "Annual Option" (as defined in
Section 6.1), and to any outstanding Options, and in the exercise price of any
outstanding Options. If a majority of the shares which are of the same class as
the shares that are subject to outstanding Options are exchanged for, converted
into, or otherwise become (whether or not pursuant to an "Ownership Change
Event" as defined in Section 8.1) shares of another corporation (the "NEW
SHARES"), the Board may unilaterally amend the outstanding Options to provide
that such Options are exercisable for New Shares. In the event of any such
amendment, the number of shares subject to, and the exercise price of, the
outstanding Options shall be adjusted in a fair and equitable manner as
determined by the Board, in its sole discretion. Notwithstanding the foregoing,
any fractional share resulting from an adjustment pursuant to this Section 4.2
shall be rounded down to the nearest whole number, and in no event may the
exercise price of any Option be decreased to an amount less than the par value,
if any, of the stock subject to the Option.
5.1 PERSONS ELIGIBLE FOR OPTIONS. An Option shall be granted only to a person who, at the time of grant, is an Outside Director.
5.2 OPTIONS AUTHORIZED. Options shall be nonstatutory stock options; that is, options which are not treated as incentive stock options within the meaning of Section 422(b) of the Code.
6.1 AUTOMATIC GRANT OF OPTIONS. Subject to execution by an Outside Director of the appropriate Option Agreement, Options shall be granted automatically and without further action of the Board, as follows:
(a) INITIAL OPTION. Each person who (i) is an Outside Director on the Effective Date, or (ii) first becomes an Outside Director after the Effective Date shall be granted an Option to purchase five thousand (5,000) shares of Stock on the Effective Date or the date he or she first becomes an Outside Director, respectively (an "Initial Option").
(b) ANNUAL OPTION. Each Outside Director (including any Director of the Company who previously did not qualify as an Outside Director but who subsequently becomes an Outside Director) shall be granted, on the date immediately following the date of each annual meeting of the stockholders of the Company (an "Annual Meeting") following which such person remains an Outside Director, an Option to purchase five thousand (5,000) shares of Stock (an "Annual Option"). Notwithstanding the foregoing, an Outside Director who has not served continuously as a Director of the Company for at least six (6) months as of the date immediately following such Annual Meeting shall not receive an Annual Option on such date.
(c) RIGHT TO DECLINE OPTION. Notwithstanding the foregoing, any person may elect not to receive an Option by delivering written notice of such election to the Board no later than the day prior to the date such Option would otherwise be granted. A person so declining an Option shall receive no payment or other consideration in lieu of such declined Option. A person who has declined an Option may revoke such election by delivering written notice of such revocation to the Board no later than the day prior to the date such Option would be granted pursuant to Section 6.1(a) or (b), as the case may be.
6.2 DISCRETION TO VARY OPTION SIZE. Notwithstanding any provision of the Plan to the contrary, the Board may, in its sole discretion, increase or decrease the number of shares of Stock that would otherwise be subject to one or more Initial Options or Annual Options to be granted pursuant to Section 6.1 if, at the time of such exercise of discretion, the exercise of such discretion would not otherwise preclude any transaction in an equity security of the Company by an officer or Director of a Participating Company from being exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3.
6.3 EXERCISE PRICE. The exercise price per share of Stock subject to an Option shall be the Fair Market Value of a share of Stock on the date the Option is granted.
6.4 EXERCISE PERIOD. Each Option shall terminate and cease to be exercisable on the date ten (10) years after the date of grant of the Option unless earlier terminated pursuant to the terms of the Plan or the Option Agreement.
6.5 RIGHT TO EXERCISE OPTIONS.
Except as otherwise provided in the Plan or in the Option
Agreement, an Option shall (a) first become exercisable on the date which is one
(1) month after the date on which the Option was granted (the "Initial Vesting
Date"); and (b) be exercisable on and after the Initial Vesting Date and prior
to the termination thereof in an amount equal to the number of shares of Stock
initially subject to the Option multiplied by the Vested Ratio as set forth
below, less the number of shares previously acquired upon exercise thereof. The
Vested Ratio described in the preceding sentence shall be determined as follows:
Vested Ratio ------------ Prior to Initial Option Vesting Date 0 On Initial Vesting Date, provided 1/12 the Optionee's Service is continuous from the date of grant of the Option until the Initial Vesting Date Plus ---- For each full month of 1/12 of the Optionee's continuous |
Service from the Initial
Vesting Date until the Vested
Ratio equals 1/1, an additional
6.6 PAYMENT OF EXERCISE PRICE.
(a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company of shares of Stock owned by the Optionee having a Fair Market Value not less than the exercise price, (iii) by the assignment of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a "CASHLESS EXERCISE"), or (iv) by any combination thereof.
(b) TENDER OF STOCK. Notwithstanding the foregoing, an Option may not be exercised by tender to the Company of shares of Stock to the extent such tender of Stock would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company's stock. Unless otherwise provided by the Board, an Option may not be exercised by tender to the Company of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company.
(c) CASHLESS EXERCISE. The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise.
6.7 TAX WITHHOLDING. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable upon the exercise of an Option, or to accept from the Optionee the tender of, a number of whole shares of Stock having a Fair Market Value equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to such Option or the shares acquired upon exercise thereof. Alternatively or in addition, in its sole discretion, the Company shall have the right to require the Optionee to make adequate provision for any such tax withholding obligations of the Participating Company Group arising in connection with the Option or the shares acquired upon exercise thereof. The Company shall have no obligation to deliver shares of Stock until the Participating Company Group's tax withholding obligations have been satisfied.
7.1 INITIAL OPTION. Unless otherwise provided for by the Board at the time an Initial Option is granted, each Initial Option shall comply with and be subject to the terms and conditions set forth in the form of Nonstatutory Stock Option Agreement for Outside Directors (Initial Option) adopted by the Board concurrently with its adoption of the Plan and as amended from time to time.
7.2 ANNUAL OPTION. Unless otherwise provided for by the Board at the time an Annual Option is granted, each Annual Option shall comply with and be subject to the terms and conditions set forth in the form of Nonstatutory Stock Option Agreement for Outside Directors (Annual Option) adopted by the Board concurrently with its adoption of the Plan and as amended from time to time.
7.3 AUTHORITY TO VARY TERMS. Subject to the limitations set forth in
Section 3.2, the Board shall have the authority from time to time to vary the
terms of any of the standard forms of Option Agreement described in this Section
7 either in connection with the grant or amendment of an individual Option or in
connection with the authorization of a new standard form or forms; provided,
however, that the terms and conditions of any such new, revised or amended standard form or forms of Option Agreement are not inconsistent with the terms of the Plan. Such authority shall include, but not by way of limitation, the authority to grant Options which are immediately exercisable subject to the Company's right to repurchase any unvested shares of Stock acquired by the Optionee upon the exercise of an Option in the event such Optionee's Service is terminated for any reason.
8.1 DEFINITIONS.
(a) AN "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred if any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A "TRANSFER OF CONTROL" shall mean an Ownership Change Event or a series of related Ownership Change Events (collectively, the "TRANSACTION") wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company's voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting stock of the Company or the corporation or corporations to which the assets of the Company were transferred (the "TRANSFEREE CORPORATION(S)"), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting stock of one or more corporations which, as a result of the Transaction, own the Company or the Transferee Corporation(s), as the case may be, either directly or through one or more subsidiary corporations. The Board shall have the right to determine whether multiple sales or exchanges of the voting stock of the Company
or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.
8.2 EFFECT OF TRANSFER OF CONTROL ON OPTIONS. In the event of a
Transfer of Control, any unexercisable or unvested portion of the outstanding
Options shall be immediately exercisable and vested in full as of the date ten
(10) days prior to the date of the Transfer of Control. The exercise or vesting
of any Option that was permissible solely by reason of this Section 8.2 shall be
conditioned upon the consummation of the Transfer of Control. In addition, the
surviving, continuing, successor, or purchasing corporation or parent
corporation thereof, as the case may be (the "ACQUIRING CORPORATION"), may
either assume the Company's rights and obligations under outstanding Options or
substitute for outstanding Options substantially equivalent options for the
Acquiring Corporation's stock. Any Options which are neither assumed or
substituted for by the Acquiring Corporation in connection with the Transfer of
Control nor exercised as of the date of the Transfer of Control shall terminate
and cease to be outstanding effective as of the date of the Transfer of Control.
Notwithstanding the foregoing, shares acquired upon exercise of an Option prior
to the Transfer of Control and any consideration received pursuant to the
Transfer of Control with respect to such shares shall continue to be subject to
all applicable provisions of the Option Agreement evidencing such Option except
as otherwise provided in such Option Agreement. Furthermore, notwithstanding
the foregoing, if the corporation the stock of which is subject to the
outstanding Options immediately prior to an Ownership Change Event described in
Section 8.1(a)(i) constituting a Transfer of Control is the surviving or
continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the outstanding Options
shall not terminate.
settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing AASTROM Biosciences, Inc. 1996 Outside Directors Stock Option Plan was duly adopted by the Board on April 30, 1996.
/s/ Todd E. Simpson ___________________________________ Todd E. Simpson, Secretary |
AASTROM BIOSCIENCES, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
FOR OUTSIDE DIRECTORS
(INITIAL OPTION)
The Company has granted to the Optionee an option to purchase certain shares of Stock, upon the terms and conditions set forth in this Option Agreement (the "OPTION").
1.1 DEFINITIONS. Whenever used herein, the following terms shall have their respective meanings set forth below:
(b) "NUMBER OF OPTION SHARES" means five thousand (5,000) shares of Stock, as adjusted from time to time pursuant to Section 9.
(d) "INITIAL EXERCISE DATE" means the Initial Vesting Date.
(e) "INITIAL VESTING DATE" means the date occurring one (1) month after the Date of Option Grant.
(f) "VESTED RATIO" means, on any relevant date, the ratio determined as follows:
Vested Ratio ------------ Prior to Initial Vesting Date 0 On Initial Vesting Date, 1/12 provided the Optionee's Service is continuous from the Date of Option Grant until the Initial Vesting Date PLUS - ---- For each full month of the 1/12 Optionee's continuous Service from the Initial Vesting Date until the Vested Ratio equals 1/1, an additional |
(g) "OPTION EXPIRATION DATE" means the date ten (10) years after the Date of Option Grant.
(h) "BOARD" means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administer the Plan, "Board" shall also mean such Committee(s).
(i) "CODE" means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.
(j) "COMMITTEE" means a committee of the Board duly
appointed to administer the Plan and having such powers as shall be specified by
the Board. Unless the powers of the Committee have been specifically limited,
the Committee shall have all of the powers of the Board granted in the Plan,
including, without limitation, the power to amend or terminate the Plan at any
time, subject to the terms of the Plan and any applicable limitations imposed by
law.
(k) "COMPANY" means Biosciences, Inc., a Michigan corporation, or any
successor corporation thereto.
(l) "CONSULTANT" means Aastrom any person, including an advisor, engaged by a Participating Company to render services other than as an Employee or a Director.
(m) "DIRECTOR" means a member of the Board or of the board of directors of any other Participating Company.
(n) "DISABILITY" means the permanent and total disability of the Optionee within the meaning of Section 22(e)(3) of the Code.
(o) "EMPLOYEE" means any person treated as an employee (including an officer or a Director who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a Director nor payment of a director's fee shall be sufficient to constitute employment for purposes of the Plan.
(p) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(q) "FAIR MARKET VALUE" means, as of any date, if there is then a public market for the Stock, the closing price of the Stock (or the mean of the closing bid and asked prices of the Stock if the Stock is so reported instead) as reported on the National Association of Securities Dealers Automated Quotation ("NASDAQ") System, the NASDAQ National Market System or such other national or regional securities exchange or market system constituting the primary market for the Stock. If the relevant date does not fall on a day on which the Stock is trading on NASDAQ, the NASDAQ National Market System or other national or regional securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date. If there is then no public market for the Stock, the Fair Market Value on any relevant date shall be as determined by the Board without regard to any restriction other than a restriction which, by its terms, will never lapse.
(r) "PARENT CORPORATION" means any present or future "parent corporation" of the Company, as defined in Section 424(e) of the Code.
(s) "PARTICIPATING COMPANY" means the Company or any Parent Corporation or Subsidiary Corporation.
(t) "PARTICIPATING COMPANY GROUP" means, at any point in time, all corporations collectively which are then Participating Companies.
(u) "PLAN" means the Aastrom Biosciences, Inc. 1996 Outside Directors Stock Option Plan.
(v) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(w) "SERVICE" means the Optionee's service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. The Optionee's Service shall not be deemed to have terminated merely because of a change in the capacity in which the Optionee renders Service to the Participating Company Group or a change in the Participating Company for which the Optionee renders such Service, provided that there is no interruption or termination of the Optionee's Service. The Optionee's Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service ceasing to be a Participating Company.
(x) "STOCK" means the common stock, no par value of the Company, as adjusted from time to time in accordance with Section 9.
(y) "SUBSIDIARY CORPORATION" means any present or future "subsidiary corporation" of the Company, as defined in Section 424(f) of the Code.
1.2 CONSTRUCTION. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural, the plural shall include the singular, and the term "or" shall include the conjunctive as well as the disjunctive.
4.1 RIGHT TO EXERCISE. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Exercise Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the Number of Option
Shares multiplied by the Vested Ratio less the number of shares previously acquired upon exercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares.
4.2 METHOD OF EXERCISE. Exercise of the Option shall be by written notice to the Company which must state the election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee's investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Chief Financial Officer of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in Section 6, accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such written notice and the aggregate Exercise Price.
4.3 PAYMENT OF EXERCISE PRICE.
(a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise provided
below, payment of the aggregate Exercise Price for the number of shares of Stock
for which the Option is being exercised shall be made (i) in cash, by check, or
cash equivalent, (ii) by tender to the Company of whole shares of Stock owned by
the Optionee having a Fair Market Value not less than the aggregate Exercise
Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(c), or
(iv) by any combination of the foregoing.
(b) TENDER OF STOCK. Notwithstanding the foregoing, the Option may not be exercised by tender to the Company of shares of Stock to the extent such tender of Stock would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company's stock. The Option may not be exercised by tender to the Company of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company.
(c) CASHLESS EXERCISE. A "Cashless Exercise" means the assignment in a form acceptable to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to decline to approve or terminate any such program or procedure.
4.4 TAX WITHHOLDING. At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Optionee agrees to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Participating Company Group, if any, which arise in connection with the Option, including, without limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, or (iii) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option.
4.5 CERTIFICATE REGISTRATION. Except in the event the Exercise Price is paid by means of a Cashless Exercise, the certificate for the shares as to which the Option is exercised shall be registered in the name of the Optionee, or, if applicable, the heirs of the Optionee.
4.6 RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES. The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company's legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Optionee to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.
4.7 FRACTIONAL SHARES. The Company shall not be required to issue fractional shares upon the exercise of the Option.
7.1 OPTION EXERCISABILITY.
(a) DISABILITY. If the Optionee's Service with the Participating Company Group is terminated because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee's Service terminated, may be exercised by the Optionee (or the Optionee's guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date.
(b) DEATH. If the Optionee's Service with the Participating Company
Group is terminated because of the death of the Optionee, the Option, to the
extent unexercised and exercisable on the date on which the Optionee's Service
terminated, may be exercised by the Optionee (or the Optionee's legal
representative or other person who acquired the right to exercise the Option by
reason of the Optionee's death) at any time prior to the expiration of twelve
(12) months after the date on which the Optionee's Service terminated, but in
any event no later than the Option Expiration Date. The Optionee's Service
shall be deemed to have terminated on account of death if the Optionee dies
within three (3) months after the Optionee's termination of Service.
(c) OTHER TERMINATION OF SERVICE. If the Optionee's Service with the Participating Company Group terminates for any reason, except Disability or death, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee's Service terminated, may be exercised by the Optionee within three (3) months after the date on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date.
7.2 EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.
7.3 EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(B). Notwithstanding
the foregoing, if a sale, within the applicable time periods set forth in
Section 7.1, of shares acquired upon the exercise of the Option would subject
the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.
8.1 DEFINITIONS.
(a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred if any of the followin g occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A "TRANSFER OF CONTROL" shall mean an Ownership Change Event or a series of related Ownership Change Events (collectively, the "Transaction") wherein the stockholders of the Company immediately before the Transaction do not retain imme diately after the Transaction, in substantially the
same proportions as their ownership of shares of the Company's voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting stock of the Company or the corporation or corporations to which the assets of the Company were transferred (the "Transferee Corporation(s)"), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting stock of one or more corporations which, as a result of the Transaction, own the Company or the Transferee Corporation(s), as the case may be, either directly or through one or more subsidiary corporations. The Board shall have the right to determine whether multiple sales or exchanges of the voting stock of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.
8.2 EFFECT OF TRANSFER OF CONTROL ON OPTION. In the event of a Transfer of Control, any unexercised portion of the Option shall be immediately exercisable and vested in full as of the date ten (10) days prior to the date of the Transfer of Control. Any exercise of the Option that was permissible solely by reason of this Section 8.2 shall be conditioned upon the consummation of the Transfer of Control. In addition, the surviving, continuing, successor, or purchasing corporation or parent corporation thereof, as the case may be (the "ACQUIRING CORPORATION"), may either assume the Company's rights and obligations under the Option or substitute for the Option a substantially equivalent option for the Acquiring Corporation's stock. The Option shall terminate and cease to be outstanding effective as of the date of the Transfer of Control to the extent that the Option is neither assumed or substituted for by the Acquiring Corporation in connection with the Transfer of Control nor exercised as of the date of the Transfer of Control. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to the Transfer of Control and any consideration received pursuant to the Transfer of Control with respect to such shares shall continue to be subject to all applicable provisions of this Option Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing, if the corporation the stock of which is subject to the Option immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a Transfer of Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the Option shall not terminate.
converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the "NEW SHARES"), the Board may unilaterally amend the Option to provide that the Option is exercisable for New Shares. In the event of any such amendment, the Number of Option Shares and the Exercise Price shall be adjusted in a fair and equitable manner, as determined by the Board, in its sole discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 9 shall be rounded down to the nearest whole number, and in no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option.
than those as set forth or provided for herein. To the extent contemplated herein, the provisions of this Option Agreement shall survive any exercise of the Option and shall remain in full force and effect.
AASTROM BIOSCIENCES, INC.
By:________________________________
Title:_______________________________
The Optionee represents that the Optionee is familiar with the terms and provisions of this Option Agreement and hereby accepts the Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under this Option Agreement.
OPTIONEE
Date:_______________________________ ____________________________________
AASTROM BIOSCIENCES, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
FOR OUTSIDE DIRECTORS
(ANNUAL OPTION)
The Company has granted to the Optionee an option to purchase certain shares of Stock, upon the terms and conditions set forth in this Option Agreement (the "OPTION").
1.1 DEFINITIONS. Whenever used herein, the following terms shall have their respective meanings set forth below:
(b) "NUMBER OF OPTION SHARES" means five thousand (5,000) shares of Stock, as adjusted from time to time pursuant to Section 9.
(c) "EXERCISE PRICE" means $ ____________ per share of Stock, as adjusted from time to time pursuant to Section 9.
(d) "INITIAL EXERCISE DATE" means the Initial Vesting Date.
(e) "INITIAL VESTING DATE" means the date occurring one (1) month after the Date of Option Grant.
(f) "VESTED RATIO" means, on any relevant date, the ratio determined as follows:
Vested Ratio ------------ Prior to Initial Vesting Date 0 On Initial Vesting Date, 1/12 provided the Optionee's Service is continuous from the Date of Option Grant until the Initial Vesting Date Plus - ---- For each full month of the 1/12 Optionee's continuous Service from the Initial Vesting Date until the Vested Ratio equals 1/1, an additional |
(g) "OPTION EXPIRATION DATE" means the date ten (10) years after the Date of Option Grant.
(h) "BOARD" means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administer the Plan, "Board" shall also mean such Committee(s).
(i) "CODE" means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.
(j) "COMMITTEE" means a committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all of the powers of the Board granted in the Plan, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law.
(k) "COMPANY" means Aastrom Biosciences, Inc., a Michigan corporation, or any successor corporation thereto.
(l) "CONSULTANT" means Aastrom any person, including an advisor, engaged by a Participating Company to render services other than as an Employee or a Director.
(m) "DIRECTOR" means a member of the Board or of the board of directors of any other Participating Company.
(n) "DISABILITY" means the permanent and total disability of the Optionee within the meaning of Section 22(e)(3) of the Code.
(o) "EMPLOYEE" means any person treated as an employee (including an officer or a Director who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a Director nor payment of a director's fee shall be sufficient to constitute employment for purposes of the Plan.
(p) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(q) "FAIR MARKET VALUE" means, as of any date, if there is then a public market for the Stock, the closing price of the Stock (or the mean of the closing bid and asked prices of the Stock if the Stock is so reported instead) as reported on the National Association of Securities Dealers Automated Quotation ("NASDAQ") System, the NASDAQ National Market System or such other national or regional securities exchange or market system constituting the primary market for the Stock. If the relevant date does not fall on a day on which the Stock is trading on NASDAQ, the NASDAQ National Market System or other national or regional securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date. If there is then no public market for the Stock, the Fair Market Value on any relevant date shall be as determined by the Board without regard to any restriction other than a restriction which, by its terms, will never lapse.
(r) "PARENT CORPORATION" means any present or future "parent corporation" of the Company, as defined in Section 424(e) of the Code.
(s) "PARTICIPATING COMPANY" means the Company or any Parent Corporation or Subsidiary Corporation.
(t) "PARTICIPATING COMPANY GROUP" means, at any point in time, all corporations collectively which are then Participating Companies.
(u) "PLAN" means the Aastrom Biosciences, Inc. 1996 Outside Directors Stock Option Plan.
(v) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(w) "SERVICE" means the Optionee's service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. The Optionee's Service shall not be deemed to have terminated merely because of a change in the capacity in which the Optionee renders Service to the Participating Company Group or a change in the Participating Company for which the Optionee renders such Service, provided that there is no interruption or termination of the Optionee's Service. The Optionee's Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service ceasing to be a Participating Company.
(x) "STOCK" means the common stock, no par value, of the Company, as adjusted from time to time in accordance with Section 9.
(y) "SUBSIDIARY CORPORATION" means any present or future "subsidiary corporation" of the Company, as defined in Section 424(f) of the Code.
1.2 CONSTRUCTION. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural, the plural shall include the singular, and the term "or" shall include the conjunctive as well as the disjunctive.
4.1 RIGHT TO EXERCISE. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Exercise Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the Number of Option
Shares multiplied by the Vested Ratio less the number of shares previously acquired upon exercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares.
4.2 METHOD OF EXERCISE. Exercise of the Option shall be by written notice to the Company which must state the election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee's investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Chief Financial Officer of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in Section 6, accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such written notice and the aggregate Exercise Price.
4.3 PAYMENT OF EXERCISE PRICE.
(a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise provided
below, payment of the aggregate Exercise Price for the number of shares of Stock
for which the Option is being exercised shall be made (i) in cash, by check, or
cash equivalent, (ii) by tender to the Company of whole shares of Stock owned by
the Optionee having a Fair Market Value not less than the aggregate Exercise
Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(c), or
(iv) by any combination of the foregoing.
(b) TENDER OF STOCK. Notwithstanding the foregoing, the Option may not be exercised by tender to the Company of shares of Stock to the extent such tender of Stock would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company's stock. The Option may not be exercised by tender to the Company of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company.
(c) CASHLESS EXERCISE. A "CASHLESS EXERCISE" means the assignment in a form acceptable to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to decline to approve or terminate any such program or procedure.
4.4 TAX WITHHOLDING. At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Optionee agrees to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Participating Company Group, if any, which arise in connection with the Option, including, without limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, or (iii) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option.
4.5 CERTIFICATE REGISTRATION. Except in the event the Exercise Price is paid by means of a Cashless Exercise, the certificate for the shares as to which the Option is exercised shall be registered in the name of the Optionee, or, if applicable, the heirs of the Optionee.
4.6 RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES. The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company's legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Optionee to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.
4.7 FRACTIONAL SHARES. The Company shall not be required to issue fractional shares upon the exercise of the Option.
7.1 OPTION EXERCISABILITY.
(a) DISABILITY. If the Optionee's Service with the Participating Company Group is terminated because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee's Service terminated, may be exercised by the Optionee (or the Optionee's guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date.
(b) DEATH. If the Optionee's Service with the Participating Company
Group is terminated because of the death of the Optionee, the Option, to the
extent unexercised and exercisable on the date on which the Optionee's Service
terminated, may be exercised by the Optionee (or the Optionee's legal
representative or other person who acquired the right to exercise the Option by
reason of the Optionee's death) at any time prior to the expiration of twelve
(12) months after the date on which the Optionee's Service terminated, but in
any event no later than the Option Expiration Date. The Optionee's Service
shall be deemed to have terminated on account of death if the Optionee dies
within three (3) months after the Optionee's termination of Service.
(c) OTHER TERMINATION OF SERVICE. If the Optionee's Service with the Participating Company Group terminates for any reason, except Disability or death, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee's Service terminated, may be exercised by the Optionee within three (3) months after the date on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date.
7.2 EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.
7.3 EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(B). Notwithstanding
the foregoing, if a sale, within the applicable time periods set forth in
Section 7.1, of shares acquired upon the exercise of the Option would subject
the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.
8.1 DEFINITIONS.
(a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred if any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A "TRANSFER OF CONTROL" shall mean an Ownership Change Event or a series of related Ownership Change Events (collectively, the "TRANSACTION") wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially the
same proportions as their ownership of shares of the Company's voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting stock of the Company or the corporation or corporations to which the assets of the Company were transferred (the "TRANSFEREE CORPORATION(S)"), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting stock of one or more corporations which, as a result of the Transaction, own the Company or the Transferee Corporation(s), as the case may be, either directly or through one or more subsidiary corporations. The Board shall have the right to determine whether multiple sales or exchanges of the voting stock of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.
8.2 EFFECT OF TRANSFER OF CONTROL ON OPTION. In the event of a Transfer of Control, any unexercised portion of the Option shall be immediately exercisable and vested in full as of the date ten (10) days prior to the date of the Transfer of Control. Any exercise of the Option that was permissible solely by reason of this Section 8.2 shall be conditioned upon the consummation of the Transfer of Control. In addition, the surviving, continuing, successor, or purchasing corporation or parent corporation thereof, as the case may be (the "ACQUIRING CORPORATION"), may either assume the Company's rights and obligations under the Option or substitute for the Option a substantially equivalent option for the Acquiring Corporation's stock. The Option shall terminate and cease to be outstanding effective as of the date of the Transfer of Control to the extent that the Option is neither assumed or substituted for by the Acquiring Corporation in connection with the Transfer of Control nor exercised as of the date of the Transfer of Control. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to the Transfer of Control and any consideration received pursuant to the Transfer of Control with respect to such shares shall continue to be subject to all applicable provisions of this Option Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing, if the corporation the stock of which is subject to the Option immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a Transfer of Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the Option shall not terminate.
converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the "NEW SHARES"), the Board may unilaterally amend the Option to provide that the Option is exercisable for New Shares. In the event of any such amendment, the Number of Option Shares and the Exercise Price shall be adjusted in a fair and equitable manner, as determined by the Board, in its sole discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 9 shall be rounded down to the nearest whole number, and in no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option.
than those as set forth or provided for herein. To the extent contemplated herein, the provisions of this Option Agreement shall survive any exercise of the Option and shall remain in full force and effect.
AASTROM BIOSCIENCES, INC.
By:________________________________
Title:_______________________________
The Optionee represents that the Optionee is familiar with the terms and provisions of this Option Agreement and hereby accepts the Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under this Option Agreement.
OPTIONEE
Date:_______________________________ ____________________________________
than those as set forth or provided for herein. To the extent contemplated herein, the provisions of this Option Agreement shall survive any exercise of the Option and shall remain in full force and effect.
AASTROM BIOSCIENCES, INC.
By:________________________________
Title:_______________________________
The Optionee represents that the Optionee is familiar with the terms and provisions of this Option Agreement and hereby accepts the Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under this Option Agreement.
OPTIONEE
Date:_______________________________ ____________________________________
EXHIBIT 10.7
AASTROM BIOSCIENCES, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
1.1 ESTABLISHMENT. The Biosciences, Inc. 1996 Employee Stock Purchase Plan (the "Plan") is hereby established effective as of the effective date of the initial registration by the Company of its Stock under Section 12 of the Exchange Act (the "Effective Date").
1.2 PURPOSE. The purpose of the Plan to provide Eligible Employees of the Participating Company Group with an opportunity to acquire a proprietary interest in the Company through the purchase of Stock. The Company intends that the Plan shall qualify as an "employee stock purchase plan" under Section 423 of the Code (including any amendments or replacements of such section), and the Plan shall be so construed.
1.3 TERM OF PLAN. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the shares of Stock available for issuance under the Plan have been issued.
2.1 DEFINITIONS. Any term not expressly defined in the Plan but defined for purposes of Section 423 of the Code shall have the same definition herein. Whenever used herein, the following terms shall have their respective meanings set forth below:
(a) "BOARD" means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administer the Plan, "Board" also means such Committee(s).
(b) "CODE" means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.
(c) "COMMITTEE" means a committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law.
(d) "COMPANY" means Biosciences, Inc., a Michigan corporation, or any successor corporation thereto.
(e) "COMPENSATION" means, with respect to an Offering Period under the Plan, all amounts paid in cash in the forms of base salary, commissions, overtime, bonuses, annual awards, other incentive payments, shift premiums, and all other compensation paid in cash during such Offering Period before deduction for any contributions to any plan maintained by a Participating Company and described in Section 401(k) or Section 125 of the Code. Compensation shall not include reimbursements of expenses, allowances, long-term disability, workers' compensation or any amount deemed received without the actual transfer of cash or any amounts directly or indirectly paid pursuant to the Plan or any other stock purchase or stock option plan.
(f) "ELIGIBLE EMPLOYEE" means an Employee who meets the requirements set forth in Section 5 for eligibility to participate in the Plan.
(g) "EMPLOYEE" means any person treated as an employee (including an officer or a director who is also treated as an employee) in the records of a Participating Company and for purposes of Section 423 of the Code; provided, however, that neither service as a director nor payment of a director's fee shall be sufficient to constitute employment for purposes of the Plan.
(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(i) "FAIR MARKET VALUE" means, as of any date, if there is then a public market for the Stock, the closing price of a share of Stock (or the mean of the closing bid and asked prices of a share of Stock if the Stock is so reported instead) as reported on the National Association of Securities Dealers Automated Quotation ("NASDAQ") System, the NASDAQ National Market System or such other national or regional securities exchange or market system constituting the primary market for the Stock. If the relevant date does not fall on a day on which the Stock is trading on NASDAQ, the NASDAQ National Market System or other national or regional securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Board, in its sole discretion. If there is then no public market for the Stock, the Fair Market Value on any relevant date shall be as determined by the Board without regard to any restriction other than a restriction which, by its terms, will never lapse. Notwithstanding the foregoing, the Fair Market Value per share of Stock on the Effective Date shall be deemed to be the public offering price set forth in the final prospectus filed with the Securities and Exchange Commission in connection with the initial public offering of the Stock.
(j) "OFFERING" means an offering of Stock as provided in
Section 6.
(k) "OFFERING DATE" means, for any Offering Period, the first day of such Offering Period.
(l) "OFFERING PERIOD" means a period determined in accordance with Section 6.1.
(m) "PARENT CORPORATION" means any present or future "parent corporation" of the Company, as defined in Section 424(e) of the Code.
(n) "PARTICIPANT" means an Eligible Employee participating in the Plan.
(o) "PARTICIPATING COMPANY" means the Company or any Parent Corporation or Subsidiary Corporation which the Board determines should be included in the Plan. The Board shall have the sole and absolute discretion to determine from time to time what Parent Corporations or Subsidiary Corporations shall be Participating Companies.
(p) "PARTICIPATING COMPANY GROUP" means, at any point in time, the Company and all other corporations collectively which are then Participating Companies.
(q) "PURCHASE DATE" means, for any Purchase Period, the last day of such Purchase Period.
(r) "PURCHASE PERIOD" means a period determined in accordance with Section 6.2.
(s) "PURCHASE PRICE" means the price at which a share of Stock may be purchased pursuant to the Plan, as determined in accordance with Section 9.
(t) "PURCHASE RIGHT" means an option pursuant to the Plan to purchase such shares of Stock as provided in Section 8 which may or may not be exercised at the end of an Offering Period. Such option arises from the right of a Participant to withdraw such Participant's accumulated payroll deductions (if any) and terminate participation in the Plan or any Offering therein at any time during a Purchase Period.
(u) "STOCK" means the common stock, no par value, of the Company, as adjusted from time to time in accordance with Section 4.2.
(v) "SUBSIDIARY CORPORATION" means any present or future "subsidiary corporation" of the Company, as defined in Section 424(f) of the Code.
2.2 CONSTRUCTION. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural, the plural shall include the singular, and use of the term "or" shall include the conjunctive as well as the disjunctive.
4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be two hundred fifty thousand (250,000) (on a post-split basis following the two-for-three reverse stock split of the Stock approved by the Board on April 30, 1996) and shall consist of authorized but unissued or reacquired shares of the Stock, or any combination thereof. If an outstanding Purchase Right for any reason expires or is terminated or canceled, the shares of Stock allocable to the unexercised portion of such Purchase Right shall again be available for issuance under the Plan.
4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification or similar change in the capital structure of the Company, or in the event of any merger (including a merger effected for the purpose of changing the Company's domicile), sale of assets or other reorganization in which the Company is a party, appropriate adjustments shall be made in the number and class of shares subject to the Plan, to the Per Offering Share Limit set forth in Section 8.1 and to each Purchase Right and in the Purchase Price.
5.1 EMPLOYEES ELIGIBLE TO PARTICIPATE. Any Employee of a Participating Company is eligible to participate in the Plan except the following:
(a) Employees who are customarily employed by the Participating Company Group for twenty (20) hours or less per week;
(b) Employees who are customarily employed by the Participating Company Group for not more than five (5) months in any calendar year; and
(c) Employees who own or hold options to purchase or who, as a result of participation in the Plan, would own or hold options to purchase, stock of the Company or of any Parent Corporation or Subsidiary Corporation possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of such corporation within the meaning of Section 423(b)(3) of the Code.
5.2 LEASED EMPLOYEES EXCLUDED. Notwithstanding anything herein to the contrary, any individual performing services for a Participating Company solely through a leasing agency or employment agency shall not be deemed an "Employee" of such Participating Company.
6.1 OFFERING PERIODS. Except as otherwise set forth below, the Plan shall be implemented by sequential Offerings of approximately twenty-four (24) months duration (an "OFFERING PERIOD"); provided, however that the first Offering Period shall commence on the Effective Date and end on August 31, 1998 (the "INITIAL OFFERING PERIOD"). Subsequent Offerings shall commence on the first days of March and September of each year and end on the last days of the second February and August, respectively, occurring thereafter. Notwithstanding the foregoing, the Board may establish a different term for one or more Offerings or different commencing or ending dates for such Offerings; provided, however, that no Offering may exceed a term of twenty-seven (27) months. An Employee who becomes an Eligible Employee after an Offering Period has commenced shall not be eligible to participate in such Offering but may participate in any subsequent Offering provided such Employee is still an Eligible Employee as of the commencement of any such subsequent Offering. Eligible Employees may not participate in more than one Offering at a time. In the event the first or last day of an Offering Period is not a business day, the Company shall specify the business day that will be deemed the first or last day, as the case may be, of the Offering Period.
6.2 PURCHASE PERIODS. Each Offering Period shall consist of four (4) consecutive purchase periods of approximately six (6) months duration (individually, a "PURCHASE PERIOD"). The Purchase Period commencing on the Offering Date of the Initial Offering Period shall end on February 28, 1997. A Purchase Period commencing on the first day of March shall end on the last day of the next following August. A Purchase Period commencing on the first day of September shall end on the last day of the next following February. Notwithstanding the foregoing, the Board may establish a different term for one or more Purchase Periods or different commencing or ending dates for such Purchase
Periods. In the event the first or last day of a Purchase Period is not a business day, the Company shall specify the business day that will be deemed the first or last day, as the case may be, of the Purchase Period.
6.3 GOVERNMENTAL APPROVAL; STOCKHOLDER APPROVAL. Notwithstanding any other provision of the Plan to the contrary, any Purchase Right granted pursuant to the Plan shall be subject to (a) obtaining all necessary governmental approvals or qualifications of the sale or issuance of the Purchase Rights or the shares of Stock and (b) obtaining stockholder approval of the Plan. Notwithstanding the foregoing, stockholder approval shall not be necessary in order to grant any Purchase Right granted in the Plan's Initial Offering Period; provided, however, that the exercise of any such Purchase Right shall be subject to obtaining stockholder approval of the Plan.
7.1 INITIAL PARTICIPATION. An Eligible Employee shall become a Participant on the first Offering Date after satisfying the eligibility requirements of Section 5 and delivering to the Company's payroll office or other office designated by the Company not later than the close of business for such office on the last business day before such Offering Date (the "SUBSCRIPTION DATE") a subscription agreement indicating the Employee's election to participate in the Plan and authorizing payroll deductions. An Eligible Employee who does not deliver a subscription agreement to the Company's payroll or other designated office on or before the Subscription Date shall not participate in the Plan for that Offering Period or for any subsequent Offering Period unless such Employee subsequently enrolls in the Plan by filing a subscription agreement with the Company by the Subscription Date for such subsequent Offering Period. The Company may, from time to time, change the Subscription Date as deemed advisable by the Company in its sole discretion for proper administration of the Plan.
7.2 CONTINUED PARTICIPATION. A Participant shall automatically participate in the Offering Period commencing immediately after the final Purchase Date of each Offering Period in which the Participant participates until such time as such Participant (a) ceases to be an Eligible Employee, (b) withdraws from the Plan pursuant to Section 14.2 or (c) terminates employment as provided in Section 15. If a Participant automatically may participate in a subsequent Offering Period pursuant to this Section 7.2, then the Participant is not required to file any additional subscription agreement for such subsequent Offering Period in order to continue participation in the Plan. However, a Participant may file a subscription agreement with respect to a subsequent Offering Period if the Participant desires to change any of the Participant's elections contained in the Participant's then effective subscription agreement.
8.1 PURCHASE RIGHT. Except as set forth below, during an Offering Period each Participant in such Offering Period shall have a Purchase Right consisting of the right to purchase that number of whole shares of Stock arrived at by dividing Fifty Thousand Dollars ($50,000) by the Fair Market Value of a share of Stock on the Offering Date of such Offering Period; provided, however, that such number shall not exceed five thousand (5,000) shares (the "Per Offering Share Limit"). Shares of Stock may only be purchased through a Participant's payroll deductions pursuant to Section 10.
8.2 PRO RATA ADJUSTMENT OF PURCHASE RIGHT. Notwithstanding the foregoing, if the Board shall establish an Offering Period of less than twenty- three and one-half (23 1/2) months or more than twenty-four and one-half (24 1/2) months in duration, (a) the dollar amount in Section 8.1 shall be determined by multiplying $2,083.33 by the number of months in the Offering Period and rounding to the nearest whole dollar, and (b) the Per Offering Share Limit shall be determined by multiplying 208.33 shares by the number of months in the Offering Period and rounding to the nearest whole share. For purposes of the preceding sentence, fractional months shall be rounded to the nearest whole month.
10.1 COMMENCEMENT OF PAYROLL DEDUCTIONS. Payroll deductions shall commence on the first payday following the Offering Date and shall continue to the end of the Offering Period unless sooner altered or terminated as provided in the Plan.
10.2 LIMITATIONS ON PAYROLL DEDUCTIONS. The amount of payroll deductions with respect to the Plan for any Participant during any pay period shall be in one percent (1%) increments not to exceed ten percent (10%) of the Participant's Compensation for such pay period. Notwithstanding the foregoing, the Board may change the limits on payroll deductions effective as of a future Offering Date, as determined by the Board. Amounts deducted from Compensation shall be reduced by any amounts contributed by the Participant and applied to the purchase of Company stock pursuant to any other employee stock purchase plan qualifying under Section 423 of the Code.
10.3 ELECTION TO DECREASE OR STOP PAYROLL DEDUCTIONS. During an Offering Period, a Participant may elect to decrease the amount deducted or stop deductions from his or her Compensation by filing an amended subscription agreement with the Company on or before the "Change Notice Date." The "CHANGE NOTICE DATE" shall initially be the seventh (7th) day prior to the end of the first pay period for which such election is to be effective; however, the Company may change such Change Notice Date from time to time. A Participant may not elect to increase the amount deducted from the Participant's Compensation during an Offering Period.
10.4 PARTICIPANT ACCOUNTS. Individual Plan accounts shall be maintained for each Participant. All payroll deductions from a Participant's Compensation shall be credited to such account and shall be deposited with the general funds of the Company. All payroll deductions received or held by the Company may be used by the Company for any corporate purpose.
10.5 NO INTEREST PAID. Interest shall not be paid on sums deducted from a Participant's Compensation pursuant to the Plan.
10.6 COMPANY ESTABLISHED PROCEDURES. The Company may, from time to time, establish or change (a) a minimum required payroll deduction amount for participation in an Offering, (b) limitations on the frequency or number of changes in the rate of payroll deduction during an Offering, (c) an exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, (d) payroll deduction in excess of or less than the amount designated by a Participant in order to adjust for delays or mistakes in the Company's processing of subscription agreements, (e) the date(s) and manner by which the Fair Market Value of a share of Stock is determined for purposes of administration of the Plan, or (f) such other limitations or procedures as deemed advisable by the Company in the Company's sole discretion which are consistent with the Plan and in accordance with the requirements of Section 423 of the Code.
11.1 EXERCISE OF PURCHASE RIGHT. On each Purchase Date of an Offering Period, each Participant who has not withdrawn from the Offering or
whose participation in the Offering has not terminated on or before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant's Purchase Right the number of whole shares of Stock arrived at by dividing the total amount of the Participant's accumulated payroll deductions for the Purchase Period by the Purchase Price; provided, however, in no event shall the number of shares purchased by the Participant during an Offering Period exceed the number of shares subject to the Participant's Purchase Right. No shares of Stock shall be purchased on a Purchase Date on behalf of a Participant whose participation in the Offering or the Plan has terminated on or before such Purchase Date.
11.2 RETURN OF CASH BALANCE. Any cash balance remaining in the Participant's Plan account shall be refunded to the Participant as soon as practicable after the Purchase Date. In the event the cash to be returned to a Participant pursuant to the preceding sentence is an amount less than the amount necessary to purchase a whole share of Stock, the Company may establish procedures whereby such cash is maintained in the Participant's Plan account and applied toward the purchase of shares of Stock in the subsequent Purchase Period or Offering Period.
11.3 TAX WITHHOLDING. At the time a Participant's Purchase Right is exercised, in whole or in part, or at the time a Participant disposes of some or all of the shares of Stock he or she acquires under the Plan, the Participant shall make adequate provision for the foreign, federal, state and local tax withholding obligations of the Participating Company Group, if any, which arise upon exercise of the Purchase Right or upon such disposition of shares, respectively. The Participating Company Group may, but shall not be obligated to, withhold from the Participant's compensation the amount necessary to meet such withholding obligations.
11.4 EXPIRATION OF PURCHASE RIGHT. Any portion of a Participant's Purchase Right remaining unexercised after the end of the Offering Period to which such Purchase Right relates shall expire immediately upon the end of such Offering Period.
13.1 FAIR MARKET VALUE LIMITATION. Notwithstanding any other provision of the Plan, no Participant shall be entitled to purchase shares of Stock
under the Plan (or any other employee stock purchase plan which is intended to meet the requirements of Section 423 of the Code sponsored by the Company or a Parent Corporation or Subsidiary Corporation at a rate which exceeds $25,000 in Fair Market Value, which Fair Market Value is determined for shares purchased during a given Offering Period as of the Offering Date for such Offering Period (or such other limit as may be imposed by the Code), for each calendar year in which the Participant participates in the Plan (or any other employee stock purchase plan described in this sentence).
13.2 PRO RATA ALLOCATION. In the event the number of shares of Stock which might be purchased by all Participants in the Plan exceeds the number of shares of Stock available in the Plan, the Company shall make a pro rata allocation of the remaining shares in as uniform a manner as shall be practicable and as the Company shall determine to be equitable.
13.3 RIGHTS AS A STOCKHOLDER AND EMPLOYEE. A Participant shall have no rights as a stockholder by virtue of the Participant's participation in the Plan until the date of the issuance of a stock certificate for the shares of Stock being purchased pursuant to the exercise of the Participant's Purchase Right. No adjustment shall be made for cash dividends or distributions or other rights for which the record date is prior to the date such stock certificate is issued. Nothing herein shall confer upon a Participant any right to continue in the employ of the Participating Company Group or interfere in any way with any right of the Participating Company Group to terminate the Participant's employment at any time.
14.1 WITHDRAWAL FROM AN OFFERING. A Participant may withdraw from an Offering by signing and delivering to the Company's payroll or other designated office a written notice of withdrawal on a form provided by the Company for such purpose. Such withdrawal may be elected at any time prior to the end of an Offering Period; provided, however, if a Participant withdraws after the Purchase Date for a Purchase Period of an Offering, the withdrawal shall not affect shares of Stock acquired by the Participant in such Purchase Period. Unless otherwise indicated, withdrawal from an Offering shall not result in a withdrawal from the Plan or any succeeding Offering therein. By withdrawing from an Offering effective as of the close of a given Purchase Date, a Participant may have shares of Stock purchased on such Purchase Date and immediately commence participation in the new Offering commencing immediately after such Purchase Date. A Participant is prohibited from again participating in an Offering at any time following withdrawal from such Offering. The Company may impose, from time to time, a requirement that the notice of withdrawal be on file with the Company's payroll office or other designated office for a reasonable period prior to the effectiveness of the Participant's withdrawal from an Offering.
14.2 WITHDRAWAL FROM THE PLAN. A Participant may withdraw from the Plan by signing and delivering to the Company's payroll office or other designated office a written notice of withdrawal on a form provided by the Company for such purpose. Withdrawals made after a Purchase Date shall not affect shares of Stock acquired by the Participant on such Purchase Date. In the event a Participant voluntarily elects to withdraw from the Plan, the Participant may not resume participation in the Plan during the same Offering Period, but may participate in any subsequent Offering under the Plan by again satisfying the requirements of Sections 5 and 7.1. The Company may impose, from time to time, a requirement that the notice of withdrawal be on file with the Company's payroll office or other designated office for a reasonable period prior to the effectiveness of the Participant's withdrawal from the Plan.
14.3 RETURN OF PAYROLL DEDUCTIONS. Upon a Participant's withdrawal from an Offering or the Plan pursuant to Sections 14.1 or 14.2, respectively, the Participant's accumulated payroll deductions which have not been applied toward the purchase of shares of Stock shall be returned as soon as practicable after the withdrawal, without the payment of any interest, to the Participant, and the Participant's interest in the Offering or the Plan, as applicable, shall terminate. Such accumulated payroll deductions may not be applied to any other Offering under the Plan.
14.4 AUTOMATIC WITHDRAWAL FROM AN OFFERING. If the Fair Market Value
of a share of Stock on a Purchase Date of an Offering (other than the final
Purchase Date of such Offering) is less than the Fair Market Value of a share of
Stock on the Offering Date for such Offering, then every Participant shall
automatically (a) be withdrawn from such Offering at the close of such Purchase
Date and after the acquisition of shares of Stock for such Purchase Period and
(b) be enrolled in the Offering commencing on the first business day subsequent
to such Purchase Period. A Participant may elect not to be automatically
withdrawn from an Offering Period pursuant to this Section 14.4 by delivering to
the Company not later than the close of business on the last day before the
Purchase Date a written notice indicating such election.
16.1 DEFINITIONS.
(a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company a party; (iii) the sale, exchange, or transfer of all or substantially
all of the assets of the Company; or (iv) a liquidation or dissolution of the
Company.
(b) A "TRANSFER OF CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, the
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.
16.2 EFFECT OF TRANSFER OF CONTROL ON PURCHASE RIGHTS. In the event of a Transfer of Control, the surviving, continuing, successor, or purchasing corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may assume the Company's rights and obligations under the Plan or substitute substantially equivalent Purchase Rights for stock of the Acquiring Corporation. If the Acquiring Corporation elects not to assume or substitute for the outstanding Purchase Rights, the Board may, in its sole discretion and notwithstanding any other provision herein to the contrary, adjust the Purchase Date of the then current Purchase Period to a date on or before the date of the Transfer of Control, but shall not adjust the number of shares of Stock subject to any Purchase Right. All Purchase Rights which are neither assumed or substituted for by the Acquiring Corporation in connection with the Transfer of Control nor exercised as of the date of the Transfer of Control shall terminate and cease to be outstanding effective as of the date of the Transfer of Control. Notwithstanding the foregoing, if the corporation the stock of which is subject to the outstanding Purchase Rights immediately prior to an Ownership Change Event described in Section 16.1(a)(i) constituting a Transfer of Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of section 1504(a) of the Code without regard to the provisions of section 1504(b) of the Code, the outstanding Purchase Rights shall not terminate unless the Board otherwise provides in its sole discretion.
registration statement under the Securities Act of 1933, as amended, shall at the time of exercise of the Purchase Right be in effect with respect to the shares issuable upon exercise of the Purchase Right, or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Purchase Right may be issued in accordance with the terms of an applicable exemption from the registration requirements of said Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company's legal counsel to be necessary to the lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of a Purchase Right, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company.
"THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF MADE ON OR BEFORE ______________, 19__. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE."
"THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN, PURSUANT TO WHICH THE SHARES MAY NOT BE SOLD, TRANSFERRED, OR DISPOSED OF (OTHER THAN TO DONEES WHO AGREE TO BE SIMILARLY BOUND) UNTIL ___________, 19__."
acquired by exercise of a Purchase Right within two years from the date of granting such Purchase Right or one year from the date of exercise of such Purchase Right. The Company may require that until such time as a Participant disposes of shares acquired upon exercise of a Purchase Right, the Participant shall hold all such shares in the Participant's name (and not in the name of any nominee) until the lapse of the time periods with respect to such Purchase Right referred to in the preceding sentence. The Company may direct that the certificates evidencing shares acquired by exercise of a Purchase Right refer to such requirement to give prompt notice of disposition.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing AASTROM Biosciences, Inc. 1996 Employee Stock Purchase Plan was duly adopted by the Board of Directors of the Company on April 30, 1996.
/s/ Todd E. Simpson -------------------------- Todd E. Simpson, Secretary |
AASTROM BIOSCIENCES, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
[_] Original Application
[_] Change in Percentage of Payroll Deductions
I hereby elect to participate in the 1996 Employee Stock Purchase Plan (the "Plan") of AASTROM Biosciences, Inc. (the "COMPANY") and subscribe to purchase shares of the Company's common stock as determined in accordance with the terms of the Plan.
I hereby authorize payroll deductions in the amount of ______________ percent (in 1% increments not to exceed 10%) of my "COMPENSATION" (as defined in the Plan) from each paycheck throughout the "OFFERING PERIOD" (as defined in the Plan) in accordance with the terms of the Plan. I understand that these payroll deductions will be accumulated for the purchase of shares of common stock of the Company at the applicable purchase price determined in accordance with the Plan. I further understand that, except as otherwise set forth in the Plan, shares will be purchased for me automatically on the last day of each Purchase Period unless I withdraw from the Plan or from the Offering by giving written notice to the Company or unless I terminate employment.
I further understand that I will automatically participate in each subsequent Offering which commences immediately after the last day of an Offering in which I am participating under the Plan until such time as I file with the Company a notice of withdrawal from the Plan on such form as may be established from time to time by the Company or I terminate employment.
Shares purchased for me under the Plan should be issued in the name set forth below. (I understand that shares may be issued either in my name alone or together with my spouse as community property or in joint tenancy.)
I hereby authorize withholding from my compensation in order to satisfy the foreign, federal, state and local tax withholding obligations, if any, which may arise upon my purchase of shares under the Plan and/or upon my disposition of shares I acquired under the Plan. I hereby agree that until I dispose of the shares, unless otherwise permitted by the Company, I will hold all shares I acquire under the Plan in the name entered above (and not in the name of any nominee) for at least two (2) years from the first day of the Offering Period in which, and at least one (1) year from the Purchase Date on which, I acquired such shares. I further agree that I will promptly notify the Chief Financial Officer of the Company in writing of any transfer of such shares prior to the end of the periods referred to in the preceding sentence.
I am familiar with the provisions of the Plan and hereby agree to participate in the Plan subject to all of the provisions thereof. I understand that any shares purchased under the Plan are subject to a 180-day "market stand- off" period, as provided in the Plan. I understand that the Board of Directors of the Company reserves the right to amend the Plan and my right to purchase stock under the Plan as may be necessary to qualify the Plan as an employee stock purchase plan as defined in section 423 of the Internal Revenue Code of 1986, as amended, or to obtain qualification or registration of the Company's common stock to be issued out of the Plan under applicable foreign, federal and state securities laws. I understand that the effectiveness of this subscription agreement is dependent upon my eligibility to participate in the Plan.
Date: ________________________ Signature: _______________________________
Name Printed: ____________________________
AASTROM BIOSCIENCES, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
I hereby elect to withdraw from the current offering (the "CURRENT OFFERING") of the common stock of AASTROM Biosciences, Inc. (the "COMPANY") under the Company's 1996 Employee Stock Purchase Plan (the "PLAN").
MAKE ONE ELECTION UNDER SECTION A AND ONE ELECTION UNDER SECTION B:
______ 1. I elect to terminate my participation in the Current Purchase Period immediately. I hereby request that all payroll deductions credited to my account under the Plan (if any) not previously used to purchase shares under the Plan shall not be used to purchase shares on the last day of the --- Current Purchase Period. Instead, I request that all such amounts be paid to me as soon as practicable. I understand that this election immediately terminates my interest in the Current Offering. ______ 2. I elect to terminate my participation in the Current Offering following my purchase of shares on the last day of the Current Purchase Period. I hereby request that all payroll deductions credited to my account under the Plan (if any) not previously used to purchase shares under the Plan shall be used to purchase shares on the last day of the Current Purchase Period. I understand that this election will terminate my interest in the Current Offering immediately following such purchase. I request that any cash balance remaining in my account under the Plan after my purchase of shares be returned to me as soon as practicable. |
I understand that if no election is made as to participation in the Current Offering under the Plan, I will be deemed to have elected to participate in the Current Offering.
______ 1. I elect to participate in future offerings under the Plan. I understand that by making this election I will participate in the next offering under the Plan commencing subsequent to the Current Offering, and in each subsequent offering commencing immediately after the last day of an offering in which I participate, until such time as I elect to withdraw from the Plan or from any such subsequent offering. ______ 2. I elect not to participate in future offerings under the Plan. --- I understand that by making this election I terminate my interest in the Plan and that no further payroll deductions will be made unless I elect in accordance with the Plan to become a participant in another offering under the Plan. |
I understand that if no election is made as to participation in future offerings under the Plan, I will be deemed to have elected to participate in such future offerings.
Date: Signature: ---------------- ------------------------------------------- |
Employment Agreement
This Employment Agreement (the "Agreement") is entered into as of __________ 1996, by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Employer") and [name] ("Employee").
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT Employer hereby engages Employee, and Employee hereby accepts such engagement, upon the terms and conditions set forth herein.
2. DUTIES Employee is engaged as an [position]. Employee shall perform faithfully and diligently the duties customarily performed by persons in the position for which employee is engaged, together with such other reasonable and appropriate duties as Employer shall designate from time to time. Employee shall devote Employee's full business time and efforts to the rendition of such services and to the performance of such duties. As a full-time employee of Employer, Employee shall not be entitled to provide consulting services or other business or scientific services to any other party, without the prior written consent of Employer.
3. COMPENSATION
3.1 BASE SALARY During the term of this Agreement, as compensation
for the proper and satisfactory performance of all duties to be performed by
Employee hereunder, Employer shall pay Employee at an annual salary rate of
[salary written] Dollars ($[salary]), payable in arrears in equal bi-weekly
installments, less required deductions for state and federal withholding tax,
Social Security and all other employee taxes and payroll deductions. The base
salary shall be subject to review and adjustment on an annual basis.
4. TERM
4.1 COMMENCEMENT The employment relationship pursuant to this Agreement shall commence [start_date].
4.2 TERMINATION AT WILL Although Employer and Employee anticipate a long and mutually rewarding employment relationship, either party may terminate this Agreement, without cause, upon fourteen (14) days' prior written notice delivered to the other. It is expressly understood and agreed that the employment relationship is "at will", and with no agreement for employment for any specified term, and with no agreement for employment for so long as Employee performs satisfactorily. Provided, however, before Employer exercises this right of termination at will, Employer shall first either (i) discuss with Employee the needs of Employer and why Employee no longer meets those needs, or (ii) discuss with Employee any concerns or dissatisfactions which Employer has with Employee's performance, and give to Employee a reasonable
Employment Agreement
opportunity to remedy those concerns or dissatisfactions, to the reasonable satisfaction of Employer.
4.3 TERMINATION FOR CAUSE Either party may terminate this employment relationship immediately upon notice to the other party in the event of any good cause, such as a default, dishonesty, neglect of duties, failure to perform by the other party, or death or disability of Employee.
4.4 PAYMENT OF COMPENSATION UPON TERMINATION Upon termination for cause, Employee shall be entitled to the compensation set forth as "base salary" herein, prorated to the effective date of such termination as full compensation for any and all claims of Employee under this Agreement.
5. FRINGE BENEFITS
5.1 CUSTOMARY FRINGE BENEFITS Employee shall be entitled to such fringe benefits as Employer customarily makes available to employees of Employer engaged in the same or similar position as Employee ("Fringe Benefits"). Such Fringe Benefits may include vacation leave, sick leave, and health insurance coverage. Employer reserves the right to change the Fringe Benefits on a prospective basis, at any time, effective upon delivery of written notice to Employee.
5.2 ACCUMULATION Employee shall not earn and accumulate unused vacation in excess of Fifteen (15) days. Employee shall not earn and accumulate sick leave or other Fringe Benefits in excess of an unused amount equal to twice the amount earned for one year. Further, Employee shall not be entitled to receive payments in lieu of said Fringe Benefits, other than for unused vacation leave earned and accumulated at the time the employment relationship terminates.
6. INVENTIONS, TRADE SECRETS AND CONFIDENTIALITY
6.1 DEFINITIONS
6.1.1 Invention Defined. As used herein "Invention" means inventions, discoveries, concepts, and ideas, whether patentable or copyrightable or not, including but not limited to processes, methods, formulas, techniques, materials, devices, designs, programs (including computer programs), computer graphics, apparatus, products, as well as improvements thereof or know-how related thereto, relating to any present or anticipated business or activities of Employer.
6.1.2 Trade Secret Defined. As used herein "Trade Secret" means, without limitation, any document or information relating to Employer's products, processes or services, including documents and information relating to Inventions, and to the research, development, engineering or manufacture of Inventions, and to Employer's purchasing, customer or supplier lists, which documents or information have been disclosed to Employee or known to
Employment Agreement
Employee as a consequence of or through Employee's employment by Employer (including documents, information or Inventions conceived, originated, discovered or developed by Employee), which is not generally known in the relevant trade or industry.
6.2 INVENTIONS
6.2.1 Disclosure. Employee shall disclose promptly to Employer each Invention, whether or not reduced to practice, which is conceived or learned by Employee (either alone or jointly with others) during the term of his employment with Employer. Employee shall disclose in confidence to Employer all patent applications filed by or on behalf of Employee during the term of his employment and for a period of three (3) years thereafter. Any disclosure of an Invention, or any patent application, made within one (1) year after termination of employment shall be presumed to relate to an Invention made during Employee's term of Employment with Employer, unless Employee clearly proves otherwise.
6.2.2 Employer Property; Assignment. Employee acknowledges and agrees that all Inventions which are discovered, conceived, developed, made, produced or prepared by Employee (alone or in conjunction with others) during the duration of Employee's employment with Employer shall be the sole property of Employer. Said property rights of Employer include without limitation all domestic and foreign patent rights, rights of registration or other protection under the patent and copyright laws, and all other rights pertaining to the Inventions. Employee further agrees that all services, products and Inventions that directly or indirectly result from engagement with Company shall be deemed "works for hire" as that term is defined in Title 17 of the United States Codes, and accordingly all rights associated therewith shall vest in the Company. Notwithstanding the foregoing, Employee hereby assigns to Employer all of Employee's right, title and interest in any such services, products and Inventions, in the event any such services, products and Inventions shall be determined not to constitute "works for hire."
6.2.4 Patents and Copyrights; Attorney-in Fact. Both before and after termination of this Agreement (and with reasonable compensation paid by Employer to Employee after termination), Employee
Employment Agreement
agrees to assist the Employer to apply for, obtain and enforce patents on, and to apply for, obtain and enforce copyright protection and registration of, the Inventions described in Section 6.2.2 in any and all countries. To that end, Employee shall (at Employer's request) without limitation, testify in any proceeding, and execute any documents and assignments determined to be necessary or convenient for use in applying for, obtaining, registering and enforcing patent or copyright protection involving any of the Inventions. Employee hereby irrevocably appoints Employer, and its duly authorized officers and agents, as Employee's agent and attorney-in-fact, to act for and in behalf of Employee in filing all patent applications, applications for copyright protection and registration, amendments, renewals, and all other appropriate documents in any way related to the Inventions described in Section 6.2.2.
6.3 TRADE SECRETS
6.3.1 Acknowledgement of Proprietary Interest. Employee recognizes the proprietary interest of Employer in any Trade Secrets of Employer. Employee acknowledges and agrees that any and all Trade Secrets of Employer, whether developed by Employee alone or in conjunction with others or otherwise, shall be and are the property of Employer.
6.3.2 Covenant Not to Divulge Trade Secrets. Employee acknowledges and agrees that Employer is entitled to prevent the disclosure of Trade Secrets of Employer. As a portion of the consideration for the employment of Employee and for the compensation being paid to Employee by Employer, Employee agrees at all times during the term of the employment by Employer and thereafter to hold in strictest confidence, and not to use, disclose or allow to be disclosed to any person, firm, or corporation, Trade Secrets of Employer, including Trade Secrets developed by Employee, other than disclosures to persons engaged by Employer to further the business of Employer, and other than use in the pursuit of the business of Employer.
6.3.3 Confidential Information of Others. Employee represents and warrants that if Employee has any confidential information belonging to others, Employee will not use or disclose to Employer any such information or documents. Employee represents that his employment with Employer will not require him to violate any obligation to or confidence with any other party.
6.4 NO ADVERSE USE Employee will not at any time use Employer's Trade Secrets or Inventions in any manner which may directly or indirectly have an adverse effect upon Employer's business, nor will Employee perform any acts which would tend to reduce Employer's proprietary value in Employer's Trade Secrets or Inventions.
6.5 RETURN OF MATERIALS AT TERMINATION In the event of any termination of Employee's employment, Employee will promptly deliver to Employer all materials, property, documents, data, and other information belonging to Employer or pertaining to Trade Secrets or Inventions. Employee
Employment Agreement
shall not take any materials, property, documents or other information, or any reproduction or excerpt thereof, belonging to Employer or containing or pertaining to any Trade Secrets or Inventions.
6.6 REMEDIES UPON BREACH In the event of any breach by Employee of the provision in this Section 6, Employer shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to enjoin Employee from violating any of the terms of this Section 6, to enforce the specific performance by Employee of any of the terms of this Section 6, and to obtain damages for any of them, but nothing herein contained shall be construed to prevent such remedy or combination of remedies as Employer may elect to invoke. The failure of Employer to promptly institute legal action upon any breach of this Section 6 shall not constitute a waiver of that or any other breach hereof.
7. COVENANT NOT TO COMPETE Employee agrees that, during Employee's employment, Employee will not directly or indirectly compete with Employer in any way, and that Employee will not act as an officer, director, employee, consultant, shareholder, lender or agent of any other entity which is engaged in any business of the same nature as, or in competition with, the business in which Employer is now engaged, or in which Employer becomes engaged during the term of Employee's employment, or which is involved in science or technology which is similar to Employer's science or technology.
8. GENERAL PROVISIONS
8.1 ATTORNEYS' FEES In the event of any dispute or breach arising with respect to this Agreement, the party prevailing in any negotiations or proceedings for the resolution or enforcement thereof shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs incurred therein.
8.2 AMENDMENTS No amendment or modification of the terms or conditions of this Agreement shall be valid unless in writing and signed by both parties hereto. There shall be no implied-in-fact contracts modifying the terms of this Agreement.
8.3 ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties with respect to the employment of Employee. This Agreement supersedes all prior agreements, understandings, negotiations and representation with respect to the employment relationship.
8.4 SUCCESSORS AND ASSIGNS The Rights and obligations of Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Employer. Employee shall not be entitled to assign any of Employee's rights or obligations under this Agreement.
8.5 WAIVER Either party's failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such
Employment Agreement
provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.
8.6 SEVERABLE PROVISIONS The provisions of this Agreement are severable, and if any or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
9. EMPLOYEE'S REPRESENTATIONS Employee represents and warrants that Employee (i) is free to enter into this Agreement and to perform each of the terms and covenants contained herein, (ii) is not restricted or prohibited, contractually or otherwise, from entering into and performing this Agreement, and (iii) will not be in violation or breach of any other agreement by reason of Employee's execution and performance of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
EMPLOYER:
AASTROM BIOSCIENCES, INC.
By: _____________________________________
R. Douglas Armstrong, Ph.D.
President and Chief Executive Officer
EMPLOYEE:
Address: __________________________________
Exhibit A
List of Prior Inventions
(Section 6.2.3)
None, other than the following:
EXHIBIT 10.9
EXECUTION COPY
STOCK PURCHASE AGREEMENT
Between
COBE LABORATORIES, INC.
and
AASTROM BIOSCIENCES, INC.
Dated as of October 22, 1993
Section i Page
- ------- ---- TABLE OF CONTENTS ----------------- Section Page - ------- ---- ARTICLE I DEFINITIONS |
1.01 Definitions................................................. 1 |
ARTICLE II
PURCHASE AND SALE OF SHARES;
CLOSING
2.01 Authorization, Purchase and Sale of Shares.................. 12 2.02 Closing..................................................... 12 |
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01 Organization, Authority and Qualification of the Company; No Subsidiaries............................................. 13 3.02 Restated Articles of Incorporation and By-Laws ............. 14 3.03 Capitalization.............................................. 14 3.04 Authority................................................... 15 3.05 No Conflict................................................. 15 3.06 Common Stock; Preferred Stock............................... 15 3.07 Compliance with Laws........................................ 16 3.08 Governmental Consents and Approvals......................... 16 3.09 Financial Information....................................... 16 3.10 Absence of Certain Changes, Events and Conditions; Conduct in the Ordinary Course.............................. 17 3.11 Employee Benefit Plans...................................... 18 3.12 Leased Real Property........................................ 19 3.13 Intellectual Property....................................... 20 3.14 Environmental Matters....................................... 23 3.15 Litigation.................................................. 23 3.16 Agreements.................................................. 23 3.17 Certain Interests........................................... 24 3.18 Licenses and Permits........................................ 24 |
3.19 Private Offering............................................ 25 3.20 Brokers..................................................... 25 3.21 General Solicitation........................................ 25 |
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PURCHASER
4.01 Organization of the Purchaser............................... 25 4.02 Authority................................................... 25 4.03 No Conflict................................................. 26 4.04 Securities Act.............................................. 26 4.05 Governmental Consents and Approvals......................... 27 4.06 Brokers..................................................... 27 |
ARTICLE V
ADDITIONAL AGREEMENTS
5.01 Access to Information; Confidentiality...................... 27 5.02 Registration Rights......................................... 28 5.03 Purchaser's Option.......................................... 28 5.04 Purchaser's Preemptive Rights............................... 29 5.05 Company Put Option.......................................... 31 5.06 Standstill Agreement........................................ 33 5.07 Purchaser's Right of First Negotiation...................... 33 5.08 Legend...................................................... 34 5.09 Board Observer; Board Representation........................ 35 5.10 Regulatory Approvals........................................ 36 5.11 Reservation of Shares....................................... 36 5.12 Voting Rights; Rights Plan.................................. 37 5.13 Survival of Representations and Warranties.................. 38 5.14 Company's Right of First Negotiation........................ 38 |
ARTICLE VI
TERM, TERMINATION, AMENDMENT AND WAIVER
6.01 Term........................................................ 38 6.02 Amendment................................................... 38 6.03 Waiver...................................................... 38 |
ARTICLE VII
GENERAL PROVISIONS
7.01 Notices..................................................... 39 7.02 Entire Agreement; Assignment................................ 40 7.03 Parties in Interest......................................... 40 7.04 Governing Law............................................... 40 7.05 Headings.................................................... 40 7.06 Severability................................................ 40 7.07 Counterparts................................................ 41 7.08 Specific Performance........................................ 41 7.09 Waiver of Trial by Jury..................................... 42 |
EXHIBIT 2.02(b)(ii) Form of Opinion of Pepper, Hamilton & Scheetz EXHIBIT 2.02(b)(iv) Restated Articles of Incorporation EXHIBIT 2.02(b)(vii) Stockholders' Agreement |
EXHIBIT 2.02(b)(viii) Form of Distribution Agreement EXHIBIT 5.02 Registration Rights
DISCLOSURE SCHEDULE
WHEREAS, the Company desires to authorize, issue, and sell to the Purchaser, and the Purchaser desires to purchase from the Company, the Shares (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
"Agreement" or "this Agreement" means this Stock Purchase Agreement dated
--------- -------------- as of October , 1993 between the Company and the Purchaser (including the -- |
Exhibits hereto and the Disclosure Schedule) and all amendments made in accordance with the provisions of Section 6.02.
a monetary value of the New Voting Securities is established, such value; and
(e) otherwise, the greater of (i) the Compounded Private Placement Price or
(ii) $8 per share of Common Stock. For purposes of calculating the Applicable
Preemptive Price, the price of shares of Non-Coupon Preferred Stock shall be
calculated based upon the number of shares of Common Stock into which such
shares of Non-Coupon Preferred Stock are convertible at the time of such
calculation.
percent from the date of the closing of such preceding Private Placement to the date of calculation.
(a) information which was in one of such parties' possession prior to its receipt from the other of such parties;
(b) information which is obtained by one of such parties from a third person who, insofar as is known to such party, is not prohibited from transmitting the information to such party by a contractual, legal or fiduciary obligation to the other of such parties; and
(c) information which is or becomes publicly available through no fault of either of such parties.
amended; (B) any petroleum products or by-products, asbestos-containing
material, polychlorinated biphenyls, radioactive materials or radon gas; or
(C) any other matter to which exposure is prohibited, limited or regulated by
any government authority or Environmental Law.
Private Placement.
purchase Common Stock issued to employees of the Company after the Initial
Public Offering, (b) all shares issuable to employees or consultants of the
Company pursuant to options issued by the Company prior to the date hereof,
(c) all options and shares issuable pursuant to the Stock Option Plans, up to
the sum of (i) the aggregate number of shares authorized in the Stock Option
Plans as of the date hereof and (ii) up to an additional 300,000 shares of
Common Stock issuable pursuant to options granted after the date hereof, and (d)
an additional number of shares of Common Stock (or options therefor) equal to
not more than 25% of the additional shares (of Common Stock or of Non-Coupon
Preferred Stock) issued by the Company from and after the date hereof (including
the Shares) until one day prior to the date of the Initial Public Offering.
of Common Stock into which such shares of Non-Coupon Preferred Stock are convertible at the time of such calculation.
ARTICLE II
(b) At the Closing, the Company shall deliver or cause to be
delivered to the Purchaser: (i) stock certificates evidencing the Shares
registered in the name of the Purchaser; (ii) a legal opinion from Pepper,
Hamilton & Scheetz, Michigan, legal counsel to the Company substantially in the
form of Exhibit 2.02(b)(ii) hereto; (iii) a receipt for the Purchase Price;
(iv) a copy of the Restated Articles of Incorporation certified by the
Corporations and Securities Bureau of the Department of Commerce of the State of
Michigan and a copy of the By-Laws certified by the Secretary of the Company;
(v) a certificate from the Corporations and Securities Bureau of the Department
of Commerce, certifying as to the good standing of the Company under the laws of
such state; (vi) evidence reasonably satisfactory to the Purchaser of the
adoption by the Board of the Company of actions duly approving this Agreement,
the Distribution Agreement and the transactions contemplated hereby and thereby;
(vii) agreements executed by H & Q Life Science Technology Fund I, H & Q London
Ventures, Brentwood Associates V, L.P., Wind Point II, L.P. and State Treasurer
of State of Michigan, as custodian for certain pension funds, which shareholders
of the Company hold in excess of 80% of the Voting Securities of the Company, in
the form of Exhibit 2.02(b)(vii) hereto agreeing (A) to vote shares held by such
shareholder against any proposal to amend the By-Laws or the Restated Articles
of Incorporation so as to make Chapter 7B of the MBCA applicable to acquisitions
of shares of Common Stock or Voting Securities and (B) to vote in favor of the
Purchaser Designees as directors; and (viii) a copy of the Distribution
Agreement, duly executed by the Company.
(c) At the Closing, the Purchaser shall deliver to the Company:
(i) the Purchase Price, by wire transfer, to an account or accounts designated
by the Company at least five Business Days prior to the Closing Date; (ii) a
receipt for the Shares; and (iii) a copy of the Distribution Agreement duly
executed by the Purchaser.
ARTICLE III
The Company represents and warrants to the Purchaser that:
(b) Except as set forth in Section 3.03(b) of the Disclosure Schedule, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company or, to the knowledge of the Company, any of its stockholders is a party or obligating the Company or any of its stockholders to issue or to sell any shares of capital stock of, or other equity interests in, the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person.
(c) Except as set forth in Section 3.03(c) of the Disclosure Schedule, the Company is not party to any agreement granting registration rights to any Person with respect to any equity or debt securities of the Company.
approval, authorization or other order of, action by, filing with or notification to any governmental or regulatory authority, domestic or foreign, except (a) as described in Section 3.08 of the Disclosure Schedule and (b) to the extent applicable, upon issuance of shares of Common Stock pursuant to Article V of this Agreement and upon a conversion of the Shares as provided for in the Articles, the notification requirements of the HSR Act.
(b) Since June 30, 1993, the Company has been operated only in the ordinary course. As amplification and not limitation of the foregoing, except as disclosed in Schedule 3.10(b) of the Disclosure Schedule, the Company has not, since June 30, 1993:
(i) permitted or allowed any of the assets or properties (whether tangible or intangible) of the Company to be subjected to any Encumbrance, other than Permitted Encumbrances;
(ii) made any loan to, guaranteed any indebtedness of or otherwise incurred any indebtedness on behalf of any Person;
(iii) failed to pay any creditor any amount owed to such creditor when
due;
(iv) redeemed any of the capital stock or declared, made or paid any dividends or distributions (whether in cash, securities or other property) to the holders of capital stock of the Company;
(v) made any material changes in the customary methods of operations of the Company;
(vi) merged with, entered into a consolidation with or acquired an interest in, any Person or acquired a substantial portion of the assets or business of any Person or any division or line of business thereof, or otherwise acquired any material assets other than in the ordinary course of business consistent with past practice;
(vii) made any capital expenditure or commitment for any capital expenditure in excess of $200,000 individually or $750,000 in the aggregate;
(viii)issued or sold any capital stock, notes, bonds or other securities, or any option, warrant or other right to acquire the same, of, or any other interest in, the Company;
(ix) entered into any agreement, arrangement or transaction with any of its directors, officers, employees or shareholders (or with any relative, beneficiary, spouse or Affiliate of such Person);
(x) made any change in any method of accounting or accounting practice or policy used by the Company, other than such changes required by U.S. GAAP;
(xi) disclosed any secret or confidential Intellectual Property (except by way of issuance of a patent) or permitted to lapse or go abandoned any Intellectual Property (or any registration or grant thereof or any application relating thereto) to which, or under which, the Company has any right, title, interest or license; or
(xii) agreed, whether in writing or otherwise, to take any of the actions specified in this Section 3.09 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.10, except as expressly contemplated by this Agreement.
qualified under Section 401(a) of the Code.
(c) With respect to the Company Benefit Plans, other than claims for benefits, no event has occurred and, to the knowledge of the Company, there exists no condition or set of circumstances, in connection with which the Company or any of its ERISA Affiliates could be subject to any liability under the terms of such Company Benefit Plans, ERISA, the Code or any other applicable Law, which would, individually or in the aggregate, have a Material Adverse Effect.
(b) Section 3.12(b) of the Disclosure Schedule contains a list of all of the Leased Real Property. Except as described in such Section of the Disclosure Schedule, (i) there is no material violation of any law, rule or regulation by the Company or known to the Company relating to any of the Leased Real Property, (ii) the Company is in peaceful and undisturbed possession of the Leased Real Property, and so long as the lease remains in effect, there are no contractual or legal restrictions that preclude or restrict the ability to use the premises for the purposes for which they are currently being used and (iii) the Company has not leased or subleased any parcel or any portion of any parcel of Leased Real Property to any other Person, nor has the Company assigned its interest under any lease or sublease listed in Section 3.12(b) of the Disclosure Schedule to any third party.
(c) The Company has, or has caused to be, delivered to the Purchaser true and complete copies of all leases and subleases listed in Section 3.12(b) of the Disclosure Schedule. Each of such leases and subleases is in full force and effect and constitutes a legal, valid and binding obligation of the respective parties thereto, and except as set forth on Schedule 3.12(c) of the Disclosure Schedule, the Company is not in default or breach of (with or without the giving of notice or the passage of time) any such leases or subleases. To the knowledge of the Company, no third party is in material breach of any of such leases or subleases.
of the Disclosure Schedule: (i) all the Owned Intellectual Property is owned by
the Company, free and clear of any Encumbrance and (ii) no Actions have been
made or asserted or are pending (nor, to the best knowledge of the Company after
due inquiry, has any such Action been threatened) against the Company either
(A) based upon or challenging or seeking to deny or restrict the use by the
Company of any of the Owned Intellectual Property or (B) alleging that any
services provided, or products manufactured or sold by the Company are being
provided, manufactured or sold in violation of any patents or trademarks, or any
other rights of any Person. To the best knowledge of the Company after due
inquiry, no Person is using any patents, copyrights, trademarks, service marks,
trade names, trade secrets or similar property that are confusingly similar to
the Owned Intellectual Property or that infringe upon the Owned Intellectual
Property or upon the rights of the Company therein. Except as disclosed in
Section 3.12 of the Disclosure Schedule, the Company has not granted any license
or other right to any other Person with respect to the Owned Intellectual
Property. The consummation of the transactions contemplated by this Agreement
will not result in the termination or impairment of any of the Owned
Intellectual Property.
(b) Except as set forth on Section 3.13(b) of the Disclosure Schedule, each license and sublicense with respect to the Licensed Intellectual Property:
(i) is valid and binding and in full force and effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license or sublicense;
(ii) except as otherwise set forth in Section 3.13(b)(ii) of the Disclosure Schedule, will not cease to be valid and binding and in full force and effect on terms identical to those currently in effect as a result of the consummation of any of the transactions contemplated by this Agreement, nor will the consummation of the transactions contemplated by this Agreement constitute a breach or default under such license or sublicense or otherwise give the licensor or sublicensor a right to terminate such license or sublicense;
(iii) no Actions have been made or asserted or are pending (nor, to the best knowledge of the Company after due inquiry, has any such Action been threatened) against the Company either (A) based upon or challenging or seeking to deny or restrict the use by the Company of any of the Licensed Intellectual Property or (B) alleging that any Licensed Intellectual Property is being licensed, sublicensed or used in violation of any patents or trademarks, or any other rights of any Person; and
(iv) to the knowledge of the Company, no Person is using any patents, copyrights, trademarks, service marks, trade names, trade secrets or similar property that are confusingly similar to the Licensed Intellectual Property or that infringe upon the Licensed Intellectual Property or upon the rights of the Company therein.
(c) Except as otherwise disclosed in Section 3.13(c) of the Disclosure Schedule, with respect to each such license or sublicense of Licensed Intellectual Property: (i) the Company has not received any notice of termination or cancellation under such license or
sublicense and no licensor or sublicensor has any right of termination or cancellation under such license or sublicense except in connection with the default of the Company thereunder, (ii) the Company has not received any notice of a breach or default under such license or sublicense, which breach or default has not been cured and (iii) the Company has not granted to any other Person any rights, adverse or otherwise, under such license or sublicense.
(d) Neither the Company nor (to the knowledge of the Company) any other party to such license or sublicense of Licensed Intellectual Property is in breach or default in any material respect, and, to the best knowledge of the Company after due inquiry, no event has occurred that, with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration under such license or sublicense.
(e) Except as set forth in Section 3.13(e) of the Disclosure Schedule, the Company is not aware of any reason that would prevent any pending applications to register trademarks, service marks or copyrights or any pending patent applications from being granted.
(f) The Company has taken all reasonable security measures to protect the secrecy, confidentiality and value of all Intellectual Property required to conduct its business. Each founder, officer, director and employee of the Company has executed a Proprietary Information and Inventions Agreement in the Company's standard form, each such agreement is in full force and effect as of the date hereof and to the best of the Company's knowledge, none of the Company's current or former officers, employees or consultants is or will be in violation thereof. The Company does not believe it is or will be necessary to utilize any inventions of any of its employees or consultants (or people it currently intends to hire) made prior to their employment by or consultancy to the Company, other than inventions which have been licensed to the Company.
(g) Section 3.13(g) of the Disclosure Schedule sets forth a complete list of all patent applications in which the Company has an interest. The Company believes that the inventions described in such applications are patentable, that the claims made therein should issue in all material respects and that the patents, if issued, would cover all techniques currently known to the Company to grow human stem cells in culture.
(h) Except as disclosed in Section 3.13(h) of the Disclosure Schedule, no consultant to or employee of the Company has granted any license or other right to any Person other than the Company with respect to the Owned Intellectual Property. The Company is not aware that any of its employees or consultants is obligated under any contract (including licenses, covenants or commitments of any nature) or any order of any court or administrative agency, that would interfere with the use of such employee's or consultant's best efforts to promote the interests of the Company or that would conflict with the Company's business as proposed to be conducted.
claim relating to any Environmental Permit, Environmental Law or otherwise relating to any Hazardous Substance and (d) is not aware of any circumstance likely to result in claims, liability, investigation, monitoring or remediation costs or restrictions on the ownership, use, or transfer of any Real Property or Environmental Permit pursuant to any Environmental Law. With respect to its period of ownership or use of any property, there has not been any contamination, release or threat of release at any currently or formerly owned, leased or used real property that would have a Material Adverse Effect.
(ii) owns, directly or indirectly, in whole or in part, or has any other interest in any tangible or intangible property which the Company uses or has used in the conduct of the Business or otherwise;
(iii) has outstanding any indebtedness to the Company; or
(iv) has any contract or agreement with the Company.
(b) Except as disclosed in Section 3.17(b) of the Disclosure Schedule, the Company has no Liability or any other obligation of any nature whatsoever to any officer, director or shareholder of the Company or to any relative or spouse (or relative of such spouse) who resides with, or is a dependent of, any such officer, director or shareholder.
ARTICLE IV
The Purchaser represents and warrants to the Company that:
and performance of this Agreement by the Purchaser do not and will not require
any consent, approval, authorization or other order of, action by, filing with
or notification to any governmental or regulatory authority, domestic or
foreign, except (a) as described in Section 4.05 of the Disclosure Schedule and
(b) to the extent applicable, upon issuance of shares of Common Stock pursuant
to Article V of this Agreement and upon a conversion of the Shares as provided
for in the Articles, the notification requirements of the HSR Act.
ARTICLE V
(d) On the Option Closing Date, the Purchaser shall pay to the Company, in immediately available funds by wire transfer to a bank account designated in writing by the Company, an amount equal to the Option Price multiplied by the number of Option Shares.
(e) At the Option Closing, simultaneously with the delivery of the consideration specified in paragraph (d) of this Section 5.03, the Company shall deliver to the Purchaser a certificate or certificates representing the Option Shares registered in the name of the Purchaser.
(f) The Option may be transferred to any Affiliate of the Purchaser but is not otherwise transferable without the prior written consent of the Company.
(iii) In the event that the Purchaser wishes to exercise its Post- Option Purchase Right, it shall deliver to the Company, within thirty days after the date of the Post-Option Issuance a written notice in which the Purchaser agrees to purchase at the Option Price the number of shares of Common Stock which the Purchaser is entitled to purchase upon exercise of the Post-Option Purchase Right.
in the case of any other Post-Determination Issuance. The Post-Determination Issuance Notice shall set forth in reasonable detail the terms of such Post- Determination Issuance, including, without limitation, (A) a description, and the number, of New Voting Securities proposed to be issued, (B) in the case of a Public Offering, the estimated price to the public, underwriting discount and commissions, expenses and underwriters of the Public Offering, (C) in the case of a Private Placement, the sales price, to the extent then known by the Company, and the identity of the proposed purchasers, and (D) in the case of a Non-Cash Transaction, a description of such transaction, including, without limitation, the consideration and the parties thereto. If information concerning the identity of proposed purchasers in a Private Placement becomes known to the Company subsequent to the delivery of the Post-Determination Issuance Notice, the Company shall, promptly after gaining such knowledge, deliver such information to the Purchaser in writing.
prior to such Pre-Determination Issuance at the conversion price of the Shares on the Conversion Determination Date (including, for purposes of calculating such percentage, all shares of Common Stock or other Voting Securities that the Purchaser has the right to acquire upon exercise of options or warrants, conversion or exchange of other securities or otherwise, but if the Option has not yet been exercised, excluding the shares of Common Stock subject to the Option).
(e) In the event that the Purchaser wishes to exercise the Pre- Determination Preemptive Right, it shall deliver to the Company, at any time during the period commencing on the Conversion Determination Date and ending thirty days thereafter, a written notice in which the Purchaser specifies the number of New Voting Securities which the Purchaser elects to purchase and in which the Purchaser agrees to purchase such specified number of New Voting Securities at the Applicable Preemptive Prices. The closing of the purchase of New Voting Securities upon the Purchaser's exercise of the Pre-Determination Preemptive Right shall take place within five days of the receipt of the written notice referred to in the immediately preceding sentence.
(c) Notwithstanding any other provision of this Section 5.05 to the contrary, (i) the Purchaser shall not be required to purchase Equity Securities having an aggregate purchase price of more than $5 million pursuant to the Company Option; (ii) the Purchaser shall not be required to purchase pursuant to the Company Option any Equity Securities being offered in conjunction with any securities other than Equity Securities; (iii) the Purchaser shall not be required to purchase Equity Securities if such purchase is prohibited by law, if any regulatory
approval required to effect any purchase of Equity Securities upon exercise of the Company Option cannot be obtained or during any waiting period under the HSR Act or during any other period in which regulatory approvals are sought by the parties hereto pursuant to Section 5.10, but such purchase shall take place as promptly as practicable after any requisite waiting period has passed and any required notification period has expired or been terminated, or such approval has been obtained; and (iv) the Purchaser shall not be required to purchase Equity Securities pursuant to the Company Option if the Company (A) becomes insolvent, (B) a bankruptcy petition is filed with respect to the Company or any of its Subsidiaries, (C) is adjudicated as a bankrupt pursuant to an involuntary petition in bankruptcy, (D) suffers appointment of a temporary or permanent receiver, trustee or custodian for its business or for all or part of its assets, where such appointment is not discharged within thirty days, (E) makes an assignment for the benefit of creditors, (F) is admitted to the benefits of any procedure for the settlement or postponement of debts, (G) becomes a party to dissolution proceedings or (H) takes any corporate action with respect to any of the foregoing.
(d) If the Company exercises the Company Option with respect to any
Qualifying IPO or Qualifying Private Placement, the Purchaser shall have the
right to purchase from the Company in connection with such Qualifying IPO or
Qualifying Private Placement, in lieu of any rights granted to the Purchaser
pursuant to Section 5.04, up to a number of Equity Securities equal to the
greater of (i) forty percent of the Equity Securities sold in such Qualifying
IPO or Qualifying Private Placement or (ii) the number of Equity Securities, if
any, that the Purchaser would have had a right to acquire in accordance with
Section 5.04, notwithstanding the Purchaser's right granted in this Section
5.05(d).
(e) In the event that the Purchaser wishes to exercise the right
granted in Section 5.05(d), it shall deliver to the Company, not later than ten
days prior to (i) the proposed date of the initial filing of the registration
statement, in the case of a Qualifying IPO, or (ii) the closing date, in the
case of a Qualifying Private Placement, a written notice in which the Purchaser
specifies the number of New Voting Securities which the Purchaser elects to
purchase and in which the Purchaser agrees to purchase such specified number of
New Voting Securities upon the same terms and subject to the same conditions as
the underwriters in the case of a Qualifying IPO, and the other purchasers of
Equity Securities in the case of a Qualifying Private Placement. Such right must
be exercised by the Purchaser in accordance with the procedures set forth in
Section 5.04.
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREUNDER."
The Purchaser agrees to comply with the foregoing transfer restriction legend; and the Purchaser acknowledges that a transfer restriction will be maintained by the Company's stock transfer agent. The legend set forth in this Section 5.08 shall be removed by delivery of substitute certificate(s) without such legend if the Purchaser shall have delivered to the Company an opinion of counsel (it being agreed that Shearman & Sterling shall be deemed satisfactory) in form and substance reasonably satisfactory to the Company and its counsel, to the effect that such legend is not required for purposes of compliance with the Securities Act.
(c) The Board shall recommend to the stockholders of the Company for election the Purchaser Designees who are nominated by the Company to serve as members of the Board, and the Company shall use its reasonable best efforts to solicit proxies from stockholders to vote in favor of such Purchaser Designees. In the event that a vacancy is created on the Board at any time by the death, disability, retirement, resignation or removal (with or without cause) of a Purchaser Designee, the Purchaser shall cause such Purchaser Designee to be elected to the Board to fill such vacancy.
place as promptly as practicable after the date on which such restriction has expired or been terminated; without limiting the foregoing, if prior approval of, notification to or filing with, any regulatory authority is required pursuant to the HSR Act or otherwise, such closing shall take place as promptly as practicable after any requisite waiting period has passed and any required notification period has expired or been terminated, or such approval has been obtained.
(b) The Company shall not adopt a shareholder rights plan, enter into any agreement, arrangement or understanding or grant any warrants, options, rights or any other privileges which, upon acquisition by the Purchaser of shares of Common Stock or other Voting Securities upon conversion of the Shares or pursuant to Article V hereof, would result in the Purchaser, in its capacity as a holder of such securities, being subject to different rights and obligations as all other holders of Common Stock or Voting Securities, as a result of such acquisition.
ARTICLE VI
ARTICLE VII
(a) if to the Purchaser:
Cobe Laboratories, Inc.
1185 Oak Street
Lakewood, Colorado 80215
Attention: Edward Wood
Telecopy: (303) 231-4160
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Peter D. Lyons, Esq.
Telecopy: (212) 848-7179
(b) if to the Company:
Aastrom Biosciences, Inc.
P.O. Box 376 - (Mail)
Ann Arbor, Michigan 48105
Dominos Farms, Lobby L - (Direct Delivery)
Attention: R. Douglas Armstrong, Ph.D.
President and Chief Executive Officer
Telecopy: (313) 665-0485
with a copy to:
Gray, Cary, Ames & Frye
401 B Street, Suite 1700
San Diego, California 92101
Attention: T. Knox Bell, Esq.
Telecopy: (619) 236-1048
Agreement, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.
IN WITNESS WHEREOF, the Purchaser and the Company have each caused this Agreement to be executed by its duly authorized officer as of the date first written above.
COBE LABORATORIES, INC.
By: /s/ MATS WAHLSTROM ------------------------------ Name: Mats Wahlstrom Title: President |
AASTROM BIOSCIENCES, INC.
By: /s/ R. DOUGLAS ARMSTRONG ------------------------------ Name: R. Douglas Armstrong Title: President and Chief Executive Officer |
AMENDMENT TO STOCK PURCHASE AGREEMENT
This Amendment is entered into as of October 29, 1996 by and between Cobe Laboratories, Inc., a Colorado corporation (the "Purchaser") and Aastrom Biosciences, Inc., a Michigan corporation (the "Company") with respect to that certain Stock Purchase Agreement between the Purchaser and the Company, dated as of October 22, 1993 (the "Stock Purchase Agreement").
1. Pursuant to Section 5.04 of the Stock Purchase Agreement, the Purchaser has certain preemptive rights to purchase additional capital stock of the Company. Pursuant to Section 5.05 of the Stock Purchase Agreement, the Company has a "put option" to require the Purchaser to purchase certain additional capital stock in the Company.
2. As specified in the definition set forth in the Stock Purchase Agreement, the "Applicable Preemptive Price" for the Purchaser to pay for purchasing the Company's capital stock in a public offering of stock by the Company is the public offering price, less underwriting discounts and commissions (e.g., a 7% underwriter's discount).
3. If the Company exercises its "put option" as specified in
Section 5.05 of the Stock Purchase Agreement, the price per share payable by the
Purchaser is the public offering price per share, less underwriting discounts
and commissions (e.g., a 7% underwriter's discount).
4. The Purchaser and the Company hereby amend the Stock Purchase Agreement, and particularly the sections referenced above, so as to provide for the Purchaser to pay the same purchase price per share as is paid by a public purchaser in the public stock offering, if and when the Purchaser purchases capital stock of the Company pursuant to Section 5.04 and/or 5.05 pursuant to a public stock offering, without the Purchaser being entitled to a price discount for the underwriter's discounts or commissions. This foregoing amendment applies only to capital stock purchased by the Purchaser from the Company at the time of the Company's initial public offering of stock.
5. The Purchaser is agreeing to the foregoing modifications to the stock purchase price in consideration and recognition of the terms in that certain Stock Purchase Agreement (for Series F Preferred stock) between the Purchaser and the Company, and other good and valuable consideration, receipt of which is hereby acknowledged by the Purchaser.
6. Terms defined in the Stock Purchase Agreement shall have the same meaning in this Amendment.
7. Excepting only as otherwise set forth above, all other terms and provisions of the Stock Purchase Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Company and the Purchaser each have caused this Amendment to be executed by its duly authorized officer as of date first written above.
COBE LABORATORIES, INC.
By: /s/ Edward C. Wood ------------------- AASTROM BIOSCIENCES, INC. By: /s/ R. Douglas Armstrong ------------------------- |
EXHIBIT 10.10
EXECUTION COPY
DISTRIBUTION AGREEMENT
Between
COBE BCT, INC.
and
AASTROM BIOSCIENCES, INC.
Dated as of October 22, 1993
Section Page - ----------------------------------------------------------------------------- ARTICLE I DEFINITIONS 1.01 Definitions....................................................... 1 ARTICLE II APPOINTMENT AS DISTRIBUTOR 2.01 Appointment and Acceptance; Products; Exclusivity; Affiliate Sales...................................... 11 2.02 Relationship; Subdistributors..................................... 14 2.03 Purpose; Development Programs..................................... 15 2.04 Review of Programs and ACL........................................ 19 2.05 Annual Customer Review; Change of Use............................. 21 ARTICLE III SUPPLIER'S UNDERTAKINGS 3.01 Product Development Program; Diligence............................ 23 3.02 Product Specifications............................................ 23 3.03 Training by the Supplier.......................................... 23 3.04 Sole Distributor.................................................. 24 3.05 Enforcement of Intellectual Property Rights....................... 24 3.06 Manufacturing and Labeling; Product Name; Parts................... 25 3.07 Regulatory Approvals.............................................. 26 3.08 Intellectual Property Indemnification............................. 26 3.09 Insurance; Indemnification for Product Liability.................. 26 3.10 Forecasting Unit Demand........................................... 28 ARTICLE IV DISTRIBUTOR'S UNDERTAKINGS 4.01 Market Development Program; Diligence............................. 28 4.02 Training by the Distributor....................................... 29 4.03 Advertising....................................................... 29 4.04 Warranties; Service............................................... 29 4.05 Notice of Infringement............................................ 30 |
Section Page - ------------------------------------------------------------------------------ 4.06 License........................................................... 30 4.07 Regulatory Approvals.............................................. 30 4.08 Competitive Products.............................................. 31 4.09 Insurance......................................................... 31 4.10 Solutions and Growth Medium....................................... 32 4.11 Information Concerning Pricing.................................... 33 4.12 Indemnification for Product Liability............................. 34 ARTICLE V DISTRIBUTOR PURCHASES OF THE PRODUCTS 5.01 Orders............................................................ 34 5.02 Purchase Price; Periodic Adjustments.............................. 34 5.03 Monthly Report; Monthly Payment; Distributor Fee.................. 37 5.04 Deliveries........................................................ 38 ARTICLE VI TRADEMARKS AND TRADE NAMES 6.01 License........................................................... 38 6.02 Licenses to Third Parties......................................... 38 6.03 Effect of Use..................................................... 38 6.04 Cessation of Use.................................................. 39 ARTICLE VII TERM; TERMINATION 7.01 Term.............................................................. 39 7.02 Notice of Breach.................................................. 39 7.03 Cure Period....................................................... 39 7.04 Objection; Negotiation............................................ 40 7.05 Remedy; Partial Termination; Termination Upon Bankruptcy.......... 40 7.06 Other Remedies.................................................... 42 7.07 Effect of Termination by Distributor.............................. 42 7.08 Attorney's Fees and Costs......................................... 43 7.09 Interest.......................................................... 43 7.10 Transition Upon Termination....................................... 43 |
Section Page - ------------------------------------------------------------------------------ ARTICLE VIII CONFIDENTIALITY 8.01 Confidentiality................................................. 44 8.02 Survival of Covenants to Keep Secret............................ 44 8.03 No License...................................................... 44 ARTICLE IX FORCE MAJEURE 9.01 Force Majeure................................................... 45 ARTICLE X MISCELLANEOUS PROVISIONS 10.01 Amendment; Alteration........................................... 45 10.02 Notice.......................................................... 46 10.03 Arbitration..................................................... 46 10.04 Governing Law................................................... 47 10.05 Waiver.......................................................... 47 10.06 Entire Agreement; Assignment.................................... 47 10.07 Parties in Interest............................................. 47 10.08 Severability.................................................... 48 10.09 Headings........................................................ 48 10.10 Counterparts.................................................... 48 10.11 Approvals....................................................... 48 |
SCHEDULES
Schedule A -- Product Development Program Schedule B -- Market Development Program Schedule C -- Annual Commitment List |
EXECUTION COPY |
WHEREAS, the Supplier wishes to create, develop and manufacture and supply Products (as defined below) and to have the Products marketed worldwide;
WHEREAS, the Distributor wishes to sell, market and distribute the Products worldwide; and
WHEREAS, the Supplier wishes that the Distributor distribute the Products worldwide;
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements hereinafter set forth, the Supplier and the Distributor agree as follows:
ARTICLE I
(a) information which was in one of such parties' possession prior to its receipt from the other of such parties;
(b) information which is obtained by one of such parties from a third person who, insofar as is known to such party, is not prohibited from transmitting the information to such party by a contractual, legal or fiduciary obligation to the other of such parties; and
(c) information which is or becomes publicly available through no fault of either of such parties.
successor product to any of the foregoing that is not a Competitive Product.
ARTICLE II
(ii) a BIU monitor module that provides a central display, an operator input device and a printer;
(iii) an inoculation and harvest unit that facilitates the initial filling and inoculation of cells, as well as the final harvest of cells at the completion of the expansion process;
(viii) all improvements and enhancements to the products described in
(i) through (vii) above;
(xi) instructions for the use of each of such products, other than the Customer License.
(b) Except as provided in Section 2.01(d), the Distributor and each Subdistributor shall sell the Products only in conjunction with Customer Licenses.
(c) Except as otherwise specifically provided in this Section 2.01 and in Sections 4.01(b) and 7.05(b), the Supplier shall not (i) authorize any Person other than the Distributor to act as a distributor of any of the Products (or any product that includes any Product as a component) to, or for resale to, Customers whose predominant use of the Products is, or reasonably is expected to be, for Stem Cell Therapy Applications or (ii) market, promote, Sell or distribute any of the Products (or any product that includes any Product as a component), directly or indirectly, to, or for resale to, any Stem Cell Therapy Customer.
(d) Notwithstanding any provision of this Agreement to the contrary, the Supplier may Sell the Products to its Affiliates for Stem Cell Therapy Applications by such Affiliates, but not for resale to Persons which are not Affiliates of the Supplier, and may make such Sales with a license for use of the Products for Stem Cell Therapy Applications, and the Distributor may Sell the Products to its Affiliates for applications other than Stem Cell Therapy Applications by such Affiliates, but not for resale to Persons which are not Affiliates of the Distributor, and
(e) The Supplier expressly reserves the right to market, sell and
distribute (either directly or through its designees) (i) the Products to its
Affiliates for Stem Cell Therapy Applications as provided in Section 2.03(d),
(ii) the Products to any Customer for applications other than Stem Cell Therapy
Applications, and (iii) the Supplier's Other Products to any Customer for any
application. Except as provided in Section 2.03(d), the Supplier shall sell the
Products to Customers that are not Stem Cell Therapy Customers only in
conjunction with a license to use the Products solely for applications other
than Stem Cell Therapy Applications. The Distributor is not authorized by the
Supplier to distribute the Products to any Person other than a Stem Cell Therapy
Customer.
(c) The Distributor shall either Sell the Products directly to Stem Cell Therapy Customers (i.e., through the Distributor's own employed sales force) in each of the countries listed below:
Australia Holland Austria Italy Belgium Japan Canada Spain France Switzerland Germany United Kingdom |
(d) The Distributor may Sell the Products to Stem Cell Therapy Customers through Subdistributors, each of whom shall be identified to the Supplier, in countries other than the Direct Sales Countries and the United States.
(e) If the Distributor uses Subdistributors to sell the Products to Stem Cell Therapy Customers in the Direct Sales Countries and the United States, the Distributor shall bear all costs and discounts attributable to the Subdistributor, unless otherwise expressly approved by the Supplier.
(b) As the Supplier's worldwide distributor of the Products for Stem Cell Therapy Applications, the Distributor shall use reasonable best efforts to develop and implement a worldwide plan for marketing and Sales of the Products for Stem Cell Therapy Applications so that the Products will be Sold for Stem Cell Therapy Applications worldwide promptly after such Sales become feasible, the market share of the Products for Stem Cell Therapy Applications will be high and the prices of the Products for Stem Cell Therapy Applications, will be commensurate with the market value of the Products, in each case in a
manner that maximizes the financial returns of both the Distributor and the Supplier.
(c) The Supplier shall use reasonable best efforts promptly to develop and produce Products that are high quality, cost competitive, cost effective for Stem Cell Therapy Customers and capable of achieving widespread acceptance among Stem Cell Therapy Customers, in each case in a manner that maximizes the financial returns of both the Supplier and the Distributor.
(d) To achieve the goals set forth in Sections 2.03(a), (b) and (c), the Supplier and the Distributor have developed the Product Development Program and the Market Development Program, each of which will be designed to comply with the applicable standards of the ISO 9000 Series of the International Standards Organization and will be amended from time to time in accordance with the terms of this Agreement.
(ii) a Plan for obtaining (A) the approval of (x) the FDA and any other United States governmental authority necessary for the Sale of the Products to Stem Cell Therapy Customers in the United States and (y) the Underwriter's Laboratory and (B) support for the claims set forth in the Market Development Program;
(iii) the specifications of each Product, including, without limitation, specifications for performance and reliability of each Product and each component thereof;
(iv) a Plan for validating the performance and reliability specifications for the Products set forth in the Product Development Program and the Product claims (including, without limitation, cost effectiveness claims) and service goals set forth in the Market Development Program;
(v) a quality assurance Plan;
(vi) a Plan for manufacturing, or causing the Products to be manufactured, so that the Products can be delivered for sale to Stem Cell Therapy Customers in a manner consistent with the Market Development Program, including, without limitation, (A) specifications of, and a timetable
for, the production capacity to be available for the supply of each of the Products; (B) Plans and leadtimes for the production of prototype, pilot and production models; (C) a Plan for identifying, qualifying, contracting with and auditing third parties for the manufacture of the Products; and (D) Plans for addressing situations in which the Distributor's orders for the Products exceeds the Supplier's capacity to deliver the Products; and
(vii) a Plan for developing enhancements to the Products in response to evolving market needs.
(iii) the Minimum U.S. Selling Price and Minimum Subdistributor Selling Price and the Minimum International Direct Selling Price in each of the Direct Sales Countries (expressed in the official currency unit of such Country) of each of the Products, as approved by the Supplier;
(iv) a mechanism for monitoring the development and growth of the market for the Products;
(v) criteria for targeting Customers and targets for sales volume and market share in each of the countries where the Products are to be sold, all as agreed upon by the Supplier and the Distributor;
(vi) criteria for targeting Customers and targets for sales volume and market share in each of the countries where the Products are to be sold, all as agreed upon by the Supplier and the Distributor;
(vii) a warranty program for the Products, as agreed upon by the Supplier and the Distributor, as well as a program for providing customer service and customer support to Stem Cell Therapy Customers beyond the scope of such warranties;
(viii) a Plan for developing customer relations, Customer contacts, Sales lead follow up and monitoring customer satisfaction with, the Products and, the Distributor's and each Subdistributor's performance;
(ix) a program for the Distributor's training of Stem Cell Therapy Customers and for the Supplier's training of the Distributor's personnel who will provide training to the Distributors' and the Subdistributors' personnel who will provide such training to Stem Cell Therapy Customers and to the Distributor's and the Subdistributors' personnel who will provide customer engineering and customer support to Stem Cell Therapy Customers;
(x) guidelines and procedures for coordinating contacts of Stem Cell Therapy Customers by the Supplier with contacts by the Distributor; and
(xi) a Plan for forecasting demand for the Products by Stem Cell Therapy Customers.
best efforts to cause such arbitration to result in a decision within 40 days after submission thereto.
(c) In connection with the preparation of the ACL and as otherwise reasonably required, the Market Development Program and the Product Development Program shall, at all times, include each of the Principal Components thereof set forth in Section 2.03 of this Agreement and such other items as are reasonably required to achieve the goals and objectives set forth in Sections 2.03(a), (b) and (c) of this Agreement. The Supplier and the Distributor shall give each other such information as is reasonably necessary to evaluate, and shall give due consideration to the views and recommendations of the other with respect to, all components of each of the Programs. The Product Development Program and the Market Development Program shall include sufficient details to enable the Distributor and the Supplier, respectively, to have a reasonable basis to assess the probability of achieving the goals and objectives set forth in the ACL and in Sections 2.03(a), (b) and (c) of this Agreement. Subject to the right of objection (and resolution of such objection) set forth below, the Supplier shall be free to amend the Product Development Program without the consent of the Distributor, and the Distributor shall be free to amend the Market Development Program without the consent of the Supplier. The Supplier may object to any amendment of, or failure to amend, any Principal Component of the Market Development Program, and the Distributor may object to any amendment of, or failure to amend, any Principal Component of the Product Development Program on the basis (i) that such amendment, or failure to amend, is not reasonably consistent with the goals and objectives set forth in the ACL or Sections 2.03(a), (b) and (c) of this Agreement, or (ii) that, as a result of such amendment, or failure to amend, the parties are not reasonably likely to achieve the goals and objectives embodied in such Principal Component. If the Supplier and the Distributor are unable to agree on a Principal Component of either Program the Supplier and the Distributor, each shall endeavor to resolve the disagreement within such 30-day period. If the Supplier and the Distributor are unable to resolve such disagreement within such 30-day period, either party shall be free to implement the Principal Component in question until such disagreement is resolved, unless the other party reasonably believes that the failure to resolve such disagreement will have an immediate adverse effect on the ability of the parties to implement the goals and objectives set forth in the ACL. In that case, either Party may cause the disagreement to be submitted immediately to arbitration in accordance with Section 10.03, and the Parties shall use their reasonable best efforts to cause such arbitration to be decided within 40 days after submission. If neither Party believes that there will be any such immediate adverse effect, then the Parties will continue to endeavor to resolve the disagreement for an additional period of six months. If the Parties are unable to resolve such disagreement within such six-month period, then the disagreement may be submitted to arbitration in accordance with Section 10.03. The Parties shall use their reasonable best efforts to cause such arbitration to result in a decision within a 40 day period.
(d) A copy of the ACL for the Fiscal Year ending June 30, 1994 is attached hereto as Schedule C.
(c) If it is determined:
(i) that at the time of the Supplier's Sale of any Equipment to a Customer (other than an Affiliate of the Supplier), the Supplier knew or reasonably should have known that such Customer's intended predominant use of such Equipment was for Stem Cell Therapy Applications, the
Supplier shall pay to the Distributor an amount equal to 40% of all amounts received by the Supplier in payment for such Equipment;
(ii) that a Customer of the Supplier (other than an Affiliate of the Supplier) uses any Disposable purchased from the Supplier for Stem Cell Therapy Applications, the Supplier shall pay to the Distributor an amount equal to 30% of all amounts received by the Supplier as payment for such Disposable;
(iii) that at the time of the Distributor's (or any Subdistributor's) Sale of any Equipment to any Customer (other than an Affiliate), the Distributor (or such Subdistributor) knew or reasonably should have known that such Customer's intended predominant use of such Equipment was not for Stem Cell Therapy Applications, the Distributor (or such Subdistributor) shall pay to the Supplier all amounts received by the Distributor (or such Subdistributor) in payment for such Equipment; and
(iv) that a Customer of the Distributor other than an Affiliate of the Distributor (or any subdistributor) has used any Disposable purchased from the Distributor (or such Subdistributor) for any application other than a Stem Cell Therapy Application, the Distributor (or such Subdistributor) shall pay to the Supplier an amount equal to 90% of all amounts received by the Distributor (or such Subdistributor) in payment for such Disposable.
(d) The Supplier and the Distributor shall make available to each other such information as is reasonably necessary to audit the Sales of the other party described in 2.05(c) above.
(e) If it is determined by the Supplier and the Distributor, based on the Customer Service Information or otherwise, (i) that a Customer of the Supplier has effected a Change of Use, such Customer may be redesignated, at the Supplier's option, as being a Stem Cell Therapy Customer and, accordingly, a Customer that the Distributor will have the responsibility to serve, or (ii) that a Customer of the Distributor has effected a Change of Use, such Customer may be redesignated, at the Distributor's option, as not being a Stem Cell Therapy Customer and, accordingly, a Customer that the Supplier will have the responsibility to serve. Upon any such redesignation, the Supplier and the Distributor shall develop a program that is reasonably acceptable to each party and such Customer for the orderly transition of responsibility for such Customer over a reasonable period of time not to exceed one year.
ARTICLE III
(b) As reasonably requested in writing by the Distributor, at any time and from time to time, the Supplier shall, at reasonable compensation rates chargeable to the Customer, provide training in applications other than Stem Cell Therapy Applications to the Distributor's Customers who wish to use the Products for applications other than Stem Cell Therapy Applications.
(b) The Supplier shall have the right to name the Products and shall, in exercising such right, give due consideration to the views and recommendations of the Distributor.
(c) The Supplier shall maintain a stock of Spare Parts for the Products in accordance with the Market Development Program. Spare Parts shall be priced in accordance with Section 5.02(e) of this Agreement.
(b) The Supplier shall provide to the Distributor such assistance, including, without limitation, providing at no charge all Products necessary for clinical trials and making any modifications to Products, as the Distributor may reasonably request to obtain the regulatory approvals necessary to sell the Products to Stem Cell Therapy Customers in countries other than the United States specified in the Market Development Program.
(c) The Supplier (i) shall not amend, change or cancel the Policy without the consent of the Distributor (which consent shall not unreasonably be withheld) and (ii) shall inform the Distributor in writing in the event that any products other than the Products distributed by the Distributor are covered by the Policy.
(d) The Supplier shall, subject to the limitation set forth in Section 4.09(c), indemnify and hold harmless each Supplier Indemnified Person from and against any Unreimbursed Losses (except Deductibles).
ARTICLE IV
(b) Notwithstanding anything in this Agreement to the contrary, if the Distributor identifies to the Supplier potential Stem Cell Therapy Customers in the United States to whom the Distributor reasonably believes it cannot effectively sell the Products, the Supplier may sell the Products to such Stem Cell Therapy Customers, directly, or through a distributor or sales agent (identified to the Distributor) who expressly agrees in writing to be bound by all of the restrictions on sales of the Products which are applicable to the Supplier under this Agreement. Upon the identification of such Stem Cell Therapy Customers by the Distributor to the Supplier, the Distributor shall have no further obligation under this Agreement to attempt to sell Products to such Customers.
(b) As reasonably requested in writing by the Supplier, at any time and from time to time, the Distributor shall, at reasonable compensation rates chargeable to the customer, provide training in Stem Cell Therapy Applications to the Supplier's Customers who wish to use the Products for such applications.
Therapy Customers by the Distributor or any such Subdistributor, as the case may be.
(b) The Monthly Purchase Price shall be reduced in accordance with
Section 5.02 by an amount equal to the costs reasonably incurred by the
Distributor in providing warranty service to Stem Cell Therapy Customers in
accordance with the Market Development Program. Any costs incurred by the
Distributor or any Subdistributor in providing extended warranty or maintenance
service beyond the standard warranty period provided in the Market Development
Program shall be borne solely by the Distributor or such Subdistributor.
(c) The Distributor and each Subdistributor shall, in accordance with the Market Development Program, provide service and customer support for the Products to Stem Cell Therapy Customers which have purchased Products from the Distributor or such Subdistributor, as the case may be. The provision of such service and support shall be priced so as not to be a disincentive to Stem Cell Therapy Customers to purchase the Products.
(d) The Supplier shall assist the Distributor in providing warranty service and other services to Stem Cell Therapy Customers, as reasonably requested by the Distributor, at prices or rates to be negotiated in good faith by the Supplier and the Distributor.
Products required for such trial, which shall be provided by the Supplier at no charge) necessary to obtain such non-U.S. approvals.
(b) If this Agreement is terminated in its entirety or with respect to any country other than the United States, the Distributor shall use reasonable best efforts to provide information on clinical trials and such other information (other than confidential business information) as is reasonably necessary to enable the Supplier to obtain registration in its name in such country.
(b) Unless otherwise agreed by the Supplier, each Subdistributor shall agree to be bound by this Section 4.08 prior to the Sale of the Products to such Subdistributor.
Countries for each of the Products and (ii) develop goals and objectives to be included in the ACL for such year to maximize the financial returns of both the Supplier and the Distributor.
(b) The Supplier and the Distributor each shall endeavor in good faith to establish, within three years after the payment of the latter of the Milestone Fees, fixed prices (which shall be revised and adjusted annually) at which the Supplier shall Sell Products to the Distributor pursuant to this Agreement, it being recognized, however that neither party shall be obligated to agree to fixed pricing unless the party determines it to be in its own best interests. Once such prices are established, they shall replace the pricing formulae set forth below in Section 5.02 and shall be consistent with the following goals and objectives: (i) to price the Products to maximize their value; (ii) to share mutually in the revenues and benefits from Sales of the Products; and (iii) to exchange openly information regarding Sales prices and production costs.
(c) Notwithstanding anything in this Agreement to the contrary, the Distributor's obligations under Sections 2.03(a) and (b) and Section 4.01 shall not require the Distributor to make any Sales of Products, which, in the judgment of the Distributor, are reasonably likely to cause the Average U.S. Selling Price, the Average International Direct Selling Price in any Direct Sales Country and the Average Subdistributor Selling Price to be less than the Minimum U.S. Selling Price, or the Minimum International Direct Selling Price in such Direct Sales Country and the Minimum Subdistributor Selling Price, respectively, during the month in which such Sales otherwise would be made.
ARTICLE V
*
*
where "P" is the Subdistributor Monthly Purchase Price, "SP" is the aggregate of the Actual Subdistributor Sales Amounts for each of the Products during such calendar month, "DS" is the Deemed Subdistributor Sales Amount during such calendar month, "U" is the aggregate dollar amount of Upcharges included in the selling price of the Actual
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
from the official currency unit of such Country into U.S. dollars at the Exchange Rate for the month in which the Sales represented by such International Direct Monthly Purchase Price were made.
(d) If Worldwide Sales exceed the Sales Threshold in any Fiscal Year, then the U.S. Monthly Purchase Price for all Sales in excess of such threshold shall be calculated based upon the formula in subsection 5.02(a) above, except that "X" shall equal *
*
where "P" is the Monthly Parts Purchase Price, "C" is the Supplier's cost of producing such Purchased Spare Parts, "R" is the aggregate price paid by the Distributor to the Supplier for the Spare Parts returned by Stem Cell Therapy Customers during such calendar month and the freight paid the Distributor with respect to such returns, "WC" is the purchase price paid to the Supplier by the Distributor for Spare Parts used for warranty service provided in such month by the Distributor to Stem Cell Therapy Customers pursuant to, and in accordance with, Section 4.04(a).
(b) Within five business days after the Distributor's first issuance of an invoice (or invoices) evidencing that the Complete System Sale has occurred, the Distributor shall pay to the Supplier a fee of *
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
ARTICLE VI
ARTICLE VII
(b) For a period of up to thirty days after the delivery of the Objection, the Parties shall pursue good faith negotiations to attempt to resolve mutually the Parties' differences concerning the Notice of Breach and the Objection. If the Parties have not reached a mutually satisfactory resolution within said thirty days, then either Party may submit the matter for resolution by binding arbitration pursuant to Section 10.03.
(c) This Agreement shall terminate immediately upon written notice by either party to the other (i) in the event that a bankruptcy petition is filed with respect to the party notified pursuant to this subparagraph or (ii) in the event that the party notified pursuant to this subparagraph (A) becomes insolvent; (B) is adjudicated as a bankrupt pursuant to an involuntary petition in bankruptcy; (C) suffers appointment of a temporary or permanent receiver, trustee or custodian for its business or for all or part of its assets, where such appointment is not discharged within thirty days; (D) makes an assignment for the benefit of creditors; (E) is admitted to the benefits of any procedure for the settlement or postponement of debts; (F) becomes a party to dissolution proceedings; or (G) takes any corporate action with respect to any of the foregoing.
(d) The Distributor may terminate this Agreement upon twelve months' advance written notice to the Supplier in the event that any Person other than the Distributor during the term of this Agreement beneficially owns more than 50 percent (measured either by value or voting rights) of the outstanding Common Stock or voting securities of the Supplier.
(e) The Distributor may terminate this Agreement at any time after December 31, 1997 if it reasonably determines that the Supplier is unlikely to be able to produce Products that can be sold to Stem Cell Therapy Customers on a competitive basis on or prior to December 31, 1998. The Supplier may terminate this Agreement at any time after the second anniversary of the payment of the later of the Milestone Fees if the Supplier reasonably determines, taking into account the fact that there is no established market for the Products, that the Distributor is unlikely to be able to develop a market for the Products among, or to market the Products effectively to, Stem Cell Therapy Customers.
(b) Under the License, the Distributor shall pay to the Supplier on a monthly basis a royalty fee equal to 15% of the sales price to Customers (net of freight, delivery and returns) for Products sold during each month using such License, subject to reduction for any amounts payable by the Distributor to any third party pursuant to any agreement between the Supplier and such third party with respect to any Intellectual Property Rights granted to the Distributor under the License.
(c) The License shall not affect any other right or remedy of the Distributor arising from the Supplier's nonperformance of this Agreement.
(b) If this Agreement is terminated the Distributor shall make
available to the Supplier (i) a list of each Customer and Subdistributor which
purchased Equipment from the Distributor, identifying the Equipment purchased by
each such Customer and Subdistributor, (ii) a list of each Customer and
Subdistributor which purchased Disposables during the 24 calendar months
immediately preceding such termination, identifying the types and quantities of
Disposables purchased by each such Customer and Subdistributor during the last
24 months, and (iii) a copy of each customer record of service performed within
the last 24 calendar months for the Customers listed in subparagraphs (i) and
(ii) above. Notwithstanding the foregoing, however, if the Supplier establishes
a Co-Marketing Arrangement pursuant to Section 7.05(b) pursuant to which the
Distributor is allowed to continue to distribute Products in one or more
specific geographical areas, then the Distributor shall not
be required to furnish to the Supplier the foregoing lists and records for such geographical areas.
ARTICLE VIII
(b) The foregoing confidentiality obligations are subject to an exception for any disclosure that becomes legally required by subpoena or other legal process; provided, however, that the Party who so becomes legally obligated shall give written notice to the other Party of such required disclosure as promptly as practicable after the Party becomes aware of such disclosure requirements.
ARTICLE IX
(b) If any event of force majeure materially impairs the Distributor's ability to sell the Products or the Supplier's ability to manufacture the Product, then during the pendency of that force majeure event, the Supplier may sell the Products or the Distributor may manufacture the Products (as the case may be) that would otherwise have been sold by the Distributor or manufactured by the Supplier, but for the force majeure event.
ARTICLE X
by courier service, by cable, telegram, telex, telecopier or facsimile or by registered or certified mail (postage prepaid, return receipt requested) as follows:
(a) if to the Distributor:
Cobe BCT, Inc.
1185 Oak Street
Lakewood, CO 80215
Telecopy: 303-231-4160
Attention: Edward Wood
(b) if to the Supplier:
Aastrom Biosciences, Inc.
(Mail: P.O. Box 376)
Ann Arbor, MI 48105
(Direct Delivery:
Dominos Farms, Lobby L)
Telecopy: 313-665-0485 Attention: R. Douglas Armstrong, PhD President and Chief Executive Officer |
or to such other address as either party may have furnished to the other in writing in accordance herewith. All notices, requests, claims, demands, waivers and other communications hereunder shall be deemed to have been received on the date of personal delivery, cable, telegram, telex, telecopier (with copy by mail) or facsimile transmission (with copy by mail), or on the fifth business day (or, in the case of international post, on the fifteenth business day) after the mailing thereof, except that notices of changes of address shall be effective only upon receipt.
contemplated hereby, or any arbitration award or decision arising from this Agreement. The Distributor and the Supplier hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding.
IN WITNESS WHEREOF, the Distributor and the Supplier each have caused this Agreement to be executed by its duly authorized officer as of the date first above written.
COBE BCT, INC.
By: /s/ EDWARD WOOD ---------------------------- Edward Wood President |
AASTROM BIOSCIENCES, INC.
By: /s/ R. DOUGLAS ARMSTRONG ------------------------------- R. Douglas Armstrong, Ph.D. President and Chief Executive Officer |
SCHEDULE A
PRODUCT DEVELOPMENT PROGRAM
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
SCHEDULE B
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
SUPPLEMENTAL AGREEMENT
This Agreement is entered into as of March 29, 1995, by and between Aastrom Biosciences, Inc., a Michigan corporation ("Aastrom"), Cobe Laboratories, Inc., a Colorado corporation ("Cobe Lab"), and Cobe BCT, Inc., a Colorado corporation ("Cobe BCT"), with respect to the following facts:
A. Pursuant to Section 5.05 of that certain Stock Purchase Agreement between Aastrom and Cobe Lab, dated October 22, 1993 (the "Stock Purchase Agreement"), Aastrom has a "put option" to require Cobe Lab to purchase stock issued by Aastrom in a "Qualifying Private Placement" (as defined in the Stock Purchase Agreement), under certain circumstances.
B. Pursuant to Section 5.03 of the Distribution Agreement between Aastrom and Cobe BCT, dated as of October 22, 1993 (the "Distribution Agreement"), Cobe BCT is obligated to pay to Aastrom a $5 million fee upon the occurrence of specified events (the "Milestone Fees").
C. Aastrom is in the process of offering for sale a new series of preferred stock, designated as Series D Preferred Stock.
WHEREFORE, the parties hereto mutually agree as follows:
1. Cobe Lab agrees that if Aastrom sells shares of its Series D Preferred Stock in a private placement on or before April 22, 1995 in which (i) the cash proceeds to Aastrom from such sales to investors other than Cobe Lab equal at least $5 million, and (ii) persons other than holders of Series A Preferred Stock and Series B Preferred Stock and their affiliates purchase shares of Series D Preferred Stock having an aggregate purchase price of at least $1 million (the "Private Placement"), then upon request by Aastrom by May 31, 1995, Cobe Lab will purchase shares of Series D Preferred Stock having an aggregate purchase price of $5 million for the same price per share and on the same terms and conditions as such other investors; provided, that such terms and conditions must be reasonably satisfactory to Cobe Lab (the "Cobe Share Purchase").
2. Aastrom, Cobe Lab and Cobe BCT agree that if the Cobe Share Purchase is consummated:
(i) The Private Placement will not be deemed to be a Qualifying Private Placement for purposes of Section 5.05 of the Stock Purchase Agreement, and Aastrom will retain its "put option" for the next Qualifying Private Placement or a Qualifying IPO;
(ii) Upon the consummation of the Cobe Share Purchase, Section 1.01 of the Distribution Agreement shall be amended by deleting the
definition of "Milestone Fees" and replacing such definition with the following words:
"Milestone Events" means each of (i) the Distributor's first issuance of an invoice (or invoices) evidencing that the Complete System Sale has occurred and (ii) the final written approval by the FDA of the Products for Sales in the United States for any clinical indications for Stem Cell Therapy Applications."
(iii) Upon the consummation of the Cobe Share Purchase, Section 4.11(b) of the Distribution Agreement shall be amended by deleting the words "within three years after the payment of the latter Milestone Fee" and replacing such words with the words "within three years after the later to occur of the Milestone Events");
(iv) Upon the consummation of the Cobe Share Purchase, Section
5.03 of the Distribution Agreement shall be amended by deleting paragraphs
5.03(b) and 5.03(c) in their entirety and by redesignating paragraph 5.03(a) as
Section 5.03;
(v) Upon the consummation of the Cobe Share Purchase, Section 7.05(e) of the Distribution Agreement shall be amended by deleting the words "the second anniversary of the payment of the later of the Milestone Fees" and replacing such words with the words "the second anniversary of the later to occur of the Milestone Events"; and
(vi) Upon the consummation of the Cobe Share Purchase, Section 7.07(a) of the Distribution Agreement shall be amended by deleting the words "and the Distributor has paid all of the Milestone Fees," and replacing such words with the words "and both Milestone Events have occurred".
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date set forth above.
AASTROM BIOSCIENCES, INC. COBE LABORATORIES, INC. By:/s/ R. Douglas Armstrong By:/s/ ------------------------- ------------------------ COBE BCT, INC. By:/s/ Edward C. Wood, Jr. ----------------------- |
AMENDMENT
to
RESTATED DISTRIBUTION AGREEMENT
between
COBE BCT, INC. and
AASTROM BIOSCIENCES, INC.
This Amendment is made as of September 11, 1995, to that certain Restated Distribution Agreement dated as of October 22, 1993, between AASTROM Biosciences, Inc., a Michigan corporation (the "Supplier"), and Cobe BCT, Inc., a Colorado corporation (the "Distributor") (the "Restated Distribution Agreement").
1. The terms which are defined in the Restated Distribution Agreement shall have the same meaning in this Amendment as defined in the Restated Distribution Agreement.
2. The definition of "Stem Cell Therapy Applications" in the Restated Distribution Agreement is hereby amended to add the words "or umbilical cord blood" on the second line, so that the first two and one-half lines read as follows:
"Stem Cell Therapy Applications" means applications of the Products pursuant to which human bone marrow or peripheral blood or umbilical cord blood derived stem and hematopoietic cells are used primarily for one or more of the following:...
3. There shall be added to Section 1.01 of the Restated Distribution Agreement: new defined terms, as follows:
"Lymphoid Cell" means lymphoid stem cell (e.g., any cell capable of generating cells solely of lymphoid lineage) and any cell derived therefrom, including but not limited to, the subcortical thymocyte, cortical thymocyte, medullary thymocyte, lymphocyte, B-cell, plasma cell, immunoblast, lymphoplasmacytoid cell and the NK-cell.
"Lymphoid Cell Applications" means any expansion, selection or genetic manipulation, including genetic transformation, of Lymphoid Cells, provided that either the starting cell population is a lymphoid selected cell mixture, or that the mature lymphoid cell production is not derived ex vivo from a pre-lymphoid cell-type (e.g., multipotent stem cell).
4. The first sentence in Section 2.01(d) of the Restated Distribution Agreement is hereby amended to add the words "(excluding, however, for Lymphoid Cell Applications)" in two locations, so that the first sentence as amended reads as follows:
(d) Notwithstanding any provision of this Agreement to the contrary, the Supplier may Sell the Products to its Affiliates for Stem Cell Therapy Applications by such Affiliates, but not for resale to Persons which are not Affiliates of the Supplier, and may make such Sales with a license for use of the Products for Stem Cell Therapy Applications, and the Distributor may Sell the Products to its Affiliates for applications other than Stem Cell Therapy Applications (excluding, however, Lymphoid Cell Applications) by such Affiliates, but not for resale to Persons which are not Affiliates of the Distributor, and may make such Sales with a license for use of the Products for applications other than Stem Cell Therapy Applications (excluding, however, for Lymphoid Cell Applications) (such permitted Sales by either the Distributor or the Supplier being "Affiliate Sales").
5. Excepting only as otherwise set forth above, all other terms and provisions of the Restated Distribution Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Distributor and the Supplier each have caused this Amendment to be executed by its duly authorized officer as of the date first written above.
COBE BCT, INC.
By: /s/ EDWARD WOOD ----------------------------------------- Edward Wood, President |
AASTROM BIOSCIENCES, INC.
By: /s/ R. DOUGLAS ARMSTRONG ----------------------------------------- R. Douglas Armstrong, Ph.D., President and Chief Executive Officer |
AMENDMENT TO
RESTATED DISTRIBUTION AGREEMENT
This Amendment is made as of October 29, 1996 to that certain Restated Distribution Agreement dated as of October 22, 1993, between Aastrom Biosciences, Inc., a Michigan corporation (the "Supplier") and Cobe BCT, a Colorado corporation (the "Distributor") (the "Restated Distribution Agreement").
1. With respect to the Purchase Price payable by the Distributor to the Supplier for the Product as specified in Article V of the Restated Distribution Agreement, the parties hereby agree that the Distributor shall be entitled to a 5% discount on the Purchase Price for all of the Product purchased until the aggregate of said discount equals a total of $350,000, increased by 25% per annum, compounded annually, from December 15, 1996, until the date the first $200,000 in aggregate discounts are actually realized and credited. Said aggregate discount, including the compounded increase, shall hereinafter be called the "Aggregate Discount". If the Aggregate Discount has not been realized by the second anniversary of the first commercial sale of the Product by the Distributor, then the discount on subsequent sales of the Product from the Supplier to the Distributor shall be at 10% (rather than 5%), until the Aggregate Discount is realized by the Distributor.
2. An example of the calculations for the Aggregate Discount specified in Section 1 above is as follows:
a. First Product sold to Distributor (12/15/97)
b. First $200,000 discount credit at 5% actually realized by Distributor (12/15/98)
c. Aggregate Discount ($350,000 x 1.25/2/) as of 12/15/98: 546,875
e. Net balance of Aggregate Discount as of 12/15/98: 346,875
g. Net balance of Aggregate Discount as of 12/15/99: 46,875
i. Aggregate Discount is fully realized.
3. The Supplier has agreed to the foregoing discount in consideration and recognition of the assistance which the Distributor has given to the Supplier in the development of the Product.
4. Terms defined in the Restated Distribution Agreement shall have the same meaning in this Amendment.
5. Excepting only as otherwise expressly set forth above, all other terms and provisions of the Restated Distribution Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Distributor and the Supplier each have caused this Amendment to be executed by its duly authorized officer as of the date first written above.
COBE BCT, INC.
By: /s/ Edward C. Wood -------------------- AASTROM BIOSCIENCES, INC. By: /s/ R. Douglas Armstrong -------------------------- |
EXHIBIT 10.11
LICENSE AGREEMENT
by and between
AASTROM BIOSCIENCES, INC.,
a Michigan corporation
and
JOSEPH G. CREMONESE
Page ---- 1. Definitions..................................................... 1 2. License Terms and Conditions.................................... 3 2.1 Grant of License........................................... 3 2.2 Reimbursement of Patent Costs.............................. 3 2.3 Royalties.................................................. 4 2.3.1 Percentage Royalty.................................. 4 2.3.2 Credits Against Royalties........................... 4 2.3.3 Minimum Annual Royalty.............................. 4 2.3.4 Most Favored Licensee............................... 4 2.4 Combination Product........................................ 5 2.4.1 Definition of Combination Product................... 5 2.4.2 Net Sales of Combination Product.................... 5 2.5 Component Product.......................................... 5 2.5.1 Definition of Component Product..................... 5 2.5.2 Net Sales of Component Product...................... 6 2.6 Quarterly Payments......................................... 6 2.7 Term....................................................... 6 2.8 Sublicense Rights.......................................... 7 2.9 Duration of Royalty Obligations............................ 7 2.10 Reports................................................... 7 2.11 Records................................................... 7 2.12 Foreign Taxes............................................. 8 3. Patent Matters.................................................. 8 3.1 Validity of Licensed Patents............................... 8 3.2 Patent Prosecution and Maintenance......................... 8 3.3 Information to Licensor.................................... 9 3.4 Patent Costs............................................... 9 3.5 Ownership.................................................. 9 3.6 Infringement Actions....................................... 9 3.6.1 Prosecution and Defense of Infringements............ 9 3.6.2 Allocation of Recovery.............................. 9 4. Obligations Related to Commercialization........................ 10 4.1 Commercial Development Obligation.......................... 10 4.2 Milestone.................................................. 10 4.3 Governmental Approvals and Marketing of Licensed Products................................................... 10 4.4 Product Liability Indemnity................................ 10 5. Representations and Warranties.................................. 11 6. Interests in Intellectual Property Rights....................... 11 6.1 Preservation of Title...................................... 11 6.2 Ownership of Improvements.................................. 11 6.2.1 Developed by Licensee............................... 11 6.2.2 Developed by Licensor............................... 11 |
7. Confidentiality and Publication................................. 11 7.1 Treatment of Confidential Information...................... 11 7.2 Publications............................................... 11 8. Termination..................................................... 12 8.1 Termination Upon Default................................... 12 8.2 Transfer Upon Bankruptcy or Insolvency..................... 12 8.3 Rights Upon Expiration..................................... 12 8.4 Rights Upon Termination.................................... 12 8.5 WorkinProgress............................................. 13 9. Binding Upon Successors and Assigns............................. 13 10. General Provisions.............................................. 13 10.1 Independent Contractors................................... 13 10.2 Arbitration............................................... 13 10.3 Entire Agreement; Modification............................ 13 10.4 Governing Law............................................. 14 10.5 Severability.............................................. 14 10.6 No Waiver................................................. 14 10.7 Attorneys' Fees........................................... 14 10.8 Notices................................................... 14 |
LICENSE AGREEMENT
This License Agreement is entered into and made effective as of July 17 , 1992, by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Licensee") whose address is Post Office Box 376, Ann Arbor, Michigan 48106, and JOSEPH G. CREMONESE, an individual ("Licensor") whose address is 227 Maple Drive, Greensburg, Pennsylvania 15601, with respect to the facts set forth below.
A. Licensee is engaged in development of cell culture technology, including products which are automated culture systems or bioreactors.
B. Licensor has disclosed to Licensee certain technology described in Patent '292 (defined below), a copy of which has been delivered to Licensee.
C. Licensor has the exclusive right to grant a license to the technology described in Patent '292 and the Licensed Patents and Licensed Technology (defined below).
D. Licensor desires to grant to Licensee, and Licensee wishes to acquire, an exclusive worldwide right and license to the technology described in Recital C, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, Licensor and Licensee hereby agree as follows:
a. Is publicly disclosed through no fault of any party hereto, either before or after it becomes known to the receiving party; or
b. Was known to the receiving party prior to the date of this Agreement, which knowledge was acquired independently and not from the other party hereto (or such party's employees or agents); or
c. Is subsequently disclosed to the receiving party in good faith by a third party who has a right to make such disclosure; or
d. Has been published by a third party as a matter of right.
No payment shall be payable by Licensee hereunder unless and until the issue of
the validity of the claims as now stated in the Licensed Patents as described in
Section 3.1 hereof is resolved favorably to Licensor's reasonable satisfaction,
or, upon the expiration of one (1) year after the date of this Agreement if no
request for re-examination of the Licensed Patents is made within such period.
All payments made by Licensee to Licensor pursuant to this Section 2.2 shall be
credited against Licensee's obligation to pay royalties as set forth in Section
2.3 hereof.
Licensee under this Agreement shall be reduced to the same rate payable by the third party.
2.4.1 Definition of Combination Product. As used herein,
the term "Combination Product" shall mean a Licensed Product which cannot be
manufactured, used or sold without (i) infringing the Licensed Patents, and also
(ii) infringing one or more patents held by Licensee or a third party (referred
to herein as "other patent rights").
A
X = - x C
B , where
X = the Net Sales attributable to the portion of the Combination Product which is attributable to the Licensed Patents, on which Net Sales Licensee shall pay the royalty rate set forth in Section 2.3.1; and
A = the value of the contribution of the Licensed Patents (as compared to the value of the contributions of the rights) used in the Combination Product; and
B = The aggregate value of all patent rights used for the Combination Product, consisting of both the Licensed Patents and all other patent rights used in the Combination Product; and
C = the Net Sales for the Combination Product.
The values described above shall be determined by the parties hereto in good faith. In the absence of agreement as to said values, the values shall be determined by arbitration in accordance with the provisions of Section 10.2 hereof.
A
X = - x C
B , where
X = the Net Sales attributable to the Component Product, on which Licensee is obligated to pay the royalty rate set forth in Section 2.3.1; and
A = the value of the Component Product, based upon costs to manufacture the Component Product, or the sales price of the Component Product if it is sold separately; and
B = The value of the aggregate product, with all components (including methods sold or licensed with the Component Product), including the Component Product, based upon the same criteria as used for A above; and
C = the Net Sales for the aggregate product.
The values described above shall be determined by the parties in good faith. In the absence of agreement as to said values, the values shall be determined by arbitration in accordance with the provisions of Section 10.2 hereof.
terminated by Licensee upon delivery of thirty (30) days' written notice or in accordance with the provisions of Section 8.1 hereof, the term of this Agreement and the license granted hereunder shall expire when the last patent licensed hereunder has expired.
to audit, upon delivery of advance written notice and during normal business hours without interruption of normal business operations, the records of Licensee, its Affiliates and sublicensees as necessary to verify the royalties payable pursuant to this Agreement. Licensee, its Affiliates and sublicensees shall pay to Licensor an amount equal to any additional royalties to which Licensor is entitled as disclosed by the audit. Such audit shall be at Licensor's expense. Licensor may exercise its right of audit hereunder no more frequently than once in any calendar year. The accounting firm shall disclose to Licensor only such information as is necessary to verify the accuracy of the royalty payments required hereunder, and all such information shall be treated as Confidential Information by Licensor. Licensee, its Affiliates and sublicensees shall preserve and maintain all records required for audit for a period of three (3) years after the calendar quarter to which the record applies.
which foreign countries, in addition to the U.S.A., in which to file for and maintain patent rights, depending on the commercial benefits Licensee can reasonably anticipate in each country. In as much as Licensee is paying the patent costs, the ultimate decision as to all of these patent prosecution and maintenance matters shall be made by Licensee.
Licensee's costs of litigation, shall be treated as "Net Sales" and Licensee shall pay a royalty thereon pursuant to Section 2.3.1 above. If Licensee elects to not prosecute an infringement, and Licensor does prosecute said infringement, then Licensee shall retain any recovery received from said prosecution.
afford Licensee sixty (60) days to review such proposed publications. Upon timely written request by Licensee, Licensor shall delay any such publication to facilitate the preparation and filing of a patent application, which delay shall not exceed ninety (90) days from the date Licensee requests such delay.
Such termination rights shall be in addition to and not in substitution for any other remedies that may be available to the non-defaulting party. Termination pursuant to this Section 8.1 shall not relieve the defaulting party from liability and damages to the other party for breach of this Agreement. Waiver by either party of a single default or a succession of defaults shall not deprive such party of any right to terminate this Agreement arising by reason of any subsequent default.
termination, each party shall be required to abide by its nondisclosure
obligations as described in Section 7.1, and, provided termination was not
initiated by Licensee due to Licensor's breach hereunder, Licensee shall
continue to abide by its obligations to indemnify Licensor as described in
Section 4.4 for products sold prior to the termination.
For Licensee: Aastrom Biosciences, Inc. Post Office Box 376 Ann Arbor, Michigan 48106 Attention: R. Douglas Armstrong, Ph.D. President/CEO Fax No.: (313) 665-0485 For Licensor: Joseph G. Cremonese 227 Maple Drive Greensburg, Pennsylvania 15601 Fax No.: (412) 838-7780 |
Notice shall be deemed delivered upon the earlier of (i) when received, (ii) three (3) days after deposit into the mail, or (iii) the date notice is sent via telefax, telex or cable,
(iv) the day immediately following delivery to overnight courier (except Sunday and holidays).
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives as of the date set forth above.
LICENSOR: LICENSEE: AASTROM BIOSCIENCES, INC. /s/ Joseph G. Cremonese By: /s/ R. Douglas Armstrong - -------------------------- ---------------------------- Joseph G. Cremonese R. Douglas Armstrong, Ph.D. 7-17-92 President/CEO 8/5/92 |
July 7, 1993
Mr. Joseph G. Cremonese
227 Maple Drive
Greensburg, PA 15601
Dear Joe,
In follow-up to our discussion, this letter is to formalize our understanding for extension of our license agreement. More specifically, we mutually agree to allow AASTROM a 1-month extension to initiate a re-examination request for Patent #4,839,292, as per sections 2.2 and 3.1 of our July 17, 1992, License Agreement. All other provisions of the License Agreement are unmodified.
To represent your agreement with this, please sign as indicated below.
Thank you.
Sincerely,
/s/ R. DOUGLAS ARMSTRONG - --------------------------- R. Douglas Armstrong, Ph.D. President and CEO |
RDA:pp
I agree to the terms as indicated above.
/s/ JOSEPH G. CREMONESE 7/8/93 - --------------------------------- Joseph G. Cremonese |
EXHIBIT 10.12
COLLABORATIVE PRODUCT DEVELOPMENT AGREEMENT
(Instrument)
Page ---- 1. Responsibilities of Aastrom.............................................. 2 1.1 Project Management................................................. 2 1.2 Specifications..................................................... 2 2. Responsibilities of SeaMED............................................... 2 2.1 Design Collaboration............................................... 2 2.2 Delivery of Preproduction Units.................................... 3 2.3 Maintenance of Adequate Facilities and Manufacturing Practices..... 4 2.4 No Subcontracting.................................................. 5 2.5 Inventory and Insurance............................................ 5 2.6 Transit............................................................ 5 2.7 Financial Condition................................................ 5 3. Acceptance Procedures.................................................... 5 4. Compensation............................................................. 6 5. Warranties............................................................... 6 5.1 SeaMED's Warranty.................................................. 6 5.2 Limitation on Liability............................................ 6 5.3 Disclaimer of Warranties........................................... 7 5.4 Aastrom's Warranty................................................. 7 6. Phase II Manufacture..................................................... 7 6.1 Manufacturing Agreement............................................ 7 6.2 Phase II Manufacturing Drawings and Process........................ 9 6.3 Transition Cooperation............................................. 9 6.4 Compensation....................................................... 9 7. Records; Inspection...................................................... 9 8. Indemnification.......................................................... 9 8.1 By SeaMED.......................................................... 9 8.2 By Aastrom......................................................... 10 8.3 Patent Infringement................................................ 10 8.4 Control of Action.................................................. 10 8.5 Insurance.......................................................... 10 9. Exclusivity.............................................................. 11 9.1 Continuing Prohibition............................................. 11 |
9.2 No Similar Product................................................ 11 9.3 No Use of Aastrom's Proprietary Information....................... 11 10. Proprietary Information.................................................. 12 10.1 Aastrom's Property; Use of Property by SeaMED..................... 12 10.2 Inventions........................................................ 12 10.3 Nondisclosure..................................................... 12 10.4 Confidentiality................................................... 12 11. Term..................................................................... 13 12. Default and Termination.................................................. 13 12.1 Breach............................................................ 13 12.2 Remedy............................................................ 14 13. Miscellaneous............................................................ 14 13.1 Independent Contractors........................................... 14 13.2 Causes Beyond Control............................................. 14 13.3 Successors and Assigns............................................ 14 13.4 Applicable Law.................................................... 15 13.5 Severability...................................................... 15 13.6 Entire Agreement; Modification and Waiver......................... 15 13.7 Counterparts...................................................... 15 13.8 Dispute Resolution................................................ 15 13.9 Notices........................................................... 15 |
EXHIBITS
A General Description of the System and the Instrument B Specifications and Functional Requirements for the Instrument C Time and Quantity Schedule - Preproduction Units C1 Pricing for Precommercial Units D Manufacturing Drawings for the Instrument E Compensation Schedule for Design Work and Manufacturing Preproduction Units F Summary of Manufacturing Agreement for Phase II |
COLLABORATIVE PRODUCT DEVELOPMENT AGREEMENT
(Instrument)
A. Aastrom is in the final stages of research and development for a proprietary Cell Expansion System which is used for stem cell growth (the "System"). The System includes an instrument or instruments (the "Instrument") and a disposable biochamber cartridge. Aastrom has completed a working prototype model of the System; and Aastrom now needs to complete the design of the Instrument and to obtain (i) pre-production models defined as pre-revision Rev. A specification units (hereinafter called "preproduction units") of the Instrument for laboratory and clinical evaluation, and (ii) pre-commercial models, defined as units made once the release occurs for Rev. A specification units (hereinafter called "precommercial units") of the Instrument for laboratory and clinical evaluation. Attached hereto as Exhibit A is a general description of the System, including the Instrument.
B. SeaMED has expertise and experience in the development and manufacture of medical instruments which are somewhat similar to the Instrument, and SeaMED is prepared to collaborate with Aastrom for completing the necessary design work on the Instrument to enable SeaMED to produce preproduction units and precommercial units of the Instrument for laboratory and clinical evaluation as outlined in the SeaMED Project Plan, Drawing Number 908180, draft dated 2-2-94.
C. As further described in this Agreement, (i) the design and manufacture of preproduction units and precommercial units of the Instrument shall be referred to as Phase I, and (ii) the subsequent manufacture of commercial units (defined as any unit that is sold) of the Instrument shall be referred to as Phase II.
D. Pursuant to the terms of this Agreement, during Phase I SeaMED shall
(i) collaborate with and assist Aastrom to design the preproduction units and
precommercial units of the Instrument, and (ii) manufacture the preproduction
units and precommercial units of the Instrument. At least six months prior to
the expected commencement of Phase II, Aastrom and SeaMED shall pursue good
faith negotiations for entering into a Manufacturing Agreement for SeaMED to
manufacture the commercial units of the Instrument, as further described in
Section 6 of this Agreement. Because of foreign governmental approval requirements, it is possible that there still will be some preproduction units and precommercial units being made during Phase I, while at the same time there will be some commercial units being made during Phase II.
E. Aastrom has contracted with Roecker Design Group, and Aastrom may also contract with other design specialists for assistance with specified aspects of the System and/or Instrument (collectively called the "Other Design Contractors").
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
(a) Assist Aastrom with respect to planning for all manufacturing issues that are likely to arise in connection with the design work and development of the Instrument, including issues relating to the Phase I and Phase II manufacturing process development and validation, component sourcing, and the creation of Device Master record documentation requirements;
(b) Review the Instrument software design and documentation, and provide third party quality assurance, including specification review, code audits, verification and validation testing, to ensure to the best of
SeaMED's ability that they are in compliance with all applicable guidelines of the U.S. Food and Drug Administration;
(c) Assist Aastrom to establish a reliability goal for the Instrument, calculate the reliability of the preproduction units and precommercial units at certain established review points during the design and development of the Instrument, and perform demonstration tests on pilot production units produced by SeaMED; and
(d) Determine all necessary requirements for certification of the Instrument by UL, CSA, IEC, TUV and EC, and to review the design of the Instrument at various key points during the product development stage to determine compliance with such requirements, and coordinate the testing of the Instrument for compliance with such requirements and the submission of the Instrument for certification by each of such entities.
(e) Prepare working drawings for manufacturing and testing the preproduction units and the precommercial units of the Instrument, including without limitation, (i) specifications for component parts to be acquired from specified vendors, (ii) drawings and specifications for component parts, (iii) test and acceptance procedures and criteria, (iv) subassembly specifications, drawings and requirements, (v) costed bill of materials, and (vi) product specific manufacturing procedures, device master record, routing and processes (collectively called the "Manufacturing Drawings"), which Manufacturing Drawings shall be subject to the prior written approval of Aastrom, shall be owned by Aastrom, and shall ultimately be incorporated herein as Exhibit D. If said manufacturing drawings reference general policies and procedures of SeaMED, such as SeaMED's Quality System, then such general policies and procedures shall remain the property of SeaMED, but Aastrom shall be given a copy of the same. As modifications are made from time to time to the Manufacturing Drawings by mutual agreement, SeaMED shall furnish to Aastrom an updated copy thereof.
(f) To the extent required for submittal to the U.S. Food and Drug Administration ("FDA") (or comparable foreign agencies) for Aastrom's IDE and/or PMA (or comparable foreign approvals), prepare a detailed description of SeaMED's manufacturing methods, processes, procedures and facility applicable to Aastrom's Instrument.
for use in clinical tests of the System. The exact number of said preproduction units, and any variations thereof, shall be as specified by Aastrom in a purchase order, subject to SeaMED's reasonable approval, which approval will not be withheld unreasonably. As Aastrom's clinical tests of the System proceed, and depending on the outcome of those tests, Aastrom may place purchase orders for additional units of the preproduction unit; and SeaMED shall manufacture and sell said additional preproduction units on the same terms and conditions as set forth herein. Provided, however, the maximum number of preproduction units shall be as specified in Exhibit C.
Aastrom's product or regulatory submission. To the extent that European Economic Community standards apply to SeaMED's facility and manufacturing practices for units to be used in Europe, SeaMED will also comply with said standards.
Specifications and the Manufacturing Drawings. In the event SeaMED cannot resolve any such failure and deliver a unit that conforms to the Specifications and the Manufacturing Drawings within thirty (30) days of receipt of such notice, Aastrom may terminate this Agreement pursuant to Section 12 below.
defective unit shall be borne by and for the account of SeaMED. Except as specified in Section 8, SeaMED shall have no liability to Aastrom for any consequential damages or loss, including but not limited to loss of profits or goodwill, additional expenses incurred, or other damages.
EXCEPT FOR THE WARRANTIES SET FORTH IN THIS SECTION, SEAMED DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
(a) SeaMED has performed its obligations during Phase I in a diligent, prompt and effective manner, to the reasonable satisfaction of Aastrom, without any defaults by SeaMED.
(b) SeaMED has manufactured the preproduction units and precommercial units of the Instrument during Phase I in full compliance with the Manufacturing Drawings and the Specifications, and SeaMED has delivered the quantities of same on a timely schedule as ordered, and SeaMED has complied fully with its obligations under this Agreement.
(c) SeaMED has successfully controlled the costs to manufacture the preproduction units and precommercial units, on a reasonable and cost effective basis.
(d) SeaMED has adequate facilities, equipment, personnel, governmental approvals, and manufacturing capacity to manufacture the quantities
of the commercial units of the Instruments needed by Aastrom during Phase II; and SeaMED shall furnish to Aastrom reasonable evidence to verify the same.
(e) SeaMED's facility has received all necessary approvals from the FDA and from the European Community (or other necessary foreign agencies) to manufacture the commercial units of the Instrument.
(f) SeaMED's financial condition is sound and stable, such that there are no reasonable doubts as to SeaMED's financial ability to remain in business and perform its obligations contemplated under the Manufacturing Agreement, and SeaMED shall furnish to Aastrom reasonable evidence to verify the same.
(g) SeaMED is able and willing to manufacture the commercial units of the Instrument on a cost effective and efficient basis, on a timely production schedule, and on a high quality basis, pursuant to mutually approved pricing and delivery schedules, all in accordance with the Manufacturing Agreement, and SeaMED shall furnish to Aastrom reasonable evidence to verify the same.
(h) SeaMED maintains the insurance coverage as specified in the Manufacturing Agreement and SeaMED shall furnish to Aastrom reasonable evidence to verify the same.
(i) Aastrom is satisfied with the results of its clinical trials and the market potential for the Instrument, such that Aastrom is prepared to proceed with Phase II and the manufacture and sale of commercial units.
(j) SeaMED approves any modifications to the Phase II Manufacturing Drawings for the Instrument which Aastrom determines to be needed.
(k) SeaMED approves the quantities and delivery schedule determined by Aastrom to be needed to meet the market needs for the commercial units of the Instrument.
If Aastrom concludes that the foregoing prerequisites are satisfied, then Aastrom and SeaMED will enter into a Manufacturing Agreement in accordance with the terms set forth in Exhibit F. Provided however, SeaMED may decline to enter into such a Manufacturing Agreement only if one or more of the following circumstances occurs:
(l) Aastrom has defaulted on its obligations under this Agreement.
breach by SeaMED of its warranties as set forth in this Agreement, or (ii) from any negligent, willful or intentional acts by SeaMED.
party thereunder. Such certificates shall provide that in the event such insurance should be materially adversely changed or terminated for any reason, the insurance company will give Aastrom thirty (30) days' prior written notice of such change or termination.
confidential information in the same manner it protects its own confidential materials. Neither party shall make any reference to this Agreement or any provision hereof in any publicly disseminated literature, printed matter, or other publicity issued by or for it, except (i) as required by law, (ii) in connection with a public or private offer or sale of securities, a business collaboration or transaction, or a governmental or industry regulatory communication, or (iii) in a fashion and at a time mutually agreed upon by both parties after the execution of this Agreement. After Aastrom has sold an Instrument in the ordinary course of business, SeaMED may add Aastrom to SeaMED's list of customers and may show external product photographs for marketing purposes.
(a) If Aastrom shall default hereunder in the payment of funds when due and such default continues for a period of thirty (30) days after written notice thereof;
(b) Subject to subsections (d) and (e) below, if either party
fails to faithfully perform or observe any agreement or condition to be
performed by such party (including without limitation, the delivery obligations
set forth on Exhibit C), and if such default continues for a period of thirty
(30) days after written notice thereof, specifying the nature of such default;
(c) If any proceeding is commenced by or for either party under any of the bankruptcy laws, or if either party is adjudged insolvent by any court,
makes an assignment for the benefit of creditors, or enters into a general extension agreement with creditors;
(d) If SeaMED shall breach its obligation to timely repair any defective Instrument preproduction unit pursuant to Section 3; or
(e) If SeaMED shall breach its obligations of exclusivity or confidentiality set forth in Sections 9 or 10 hereof.
Said written notice may be given by mail, telecopy, rush delivery service, personal delivery or any other means.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
AASTROM:
AASTROM BIOSCIENCES, INC.
a Michigan corporation
By:/s/ R. DOUGLAS ARMSTRONG -------------------------------- Name: R. Douglas Armstrong, Ph.D. --------------------------- Title: President and CEO ---------------------------- |
P. O. Box 376 Ann Arbor, MI 48106 Attn: R. Douglas Armstrong, Ph.D.
Fax: (313) 665-0485
SEAMED:
SEAMED CORPORATION,
a Delaware corporation
By: /s/ W. ROBERT BERG ------------------------------- Name: W. Robert Berg Title: President/CEO |
11810 North Creek Parkway North Bothell, WA 98011 Attn: W. Robert Berg Fax: (206) 487-1736
EXHIBITS
A General Description of the System and the Instrument B Specifications and Functional Requirements for the Instrument C Time and Quantity Schedule - Preproduction Units C-1 Pricing for Precommercial Units D Manufacturing Drawings for the Instrument E Compensation Schedule for Design Work and Manufacturing Preproduction Units F Summary of Manufacturing Agreement for Phase II |
EXHIBIT A
General Description of the System and the Instrument
1.1 The Aastrom Cell Expansion System represents technology for the ex vivo growth and expansion of human stem and hematopoietic progenitor cells. The system is intended to provide cells in sufficient volume and with the necessary characteristics to complete a bone marrow transplantation or a nadir prevention/rescue resulting from therapies such as high dose chemotherapy or radiation. These cells are grown from a small starting population of cells normally obtained from the bone marrow or peripheral blood. The use of Cell Expansion System provides for production of cells that can be infused to augment recovery of a compromised hematopoietic system.
1.2 The Cell Expansion System consists of (1) a disposable biochamber cartridge
where the growth and expansion of cells takes place, (2) a biochamber
incubation unit and companion monitor module that controls the biological
and physical environment during the expansion process, (3) an
inoculation/harvest unit that facilitates the initial filling and
inoculation of cells as well as the final harvest of cells at the
completion of the expansion process, (4) growth medium as required by the
cell culture (to which specified growth factors and glutamine are added),
(5) harvest reagents which facilitate the removal of the expanded cells
from the biochamber, (6) a system rack will be available to conveniently
integrate multiple biochamber incubation units with the monitor module.
1.2.1. The disposal biochamber cartridge (DBC) contains the medium contact components for the incubation period and provides a functionally closed environment in which the cell expansion can occur. The cartridge is provided fully assembled in a sterile package.
In addition to a cell growth chamber, the medium contact components include a reservoir for medium supply, a pump mechanism for delivery of the medium to the growth chamber, valves to facilitate filling and harvesting, a reservoir for the collection of waste medium exiting the growth chamber, and a reservoir for the collection of harvested cells.
The cartridge also includes a gas chamber which is supplied with a controlled mixture of gases for pH stability and oxygenation of the growth chamber through a gas permeable, hydrophobic membrane that separates the two chambers.
The cartridge also includes a provision for heat transfer to the growth chamber and away from the medium supply reservoir to facilitate temperature control.
A biochamber key containing a non-volatile memory device is attached to the DBC at the beginning of use and accessed by the system electronics during the cell expansion process to record pertinent data. The key is detached after cell harvest, and archived as part of the patient specific cell expansion record.
1.2.2. The biochamber incubation unit (BIU) provides the biological and physical environment to support the cell growth process. The biochamber cartridge is inserted into the BIU after inoculation is complete. The BIU controls: the flow of medium to the growth chamber; the temperature of the growth medium supply compartment; the temperature of the growth chamber compartment; and the concentration and flow rate of gases delivered to the gas chamber. The BIU also monitors the density of cells in the growth chamber and various safety/alarm parameters to assure that the cell expansion process is proceeding as expected.
The unit receives commands from keys on its front panel and communicates with the operator through a central BIU monitor module (BIUMM). An integral BIU display also provides information to the operator. Up to twelve biochamber incubation units can be connected to the monitor module. Each BIU has its own micro processor based control system and operates independently of the monitor module. As such, it will continue to function in the event of failure of the monitor module.
1.2.3. The inoculation/harvest unit (IHU) performs the initial filling of the biochamber cartridge with growth medium (supplemented with growth factors) and the inoculation of cells. The same unit also performs the removal of the cells from the growth chamber at the completion of the cell expansion process. The system design provides for the appropriate level of sterility assurance during the inoculation and harvest procedures.
1.2.3.1 During initial set up and fill, the operator loads the biochamber cartridge into the IHU, connects the medium supply (supplemented with growth factors) to the cartridge and transfer the medium to the internal reservoir. The operator is prompted to 2 |
manually inject the cells into the cartridge at the appropriate time. The process then continues under software control until the cartridge is ready to be placed in the biochamber incubation unit for cell expansion. |
1.2.3.2. At the completion of the expansion process, the operator loads the biochamber back into the IHU, attaches the harvest reagents, and harvesting of the expanded cells proceeds under software control. At the completion of the harvest process, the expanded cell product is contained in a single bag to facilitate washing and preparation for direct infusion or cryopreservation.
1.2.4. The standard growth medium for the expansion of hematopoietic cells will be distributed as a separate item in packaging that will facilitate the addition of growth factors and glutamine followed by sterile connection to the biochamber cartridge just prior to use.
1.2.5. The harvest reagents needed for the process will be distributed as separate items in packaging that will facilitate an aseptic connection to the biochamber cartridge for cell harvest.
1.2.6. The system rack conveniently integrates several BIUs and a monitor module. The rack organizes connections to the facility and the inter connections between the various modules.
The Instrument consists of the components described in paragraphs 1.2.2 (BIU), 1.2.3 (IHU), and 1.2.6 (Rack).
EXHIBIT B
Functional Requirements and Specifications for the Instrument
(to be added per Section 1.2)
See generally Exhibit A. See also the SeaMED Project Plan, Drawing Number 908180, draft dated 2-2-94, which is incorporated herein. Additional functional requirements and specifications for the Instrument will be added by Aastrom during the course of the work.
EXHIBIT C
Time and Quantity Schedule --
Preproduction Units
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT C-1
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT D
Manufacturing Drawings for the Instrument
(to be added per Section 2.1(e))
EXHIBIT E
Compensation Schedule for Design Work
and Manufacturing Preproduction Units
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT F
Summary of Manufacturing Agreement for Phase II
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT 10.13
Bioreactor Assembly and Tubing Kit
Page ---- 1. Responsibilities of Aastrom........................................... 2 1.1 Project Management.............................................. 2 1.2 Specifications.................................................. 2 2. Responsibilities of Company........................................... 2 2.1 Design Collaboration............................................ 2 2.2 Delivery of Products............................................ 3 2.3 Maintenance of Adequate Facilities and Manufacturing Practices.. 3 2.4 No Subcontracting............................................... 4 2.5 Inventory Insurance............................................. 4 2.6 Transit......................................................... 4 2.7 Financial Condition............................................. 4 3. Acceptance Procedures................................................. 4 4. Compensation.......................................................... 5 5. Company's Warranty.................................................... 5 6. Records; Inspection................................................... 5 7. Patent Infringement; Insurance........................................ 6 7.1 Patent Infringement............................................. 6 7.2 Insurance....................................................... 6 8. Exclusivity........................................................... 6 8.1 Continuing Prohibition.......................................... 6 8.2 No Similar Product.............................................. 6 8.3 Disclosure...................................................... 6 9. Ownership of Technology; Confidentiality.............................. 7 9.1 Ownership of Technology......................................... 7 9.2 Confidential Information........................................ 7 (a) Title to Confidential Information and Related Documents.... 8 (b) Nondisclosure or Use of Confidential Information........... 8 (c) Protection of Confidential Information..................... 8 |
(d) Confidential Information.................................... 8 9.3 Other Design Contractors......................................... 8 9.4 Privacy of Agreement............................................. 9 10. Term................................................................... 9 11. Default and Termination................................................ 9 11.1 Breach........................................................... 9 11.2 Remedy........................................................... 10 12. Miscellaneous.......................................................... 10 12.1 Independent Contractors.......................................... 10 12.2 Causes Beyond Control............................................ 10 12.3 Successors and Assigns........................................... 10 12.4 Applicable Law................................................... 11 12.5 Severability..................................................... 11 12.6 Entire Agreement; Modification and Waiver........................ 11 12.7 Counterparts..................................................... 11 12.8 Dispute Resolution............................................... 11 12.9 Notices.......................................................... 11 |
A Description of Product
B Company's Project Plan
C Specifications for the Product
D Manufacturing Drawings
Bioreactor Assembly
and
Tubing Kit
A. Aastrom is in the final stages of research and development for a proprietary, manually operated, bioreactor assembly and custom tubing kit (collectively hereinafter referred to as the "Product" and individually referred to as the "Bioreactor" or the "Tubing Kit"). The Product is more fully described on Exhibit A attached hereto.
B. Aastrom has completed working prototype models of the Product; and Aastrom now needs to obtain pre-production units of the Product for laboratory and clinical evaluation.
C. Company has expertise and experience in the development and manufacture of medical products which are somewhat similar to the Product. Company is prepared to collaborate with Aastrom for completing the necessary design work on the Product to enable Company to manufacture the Product.
D. Company has prepared a Project Plan, attached hereto as Exhibit B, which specifies the Company's resources and activities to be applied and used for performing this Agreement. Said Project Plan includes Company's pricing and an estimate of the time, materials and costs for Company to perform under this Agreement as the design stood at the time on April 10, 1994. With changes in the design and specifications it is contemplated that Company pricing and estimates will be subject to change.
E. Aastrom has contracted with Roecker Design Group, and Aastrom may also contract with other design specialists for assistance with specified aspects of the Product (collectively called the "Other Design Contractors"), subject to the provisions hereof.
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
(a) Assist Aastrom with respect to planning for all manufacturing issues that are likely to arise in connection with the design work and development of the Product, including issues relating to the manufacturing process development and validation, component sourcing, and the creation of Device Master record documentation requirements.
(b) Prepare working drawings in accordance with the
Specifications for manufacturing and testing the Product (the "Manufacturing
Drawings"), which Manufacturing Drawings shall be owned by Aastrom and shall,
subject to the prior written approval of Aastrom and Company, ultimately be
attached hereto as Exhibit D. Said Manufacturing Drawings shall include the
Device Master Record and (i) specifications for component parts to be acquired
from specified vendors, (ii) drawings and specifications for component parts,
(iii) test and acceptance procedures and criteria, (iv) subassembly
specifications,
drawings and requirements, and (v) product specific manufacturing procedures, routing and processes. Said Manufacturing Drawings may reference general policies and procedures of Company, such as Company's quality system; and Company's general policies and procedures shall remain the property of Company. As modifications are made from time to time to the Manufacturing Drawings by mutual agreement, Company shall furnish to Aastrom an updated copy thereof.
(c) Prepare a gamma sterilization validation plan and conduct the required laboratory tests to achieve a 10/-6/ sterility assurance level for the Product.
(d) To the extent required for submittal to the U.S. Food and Drug Administration ("FDA") for Aastrom's IDE and/or PMA, prepare a detailed description of Company's manufacturing methods, processes, procedures and facility applicable to Aastrom's Product.
could adversely affect availability or approval of the Product. Company shall allow Aastrom and its agents (such agent to be acceptable to Ethox, with approval not to be unreasonably withheld) to review and inspect Company's facilities, FDA compliance files, and correspondence to and from the FDA regarding inspections, registrations, and audits that pertain to the Product or the Aastrom's regulatory submission. To the extent Aastrom shall determine that European Economic Community standards apply to Company's facility and manufacturing practices for units of the Product to be used in Europe, Aastrom will provide details of said standards to Company, and Company shall make every reasonable effort to comply with said standards.
such notice and advise, Company shall diligently attempt to promptly resolve any such non-conformance. In the event Company cannot resolve any such non- conformance and deliver a Product that conforms to the Specifications and the Manufacturing Drawings within a time period not to exceed six (6) weeks of receipt of such notice, Aastrom may pursue remedies pursuant to Section 12 below.
THE WARRANTIES SET FORTH IN THIS SECTION 5 ARE EXCLUSIVE AND IN
LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED.
stem cell processing. In addition, Company has contract relationships, and is working with other companies to develop relationships, for cell processing devices which, to the best of Company's belief, function in a significantly different manner than Aastrom's Product.
(a) Except as set forth in Section 9.1(c) below, Aastrom shall retain and own all right, title, and interest in any invention, technology or development, whether or not patentable, which it now has or which arises in connection with the Product during the course of the Company's performance of this Agreement. Any invention made by Company in connection with Company's work with the Product, which invention is an improvement or variation to the Product, shall be owned by Aastrom and assigned to Aastrom by Company. Company shall cooperate with Aastrom and take all steps reasonably required, including executing assignments, to aid Aastrom in securing any patent or other protection which may be appropriate, and Aastrom shall bear the expense in connection therewith.
(b) All tools and tooling which were paid for by Aastrom (either separately or as part of the price for the Product sold by Company to Aastrom) shall be owned by Aastrom. The Manufacturing Drawings (including the device master records) shall be owned by Aastrom.
(c) Company shall retain all of its right, title, and interest in and to its proprietary knowledge in fabrication methods which it currently has, and in and to such additional knowledge in fabrication methods Company may develop at its sole expense (and for which Aastrom is not invoiced) as a part of the Company's performance of this Agreement. As to any fabrication methods developed by Company from efforts for which Aastrom is invoiced, said fabrication methods shall be deemed developed for Aastrom as a "work for hire," and Aastrom shall have sole ownership thereof. Company shall retain a royalty free license to make, use, sell or otherwise promote any such fabrication methods which are developed by Company but owned by Aastrom, so long as such undertaking does not directly or indirectly cause competition to Aastrom products or business activities.
interchangeable as between Aastrom and Company as appropriate under the circumstances.
(a) If Aastrom shall default hereunder in the payment of funds when due and such default continues for a period of thirty (30) days after written notice thereof;
(b) If either party fails to faithfully perform or observe any agreement or condition to be performed by such party, and if such default continues for a period of thirty (30) days after written notice thereof, specifying the nature of such default;
(c) If any proceeding is commenced by or for either party under any of the bankruptcy laws, or if either party is adjudged insolvent by any court, makes an assignment for the benefit of creditors, or enters into a general extension agreement with creditors;
(d) If Company shall breach its obligation to timely give credit for or to repair any non-conforming Product prototype pursuant to Section 3; or
(e) If either party shall breach its obligations set forth in Sections 8 or 9 hereof.
Said written notice may be given by mail, telecopy, rush delivery service, personal delivery or any other means.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
AASTROM:
AASTROM BIOSCIENCES, INC.
a Michigan corporation
By:
Name: /s/ R. DOUGLAS ARMSTRONG ------------------------ Title: President/CEO ------------------------ Address: P. O. Box 376 Ann Arbor, MI 48106 Attn: James Maluta Fax: (313) 665-0485 |
COMPANY:
ETHOX CORP.
a New York corporation
By: /s/ FRANK P. WILTON ------------------- Name: Frank P. Wilton Title: President Address: 251 Seneca Street Buffalo, NY Attn: Frank P. Wilton Fax: (716) 842-4040 |
EXHIBITS
A Description of Product (Bioreactor Assembly and Custom Tubing Kit) B Company's Project Plan C Specifications for the Product D Manufacturing Drawings for the Product |
EXHIBIT A
Description of Product
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT B
Company's Project Plan
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT C
Time and Quantity Schedule --
Preproduction Units
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT C-1
Pricing for Precommercial Units/1/
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT D
Manufacturing Drawings (Device Master Record) for the Product
(to be added per Section 2.1(b))
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT 10.14
LICENSE AND SUPPLY AGREEMENT
In consideration of the mutual covenants and undertakings set forth herein, IMMUNEX and AASTROM hereby agree as follows:
(a) is or becomes known publicly through no fault of the recipient;
(b) is learned by the recipient from a Third Party entitled to disclose it;
(c) is developed by the recipient independently of information obtained from the disclosing party;
(d) is already known to the recipient before receipt from the disclosing party, as shown by prior written records; or
(e) is released with the prior written consent of the disclosing party.
claim priority based upon such applications; any patents that issue in respect of the foregoing applications; and any reissues or extensions of such patents, and any other patents or patent applications owned or controlled by IMMUNEX that are necessary and useful to permit AASTROM to use and sell Licensed Technology in the Field.
manufactured in material compliance with current GMP and according to manufacturing information in the Manufacturing Regulatory Documentation. IMMUNEX shall perform sufficient quality control testing of all Supplied Products released to AASTROM to establish compliance with any release specifications required by the Manufacturing Regulatory Documentation.
Regulatory Documentation. Following the establishment of a standard formulation for each Cytokine, IMMUNEX shall use reasonable commercial efforts to maintain the integrity and consistency of all specifications applicable to Cytokines. In the event that IMMUNEX deems it necessary to revise any specifications, procedures or Manufacturing Regulatory Documentation applicable to a Cytokine, IMMUNEX shall provide reasonable advance notice of any such revision to AASTROM. All specification changes that result in procedures or limits that exceed or differ from those set forth in the Manufacturing Regulatory Documentation shall be submitted to the FDA before being implemented. IMMUNEX shall take reasonable actions in consultation with AASTROM to ensure that any such changes do not compromise any clinical study or Regulatory Filing of AASTROM.
shall be entitled to terminate this Agreement, subject to the liquidated damages provisions of Section 8.4 hereof.
AASTROM shall pay IMMUNEX a Signing Fee of $1,500,000, due and payable thirty
(30) days following the Effective Date. In order to maintain its license and
supply rights, AASTROM shall pay IMMUNEX an annual Fee of $1,000,000, which
shall be due and payable on each one year anniversary of the Effective Date
during the Term. If any such Annual Fee is not paid when due, IMMUNEX shall have
the right to terminate this Agreement for material breach, upon notice to
AASTROM as provided in Section 8.2(a) hereof.
expected to result in harm to AASTROM, AASTROM shall have the right to request that IMMUNEX commence suit or otherwise abate such infringement. If, following such notice, IMMUNEX has not commenced such suit within one hundred eighty (180) days following such notice, AASTROM shall have the right to suspend payment of any annual fees or royalties payable hereunder (but not any payments for Supplied Products) until IMMUNEX commences such suit or otherwise abates the infringement by licensing or otherwise. IMMUNEX shall not be obligated to undertake any patent enforcement activities if AASTROM has not paid IMMUNEX total annual fees equal to at least $3,500,000.
IMMUNEX shall not be obligated to enforce Licensed Patent Rights against more than one infringer at any one time.
(a) to prepare or supplement any Regulatory Filing applicable to the use of a Supplied Product in the Field, or otherwise to assist in securing institutional or government approval to clinically test or government approval to market a Supplied Product for use in the Field; or
(b) where the disclosure and use of the Confidential Information will be useful or necessary to the procurement of Licensed Patent Rights;
provided that the affected party shall have been notified of such disclosure and that any such disclosure shall be in confidence and subject to provisions the same, or substantially the same, as those in Section 6.3 hereof, whenever reasonably possible.
(a) IMMUNEX is a corporation duly organized, validly existing and in good standing under the laws of the State of Washington and has all necessary corporate power to enter into and perform its obligations under this Agreement;
(b) the execution, delivery and performance of this Agreement by IMMUNEX have been duly authorized and approved by all necessary corporate action, and that the Agreement is binding upon and enforceable against IMMUNEX in accordance with its terms (subject to bankruptcy and similar laws affecting the rights of creditors generally);
(c) IMMUNEX is the owner of the Licensed Patent Rights, Licensed Technology and Licensed Trademarks, and has the right to grant AASTROM the licenses granted hereunder, subject to any dominating patent rights of third parties (for example, IL-3 or GM-CSF patents owned or controlled by Genetics Institute, Inc. or Sandoz AG) and the rights of AHP under applicable agreements with IMMUNEX;
(d) IMMUNEX is not aware of any special or unusual hazards that would arise as a result of AASTROM's use of Licensed Technology as permitted hereunder;
(e) Each lot of each Supplied Product delivered to AASTROM hereunder shall be manufactured, tested and released in material compliance with current GMP and the applicable Manufacturing Regulatory Documentation; and
(f) Any documentation provided to AASTROM by IMMUNEX concerning any Supplied Product or Drug Master File shall be accurate in all material respects.
7.2 Warranties and Representations of AASTROM. AASTROM represents and warrants to IMMUNEX that:
(a) AASTROM is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan and has all necessary corporate power to enter into and perform its obligations under this Agreement;
(b) the execution, delivery and performance of this Agreement by AASTROM have been duly authorized and approved by all necessary corporate action, and that the Agreement is binding upon and enforceable against AASTROM in accordance with its terms (subject to bankruptcy and similar laws affecting the rights of creditors generally); and
(c) AASTROM shall use the Licensed Technology in compliance with all applicable federal, state and local laws and regulations.
SHALL NOT BE LIABLE FOR ANY USE OF LICENSED TECHNOLOGY BY AASTROM OR FOR ANY LOSS, CLAIM, DAMAGE, OR LIABILITY, OF ANY KIND OR NATURE, WHICH MAY ARISE FROM OR IN CONNECTION WITH THIS AGREEMENT OR FROM THE USE, HANDLING OR STORAGE OF THE SUPPLIED PRODUCTS OR ANCILLARY MATERIALS. NEITHER PARTY TO THIS AGREEMENT SHALL BE ENTITLED TO RECOVER FROM THE OTHER ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES.
(a) AASTROM fails to perform or observe or otherwise breaches any of its material obligations under this Agreement and such failure or breach continues unremedied for a period of sixty (60) days after receipt by AASTROM of written notice thereof from IMMUNEX;
(b) a proceeding or case shall be commenced without the application or consent of AASTROM and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the following shall be entered and continue unstayed and in effect, for a period of forty-five (45) days from and after the date service of process is effected upon AASTROM, seeking (i) AASTROM's liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidation or the like of AASTROM or of all or any substantial part of its assets, or (iii) similar relief in respect of AASTROM under any law relating to bankruptcy, insolvency, reorganization, winding-up or the composition or readjustment of debts.
Such liquidated damages shall be paid by AASTROM to IMMUNEX within thirty (30) days following receipt of an invoice detailing the calculation thereof.
(a) IMMUNEX fails to perform or observe or otherwise breaches any of its material obligations under this Agreement and such failure or breach continues unremedied
*CONFIDENTIAL PORTION REDACTED AND FILED SEPARATELY WITH THE COMMISSION
for a period of sixty (60) days after receipt by IMMUNEX of written notice thereof from AASTROM;
(b) a proceeding or case shall be commenced without the application or consent of IMMUNEX and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the following shall be entered and continue unstayed and in effect, for a period of forty-five (45) days from and after the date service of process is effected upon IMMUNEX, seeking (i) IMMUNEX's liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidation or the like of IMMUNEX or of all or any substantial part of its assets, or (iii) similar relief in respect of IMMUNEX under any law relating to bankruptcy, insolvency, reorganization, winding-up or the composition or readjustment of debts.
Immunex Corporation 51 University Street Seattle, Washington 98101 Attention: General Counsel FAX: (206) 233-0644
Aastrom Biosciences, Inc. Lobby L, Domino's Farms Ann Arbor, Michigan 48106 Attention: President FAX: (313) 665-0485
and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by IMMUNEX and AASTROM.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date first written above.
IMMUNEX CORPORATION AASTROM BIOSCIENCES, INC.
By /s/ Scott G. Hallquist By /s/ R. Douglas Armstrong ---------------------- ------------------------ Title Senior Vice President Title President/CEO --------------------- ------------- |
EXHIBIT A: LICENSED PATENT RIGHTS
NOTE: LICENSE TO INTERNATIONAL RIGHTS IS SUBJECT TO PRIOR CONSENT OF AMERICAN
HOME PRODUCTS CORPORATION
Technology Country (Application SN) Filing Date Patent Number (Priority Date) - --------------------------------------------------------------------------------------- PIXYKINE(R) United States 5,073,627 8/14/90 (8/22/89) rh GM-CSF/IL-3 fusion 5,108,910 3/22/91 (8/22/89) protein Australia 632372 8/14/90 (8/22/89) Canada (2,054,608) 10/31/91 (8/22/89) Germany DD297,188 8/22/90 (8/22/89) Europe 0489116 8/14/90 (8/22/89) Austria 0489116 8/14/90 (8/22/89) Belgium 0489116 8/14/90 (8/22/89) Denmark 0489116 8/14/90 (8/22/89) France 0489116 8/14/90 (8/22/89) Italy 0489116 8/14/90 (8/22/89) Germany 0489116 8/14/90 (8/22/89) Luxembourg 0489116 8/14/90 (8/22/89) Liechtenstein 0489116 8/14/90 (8/22/89) Netherlands 0489116 8/14/90 (8/22/89) Spain 0489116 8/14/90 (8/22/89) Sweden 0489116 8/14/90 (8/22/89) Switzerland 0489116 8/14/90 (8/22/89) United Kingdom 0489116 8/14/90 (8/22/89) Finland (920764) 8/14/90 (8/22/89) Ireland 64202 8/21/90 (8/22/89) Japan (513381/90) 8/14/90 (8/22/89) Mexico (92 03426) 6/25/92 (8/22/89) Malaysia (PI9102157) 11/22/91 (8/22/89) Norway (920703) 8/14/90 (8/22/89) Philippines (44030) 3/11/92 (8/22/89) PCT (PCT/US90/04599) 8/14/90 (8/22/89) - --------------------------------------------------------------------------------------- |
- --------------------------------------------------------------------------------------- rh Flt3L United States (08/243,545) 5/11/94 (5/24/93) (08/444,626) 5/19/95 (5/24/93) (08/444,632) 5/19/95 (5/24/93) (08/444,625) 5/19/95 (5/24/93) (08/444,627) 5/19/95 (5/24/93) Australia 69877/94 5/12/94 Canada 5/12/94 Europe (94303575.8) 5/19/95 (5/24/93) Finland 955646 5/12/94 Israel (109677) 5/18/94 (5/24/93) Japan 500715/95 5/12/94 Korea 705236/1995 5/12/94 Mexico (943806) 5/23/94 (5/24/93) Malaysia (PI 9401321) 5/24/94 (5/24/93) Norway 954735 5/12/94 New Zealand 267541 5/12/94 South Africa 94/3490 5/20/94 (5/24/93) Thailand (022529) 5/23/94 (5/24/93) Taiwan (83105225) 6/8/94 (6/8/94) Taiwan (83110743) 11/18/94 (11/18/94) PCT (PCT/US94/05365) 5/12/94 (5/24/93) - --------------------------------------------------------------------------------------- Method for Improving United States 5,199,942 9/26/91 (6/7/91) Autologous Transplantation Australia (21793/92) 6/5/92 (6/7/91) Canada (2,109,699) 6/5/92 (6/7/91) Europe (92913333.8) 6/5/92 (6/7/91) Japan (500649/93) 6/5/92 (6/7/91) PCT (PCT/US92/04686) 6/5/92 (6/7/91) - --------------------------------------------------------------------------------------- Extracorporeal Cell United States (08/399,404) 3/6/95 (3/6/95) Culture and Transplantation Kits PCT (PCT/US95/02886) 3/7/95 (3/6/95) - --------------------------------------------------------------------------------------- LEUKINE(R) United States 5,391,485 8/6/85 rh GM-CSF 5,229,496 10/6/88 5,393,870 5/27/93 Canada (514,337) 7/22/86 - --------------------------------------------------------------------------------------- |
EXHIBIT B: PRICE OF SUPPLIED PRODUCT
*
*CONFIDENTIAL PORTION REDACTED AND FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT 10.15
THIS LEASE is made as of this 18 day of May, 1992, between the following parties:
LANDLORD: TENANT Domino's Farms Holding AASTROM Biosciences, Inc. Limited Partnership Post Office Box 130469 (a Michigan corporation) Ann Arbor, Michigan 48113-0469 24 Frank Lloyd Wright Drive Ann Arbor, MI 48105 LEASE OF PREMISES: - ----------------- |
In consideration of the rents to be paid and the covenants and agreements to be performed hereunder, Landlord hereby leases to TENANT and TENANT hereby leases from Landlord the PREMISES (defined below).
SUMMARY OF LEASE TERMS:
The following is intended to summarize certain basic terms of this Lease, and is not intended to be exhaustive. In the event anything set forth in this Summary of Lease Terms ("SUMMARY") conflicts with the other specific provisions of this Lease contained in the Standard Lease Terms, the latter shall be deemed to control.
A. BUILDING:
The office building known as Phase 5 of the Domino's Farms Prairie House Office Complex and located at 24 Frank Lloyd Wright Drive, Ann Arbor, MI 48105.
B. PREMISES:
OFFICE/LABORATORY SQUARE FOOTAGE:
Approximately 4,592 of usable square feet of space.
Location: Office and laboratory space located between column lines 25 and 29, and A and C, on Level 2 of Phase 5. Perimeters of premises are as defined by BOMA (Building Owners & Managers Association) standards, and are as shown on Rider A-1.
Address: 24 Frank Lloyd Wright Drive Ann Arbor, MI 48105
C. TERM: COMMENCEMENT DATE: 1. , 19 (check one) ------ ---------- --------- XX 2. See Section 3.03 ---- EXPIRATION DATE: Two years and eight months after Commencement Date, subject to renewal as set forth in Rider D. D. RENT: Months 1 and 2 The monthly rental charge will be equal to $2.31 per square foot for utilities, or $883.96. |
Months 3-32 The monthly rental charge will be $8,919.96. This amount is equal to $107,039.52 annually, based upon a gross amount of $23.31 per square foot ($21.00 per square foot for rent plus $2.31 per square foot for utilities). E. PERMITTED USES: Office and laboratory F. SECURITY DEPOSIT: $8,919.96 |
G. TENANT'S PROPORTIONATE SHARE: Not applicable
H. LANDLORD'S AGENT: Domino's Farms Corporation I. MAILING ADDRESS: Domino's Farms Corporation 24 Frank Lloyd Wright Drive P.O. Box 445 Ann Arbor, MI 48105 |
RIDER A Floor Plan of Building
Layout of Space Site Plan
RIDER B Work Agreement
RIDER C Rules and Regulations
RIDER D Addendum to Lease
RIDER E Right of First Refusal
RIDER F Attornment
RIDER G Hazardous Materials
RIDER H To Be Attached at Lease Commencement:
Construction Documents
Specifications
Warranties and Manuals
List of Tenant-owned Equipment
Financial Compilation
SECTION 1
DEFINITIONS
SECTION 2
AMENITIES AND COMMON AREA
SECTION 3
THE TERM
*See Rider D
The Premises shall be deemed substantially complete when Landlord has substantially completed the work required to be performed by Landlord for Tenant as provided in the Work Agreement.
Date. The Commencement Date shall not be postponed or delayed by reason of or arising out of delays occasioned by Tenant.
SECTION 4
THE BASE RENT
SECTION 5
LATE CHARGES AND INTEREST
SECTION 6
TAXES, ASSESSMENTS, UTILITIES, SERVICES
A. Utilities to be Furnished: So long as Tenant is not in default ------------------------- under the terms of this Lease, Landlord shall furnish the following utilities ("Utilities"): (1). Electricity (2). Air conditioning and heat during the appropriate season, as provided in the Rules and Regulations attached as Rider C; and (3). Hot and cold water for lavatory purposes. B. Tenant's Utilities Share: Tenant agrees to pay to Landlord, as ------------------------ Additional Rent for the Premises, $2.31 per square foot for utility charges. 6.04 Telecommunications: Tenant shall arrange and pay for its own telephone ------------------ |
or other telecommunications services, subject to Landlord's prior written approval of the means of installation of such service(s).
SECTION 7
USE OF PREMISES
SECTION 8
INSURANCE
may be determined by Landlord or any mortgagee of the Building; provided, however, that the amount of coverage will not be increased more frequently than at one (1) year intervals. Such policy shall be issued by an insurance company acceptable to Landlord. The policy procured by Tenant under this Subsection 8.01 must provide for at least thirty (30) days' written notice to Landlord of any cancellation. On or before the Commencement Date, Tenant shall deliver to Landlord, at Landlord's option, a certificate of insurance or a certified copy of the original policy, together with receipts evidencing payment of the premiums therefor. Tenant will deliver certificates of renewal for such policies to Landlord at least thirty (30) days prior to the expiration dates thereof. The insurance provided by Tenant under this Subsection 8.01 may be in the form of a blanket insurance policy covering other properties as well as the Premises; provided, however, that Tenant must furnish Landlord with a written statement from the insurer(s) under such policy or policies which statement shall (i) specify the policy limits of the policy or policies, (ii) state that the Premises and this Lease are covered by such policy or policies and (iii) state the amount of total insurance allocated to the Premises; provided, further, that any such policy or policies of blanket insurance must, as to the Premises, otherwise comply as to insurance amounts, endorsements, notice of cancellation and coverage with the other provisions of this Subsection 8.01.
DAMAGE
forthwith by a written notice to Tenant stating the date upon which this Lease will terminate.
SECTION 10
MAINTENANCE AND REPAIRS
SECTION 11
INTERRUPTION OF SERVICES OR UTILITIES
visitors, invitees, licensees or employees or those required by any governmental authority due to the nature of Tenant's use of the Premises, there shall be a proportionate abatement of rent during the period of such untenantability.
SECTION 12
PAYMENT FOR SERVICES RENDERED BY LANDLORD
SECTION 13
ALTERATIONS
SECTION 14
LIENS
SECTION 15
EMINENT DOMAIN
sale in lieu of eminent domain, this Lease will terminate as of the date of such taking or sale, and Tenant may receive a pro rata refund of any rents, deposits or other sums paid in advance. Landlord reserves the right, however, to elect to demolish, rebuild or reconstruct the Building if any portion of the Building is so taken, and if Landlord so elects, whether or not the Premises are involved in the taking, this Lease may be terminated by Landlord on 90 days written notice to Tenant and the rent will be adjusted to the date Tenant's possession of the Premises is terminated.
SECTION 16
ASSIGNMENT OR SUBLETTING
SECTION 17
INSPECTION AND ALTERATION OF PUBLIC PORTIONS
of any such mortgages. Landlord shall be allowed to take all material into and upon the Premises that may be required for the repairs or alterations above mentioned without the same constituting an eviction of Tenant in whole or in part, and the rent reserved shall in no wise abate, except as otherwise provided in this Lease, while said repairs or alterations are being made.
SECTION 18
FIXTURES AND EQUIPMENT
SECTION 19
UTILITY EXPENSES
19.01 Definitions: ----------- (i) "Utility Expenses" means any and all charges for heat, air conditioning, ventilating, and steam, gas, electricity, water or other fuels made against the Entire Premises and all labor services and materials related thereto which are delivered or provided to or with respect to the Entire Premises. (ii) "Tenant's Proportionate Share of Utilities" means Utility Expenses multiplied by the percentage set forth in Paragraph G of the Summary. (iii) "Utility Expense Statements" means written statements, certified by Landlord, showing the amounts of Utility Expenses for each calendar year which includes any portion of the Term or any renewal or extension thereof. 19.02 Utility Expenses: Tenant will pay to Landlord as Additional Rent $2.31 ----------------- |
per square foot for Utility Expenses.
Payments due pursuant to this Section will be due at the time specified in
Section 6.03.
SECTION 20
NOTICES OR DEMANDS
SECTION 21
BREACH; INSOLVENCY; RE-ENTRY
violation or default continues for a period of ten (10) days after written notice, then Landlord may (but will not be required to) declare this Lease forfeited and the Term ended, or re-enter the Premises, or may exercise all other remedies available under Michigan law. Landlord will not be liable for damages to person or property by reason of any legitimate re-entry or forfeiture, and Landlord will be aided and assisted by Tenant, its agents, representatives and employees. Tenant, by the execution of this Lease, waives notice of re-entry by Landlord. In the event of re-entry by Landlord without declaration of forfeiture, the liability of Tenant for the rent provided herein will not be relinquished or extinguished for the balance of the Term, and any rentals prepaid may be retained by Landlord and applied against the costs of re- entry, or the costs of enforcement of this Lease, including the cost of any proceeding under the Federal Bankruptcy Code.
liquidated damages in one payment equal to any deficiency between the total rent reserved hereunder and the fair and reasonable rental of the Premises, both discounted at five (5%) percent per annum to present value at the time of declaration of forfeiture.
SECTION 22
SURRENDER OF PREMISES ON TERMINATION
SECTION 23
PERFORMANCE BY LANDLORD OF THE COVENANTS OF TENANT
not be required to), and without waiving or releasing Tenant from any of
Tenant's obligations, make any such payment or perform any such other act. All
sums paid by Landlord and all reasonable incidental costs, including without
limitation the cost of repair, maintenance or restoration of the Premises if so
performed by Landlord hereunder, shall be deemed additional rental and, together
with interest thereon at the rate set forth in Section 5.02 from the date of
payment by Landlord until the date of repayment by Tenant to Landlord, shall be
payable to Landlord within fifteen (15) days after receipt of invoice by Tenant.
On default in such payment, Landlord shall have the same remedies as on default
in payment of rent. The rights and remedies granted to Landlord under this
Section 23 shall be in addition to and not in lieu of all other remedies, if
any, available to Landlord under this Lease or otherwise, and nothing herein
contained shall be construed to limit such other remedies of Landlord with
respect to any matters covered herein.
SECTION 24
SUBORDINATION; ESTOPPEL CERTIFICATES
SECTION 25
SUBSTITUTE SPACE
SECTION 26
QUIET ENJOYMENT
SECTION 27
HOLDING OVER
SECTION 28
REMEDIES NOT EXCLUSIVE; WAIVER
SECTION 29
WAIVER OF SUBROGATION
SECTION 30
INDEMNIFICATION
SECTION 31
ASSIGNMENT BY LANDLORD
SECTION 32
SECURITY DEPOSIT
SECTION 33
MOVEMENT OF TENANT'S PROPERTY
performing the move, and will indemnify and hold harmless Landlord against and from all liability for damage to property (whether belonging to landlord, other tenants or any other person) and injuries to persons in connection with the move and the actions, or failure to act, or by those performing the move;
SECTION 34
NON-TERMINABILITY, COMPLIANCE WITH LAWS, COSTS, SEVERABILITY
Except as otherwise specifically provided in this Lease, Tenant shall remain obligated under this Lease in accordance with its terms, and will not take any action to terminate, rescind or avoid this Lease for any reason, notwithstanding any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution or other proceeding affecting Landlord or any assignee of Landlord or any action with respect to this Lease which may be taken by any receiver, trustee or liquidator (or other similar official) or by any court. All payments by Tenant hereunder shall be final and Tenant will not seek to recover any such payment or any part thereof for any reason. Tenant waives all rights now or hereafter conferred by statute or otherwise to
quit, terminated or surrender this Lease, or to any abatement, suspension, deferment, diminution or reduction of rent, additional rent or other amounts payable by Tenant hereunder, or for damage, loss, cost or expense suffered by Tenant, on account of any of the reasons referred to herein or otherwise.
SECTION 35
ENTIRE AGREEMENT
SECTION 36
RECORDING
SECTION 37
GENERAL
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written.
WITNESSES: DOMINO'S FARMS HOLDING LIMITED PARTNERSHIP (a Michigan Corporation) /s/ MARGARET T. PARKINSON By: /s/ - ------------------------- ---------------------------- Its: SENIOR VICE PRESIDENT ----------------------- For: Landlord AASTROM BIOSCIENCES, INC. /s/ PATRICIA A. POWELL By: /s/ R. DOUGLAS ARMSTRONG - ------------------------- ------------------------- Its: President/CEO ----------------------- For: Tenant |
RIDER A-1
FLOOR PLAN
RIDER A-2
LAYOUT OF SPACE
RIDER A-3
SITE PLAN
RIDER B
The terms and conditions of this Work Agreement shall govern Landlord and Tenant's participation in the design, construction and installation of improvements to the Premises in accordance with the Final Plans (as defined below) and the terms hereof (the "Work"). Tenant acknowledges that it has had an opportunity to inspect the Premises prior to the execution and delivery of this Work Agreement. Tenant further acknowledges and agrees that all construction or improvements to the Premises to the completed at Landlord's expense have been completed and are accepted by Tenant in an "As Is" condition except for work to be performed by Landlord pursuant to the Work Agreement. All additional improvements to the Premises and services incidental or related thereto are referred to as "Work" and shall be paid for by Landlord and Tenant as set forth herein.
Landlord and Tenant in all respects. The cost of any Field Change Order shall be an additional Work Cost. Tenant's Representative shall approve all Field Change Orders, changes or modifications to the Final Plans and any design changes to the Work. Tenant's Representative, on behalf of Tenant, and Landlord's Representative, on behalf of Landlord, will promptly respond to any requests or inquiries of Landlord or Tenant, as the case may be, including those relating to Field Change Orders, so as not to interfere with the orderly progress of the Work. Landlord shall have the right to reject any Field Change Order requested by Tenant which, individually or in the aggregate, would delay the Commencement Date of the term of this Lease in excess of fourteen (14) days, unless in conjunction therewith, Tenant agrees to pay rental for the Premises as of the date the Commencement Date would have occurred but for the completion of the Field Change Order. The Landlord's and Tenant's reasonable judgement as to whether delay may ensue as a result of Tenant requested Field Change Orders shall be conclusive.
shall consult with, and include reasonable suggestions of, Tenant with respect to the terms and conditions of the Architect Agreement prior to execution thereof. Landlord shall be, and perform the obligations of, the Owner under the Architect Agreement.
according to the Final Plans (the "Contractor Agreement"). Landlord shall provide Tenant with a copy of the proposed Contractor Agreement and shall consult with Tenant with respect to the terms and conditions of the Contractor Agreement prior to execution thereof. Landlord shall be, and perform the obligations of, the Owner under the Contractor Agreement. The Contractor Agreement shall include a completion date satisfactory to Tenant (which date shall not be changed or modified except by an amendment to the Contractor Agreement with prior written consent of both landlord and Tenant). Landlord shall not have any liability whatsoever to Tenant for any cost, expense, lost profits, damage or other liability suffered or incurred by Tenant by reason of the Contractor's failure to complete the Work on or before the completion date contained in the Contractor Agreement. Landlord shall use its reasonable best efforts to cause the Contractor to complete the Work on or before the Completion Date contained in the Contractor Agreement, and in any event as soon as possible.
(a) All filing fees and permit costs incurred in connection with the Work to the extent not included in contracts above, and Landlord shall provide receipts for payment of the same upon Tenant's request.
(b) Legal fees, as mutually agreed upon in writing, in connection with obtaining governmental approvals of the Work and Tenant's uses of the Premises.
(c) Litigation costs in connection with the Work Agreement as mutually agreed upon in writing.
(d) All other costs of the Work mutually agreed upon in writing.
Tenant shall pay the Work Cost in the following manner:
(1) Tenant, Architect and Landlord shall have inspected the Work and determined that the Work is complete and that all items comprising the Punch List prepared pursuant to Section 3.03 of this Lease shall have been completed or corrected. In the event of any dispute regarding completion, the Architect's determination shall be final;
(2) Landlord shall have removed or have caused to be removed, at its expense, from the site of the Work all material, equipment and structures which are not part of the Work and shall have made the site of the Work clean and ready for use; and
(3) Landlord shall have caused to be executed and copies delivered to Tenant of lien waivers executed by all persons, firms, and companies who have provided labor or furnished materials in connection with the Work including a general release and specific lien waiver from Contractor both in form and substance reasonably satisfactory to Tenant.
Landlord warrants to Tenant that the Work will be performed in a workmanlike manner and in accordance with the Final Plans and any approved changes or modifications thereto and shall comply with all applicable codes, laws, and regulations. Landlord will obtain from the Contractor under the terms of the Construction Agreement such warranties as the Contractor generally provides in connection with its services. Landlord will use reasonable efforts to have all such warranties include a provision that they may be assigned to Tenant at Landlord's option. Upon the completion of the Work, Landlord shall assign to Tenant those warranties and manuals with respect to those items described in Rider H to this Lease and such other items as Tenant is required to maintain or repair pursuant to the terms of this Lease or otherwise, procured by Landlord from the Contractor, the Architect, Engineer, or others in connection with the performance of the Work or and any material or equipment installed upon the Premises as part of the Work. Landlord shall retain all other warranties and manuals. If such warranties are not assignable, Landlord shall pursue and, if possible, obtain coverage as requested by Tenant for and on behalf of Tenant, under such warranties (at Tenant's cost and expense). LANDLORD HEREBY DISCLAIMS ANY AND ALL OTHER
WARRANTIES OF ANY KIND IN CONNECTION WITH THE WORK INCLUDING WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
To the fullest extent permitted by law, Tenant agrees to defend, indemnify and hold Landlord, its partners, employees, officers, and agents, and their legal successors and assigns (herein the "Landlord Indemnitees"), free and harmless of and from any and all liability, damages, all losses, costs and expenses, including, without limitation, all Work Cost and attorney fees, (collectively "Losses") incurred, suffered or required to be paid by Landlord Indemnitees to the extent that such losses result from or are attributable to (a) Tenant's failure to pay the Work Cost due and payable pursuant to this Work Agreement or (b) Landlord's Indemnitees' reliance on orders, instructions, directives or requests of Tenant in connection with the construction of the Work and the preparation of the Final Plans or (c) any negligent or grossly negligent acts, or omissions and/or intentional malfeasance, of Tenant, its employees, agents, guests or invitees prior to final completion of the Work, provided however, that notwithstanding anything herein to the contrary, the foregoing obligation to indemnify, hold harmless and defend shall not apply to any liability, damages, losses, costs or expenses attributable to the Landlord's Indemnitees. If any claim is made by a third party against any Landlord Indemnitees for which the Landlord Indemnitee seeks indemnification from Tenant hereunder, Landlord shall give prompt notice to Tenant who shall have the right at Tenant's sole expense to participate in or control the defense of such claim at its own expense and through counsel of its own choice. If after such notice Tenant does not so participate, Tenant shall nevertheless be bound by the results obtained by Landlord insofar as the claim against any Landlord Indemnitee is concerned.
Landlord shall defend, indemnify and hold harmless Tenant, its affiliates, and any of their respective directors, officers, employees, agents, servants and representatives ("Tenant Indemnitees") from and against any and all liability, damages, all losses, costs and expenses, including reasonable attorney fees, incurred, suffered or required to be paid by Tenant Indemnitee, resulting from or caused by or arising out of any action, omission or operation (i) under this Agreement or in connection with the Work attributable to Landlord, (ii) under the Architect Agreement, the Engineer Agreement, the Contractor Agreement or any other construction related document attributable to Landlord or the performance of any obligation of Landlord under such agreements or documents, or (iii) relating to any claim against Tenant arising under the Architect Agreement, the Engineer Agreement, the Contractor Agreement or any Work related document provided, however, that the foregoing obligation by the Landlord to defend, indemnify and hold harmless shall not apply to (x) any liability, damages, losses, costs or expenses, attributable to the negligence, gross negligence or willful misconduct of any Tenant Indemnitee, (y) the breach of any obligation of Tenant hereunder or (z) those matters for which Tenant is obligated to indemnify Landlord pursuant to Section B(5) of this Work Agreement. If any claim is made by a third party against any Tenant Indemnitee for which the Tenant Indemnitee seeks indemnification from Landlord hereunder, the Tenant Indemnitee shall give prompt notice to Landlord who shall have the right, at its sole option, to participate in or control the defense of such claim at its own expense and through counsel of its own choice. If after such notice Landlord does not so participate, Landlord shall nevertheless be bound by the results obtained by Tenant Indemnitee insofar as the claim against Tenant Indemnitee is concerned.
performance of the Work hired by Landlord or by any contractor of Landlord as between Landlord and Tenant shall be conclusively deemed to be employees or contractors of Landlord and not Tenant. This Agreement shall not constitute Landlord or any contractor as the agent, partner, or legal representative of Tenant, and Tenant shall not be responsible in any way for any obligations or liability incurred or assumed by Landlord or any contractor (the foregoing shall not in any manner limit the liability of obligations of Tenant to Landlord hereunder). Landlord shall contract only in its own name and only for its own account. Each such contract shall expressly state that the contractor recognizes that, to the extent permitted by law, it does not have a right to make any claim for payment directly from Tenant, since the contract has been made exclusively with Landlord and that, upon the request of Landlord, the contractor shall provide Landlord with a sworn statement regarding the contractor's right to receive payments for work or materials provided to the Work.
RIDER C
RULES AND REGULATIONS
The Landlord, or the Agent of the Landlord, as the case may be, reserves the right to make such other further and reasonable rules and regulations as in its judgment may from time to time be necessary or desirable for the safety and preservation of good order and prestige therein.
Wherever the word "Tenant" occurs, it is understood and agreed that it shall mean Tenant's employees, agents, clerks, servants and visitors. Wherever the word "Landlord" occurs, it is understood and agreed that it shall mean Landlord's assigns, agents, clerks, servants and visitors.
1. No sign, picture, lettering, notice or advertisement of any kind shall be
painted, taped or displayed on or from the windows, doors, roof or
outside wall of the premises. Landlord shall have the right to approve
all signs, exhibits and displays to be made by Tenant in and from common
areas of the building. All of Tenant's interior sign painting or lettering
shall be approved by Landlord and the cost thereof shall be paid by Tenant.
(See footnote #1)
2. No electric or other wires for any purpose shall be brought into the premises without Landlord's written permission specifying the manner in which same may be done. This shall prohibit use of hot plates (cooking) and only approved electric percolators or coffee makers shall be permitted. No boring, cutting or stringing of wire shall be done without Landlord's prior written consent. Tenant shall not disturb or in any way interfere with the electric light fixtures, and all work upon or alterations to the same shall be done by persons authorized by Landlord.
3. Water closets and other toilet fixtures shall not be used for any purposes other than that for which the same is intended, and any damage resulting to same from Tenant's misuse shall be paid for by Tenant. No person shall waste water by interfering or tampering with the faucets or otherwise.
4. No person shall disturb the occupants of this or adjoining buildings or premises by the use of radios, television sets, loud speakers, or musical instruments, or by making loud or disturbing noises.
5. No bicycle or other vehicle and no pets shall be allowed in offices, hall, corridors or elsewhere in the building.
6. No floor load exceeding an average rate of 60 pounds of live load per square foot of floor area can be allowed. Tenant's business machines and mechanical equipment which cause vibration or noise that may be transmitted to the building structure or to any other leased space in the building shall be placed and maintained by Tenant in settings of cork, rubber, spring or other types of vibration eliminators sufficient to eliminate such vibration or noise.
7. Any safe, vault, heavy equipment, furniture, or machinery moved in or out of the premises shall be moved in such manner and at such times as Landlord shall in each instance approve.
May 20, 1991
8. No additional lock or locks shall be placed on any door in the building without Landlord's prior written consent. Upon the termination of this Lease, the Tenant shall surrender to Landlord all keys to the premises.
9. Tenant shall not install or operate any steam or gas engine or boiler
or carry on any mechanical business on said premises or use oil burning
fluids, or gasoline for heating or lighting or for any other purpose.
(See Rider G.)
10. The premises shall not be used for lodging or sleeping or for any immoral or illegal purposes.
11. Any newspaper, magazine or other advertising done from the said premises or referring to the said premises, Domino's Farms or Prairie House, which in the opinion of the Landlord is objectionable, shall be immediately discontinued upon notice from the Landlord.
12. The sidewalk, entry, passage hall and stairway shall not be obstructed or used for any purpose other than those of ingress and egress without the express written consent of the Landlord.
13. Window coverings other than those which may be provided by Landlord, either inside or outside of the windows, may only be installed with the Landlord's prior written consent, and must be furnished, installed and maintained at the expense of the Tenant and at Tenant's risk, and must be of such shape, color, material, quality and design as may be prescribed by the Landlord. Tenant shall exercise reasonable care in placing furniture, equipment, etc. in such a position as to not obstruct the windows.
14. Tenant will exercise reasonable discretion with regards to thermostat settings within the tenant space. Acceptable temperatures for heating will not exceed 72 degrees or fall below 68 degrees for cooling.
15. Tenant will be responsible for vending service located within the tenant premises. Landlord will designate approved vending contractors within the building. Tenant will coordinate vending installation with Landlord.
16. Domino's Farms Prairie House is a smoke free building; smoking of cigars, pipes and cigarettes is not allowed inside the building.
17. Subject to the terms of the Lease between Tenant and Landlord, Landlord will provide normal heating, ventilation and air conditioning as reasonably required by prevailing weather conditions to the leased premises on the following days (except legal holidays):
Monday - Friday from 8:00 a.m. to 6:00 p.m. Saturday from 8:00 a.m. to 12:00 p.m.
Footnotes: #1 - Tenant will be permitted to provide signage for door leading from lobby into tenant space. Such signage must be reviewed and approved by Landlord.
RIDER D
ADDENDUM TO LEASE
The tenant improvement allowance shall equal $29.25 per square foot. Any costs in excess of this allowance, based upon construction estimates, shall be paid by the Tenant to the Landlord according to the following payment schedule:
Fifty percent (50%) shall be deposited by Tenant with Landlord prior to commencement of work.
Forty percent (40%) shall be paid when the project is approximately fifty percent complete, based upon projected project costs.
The remaining ten percent (10%) shall be held until project completion, and until a project costs compilation is prepared. At such time, the ten percent plus any overages or minus any amount under budget will be paid to Landlord.
The Landlord shall provide cold water and sanitary to the leased space. The cost of internal routing will be a portion of the tenant build improvements.
The Tenant will have an option to renew the lease for an additional period of up to five (5) years, at a rate equal to $21.00 per square foot plus an adjustment based upon the Consumers Price Index. Once per year for each year during the renewal term, the rate will be adjusted based upon the Consumers Price Index. Such increases shall not be less than three (3) percent nor more than seven (7) percent in any one year.
If Tenant exercises said option to renew, Landlord may elect to install, at Landlord's expense, a meter for electrical service to the Premises. In such event, Tenant will then become responsible for monthly electrical charges based upon actual meter readings. In the event Landlord elects not to install a meter, then Tenant will be assessed a monthly pro rata share of electrical charges for Phase 5.
Landlord will provide temporary office space and associated utility costs to the Tenant at no charge, upon signing of lease, and until Commencement Date of lease. Said space shall be approximately 1,000 square feet, and location in building will be at discretion of Landlord based upon availablility of space. Tenant shall be responsible for telephone, furniture, post office box, moving charges, and all other associated costs.
Ample, free parking Travel Agency 24 hour on-site security staff Fitness center 24 hour access Auto rental agency A variety of restaurants Dry cleaners Catering services Clothier & tailor Conference and Meeting Rooms Sundry shop Automated teller machine U.S. Post Office Hair salon Child care facility |
RIDER E
RIGHT OF REFUSAL - Page 1
During the Initial Term and Renewal Term, if any, of this Lease, Tenant shall have a First Right of Refusal ("Right of Refusal") to lease certain additional space in the Building, under the following terms and conditions:
A. Space. Tenant's Right of Refusal shall apply to the approximately 2,306 square feet of rentable space on the second floor of Phase 5 of the Building, which is located adjacent to the Premises leased hereunder, and which is outlined on the attached floor plan.
To the greatest extent possible, Landlord will endeavor to locate alternative space for any leasing prospects interested in approximately 2,300 square feet.
B. Exercise by Tenant. Tenant shall have the right to exercise its Right of Refusal in the following manner: If at any time after the date hereof, the space is vacant, and Landlord intends to let such vacant space, as evidenced by a written proposal from Landlord (Landlord's Proposal) to a proposed lessee, then Landlord shall give Tenant written notice of such intention (Notice of Intent to Lease). Tenant shall have a period of ten (10) business days from the date of receipt of such Notice of Intent to Lease to exercise its Right of Refusal by sending written notice to Landlord of such exercise (which notice must be received by Landlord within such ten (10) day period).
C. Refusal by Tenant. If Tenant does not exercise its Right of Refusal as to the space covered by a Landlord's Proposal, Landlord shall be free to lease the space pursuant to the Landlord's Proposal.
If Tenant does not exercise its Right of Refusal and the proposed lessee does not accept the Landlord's Proposal, Tenant's Right of Refusal with respect to such space shall be reinstated as set forth above, including, without limitation, the right to exercise its Right of Refusal as to any subsequent proposals to lease the space as set forth above.
D. Notices. All notices hereunder shall be sent in compliance with Section 20 of the Lease.
E. Same Lease Terms. Under the exercise of Tenant's Right of Refusal, the space affected thereby shall be subject to all of the same terms and conditions of this Lease (including, without limitation, the Renewal Option set forth above and the Expiration Date) except that (i) additional rent with respect to such space shall commence ninety (90) days after the exercise of Tenant's Right of Refusal relating to such space, or upon taking possession of such space, if sooner; and (ii) Base Annual Rent and Base Monthly Rent for the additional space taken by Tenant shall be at the same rate in effect for the Premises at the time of exercise of Tenant's Right of Refusal; and (iii) an allowance for Tenant's build out of such space shall be given by Landlord at the rate of $28 per square foot.
RIDER E
RIGHT OF REFUSAL
[CRC]
RIDER F
(b) In addition, the mortgagee or the then owner, as the case may be, shall
at all times during Tenant's attornment hereunder, be bound to Tenant
as Landlord under all the terms and conditions of this Lease, provided,
however, that the mortgagee or the then owner, as the case may be,
shall not be (i) liable for the act or omission of any prior landlord
under the Lease (including Landlord); (ii) subject to any offsets or
defenses which Tenant might have against any prior landlord under the
Lease (including Landlord); (iii) bound by any rent or additional rent
which Tenant might have paid for more than the current month to any
prior landlord under the Lease (including Landlord) unless such rent
or additional rent has been delivered to mortgagee or such then owner;
(iv) responsible for any security deposit which Tenant may have paid
to any landlord (including Landlord), unless such deposit has been
delivered to the mortgagee or such then owner, or (v) bound by any
modification, amendment, surrender or cancellation of the Lease made
without the prior written consent of mortgagee or the then owner.
RIDER G
(c) Federal Resource Conservation and Recovery Act of 1976;
(d) Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980; and
(e) Federal Superfund Amendments and Reauthorization Act of 1986.
property damage (real or personal) arising out of or related to such Hazardous Materials; (C) any lawsuit brought or threatened, settlement reached or government order relating to such Hazardous Material; and/or (D) any violation of laws, orders, regulations, requirements or demands of government authorities, or any reasonable policies or requirements of Landlord (and in the case Landlord's requirements of which Tenant was provided prior written notice), which are based upon or in any way related to such Hazardous Materials, including, without limitation, reasonable attorney's and reasonable consultant's fees, investigation and laboratory fees, court costs and out-of-pocket litigation expenses. In no event shall Tenant have any liability for: (i) conditions not in existence on the day Landlord, its successors or assigns, takes possession of the Premises from Tenant, (ii) conditions existing prior to the date Tenant takes possession of the Premises, or (iii) conditions aggravated or worsened (but only to the extent so aggravated or worsened) by Landlord, or its successors, assigns or any third party, after the date Landlord or its successors and assigns takes such possession of the Premises. Landlord shall give Tenant prompt notice of any claim or information of which Landlord has knowledge that is likely to give rise to a claim for defense, indemnity or hold harmless under this Section, and shall permit Tenant's involvement in the defense of any such claim as reasonably requested by Tenant. Neither Landlord nor Tenant shall settle or pay any third party claim with respect to any claim hereunder, except upon the written approval of both Landlord and Tenant. The provisions hereof shall be in addition to any and all other obligations and liabilities Tenant may have to the Landlord at law or in equity and shall survive termination of this Lease and the satisfaction of all other obligations of Tenant hereunder.
Material, the manner of its use and the quantities on the Premises) presents an unreasonable hazard to, or unreasonably endangers the health, safety or welfare of, the Building's Tenants, or any of them, Tenant shall, as appropriate, upon written notice from Landlord cease using any such Hazardous Material on the Premises and immediately dispose of such Hazardous Material in compliance with all Environmental Law or appropriately modify its use thereof so as to not render such use unreasonably hazardous or dangerous. In the event that Tenant disputes Landlord's assessment or designation of any prohibited Hazardous Material, the matter shall be referred to an Environmental Engineer for decision. The decision of such Environmental Engineer shall be conclusive on the parties (except the extent that such decision is overridden by any governmental authority enforcing any Environmental Law). The fees of such Environmental Engineer shall be paid by the unsuccessful party and if both parties are partially unsuccessful, the Environmental Engineer shall apportion such fees and expenses between the parties, based on the degree of success of each party.
In addition, Landlord represents, warrants and covenants to Tenant that:
1. Landlord has not, and, to Landlord's knowledge no prior owner of the Building, tenant or prior tenant, occupant or prior occupant of the Building has, used or permitted the release of any Hazardous Materials on, from or affecting the Premises in any manner which violates Environmental Law.
2. Landlord has never received any summons, citation, directive, letter, notice or other communication, written or oral, regarding any violation of Environmental Law affecting the Premises, and there have been no actions commenced to Landlord's knowledge threatened by any party for noncompliance therewith.
3. Any and all plumbing, sewer and disposal systems, and pipelines and tanks, located upon or beneath or servicing the Premises will be maintained in good and safe operating condition and repair and to Landlord's knowledge are in good and safe operating condition and repair.
If it is determined during or following the termination or expiration of the Lease that there is a violation of Environmental Law associated with the leased premises and the violation was not created by Tenant, its agents, representatives, contractors, officers, directors, employees, licensees or invitees in violation of Environmental Law then Landlord agrees to comply with all federal, state and local laws, ordinances, rules, regulations, and policies pertaining to such violation that are binding upon Landlord and to take whatever safety precautions and measures are required or prescribed, at the Landlord's expense. Landlord also agrees to defend and indemnify Tenant and its affiliates and their respective agents, representatives, contractors, officers, directors, employees, licensees and invitees, from and against all obligations, liabilities, loss, costs, damages, settlement or expenses of whatsoever kind or nature, known or unknown, contingent or otherwise, directly or indirectly arising out of or in any way related to any of the following caused solely by Landlord, its agents, representatives, contractors, officers, directors, employees, licensees or invitees: (i) the presence, disposal, release or threatened release of any Hazardous Materials on, over, under, from or affecting the Premises or the soil, water, vegetation, buildings, personal property, persons or animals thereon; (ii) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Materials; (iii) any lawsuit brought or threatened, settlement reached or government order relating to such Hazardous Materials; and/or (iv) any violations of laws, regulations, requirements or demands of government authorities which are based upon or are in any way related to Hazardous Materials, including, without limitation and in each of the foregoing cases, reasonable attorney and consultant fees, investigation and laboratory fees, court costs and litigation expenses. Landlord will notify Tenant in writing immediately of any condition of which Landlord has knowledge and which involves Hazardous Materials or violation of Environmental Law which might affect the Premises.
FIRST AMENDMENT TO LEASE
WHEREAS, Landlord and Tenant entered into a Lease commencing October 1, 1992 (the "Lease") for approximately 4,592 of usable square feet of office space in the building commonly known as Domino's Farms Prairie House; and
WHEREAS, Tenant desires modifications to be made to the original lease; and
WHEREAS, Landlord agrees to the modifications proposed by Tenant;
NOW, THEREFORE, in consideration of the mutual covenants contained in this First Amendment to Lease, the parties agree to the following changes:
Tenant expanded into an additional 191 square feet of usable space. Construction of said expansion was complete and rent became effective January 1, 1993.
Per the terms of the original Lease, Landlord will contribute Five Thousand Three Hundred Forty Eight Dollars ($5,348) towards the construction costs for said expansion.
The total monthly charge for rent will now be Nine Thousand Two Hundred Ninety Dollars and Ninety Eight Cents ($9,290.98).
Per the original Lease, Tenant was to pay Landlord a Security Deposit in the amount of $8,919.96. Said deposit was not paid as of the date of this Amendment, and Landlord hereby waives requirement for said deposit.
IN WITNESS WHEREOF, this Amendment to Lease is executed on the 26th day of February, 1993.
DOMINO'S FARMS HOLDING
LIMITED PARTNERSHIP
(A Michigan Corporation)
By: /s/ THOMAS R. MINICK ----------------------- Thomas R. Minick |
Its:
AASTROM BIOSCIENCES, INC.
(A Michigan Corporation)
By: /s/ R. Douglas Armstrong ------------------------- R. Douglas Armstrong, Ph.D. Its: President and C.E.O. |
[CRC]
SECOND AMENDMENT TO LEASE
This Amendment to Lease is made the third day of October, 1994, by and between DOMINO'S FARMS HOLDING LIMITED PARTNERSHIP, a Michigan Corporation, having offices at 24 Frank Lloyd Wright Drive, Ann Arbor, Michigan 48106 ("Landlord"), and AASTROM BIOSCIENCES, INC. having offices at 24 Frank Lloyd Wright Drive, Ann Arbor, Michigan 48106 ("Tenant").
WHEREAS, Landlord and Tenant entered into a Lease commencing October 1, 1992 (the "Lease") for approximately 4,592 of usable square feet of office space in the building commonly known as Domino's Farms Prairie House; and
WHEREAS, modifications were made to the original lease on February 26, 1993 which increased the total usable square feet to 4,783 with a corresponding increase in rent charge; and
WHEREAS, Tenant desired further modifications to be made to the original lease and subsequent First Amendment; and
WHEREAS, Landlord agreed to the modifications proposed by Tenant;
NOW, THEREFORE, in consideration of the mutual covenants contained in this Second Amendment to Lease, the parties agree to the following changes:
1. Tenant expanded into the former Allstate Insurance Company suite, effective July 12, 1993. Said suite is 750 square feet, and is further identified on the attached floor plan. Tenant accepted space in current configuration; Landlord painted suite, provided an allowance of $1,200 for carpet replacement (to be arranged by Tenant), and provided an allowance of $806.30 for installation of soffit lighting (to be arranged by Tenant). No further contribution was made by Landlord, and no further modifications to space were made by Tenant. Based upon the necessity of relocation of Allstate Insurance Company to allow for said expansion, Tenant agreed to pay a pro- rated share of the unamortized tenant improvement costs initially paid by the Landlord. A surcharge of $228.45 will be assessed each month through May 1995 (initial term covered by this Lease agreement).
2. Tenant expanded into an additional 2,115 square feet of usable space, located between the leased premises and the expansion space described in Item #1 above. Construction of said space was complete and rent became effective September 20, 1993.
Per the terms of the original Lease, Landlord contributed Fifty Nine Thousand, Two Hundred Twenty Dollars ($59,220.00) towards the construction costs for said expansion. Tenant contracted for and managed construction, with approval of Landlord.
3. Tenant agreed to lease a storage room located on Level 1 of the Building. Said room is 868 square feet, of which 728 square feet is usable by Tenant, and is further identified on the attached floor plan. Tenant agrees to at all times maintain a five foot (5') clear aisle to doors entering building mechanical room east of leased storage room. Landlord agrees to provide an allowance of $600 for installation of electrical power to said room. Tenant, at its expense, may elect to make additional modifications to room, and same will be coordinated with Landlord. Rent for said room will be calculated based upon 728 square feet, at a rate of $8.00 per square foot, and will equal $485.33 per month.
4. Based upon the changes described in Item #1 and #2 above, the total monthly charge for rent will now be based upon a total of 7,648 usable square feet, and will equal $14,856.24. With the surcharge described in Item #1 above, total monthly rent due for office and lab space will equal $15,084.69. Total rent due for storage space described in Item #3 above will equal $485.33.
5. The terms and conditions of the Lease shall remain in full force and effect except as specifically modified herein.
IN WITNESS WHEREOF, this Second Amendment to Lease is executed on the date set forth above.
AASTROM BIOSCIENCES, INC.
(A Michigan Corporation)
By: /s/ R. DOUGLAS ARMSTRONG --------------------------- R. Douglas Armstrong, Ph.D. Its: President & C.E.O. |
DOMINO'S FARMS HOLDING
LIMITED PARTNERSHIP
(A Michigan Corporation)
By: /s/ THOMAS R. MINICK --------------------------- Thomas R. Minick Its: Vice President of Services |
[CRC]
[CRC]
THIRD AMENDMENT TO LEASE
WHEREAS, Landlord and Tenant entered into a Lease commencing October 1, 1992 (the "Lease") for approximately 4,592 of usable square feet of office space in the building commonly known as Domino's Farms Prairie House; and
WHEREAS, modifications were made to the original lease on February 26, 1993 which increased the total usable square feet to 4,783 with a corresponding increase in rent charge (First Amendment); and further modifications were made to the original lease on October 3, 1994 which increased the total usable square feet to 7,648 and provided for rental of a storage room of 728 square feet, with corresponding increases in rent charge (Second Amendment); and
WHEREAS, Tenant desires further modifications to be made to the original lease and subsequent First and Second Amendments; and
WHEREAS, Landlord agrees to the modifications proposed by Tenant;
NOW, THEREFORE, in consideration of the mutual covenants contained in this Third Amendment to Lease, the parties agree to the following changes:
1. Tenant will expand into 6,723 usable square feet located across the corridor from the existing premises, and further identified on Attachment A.
2. Modifications will be made to the expansion suite. Tenant will be responsible for development of plans and all aspects of the construction process. However, plans must be submitted to and approved by Landlord prior to construction start-up.
3. $188,244 will be contributed by the Landlord to the cost of the tenant improvements. This sum is equal to $28.00 per square foot. Further, Landlord will bear responsibility for certain work, to include floor leveling (cement work), installation of a fire damper, relocation of an alarm panel, construction of the demising wall along the East wall of the expansion suite, and installation of a major air supply duct. Upon completion of the project, as-built drawings and a financial summary will be provided to Landlord to detail the total scope of the project. Said improvements are projected to be completed by November 15, 1994.
4. On or before January 1, 1995, Tenant will vacate and be released of all responsibility for the 750 usable square feet acquired by Tenant on July 12, 1993. Said space is required by Landlord for installation of a mechanical room. A corresponding reduction in rent will be applied, and the monthly surcharge for said space will be discontinued.
5. For the period of November 16, 1994 through March 15, 1995, Tenant will pay no rent for the expansion suite. However, during this time period, Tenant will pay $7.35 per square foot ($4,117.84 per month) to be applied to the cost of utilities, maintenance, taxes, grounds, and housekeeping for the expansion suite.
For the period from March 16, 1995 through May 31, 1995, Tenant will pay rent for the expansion suite at the same rate provided in the initial lease ($21.00 per square foot plus $2.31 for a utility charge).
6. The Lease will expire on May 31, 1995, and via this Third Amendment, will be extended for an additional three year term (June 1, 1995 through May 31, 1998). From June 1, 1995 forward, the rental rate will be considered a gross rate.
7. Effective June 1, 1995, an annual increase of three percent (3%) will be applied to the rates for this Lease. Said rates and rents due are detailed on Attachment B to this Amendment (Rent Payment Schedule).
8. Tenant shall have a right to terminate the Lease during the three year extension period, in the event of any one of the following:
a.) Landlord is unable to provide acceptable space for further expansion of the Tenant; or
b.) AASTROM Biosciences, Inc. is acquired by another company and the company is relocated to a non-Michigan site; or
c.) Zoning or other governmental restrictions limit the Tenant from conducting business at Domino's Farms.
In the event the Tenant elects to terminate the Lease based upon one of the stated factors, the following shall apply:
i) Tenant shall provide Landlord with twelve (12) month written notice of any intent to terminate.
ii) To the extent reasonable, Tenant will assist with location of a replacement tenant. Subject to Section 16 of the Lease, Tenant may sub- lease the Premises.
iii) Tenant will re-pay the unamortized tenant improvements stated above ($188,244.00) based upon a three year amortization schedule. Such re- payment of unamortized tenant improvements will be made only if Tenant is unable to find a sub-tenant and/or Landlord is unable to lease the premises essentially "as is" within ninety (90) days following the early termination date of Lease.
iv) The four month rent abatement will be re-paid if notice to terminate is given within the initial eighteen months of the three year lease extension period.
9. Tenant shall have a Second Right of Refusal for the approximately 7,590 square feet located North of and contiguous to the expansion suite. (As of the date of this Amendment, Parke-Davis has a First Right of Refusal for said suite.) Tenant shall have a First Right of Refusal for the approximately 5,000 square feet located North of and contiguous to the suite covered by the Second Right of Refusal. Said suites are further identified on Attachment A.
Under the exercise of either Right of Refusal stated above, the terms and conditions shall be as provided in Rider E of the Lease, with the exception of paragraph E(iii). For any space previously unoccupied by a Tenant and in an unfinished status, an allowance in the set amount of $28.00 per square foot shall be provided. For any space built out and occupied by another tenant, the Landlord would be responsible for any negotiated
relocation and associated costs. An allowance to Tenant would be provided in the amount of $8.00 per square foot for any alterations resulting in office space, and $12.00 per square foot for any alterations resulting in laboratory space.
10. Tenant shall have one option to extend the lease for a term up to five
(5) years. Tenant shall notify Landlord in writing of intent to extend
at lease one hundred eighty days (180) prior to lease expiration. Rent
for such extension shall be at a rate equivalent to the rate in effect
during the last year of the lease prior to such proposed extension, with
an adjustment of three percent (3%) applied during the first and each
subsequent year of the extension.
11. The terms and conditions of the Lease shall remain in full force and effect except as specifically modified herein.
IN WITNESS WHEREOF, this Third Amendment to Lease is executed on the date set forth above.
AASTROM BIOSCIENCES, INC.
(A Michigan Corporation)
By: /s/ R. DOUGLAS ARMSTRONG --------------------------- R. Douglas Armstrong, Ph.D. Its: President and C.E.O. |
DOMINO'S FARMS HOLDING
LIMITED PARTNERSHIP
(A Michigan Corporation)
By: /s/ THOMAS R. MINICK -------------------------- Thomas R. Minick Its: Vice President of Services |
[CRC]
ATTACHMENT B
09-Dec-94
DOMINO'S FARMS PRAIRIE HOUSE
RENT PAYMENT SCHEDULE
OFFICE RENT STORAGE CAGE STOREROOM 1994 EXPANSION (6,898 SQ.FT.) (64 SQ.Ft.) (728 SQ.FT.) (6,723 SQ.FT) TOTAL RENT ============================================================================================== 10/01/94 - 10/31/94 15,084.69 * 64.00 485.33 N/A 15,634.02 11/01/94 - 11/30/94 15,084.69 * 64.00 485.33 2,058.92 ** 17,692.94 12/01/94 - 12/31/94 15,084.69 * 64.00 485.33 4,117.84 ** 19,751.86 01/01/95 - 01/31/95 13,399.37 64.00 485.33 4,117.84 ** 18,066.54 02/01/95 - 02/28/95 13,399.37 64.00 485.33 4,117.84 ** 18,066.54 03/01/95 - 03/31/95 13,399.37 64.00 485.33 8,935.26 *** 22,883.96 04/01/95 - 04/30/95 13,399.37 64.00 485.33 13,059.43 27,008.12 05/01/95 - 05/31/95 13,399.37 64.00 485.33 13,059.43 27,008.12 06/01/95 - 06/30/95 13,801.75 64.00 499.89 13,451.60 27,817.24 07/01/95 - 07/31/95 13,801.75 64.00 499.89 13,451.60 27,817.24 08/01/95 - 08/31/95 13,801.75 64.00 499.89 13,451.60 27,817.24 09/01/95 - 09/30/95 13,801.75 64.00 499.89 13,451.60 27,817.24 10/01/95 - 10/31/95 13,801.75 64.00 499.89 13,451.60 27,817.24 11/01/95 - 11/30/95 13,801.75 64.00 499.89 13,451.60 27,817.24 12/01/95 - 12/31/95 13,801.75 64.00 499.89 13,451.60 27,817.24 01/01/96 - 01/31/96 13,801.75 64.00 499.89 13,451.60 27,817.24 02/01/96 - 02/28/96 13,801.75 64.00 499.89 13,451.60 27,817.24 03/01/96 - 03/31/96 13,801.75 64.00 499.89 13,451.60 27,817.24 04/01/96 - 04/30/96 13,801.75 64.00 499.89 13,451.60 27,817.24 05/01/96 - 05/31/96 13,801.75 64.00 499.89 13,451.60 27,817.24 06/01/96 - 06/30/96 14,215.63 64.00 515.06 13,854.98 28,649.67 07/01/96 - 07/31/96 14,215.63 64.00 515.06 13,854.98 28,649.67 08/01/96 - 08/31/96 14,215.63 64.00 515.06 13,854.98 28,649.67 09/01/96 - 09/30/96 14,215.63 64.00 515.06 13,854.98 28,649.67 10/01/96 - 10/31/96 14,215.63 64.00 515.06 13,854.98 28,649.67 11/01/96 - 11/30/96 14,215.63 64.00 515.06 13,854.98 28,649.67 12/01/96 - 12/31/96 14,215.63 64.00 515.06 13,854.98 28,649.67 01/01/97 - 01/31/97 14,215.63 64.00 515.06 13,854.98 28,649.67 02/01/97 - 02/28/97 14,215.63 64.00 515.06 13,854.98 28,649.67 03/01/97 - 03/31/97 14,215.63 64.00 515.06 13,854.98 28,649.67 04/01/97 - 04/30/97 14,215.63 64.00 515.06 13,854.98 28,649.67 05/01/97 - 05/31/97 14,215.63 64.00 515.06 13,854.98 28,649.67 06/01/97 - 06/30/97 14,641.01 64.00 530.23 14,269.57 29,504.80 07/01/97 - 07/31/97 14,641.01 64.00 530.23 14,269.57 29,504.80 08/01/97 - 08/31/97 14,641.01 64.00 530.23 14,269.57 29,504.80 09/01/97 - 09/30/97 14,641.01 64.00 530.23 14,269.57 29,504.80 10/01/97 - 10/31/97 14,641.01 64.00 530.23 14,269.57 29,504.80 11/01/97 - 11/30/97 14,641.01 64.00 530.23 14,269.57 29,504.80 12/01/97 - 12/31/97 14,641.01 64.00 530.23 14,269.57 29,504.80 01/01/98 - 01/31/98 14,641.01 64.00 530.23 14,269.57 29,504.80 02/01/98 - 02/28/98 14,641.01 64.00 530.23 14,269.57 29,504.80 03/01/98 - 03/31/98 14,641.01 64.00 530.23 14,269.57 29,504.80 04/01/98 - 04/30/98 14,641.01 64.00 530.23 14,269.57 29,504.80 05/01/98 - 05/31/98 14,641.01 64.00 530.23 14,269.57 29,504.80 ============================================================================================== |
* 1994 OFFICE RENT BASED ON 7,648 SQ. FT. AND INCLUDES THE ALLSTATE SURCHARGE OF $228.00.
** CAM EXPENSES ONLY - EFFECTIVE 11/16/94
*** CAM EXPENSES AND RENT PRO-RATED TO REFLECT CHANGE EFFECTIVE
ON THE 16TH.
RENTAL AGREEMENT FOR STORAGE SPACE
1. AASTROM BIOSCIENCES, INC. agrees to rent Storage Unit #13, located on Level 1 of Prairie House, effective March 15, 1993. It is understood that rental is on a monthly basis, and can be terminated by either Landlord or Tenant with thirty (30) days written notice.
2. Rent for the period from March 15 through March 31, 1993 is $32.00. Rent for a full calendar month is $64. Rate is $12 per square foot, based upon 64 square feet (8' x 8'). The Tenant will be invoiced on a monthly basis, and rent shall be due on the first day of each month.
3. No security deposit is required, and a key request form must be submitted to the Control Center for access to the unit. Responsibility for any keys issued is solely the responsibility of the tenant.
4. The unit will be used only for the storage of property, and will not be used to store any edible, flammable, explosive, toxic or dangerous materials. However, Landlord acknowledges that Tenant may store hazardous materials in said unit, and Tenant agrees that any hazardous materials shall at all times be stored in appropriate containers. The unit will never be intentionally damaged, and rubbish will be disposed of in appropriate containers. Access will be only during normal business hours. No alterations will be made to the unit.
5. Signature below indicates an understanding that Landlord is only renting space, and will bear no responsibility for damage or loss to personal property contained within said space. It is an option for the Tenant to secure and purchase property insurance through an independent agent.
6. This rental agreement is independent and separate from any other lease the undersigned may have with respect to other space at the Domino's Farms complex.
/s/ R. DOUGLAS ARMSTRONG ------------------------- For Tenant /s/ MARGARET PARKINSON ------------------------- For Landlord |
FOURTH AMENDMENT TO LEASE
This Amendment to Lease is made this 29th day of July, 1996, by and between DOMINO'S FARMS HOLDING LIMITED PARTNERSHIP, a Michigan Corporation, having offices at 24 Frank Lloyd Wright Drive, Ann Arbor, Michigan 48106 ("Landlord"), and AASTROM BIOSCIENCES, INC., a Michigan Corporation, having offices at 24 Frank Lloyd Wright Drive, Ann Arbor, Michigan 48106 ("Tenant").
WHEREAS, Landlord and Tenant entered into a Lease commencing October 1, 1992 (the "Lease") for approximately 4,592 of usable square feet of office space in the building commonly known as Domino's Farms Prairie House; and
WHEREAS, modifications were made to the original lease on February 26, 1993 which increased the total usable square feet to 4,783 with a corresponding increase in rent charge (First Amendment); and further modifications were made to the original lease on October 3, 1994 which increased the total usable square feet to 7,648 and provided for rental of a storage room of 728 square feet, with corresponding increases in rent charge (Second Amendment); and further modifications were made to the original lease on November 16, 1994 which increased the total usable square feet to 14,371 with a corresponding increase in rent charge (Third Amendment); and
WHEREAS, Tenant desires further modifications to be made to the original lease and subsequent First, Second and Third Amendments; and
WHEREAS, Landlord agrees to the modifications proposed by Tenant;
NOW, THEREFORE, in consideration of the mutual covenants contained in this Fourth Amendment to Lease, the parties agree to the following changes:
1. Tenant will expand into 5,510 usable square feet, which is further identified on Attachment A.
2. Modification will be made to the expansion suite. Tenant will be responsible for development of plans and all aspects of the construction process. However, plans must be submitted to and approved by Landlord prior to construction start-up. Upon project completion, Tenant must furnish Landlord with complete set of "as-built" drawings and a financial summary which details the total scope of the project.
3. $66,668.00 will be contributed by the Landlord to the cost of the tenant improvements. Further, Landlord will bear responsibility for certain work, to include floor leveling (cement work), installation of two fire dampers, construction of the
demising wall along the North wall of the expansion suite, removal of storm conductor, removal of double doors on West wall and installation of glass to match building standard, and upgrade of patio area on West side of suite.
The tenant improvement allowance provided by the Landlord shall be calculated as follows:
2,550 square feet $17.60 per square foot $44,880.00 1,568 square feet $ 9.43 per square foot $14,786.24 1,392 square feet $ 5.03 per square foot $ 7,001.76 ----------------- ---------- 5,510 square feet $66,668.00 |
4. Rent will commence on August 1, 1996 and shall run current with existing Lease term which will expire on May 31, 1998.
5. An annual increase of three percent (3%) will be applied to the rates for this Lease. Said rates are as follows:
8/1/96 to 5/31/97 $24.73 per square foot 6/1/97 to 5/31/98 $25.47 per square foot
A portion of the proposed expansion space is considered to be somewhat less desirable than usual, due to interior location or lower than normal ceiling height. Such areas amount to 2,808 square feet, and are further defined on Attachment B. Rental rate for same shall be as follows:
8/1/96 to 5/31/97 $18.00 per square foot 6/1/97 to 5/31/98 $18.54 per square foot
Tenant currently occupies two (2) storage cages located on Level One in close proximity to the dock. Rental rate for same shall remain at a flat rate of $12.00 per square foot.
Cage #1 $ 64.00 per month Cage #2 $336.00 per month
Tenant currently occupies a 728 square foot storage room located on Level One of the building. Rental rate for same shall increase at a rate of three percent (3%) per year as follows:
8/1/96 to 5/31/97 $8.49 per square foot 6/1/97 to 5/31/98 $8.74 per square foot
6. Tenant shall have a right to terminate the Lease during the remaining lease term, in the event of any one of the following:
a) Landlord is unable to provide reasonably acceptable space for further expansion of the Tenant; or
b) AASTROM Biosciences, Inc. is acquired by another company and the company is relocated to a non-Michigan site; or
c) Zoning or other governmental restrictions limit Tenant from conducting business at Domino' Farms.
In the event the Tenant elects to terminate the Lease based upon one of the above stated factors, the following shall apply:
i) Tenant shall provide Landlord with twelve (12) month written notice of any intent to terminate.
ii) To the extent reasonable, Tenant will assist with location of a replacement tenant. Subject to Section 16 the Lease, Tenant may sub- lease the Premises.
iii) In addition to the financial obligation defined in 8(iii) of the Third Amendment to Lease, the tenant will re-pay the unamortized tenant improvements stated above ($66,668.00) based upon a two year amortization schedule. Such repayment of unamortized tenant improvements will be made only if Tenant is unable to find a subtenant and/or Landlord is unable to lease the premises essentially "as is" within ninety (90) days following the early termination date of Lease.
7. Tenant shall have a First Right of Refusal for the approximately 10,000 square feet located North of and contiguous to the suite covered by this amendment.
Under the exercise of the Right of Refusal stated above, the terms and conditions shall be as provided in Rider E of the Lease, with the exception of paragraph E(iii). For any space previously unoccupied by a Tenant and in an unfinished status, an allowance in the set amount of $28.00 per square foot shall be provided. For any space built out and occupied by another tenant, the Landlord would be responsible for any negotiated relocation and associated costs. An allowance to Tenant would be
provided in the amount of $8.00 per square foot for any alterations resulting in office space, and $12.00 per square foot for any alterations resulting in laboratory space. All such allowances are based upon a five (5) year lease term.
Additionally, Tenant shall have a First Right of Refusal for the suite located on Level 3, between Lobby K and Lobby L, and directly above Tenant's premises. Any Tenant improvement allowance would depend on the proposed alterations to the suite and length of lease term.
8. Tenant shall retain one option to extend the Lease for a term up to five (5) years, in whole or in part. Tenant shall notify Landlord in writing of intent to extend at least one hundred eighty (180) days prior to Lease expiration. Rent for such extension shall be at a rate equivalent to the rate in effect during the last year of the Lease prior to such proposed extension, with an adjustment of three percent (3%) applied during the first and each subsequent year of the extension.
9. The terms and conditions of the Lease shall remain in full force and effect except as specifically modified herein.
IN WITNESS WHEREOF, this Fourth Amendment to Lease is executed on the date set forth above.
AASTROM BIOSCIENCES, INC.
(A Michigan Corporation)
By: /s/ Todd E. Simpson --------------------------------- Its: Vice President - Financial Administrator, Chief Financial Officer ------------------------------- |
DOMINO'S FARMS HOLDING LIMITED
PARTNERSHIP
(A Michigan Corporation)
By: /s/ --------------------------------- Its: -------------------------------- |
[ATTACHMENT A BLUEPRINT APPEARS HERE]
[ATTACHMENT B BLUEPRINT APPEARS HERE]
DOMINO'S FARMS PRAIRIE HOUSE
RENT PAYMENT SCHEUDLE
STORAGE STORE 1994 1994 OFFICE RENT CAGE ROOM EXPANSION EXPANSION (6,695 sq. ft) (64 sq. ft.) (728 sq. ft.) (6,723 sq ft.) (5,510 sq. ft) TOTAL RENT ====================================================================================================================== 10/01/94 - 10/31/94 15,084.69* 64.00 485.33 -- -- 15,834.02 11/01/94 - 11/30/94 15,084.60* 64.00 485.33 2,058.92** -- 17,692.94 12/01/94 - 12/31/94 15,084.89* 64.00 485.33 4,117.84** -- 19,751.88 01/01/95 - 01/31/95 13,399.87 64.00 485.33 4,117.84** -- 18,066.54 02/01/95 - 02/28/95 13,389.37 64.00 485.33 4,117.84** -- 18,066.54 03/01/95 - 03/31/95 13,399.87 64.00 485.33 8,838.26*** -- 22,883.98 04/01/95 - 04/30/95 13,399.87 64.00 485.33 13,059.49 -- 27,006.18 05/01/95 - 05/31/95 13,399.87 64.00 485.33 13,059.43 -- 27,006.13 06/01/95 - 06/30/95 13,001.75 64.00 499.89 13,451.60 -- 27,817.24 ---------------------------------------- ---------------------------- 576.00 4,382.53 62,916.16 -- 193,929.36 07/01/95 - 07/31/95 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 08/01/95 - 08/31/95 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 09/01/95 - 09/30/95 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 10/01/95 - 10/31/95 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 11/01/95 - 11/30/95 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 12/01/95 - 12/31/95 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 01/01/96 - 01/31/96 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 02/01/96 - 02/29/96 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 03/01/96 - 03/31/96 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 04/01/96 - 04/30/96 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 05/01/96 - 05/31/96 13,801.75 64.00 499.89 13,451.60 -- 27,817.24 06/01/96 - 06/30/96 14,215.83 64.00 515.06 13,854.98 -- 28,849.87 ---------------------------------------- ---------------------------- 768.00 6,013.85 161,822.58 -- 334,639.31 07/01/96 - 07/31/96 14,215.63 64.00 515.06 13,854.98 -- 28,649.67 08/01/96 - 08/31/96 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 09/01/96 - 09/30/96 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 10/01/96 - 10/31/96 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 11/01/96 - 11/30/96 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 12/01/96 - 12/31/96 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 01/01/97 - 01/31/97 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 02/01/97 - 02/28/97 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 03/01/97 - 03/31/97 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 04/01/97 - 04/30/97 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 05/01/97 - 05/31/97 14,215.63 64.00 515.06 13,854.98 9,780.37 38,430.04 06/01/97 - 06/30/97 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 ---------------------------------------- ---------------------------- 768.00 6,195.89 166,874.35 107,877.05 452,528.23 07/01/97 - 07/31/97 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 08/01/97 - 08/31/97 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 09/01/97 - 09/30/97 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 10/01/97 - 10/31/97 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 11/01/97 - 11/30/97 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 12/01/97 - 12/31/97 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 01/01/98 - 01/31/98 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 02/01/98 - 02/28/98 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 03/01/98 - 03/31/98 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 04/01/98 - 04/30/98 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 05/01/98 - 05/31/98 14,641.01 64.00 530.23 14,269.57 10,073.35 39,578.16 ---------------------------------------- ---------------------------- 704.00 5,892.83 186,988.27 110,806.85 436,359.76 |
* 1994 Office Rental based on 7,648 sq. ft. and includes the Allstate surcharge of $228.00
** CAM expenses only - Effective 11/16/94
*** CAM expenses and rent pro-rated to reflect change effective on the 16th.
EXHIBIT 10.16
RECITALS
WHEREAS, Aastrom is the developer, manufacturer and/or licensee of medical devices and materials, such as a Cell Production System ("CPS") device and related materials and device, which have potential medical application for use in subjects care and research;
WHEREAS, Aastrom desires to conduct a human clinical trial ("Study") of the CPS in subjects in accordance with a protocol entitled "Feasibility Study of Expanded Progenitor Cells for Hematopoietic Engraftment in Patients with Breast Cancer" ("Protocol") which is incorporated herein by reference as Exhibit B attached hereto;
WHEREAS, the Institution has research, clinical and medical facilities, technical capabilities and expertise in order to conduct the Study in accordance with the Protocol;
WHEREAS, the Study contemplated by this Agreement is of mutual interest and benefit to the Institution and to Aastrom such that the parties hereto desire to have the Institution conduct the Study under the qualified direction of Richard E. Champlin, M.D. (the "Principal Investigator"); and
WHEREAS, Aastrom and the Institution agree to conduct the Study in accordance with the terms and conditions hereinafter set forth.
AGREEMENT
I. CLINICAL TRIAL DESCRIPTION
The Institution agrees to undertake and complete the Study described in the Protocol in compliance with all applicable laws, rules and regulations relating to the Study, including without limitation, all laws, rules and regulations concerning or promulgated by the Food and Drug Administration ("FDA").
Aastrom agrees to loan the Institution the laboratory and clinical equipment listed in the Schedule of Laboratory and Clinical Equipment on Exhibit C which are reasonably necessary for the Institution to conduct the Study. Aastrom shall retain title to all such equipment which shall promptly be returned to Aastrom upon request by Aastrom.
II. FUNDING
Aastrom shall provide payment to the Institution in accordance with the terms contained in the Schedule of Clinical Trial Milestone Payments attached as Exhibit D and incorporated herein.
III. CONDUCT OF STUDY
The Study shall be conducted only at the following location(s): The University of Texas M.D. Anderson Cancer Center, 1515 Holcombe Blvd., Houston, Texas 77030. The CPS and other Study materials may not be transferred to any other location or to any third party without the prior written consent of Aastrom.
The Institution agrees that the Study will be conducted under the direction of the Principal Investigator in accordance with the Protocol and the Investigator Agreement (included as Exhibit E of the Agreement) and incorporated herein by reference. The Principal Investigator may, subject to the prior written consent of Aastrom, designate a clinical coordinator and one or more subinvestigators to assist in conducting the Study. The Institution acknowledges that the Principal Investigator and subinvestigators have each executed an Investigator Agreement, copies of which are included in Exhibit E. In the event that additional subinvestigators are added to the Study, such subinvestigators must execute and deliver an Investigator Agreement which shall be deemed incorporated by reference into this Agreement. In the event the Principal Investigator can no longer function in such capacity, then Aastrom and the Institution shall attempt to agree on a replacement. If a mutually acceptable replacement cannot be agreed upon, this Agreement and the Study at the Institution shall terminate. The Institution agrees that it will use its best efforts to recruit qualified subjects for enrollment in the Study consistent with the guidelines contained in the Protocol and the best interest of the subjects; however, no subjects shall be enrolled in the Study if they are currently enrolled in another investigational study without the prior written consent of Aastrom.
Any changes to the Protocol may only be made with the prior written agreement of Aastrom; provided that during the Study, if the Principal Investigator feels that it is necessary to deviate from the Protocol in order to protect the life or physical well-being of a Study subject before written approval can be obtained, he/she may do so in accordance with the procedures detailed in the Protocol.
The Institution will obtain: (i) the approval of the governing the
Institutional Review Board ("IRB") prior to initiating the Study and
thereafter as required by applicable laws, rules and regulations; and
(ii) prior written informed consent of all subjects and/or their legal
guardians in a form that is substantially the same as provided in the
Protocol and satisfactory to both the governing IRB and Aastrom and in
compliance with applicable laws, rules and regulations.
The Institution shall immediately notify Aastrom (Dr. Thomas E. Muller at 313/930-5555 and/or by fax at 313/665-0485) of any unanticipated adverse effect, whether ascribed to the investigational device or not, in accordance with instructions provided in the Protocol.
IV. STUDY MONITORING AND ACCESS TO FACILITIES
Aastrom's designated representatives and/or authorized representatives of regulatory agencies may, at all reasonable times, visit the Institution in order to: (i) determine the adequacy of the facilities; (ii) validate case reports against original data in the subject medical records and the files of the Principal Investigator; and (iii) monitor the conduct of the Study to determine whether the Study is being conducted in compliance with the Protocol and all applicable laws, rules and regulations. The Institution agrees to obtain any required subject release(s) to allow Aastrom's designated representatives, and/or authorized representatives of regulatory agencies, to conduct such review prior to enrolling each subject in the Study.
V. REPORTS
The Institution agrees to have the Principal Investigator submit reports to Aastrom and the reviewing IRB in accordance with the Protocol and all applicable laws, rule and regulations.
VI. PROPRIETARY RIGHTS
The Institution understands and agrees that the underlying rights to the CPS and other intellectual property and materials which are the subject of the Protocol belong to Aastrom. The parties agree that the Institution shall retain control over the CPS and Study materials, and further agree not to allow access to, disclose the existence or nature of, or transfer the CPS or Study materials to third parties without advance written approval of Aastrom. Aastrom reserves the right to distribute the CPS and Study materials to others and to use them for its own purposes. Title to the CPS and Study materials shall remain with Aastrom. Further, the Institution agrees that data and materials derived as a direct result of the Study described in the Protocol (hereinafter referred to as "Clinical Trial Information") whether generated by the
Institution, the Principal Investigator, and/or their agents or employees, either solely or jointly with others, is the property of Aastrom; provided that the Institution and the Principal Investigator may utilize the Clinical Trial Information in furtherance of academic publications authorized by this Agreement and for subject care purposes.
The Institution agrees that the Study results and any inventions or discoveries by the Institution, the Principal Investigator or their agents or employees during the Study that are modifications, improvements or new uses applicable to the CPS or that are a direct result of the performance of the Study in accordance with the detailed testing Protocol provided by Aastrom to Institution and which are dependent on, or relate to, the Study, the claims of Aastrom's patentable inventions, the use of the cells processed through the CPS or Aastrom's Confidential Information shall be the property of Aastrom. Any invention arising out of the work performed under this Study solely by the Institution and not covered in the previous sentence shall be the exclusive property of the Institution (the "Institution Invention") and shall not be considered a part of Aastrom's Confidential Information. The Institution shall promptly disclose each such Institution Invention and the terms under which the Institution would be prepared to license it. Aastrom shall have a right of first refusal to exclusively develop, license and commercialize such Institution Invention. Aastrom shall have sixty (60) days after receipt of such disclosure to exercise its right of first refusal, and if so exercised, the parties shall thereafter negotiate a mutually acceptable licensing agreement in good faith. If the Institution at any time offers such Institution Invention on terms different than those disclosed to Aastrom, the Institution shall offer such Institution Invention to Aastrom on such different terms in accordance with the first right refusal herein. The Institution and Principal Investigator shall not obtain, or attempt to obtain, patent coverage on the CPS or its use without the express written consent of Aastrom. The Institution and the Principal Investigator shall assist Aastrom in prosecuting any Aastrom patent applications and shall execute and deliver any and all instruments necessary to make, file and prosecute all such applications, divisions, continuations, continuations-in-part or reissues thereof.
VII. WARRANTIES AND REPRESENTATIONS
It is understood that the CPS is experimental in nature, has not been approved for commercial distribution and is provided hereunder for investigational purposes only. NEITHER THE INSTITUTION NOR AASTROM MAKES ANY REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION WITH RESPECT TO SAFETY, EFFICACY, MERCHANTABILITY, FITNESS FOR ANY PURPOSE OR NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS, WITH RESPECT TO THE PRODUCT OR INFORMATION PROVIDED TO THE OTHER HEREUNDER.
Each party hereto represents that it has right to enter into and perform its respective obligations under this Agreement.
The Institution represents that: (i) it has adequate facilities and
staff to conduct the Study in accordance with the Protocol; (ii) the
governing IRB is qualified to review and approve the Study; and
(iii) the Principal Investigator is qualified by education and
training to conduct the Study and has not been disqualified, or
otherwise limited, as a clinical investigator by the FDA or any
other regulatory or administrative body. The Institution represents
that the Principal Investigator and all other investigators and
personnel that may perform services hereunder are its employees and
shall abide by the terms and conditions of this Agreement as if each
were a party hereto.
VIII. LIMITATIONS OF LIABILITY
In no event shall any party be liable to the other party hereto for any incidental, special or consequential damages.
IX. INDEMNIFICATION
Aastrom agrees to indemnify, defend and hold harmless the Institution, the University of Texas System, and their Regents, officers, agents and employees from and against any and all claims, suits, and liabilities (collectively "Liabilities") arising out of or resulting from the activities to be carried out pursuant to the obligations of this Agreement, including but not limited to the use by Aastrom of the results of the Study; provided that such Liabilities do not arise from:
i. a failure to adhere to the Protocol or written instructions relative to use of the CPS or other materials utilized in the Study;
ii. a failure to comply with any applicable law, rule or regulation relating to the Study, including without limitation, all FDA regulations or other governmental requirements; or
iii. the negligence or willful misconduct by the regents, officers, agents or employees of the Institution or the University of Texas System.
The Institution agrees, to the extent allowed by the Constitution and the laws of the State of Texas, to indemnify, defend and hold harmless Aastrom and its directors,
officers, agents and employees from and against any and all Liabilities they may suffer in connection with the Study which arise out of the negligent acts or omissions of the Institution, its employees or agents pertaining to the activities to be carried out pursuant to the obligations of this Agreement; provided, however, that Institution shall not hold Aastrom harmless from claims arising out of the negligence or willful malfeasance of Aastrom, its directors, officers, agents or employees, or any person or entity not subject to Institution supervision or control.
The Institution and Aastrom each agree to notify the other in writing as soon as they become aware of a claim or action and to, subject to the statutory duties of the Texas Attorney General, cooperate with the management and defense of such claim or action. The indemnifying party agrees, at its own expense, subject to the statutory duties of the Texas Attorney General, to provide attorneys of its own selection to defend against any actions brought or filed against the indemnified party with respect to the subject of indemnity contained herein. The indemnifying party shall, subject to the statutory duties of the Texas Attorney General, control the defense of any action; however the indemnified party may, at its own expense, participate by providing attorneys of its own selection. No indemnified party shall compromise or settle any claim of action without the prior written approval of the indemnifying party.
X. RESTRICTIONS ON USE; COMPLIANCE WITH LAWS
The Institution and the Principal Investigator agree that the CPS will be used for clinical research purposes only in connection with the Study by the Principal Investigator and his/her subinvestigators at the facility(ies) described in Section III.A. under suitable containment conditions. Neither the Institution nor the Principal Investigator shall use the CPS for any commercial purposes, including screening, production or sale. The CPS will not be used in the treatment or diagnosis of human or animals except for the purpose of conducting the Study as described in the Protocol. The Institution agrees to comply with all laws, rules and regulations applicable to the Study and the handling, use and disposal of any Study materials. The CPS is to be used with caution and prudence since all of its characteristics are not known.
XI. CONFIDENTIALITY
The Institution agrees that it will not disclose or use Confidential
Information for any purpose other than the purpose of conducting the
Study, obtaining any required review of the Protocol or its conduct,
or ensuring proper medical treatment of any subject or subject. The
Institution agrees to limit distribution of Aastrom's Confidential
Information to Institution personnel on a need-to-know basis. The
Institution agrees to ensure that its personnel abide by the
confidentiality obligations as set forth herein in accordance with
Section VII.C. The obligations set forth in this Section XI.A. shall
survive for a period of five (5) years following the termination or
expiration of this Agreement.
The term "Confidential Information" shall mean any and all oral, written or tangible proprietary or confidential ideas, inventions, information, data, plans, materials and know-how or the like owned, controlled or developed by Aastrom and disclosed to Institution. Aastrom shall attempt to identify the confidential status of Confidential Information disclosed hereunder, but the failure to so mark or identify shall not destroy the confidential nature of such Confidential Information. Without limiting the generality of the foregoing, Confidential Information shall include, without limitation, all clinical trial plans, protocols, information, data analyses, proprietary equipment, and materials related to the Confidential Information. Confidential Information shall not include any information which the Institution can demonstrate:
i. Was known to the Institution prior to receipt from Aastrom, provided that the Institution promptly notifies Aastrom in writing of the same promptly after disclosure by Aastrom;
ii. Is or becomes part of the public domain through no act by or on behalf of the Institution;
iii. Was lawfully received by the Institution or the Principal Investigator from a third party who had a legal right to disclose the same; or
iv. Is required by law or regulation to be disclosed.
In the event that Confidential Information is required to be disclosed pursuant to subsection iv., the Institution will notify Aastrom to allow Aastrom to assert whatever exclusions or exemptions may be available to it under such law or regulation.
No publicity, news releases, or other public announcement, written or oral, relating to the Agreement, to any amendment hereto or to performance hereunder or to the existence of an arrangement between the parties, shall be originated by either party without the prior written approval, such approval not to be unreasonably withheld, of the other party except as shall be required by law.
No Party shall use or publicly disclose the name of another party hereto without the prior written consent, such consent not to be unreasonably withheld, of such other party except that the name of a party may be disclosed to regulatory bodies such as the FDA, Securities and Exchange Commission or as required by law.
XII. PUBLICATION RIGHTS
At least thirty (30) days prior to submission for publication, the Institution agrees to provide Aastrom a final draft of any manuscript describing the results obtained by the Institution from
the Study. Aastrom shall be permitted to advise as to the implications
of such manuscripts upon patentability of any inventions or the
potential effects on commercialization. The Institution shall, upon
Aastrom's request, delete any of Aastrom's Confidential Information and
shall consider all reasonable editorial suggestions based on sound
scientific and clinical judgment, Aastrom acknowledges that Institution
shall have the final authority to determine the scope and content of
any publication, provided that such authority shall be exercised with
reasonable regard for the commercial interests of Aastrom. Subject to
Aastrom's right to delete such Confidential Information and to propose
mutually agreeable modification of such manuscripts, the Institution
shall have the right to submit the manuscript for publication. However,
if Aastrom determines that any invention disclosed therein is
patentable and that a patent application should be filed on such
invention, Aastrom shall so notify the Institution in writing and the
Institution shall postpone publication for a period not to exceed sixty
(60) days from said notice (unless otherwise mutually agreed in
writing) to provide time for patent applications to be filed.
XIII. TERM AND TERMINATION
Except as otherwise provided in this section, this Agreement shall commence on the Effective Date hereof and continue for the period necessary to satisfy the requirements of the Protocol.
Aastrom and the Institution shall have the right to terminate this Agreement at any time without cause upon thirty (30) days prior written notice. Any party may terminate the Study at any time if, in its option, it is in the best interest of the Study subjects.
Any termination of this Agreement shall not relieve any party hereto of any obligation or liability accrued hereunder prior to such termination, or rescind or give rise to any right to rescind anything done hereunder prior to the time such termination becomes effective; nor shall such termination relieve any party from any obligation which, by its nature, survives termination including the obligations set forth in Articles IV through IX, XI and XIV.D.
The parties further agree that all Study data and used and unused Study equipment, materials and supplies, including the CPS, provided to the Institution by Aastrom for the purpose of this Study will be returned to Aastrom promptly upon request by Aastrom.
XIV. MISCELLANEOUS
The Institution recognizes and agrees that it is operating as an independent contractor and not as an agent of Aastrom. The Agreement shall not constitute a partnership or joint venture, and no party may be bound by the other to any contract, or make any representations or warranties, express or implied, on behalf of another party, or otherwise create any liability against another party in any way for any purpose.
The rights and obligations of the parties under this Agreement shall bind and inure to the benefit of the successors, assigns and transferees of the parties; provided, however, this Agreement shall not be assignable by either party without the prior written consent of other party.
This Agreement shall be construed and interpreted in accordance with and governed by the laws of the State of Texas.
Any controversy or claim arising out of or relating to this Agreement or the breach thereof, including, without limitation, disputes relating to patent validity or infringement arising under this Agreement, shall be settled through use of an appropriate method of Alternative Dispute Resolution, including, without limitations, by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon an award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties shall be entitled to petition any court of competent jurisdiction in the event of any alleged breach of Article XI.
This Agreement contains the entire agreement and understanding between the parties and supersedes all prior agreements and understandings between them relating to the subject matter hereof.
The headings of this Agreement are to facilitate reference only, do not form a part of this Agreement and shall not effect the interpretation thereof.
If any provision of this Agreement or portion of this Agreement shall be construed to be a waiver of any other breach of the same or any other provision.
No waiver of a breach by a party of any provision of this Agreement shall be construed to be a waiver of any other breach of the same or any other provision.
No right or license to the CPS or to its use is granted by Aastrom or implied as result of the transmission of the CPS to the Institution under the supervision of the Principal Investigator, except to the limited extent necessary to conduct the Study. The transfer of the CPS provided for herein does not constitute a public disclosure.
At the request of Aastrom, the Institution and the Principal Investigator shall execute any documents and take any actions which may be necessary, in the opinion of Aastrom, or its legal counsel, to evidence or perfect any rights of Aastrom hereunder.
This Agreement may be executed in counterparts all of which together shall constitute one and the same instrument.
All notices and other communications permitted or required under this Agreement shall be in writing and shall be deemed to have been given when received at the addresses set forth on the signature page hereof, or at such other address as may be specified by one party in writing to the other. Said written notice may be given by mail, telecopy, rush delivery service, telegram, telex, personal delivery or any other means to the parties at the addresses as follow:
If to the Institution:
Donna S. Gilberg, CPA
Manager, Sponsored Programs
The University of Texas
M.D. Anderson Cancer Center
1515 Holcombe Blvd.
Houston, TX 77030
If to the Principal Investigator:
Richard E. Champlin, M.D.
The University of Texas
M.D. Anderson Cancer Center
1515 Holcombe Blvd.
Houston, TX 77030
If to Aastrom:
Thomas E. Muller, Ph.D.
Aastrom Biosciences, Inc.
24 Frank Lloyd Wright Drive, Lobby L
Ann Arbor, MI 48105
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date and year first above written.
INSTITUTION: AASTROM: THE UNIVERSITY OF TEXAS AASTROM BIOSCIENCES, INC. M.D. ANDERSON CANCER CENTER By: /s/ DONNA S. GILBERG By: /s/ R. DOUGLAS ARMSTRONG ---------------------------- ----------------------------- Donna S. Gilberg, CPA Name: Manager, Sponsored Programs Title: President/CEO Date: 5/10/96 Date: 5/20/96 -------------------------- ---------------------------- |
I have read this agreement and understand my obligations hereunder:
By: /s/ RICHARD E. CHAMPLIN --------------------------- Richard E. Champlin, M.D. Principal Investigator Interim Chairman, Dept. Of Hematology By: /s/ ROBERT C. BAST --------------------------- Robert C. Bast, Jr., M.D. Head, Division of Medicine |
EXHIBIT A
DEFINITIONS
EXHIBIT B
PROTOCOL
THE UNIVERSITY OF TEXAS
M.D. ANDERSON CANCER CENTER
DIVISION OF MEDICINE
CLINICAL FEASIBILITY STUDY OF EXPANDED PROGENITOR CELLS FOR
HEMATOPOIETIC ENGRAFTMENT IN PATIENTS WITH BREAST CANCER
1.0 OBJECTIVES 2.0 BACKGROUND 3.0 BACKGROUND DRUG AND DEVICE INFORMATION 4.0 PATIENT ELIGIBILITY 5.0 TREATMENT PLAN 6.0 PRETREATMENT EVALUATION 7.0 STUDY PROCEDURES AND EVALUATIONS 8.0 DATA COLLECTION 9.0 ADVERSE EVENTS 10.0 STATISTICAL CONSIDERATIONS AND DATA ANALYSIS 11.0 CLINICAL SUPPLIES 12.0 STUDY MONITORING 13.0 INVESTIGATOR OBLIGATIONS 14.0 REFERENCES APPENDIX A: TOXICITY CRITERIA APPENDIX B: PATIENT EVALUATION APPENDIC C: ZUBROD PERFORMANCE STATUS APPENDIX D: INFORMED CONSENT APPENDIX E: CASE REPORT FORMS |
STUDY CHAIRMAN:
STUDY CO-CHAIRMAN:
STUDY COLLABORATORS: - ------------------------------- ------------------------- Gabriel Hortobagyi, M.D. Zia Rahman, M.D. - ------------------------------- ------------------------- David Seong, M.D. David Claxton, M.D. - ------------------------------- ------------------------- Borje S. Andersson, M.D., Ph.D. Koen van Besien, M.D. |
The Section of Blood and Marrow Transplantation, Departments of Hematology and Medical Breast and Gynecologic Oncology, Division of Medicine, The University of Texas, M.D. Anderson Cancer Center, 1515 Holcombe Boulevard, Houston, Texas 77030. Telephone: 713-792-3611 or 713-792-2684.
PROTOCOL ABSTRACT
Protocol:
FEASIBILITY STUDY OF EXPANDED PROGENITOR CELLS FOR HEMATOPOIETIC ENGRAFTMENT IN PATIENTS WITH BREAST CANCER
Study Chairman: Richard Champlin, M.D.
OBJECTIVES:
Assess the safety of the mixture of early- mid- and late stage bone marrow derived mononuclear cells produced in the Cell Production System (CPS) (primary objective and the biologic effect on hematopoietic recovery after infusion of ex vivo expanded hematopoietic cells following high dose chemotherapy as treatment of patients with breast cancer.
RATIONALE:
High dose chemotherapy is increasingly used for treatment of malignancies. Despite infusion of autologous bone marrow or PBPC, patients experience at least one week of profound pancytopenia prior to engraftment and hematologic recovery. Recently technology for expansion of hematopoietic progenitors ex vivo has been developed and we performed a study showing no toxicity and rapid hematopoietic recovery when given in addition to autologous bone marrow. The expansion systems produces large numbers of progenitors similar to that present in full autologous marrow graft and the expansion conditions do not support the growth of malignant cells, thus the system acts to purge contaminating tumor cells from the autologous graft. Preliminary studies suggest that infusion of large numbers of expanded cells may modify the nadir of granulocytopenia and potentially reduce infectious complications. Recently, Brugger et al reported rapid engraftment and hematopoetic recovery using ex vivo expanded cells alone. This study is designed to assess hematopoietic recovery after high dose chemotherapy and infusion of cells expanded using the Aastrom expansion device.
ELIGIBILITY:
Female patients age 18- 65 years with diagnosis of Stage IV breast carcinoma who are not eligible for protocols of higher priority and who have received no more than one chemotherapy regimen for metastatic disease, with chemotherapy responsive or stable disease at the time of study entry. Zubrod performance status 0 or 1. Patients must be HIV negative and have a creatinine less than or equal to 1.5 mg/dl, SGOT, SGPT, & bilirubin less than 2 x normal, normal cardiac ejection fraction and DLCO greater than 50% of predicted. Patients must have WBC greater than 3,000/mm/3/. Women of childbearing potential must have a negative pregnancy test within 3 weeks of initiation of therapy. Exclusion Criteria include: History of central nervous system (CNS) disease; Concurrent involvement in any other clinical trial that affects engraftment (e.g. other hematopoietic growth factors); Previous pelvic radiotherapy; Previous treatment with mitomycin-C or carmustine (BCNU); any co-morbid conditions which, in the view of the principal investigators, renders the patient at high risk from treatment complications; bone marrow involvement with tumor at the time of marrow harvest as demonstrated by standard histopathological examination of bilateral iliac marrow biopsies.
TREATMENT PLAN:
Prior to planned marrow transplant, 2.25 x 10/8/ mononuclear cells are inoculated into 3 Aastrom expansion devices and expanded ex vivo over the next 12 days. Patients receive the following pretransplant regimen: Cyclophosphamide 2.0 gm/m/2/ IV days -7,-6,-5; Thiotepa 240 mg/m/2/IV days -7, -6, -5; Benu 150 mg/m/2/ days -7, -6, -5 with reinfusion of the ex vivo expanded cells on day 0. Patients with WBC less than .2 by day 12 or less than .5 by day 16 or less than 1.0 after day 21 or platelets less than 20 x 10/9//1 by day 28 or with later graft failure will receive backup bone marrow, harvested using standard techniques with greater than 0.5 x 10/6/ CD34 positive cells/kg. SEE PROTOCOL FOR COMPLETE TREATMENT PLAN
STATISTICAL CONSIDERATION:
10 patients will be treated and receive infusion of ex vivo expanded cells to meet the objectives of the study, to the toxicity and biologic effects of these cells on engraftment.
PATIENT EVALUATION:
ESTIMATED ACCRUAL
10 patients will be required. It is estimated that 2 patients per month will be accrued: this study accrual will be completed within 6 months.
SITE OF STUDY:
This protocol will be performed in patients both inpatients and outpatients
LENGTH OF STAY:
The total time in hospital is approximately three weeks. This does not represent an increase over the current standard of care for PBPC mobilization and transplantation.
RETURN VISITS:
Patients return to MD Anderson daily to three times per week during the granulocytopenic phase of this treatment up to 28 days post PBPC transplant. Thereafter, they are seen as per standard practice for disease reassessment and long term follow up.
HOME CARE:
None, other than outpatient care monitored at MDACC.
WHERE WILL THE STUDY BE CONDUCTED?
Only MDACC
NAME OF SPONSOR OF FUNDING SOURCE
Aastrom Corporation
COMPETING PROTOCOLS
This protocol is the follow-up to DM94-127.
NAME OF RESEARCH NURSE/DATA MANAGER
Marilyn Davis, R.N.
1.0 OBJECTIVE
Assess the safety of the mixture of early-, mid-, and late-stage bone marrow-derived mononuclear cells produced in the CPS (primary objective), and the biological effect in terms of hematopoietic recovery after infusion of ex vivo-produced hematopoietic cells following high dose chemotheraphy as treatment of patients with breast cancer.
2.0 BACKGROUND
Autologous bone marrow transplantation has been increasingly employed as supportive therapy for subjects undergoing high dose chemotheraphy or chemoradiotherapy for malignant diseases, including lymphoma, leukemia, and breast cancer. Breast cancer is now the most frequent indication for autologous bone marrow or blood progenitor cell transplantation.
Despite the use of cytokines such as granulocyte-macrophage colony- stimulating factor (GM-CSF) and granulocyte colony-stimulating factor (G- CSF) following bone marrow reinfusion, there is an obligate period of profound pancytopenia lasting 1-3 weeks, and delayed engraftment can occur, resulting in morbidity or mortality.
The safety, comfort, and cost of stem- and progenitor cell harvest are also concerns. The standard techniques employed to harvest bone marrow involves obtaining 500-1500 mL of bone marrow from the marrow donor, usually under general anesthesia. In addition to the discomfort caused by the hundreds of marrow aspirates performed, donors are subject to the risks of general anesthesia. Finally, the bone marrow harvest procedure is expensive. Alternatively, stem - and progenitor cells can be collected from peripheral blood by apheresis, but this requires chemotherapy and/or growth factors for mobilization and multiple collections are generally necessary, which are costly.
Important differences exist among approaches, systems and devices used for ex vivo expansion. This study utilizes the Aastrom CPS, which includes a
cell
culture device and a biological environment designed to allow the establishment
of a stromal adherant layer, using constant perfusion with medium, and
relatively low concentrations of hematopoietic growth factors. Preliminary
studies at MD Anderson Cancer Center (DM94-127), using transplantation of ex
vivo-produced cells prepared with this system, in combination with a standard
autologous marrow transplant, indicate that ex vivo expansion can be performed
reliably and reproducibly, and that no toxicity occurs with intravenous infusion
(19). Ten patients, age 18-60 years with breast carcinoma, were entered into a
study transplanting bone marrow plus ex vivo-produced cells. Bone marrow was
harvested, collecting greater than 2 x 10/8/ nucleated cells/kg and greater than
0.5 x 10/6/ CD34+ cells/kg. Twelve days prior to the planned bone marrow
transplant, 2.25 x 10/8/ mononuclear cells were inoculated into a cell culture
device, part of the CPS, and continuously perfused with medium containing
PIXY321 (5 ng/ml), Epo (0.1 U/ml) and hydrocortisone (5 x 10-6/ M). The
expansion reproducibly increased total nucleated cells, CFU-GM, and long term
culture initiating cells (LTC-IC). Patients received Cyclophosphamide
2.0 g/m/2/d; Thiotepa 240 mg/m/2/d; BCNU 150 mg/m/2/d, Days -7, -6, -5, with
reinfusion of the cryopreserved bone marrow on Day 0 plus the ex vivo-produced
cells four hours later. No toxicity was observed from the expanded cell
infusion. Nadir WBC was less than 0.1/ul. All patients engrafted within narrow
time ranges, with median recovery of WBC greater than 200/ul on Day 8 (range 7-
8) granulocytes greater than 500/ul on Day 11 (range 10-13) and platelets
greater than 25,000/ul on Day 16 (range 13-21) and greater than 50,000 on Day 20
(range 18-27). A median of 4 (range 1-9) platelet and 4 (range 2-9) RBC
transfusions were administered. No grade greater than 2 toxicity occurred from
the chemotherapy or bone marrow infusions. Four patients had infections
unrelated to the infusion of the cells produced in the CPS. These data compare
favorably with 29 historical controls receiving the same chemotherapy and
autoBMT without cell expansion, in which granulocytes recovered to greater than
500 on Day 11 (range 7-29) and platelets to greater than 25,000 and greater than
50,000 on Days 24 (range 9-78) and 28 (range 9-147), respectively.
A potential advantage of collecting a relatively small marrow inoculum is that the number of contaminating malignant cells is reduced; additionally, growth of breast cancer cells is not stimulated under these expansion conditions (Brugger et al).
Application of this technology to autologous bone marrow and peripheral stem cell transplant offers a potentially attractive means to increase the efficacy and safety of autologous transplantation, while reducing its complexity and cost. In particular, this technology could eliminate the need for operative bone marrow harvests, produce more rapid recovery of hematopoiesis post-transplant, reduce the length of post-transplant hospitalization, and could increase the purity of the stem- and progenitor cells transfused. In addition, the inclusion of cytokine-primed progenitors could result in accelerated hematopoietic recoveries.
2.1 PREVIOUS PRE-CLINICAL RESEARCH
During hematopoietic expansion culture, total cell numbers increase 8 to 11-fold over 12 days. This includes nonadherent, loosely adherent, and tightly adherent cells. Over 80% of the nucleated cells are viable, as shown by exclusion of propidium iodine stain (4) or Trypan blue dye. These cells have the morphological distribution of normal bone marrow cells, including blast cells and maturing granulocyte precursors, maturing erythroid cells, monocytes and macrophages.
These expanded cells also show typical immunophenotype characteristics of normal granulocyte, erythroid, monocyte/macrophage megakaryocytic, and blast cells (5). Cell surface antigens identified using this technique include CD3, CD11b, CD15, CD20, CD33, CD71, and glycophorin A. While there are minor variations in staining patterns from sample to sample, the expanded cells are typically less than 3% CD3+, 20-50% CD11b+, less than 1% CD19+, and 40-70% CD71+. The frequency of mature T and B lymphocytes in the expanded cell population is significantly reduced.
As shown in the experiments summarized in the Table below, it was shown by Aastrom that varying the standard growth factor combination (IL-3+GM-CSF or PIXY321, Epo, SCF and flt3L) had a direct effect on the productivity of cells in the CPS, but the relative cell mixture composition remained substantially similar. These data were obtained in 36-well plate studies. This finding provided the original justification for selecting the growth factor combination (Epo + PIXY321 + flt3L) for this study to yield the desired relative composition and mixture of early-, mid- and late-stage cells produced in the pre-clinical experiments.
Product/cm/2/ ---------------------------------------------- Growth Factors CellsX10/6/ CFU-GM LTC-IC n - ---------------------- ----------- ------ ------ -- None 0.58 404 yes/a/ 7 Epo, GM-CSF, IL-3, SCF 2.35 4,790 48 23 Epo, GM-CSF, IL-3 1.13 2,060 yes/a/ 3 Epo, PIXY, SCF 1.72 6,960 yes/a/ 4 Epo, PIXY 1.31 3,140 94 13 Epo, PXY, flt3L 1.57 10,580 108 14 |
/a/LTC-IC were not evaluated, but in these conditions, 24 week CFU-GM producing cultures were obtained, representing an LTC-IC proxy.
Aastrom has projected, based on this pre-clinical research, that clinical-size CPSs are expected to yield a mean of 3.0 x 10/9/ cells, 17.7 x 10/6/ CFU-GM and 6.4 x 10/5/ LTC-IC per patient cell yield from the CPS at 1.6 x 10/9/ total nucleated cells and 7.0 x 10/6 CFU-GM. In an average 70 kg patient, this translates to a dose of 2 x 10/6/ CFU-GM/kg. The clinically standard ABMT engrafting dose is reported to be 1 x 10/5/ CFU-GM/kg. Therefore, using the cell dose and the CFU-GM content in the cells produced in the CPS as a key progenitor marker, along with the reliable presence of early stage cells (e.g., LTC-IC, CD34+lin-), there is an expectation that the CPS-produced cells should provide a minimum full engrafting dose for these subjects, with a greater number expected for most patients. Should the minimum cell number, 1.6 x 10/9/, not be attained, the cryopreserved back-up cells will be reconstituted and administered to a subject on Day 0.
It is anticipated that infusion of ex vivo-produced progentiors generated with the CPS will enhance engraftment and shorten time to recovery of granulocytes and platelets and, in so doing, reduce the incidence of infections, febrile episodes and the need for blood- and platelet transfusions.
2.2 HIGH DOSE CHEMOTHERAPY AND AUTOLOGOUS BONE MARROW TRANSPLANT FOR METASTATIC BREAST CANCER - MD ANDERSON PROGRAM
Breast cancer is responsive to initial combination chemotherapy for metastatic disease with a 50-80% response rate and a 10-20% complete response rate, but few patients are cured and median duration of response is generally less than one year (20-24). Once patients relapse, the response to second-line therapy is 20-40% with very few complete responses (CR) and a median duration of response of 2-3 months and a median survival of 12 months.
Studies from a number of drug-resistant cell lines suggest that different alkylating agents may not be cross-resistant, particularly if they interact with
DNA at different sites, or if the alkylating agent previously used may have specific mechanisms of resistance (such as exaggerated levels of aldehyde dehydrogenase) in tumor cells resistant to Cyclophosphamide. Cyclophosphamide and Thiotepa have been shown to have synergistic activity against human breast cancer in preclinical models (40). These two agents have been used together in high dose therapy with the reported MTD being 6g/m/2/ of Cyclophosphamide with 720 mg/m/2/ of Thiotepa, with severe mucositis being the dose-limiting toxicity if one attempts to increase Thiotepa dose further (41,42). None of the 17 patients treated with 6000 mg/m/2/ of Cyclophosphamide and Thiotepa, in doses ranging from 180 to 720 mg/m/2/ developed mucositis. Mild oral pain and erythema developed in 2/3 patients treated at the 720 mg/m/2/ level of Thiotepa, and at 900 mg/m/2/ 3/3 had severe life-threatening but reversible oral and esophageal mucositis. Cyclophosphamide, BCNU, and Cisplatin has been a commonly used preparative regimen at other centers for ABMT for breast cancer (33). In other studies with high dose BCNU, pulmonary complications can be avoided by lowering the dose of BCNU to 450 mg/m/2/, including the CBT regimen described below.
Phase I studies of the combination of Cyclophosphamide, BCNU, and Thiotepa with autologous bone marrow transplantation in high risk patients with metastatic breast cancer (DM91-031, DM92-060 and DM92-084) were recently evaluated. The maximum tolerated dose was Cyclophosphamide 6 gm/m/2/, BCNU 450 mg/m/2/ and Thiotepa 720 mg/m/2/. The regimen produces marked myelosuppression, but with prompt recovery using autologous bone marrow transplantation. Reponse rates and survival with autologous bone marrow transplantation are highly dependent on patient prognostic characteristics, such as prior disease-free interval, sites and number of metastasis, and response to prior chemotherapy. This regimen has proven to be highly active. Among patients with a partial response to chemotherapy, 52% achieved a complete response with this regimen; results were from comparable to superior to other high dose programs.
3.0 BACKGROUND DRUG AND DEVICE INFORMATION
3.1 DESCRIPTION OF THE CPS
The single-use, sealed, sterile cell culture device in the Aastrom CPS consists of three rigid plastic parts separated by a gas-permeable, water- impermeable membrane. The lower cell culture chamber is continuously perfused by growth medium. The cells expand in culture on the plastic surface of the cell culture bed. The upper cell culture chamber is provided with a constant flow of gas, such that oxygenation of the cell culture bed is accomplished by diffusion across the membrane and through the culture medium. Carbon dioxide is removed by the same mechanism. The medium used to perfuse the cultured cells is stored in a closed vessel in an adjacent refrigerator at 4 degrees C whose only external connection is by medical grade tubing. A "Y" connector, attached to the effluent line, allows sampling of the cell product prior to harvest, to test for
bacterial and fungal contaminants. A detailed device description is provided in the Operator's Manual provided by Aastrom.
3.1.1 CELL CULTURE CONDITIONS
The hematopoietic cells are suspended in tissue culture medium composed of Iscove's Modified Dulbecco's Media supplemented with 10% fetal bovine serum, 10% horse serum, hydrocortisone (5 x 10/-6/M), PIXY321 (5 ng/ml), glutamine (4 mM), Erythropoietin (Epo 0.1 U/ml), flt3L (5 ng/ml), gentamicin sulfate (5 Fg/ml), vancomycin (20 Fg/ml), sterile water for injection, and are inoculated into the CPS. The cells are cultured in the CPS for 12 days at 37 degrees C with the tissue culture medium continuously replaced with fresh medium. Sampling of the culture medium is carried out 48 hours prior to harvest, to allow testing for bacterial and fungal contaminants.
To harvest the cells, the non-adherent fraction is removed from the cell culture device by draining the growth medium from the cell culture device into the harvest bag. The chamber is then rinsed with 50 ml of Hank's Balanced Salt solution (HBSS) by injection of the solution with a syringe via an access port. This is followed by agitation of the cell culture device and collection of the rinse into the harvest bag. The adherent layer is detached from the cell culture bed surface by injection of 50 ml of Trypsin-EDTA solution by syringe via an access port. This is also followed by agitation of the cell production device and collection of the rinse into the harvest bag. The chamber is then given a final rinse by injecting 50 ml of HBSS with a syringe via an access port. This is followed by agitation of the cell production device and collection of the rinse into the harvest bag.
Following collection, the cells are washed free of culture medium as detailed in the Operator's Manual. The final product is suspended in appropriate media for immediate infusion.
3.1.2 CELL CULTURE MEDIA INFORMATION
Studies by Aastrom and the University of Michigan have shown that, after the cell washing regimen, the added growth factors and other reagents are below detectable limits, using a very sensitive ELISA assay (R&D Systems, Minneapolis, MN, and Immunex Research Corporation, Seattle, WA). These levels are well below the level of biological activity. The horse and fetal calf sera are tested preclinically for contamination for bacteria, fungi, mycoplasma, endotoxin and viruses. The expanded cell product is washed (See Operator's Manual) prior to transfusion. Nonetheless, the human toxicities and contraindications identified for these drugs are included below:
3.1.2.1 RECOMBINANT HUMAN EPO
Recombinant Human Erythropoietin: Epoetin Alfa, Procrit, NDC 0062-7402-01 Amgen, Thousand Oaks, CA.
Human Toxicity: Toxicities have included hypertension, headache, fever, seizures, and skin rash. The majority of these subjects had chronic renal failure, and these adverse events are frequent sequelae of chronic renal failure and were not necessarily attributable to Epo.
Contraindications: Epo is contraindicated in subjects with: uncontrolled hypertension, known hypersensitivity to mammalian-derived products, and known sensitivity to human albumin.
3.1.2.2 PIXY321
PIXY321 is a fusion protein of granulocyte-macrophage colony-stimulating factor (GM-CSF) and interleukin 3 (IL-3).
3.1.2.3 RECOMBINANT GM-CSF
Human Toxicity: Specific toxicities include peripheral edema, pleural and/or pericardial effusions, fluid retention, sequestration of granulocytes in the lung, supraventricular arrhythmia, elevation of serum creatinine, and elevation of hepatic enzymes.
Contraindications: GM-CSF is contraindicated in subjects with excessive leukemic blasts in the bone marrow or peripheral blood (greater than 10%), or with known hypersensitivity to GM-CSF, yeast-derived products, or any component of the product.
3.1.2.4 FLT3 LIGAND (FLT3L)
The manufacturer of flt3L, Immunex Research and Development Corporation, Seattle, WA, has advised that a biologic Master File is in preparation for clinical, in vivo grade flt3L, and that the Master File will be submitted to the FDA in 1996, and will be available as reference for the purposes of this clinical feasibility trial (Letter, Immunex to Aastrom, December 11, 1995).
Immunex has also advised that flt3L appeared to be well tolerated when administered to mice and monkeys for 14 days, at doses up to 400 ug/kg/day. Based on the safety profile established by Immunex, including the animal data generated to-date, flt3L has no apparent toxicities, and does not stimulate the proliferation and detrimental activation of mast cells.
As indicated above, the cells produced in the CPS are washed four times, resulting in a 5-log reduction in the presence of media components, to levels
below detectable limits. An ELISA, supplied by Immunex, is used to determine residual flt3L levels subsequent to cell washing.
3.1.2.5 HORSE SERUM Contraindications: Known hypersensitivity to horse serum. 3.1.2.6 FETAL CALF SERUM Contraindications: Known hypersensitivity to bovine serum. |
3.1.3 INTENDED USE
The intended use of the CPS is to produce human stem- and hematopoietic progenitor cells to support subjects with compromised hematopoietic systems. A per-patient cell production procedure, beginning with 225 x 10/6/ nucleated bone marrow cells per device, will yield at least 1.6 x 10/9/ cells. The cells will not be infused if the cell yield is below this level; the back-up cells will be infused in such a case.
3.2 CHEMOTHERAPY DRUG INFORMATION
CYCLOPHOSPHAMIDE NSC# 26271
Synonyms (Trade names, etc.): Cytoxan, Endoxan Therapeutic Classification: Alkylating agent
Carmustine
Synonyms: BCNU, BICNU
Therapeutic Classification: Nitrosourea
Rapid I.V. infusion is associated with intense flushing of the skin and suffusion of the conjunctiva within 2 hours. Nausea and vomiting appear within 2 hours and generally last 4 to 6 hours. Burning at the site of infusion is common. Suppression of the peripheral blood leukocytes and platelet counts is the most severe toxic manifestation and the major dose-limiting factor. Toxicity occurs 3-4 weeks after drug administration and lasts for 2-3 weeks. Elevated SGOT, alkaline phosphatase and bilirubin can occur 28 to 38 days after treatment but is reversible. Renal toxicity as measured by unexplained elevations of BUN was present in 10% of patients but was not related to time, dose, or schedule of the drug. Pulmonary fibrosis has also been reported with long-term therapy. The associated mortality rate is high. The reaction presents either as an insidious cough and dyspnea or sudden onset of respiratory failure. Also risk of developing second malignancies (leukemia) with use of nitrosoureas.
4.0 PATIENT ELIGIBILITY
Female patients, age 18-65 years with diagnosis of Stage IV breast carcinoma, who have received no more than one chemotherapy regimen for metastatic disease, with chemotherapy responsive or stable disease at the time of study entry. Zubrod performance status 0 or 1. Patients must be HIV negative and have creatinine less than or equal to 1.5 mg/dl; SGOT, SGPT, & bilirubin less than 2x normal, normal cardiac ejection fraction and DLCO greater than 50% of predicted. Prior to marrow collection for ex vivo expansion, patients must have WBC greater than 3,000/mm/3/ and platelet count greater than 100,000/mm/3/. Women of childbearing potential must have a negative pregnancy test within 3 weeks of study entry.
Exclusion Criteria include: History of hypersensitivity to horse serum or fetal calf serum; central nervous system (CNS) disease within 6 months of study entry; Concurrent involvement in any other clinical trial that affects engraftment (e.g. other hematopoietic growth factors); treatment with any growth factors within one week; Previous pelvic radiotherapy rendering the marrow hypocellular; Previous treatment with Mitomycin-C or Carmustine (BCNU); any co-morbid condition which, in the view of the Principal Investigator, renders the patient at high risk from treatment complications; any evidence of bone marrow involvement with tumor as demonstrated by standard histopathological examination of bilateral lilac marrow biopsies within 4 weeks of study entry.
5.0 TREATMENT PLAN
5.1 Registration
All patients must be registered with the Data Management office at 713-792-2926 for entry on study.
5.2 Bone Marrow Harvest
Patients will undergo back-up bone marrow harvest at any time prior to initiation of the ablative chemotherapy, with cryopreservation, using standard techniques. Patients must have greater than 2 x 10/8/ nucleated cells per kg harvested, including greater than 0.5 x 10/6/ CD34+ cells/kg.
The bone marrow harvest will be performed by standard technique in an operating suite under general or epidural anesthesia. In a standard harvest, approximately 500-1500 ml of marrow is withdrawn. Patients will have the back-up bone marrow collected simultaneously with the cells for ex vivo production. If a sufficient number of cells are collected, the bone marrow collected will be processed and a small fraction utilized for the ex vivo culture described below, and the remainder of the cells will be cryopreserved per standard technique and held as a back-up for use if the prescribed number of cells is not produced or if graft failure occurs.
5.3 Ex Vivo Cell Production
As mentioned in other parts of the Protocol, at the time of bone
marrow harvest, all harvested marrow will be delivered to the bone
marrow laboratory for processing. A portion of the harvested marrow
will be used for cell production in the CPS and the balance of the
harvested marrow will be cryopreserved. Twelve days prior to the
scheduled bone marrow transplant, 2.5 x 10/8/ mononuclear cells
from freshly collected marrow will be placed into the CPS in the
presence of PIXY321 (5 ng/ml), hydrocortisone (final concentration 5
x 10/-6/ M), glutamine (4mM), gentamicin sulfate (5 Fg/ml),
vancomycin (20 Fg/ml), Epo (0.1 U/ml/day) and flt3L (5 ng/ml). The
tissue culture medium will be supplemented with 10% fetal calf serum
and 10% horse serum. A sample of the harvested marrow will be sent for
bacterial/fungal culture.
The cell production will be performed in the Aastrom CPS, which is operated in standard, validated laboratory equipment (incubators, refrigerators, gas pumps) which provide for constant temperature (37 degree C), pH (7.2-7.4), and delivery of sterile air (5% CO\\2\\) to the hematopoietic cells.
Two days prior to the completion of cell production, the cell culture effluent will be sampled to allow for bacterial and fungal testing including gram stain, endotoxin testing and mycoplasma. At the completion of the cell expansion process (12 days), the non-adherent fraction will be removed from the cell culture devices by draining the growth medium from the cell culture devices into the harvest bag. The devices will then be rinsed by using a syringe to inject 50 ml of an HBSS solution into an access port. This is followed by agitation of the cell culture device and collection of the rinse into the harvest bag. The adherent layer will be detached from the cell culture device surface by injection of 50 ml of Trypsin-EDTA solution via an access port. This is again followed by agitation of the cell culture device and collection of the rinse into the harvest bag. The chamber will be then given a final rinse with 50 ml of HBSS, again by injection via an access port. This is followed by agitation of the cell culture device and collection of the rinse into the harvest bag.
The expanded cells will be washed according to the procedure outlined in the Operator's Manual.
All subjects will receive freshly harvested expanded cells. The expanded cells must be greater than 80% viable, as determined by Trypan blue dye, and the minimum total cell number, as determined by an automated cell counter, will be 1.6 x 10/9/ cells.
As part of the standard laboratory in this study, the total cell count, CFU-GM and LTC-IC will be determined for the starting and final cell number. The pre and post expansion sample will be sent for cytology and immunocytochemistry for breast cancer cells.
Pre-transplant Evaluation of the cultured Cells: 48 hours prior to the collection of the expanded cells, the effluent from the CPS will be tested for bacterial and fungal contamination, as described above. If the bone marrow cultures are either visibly contaminated or are positively cultured for bacterial or fungal contamination, or if the cultures die, the expanded cells will not be returned to the subject, who will then simply receive her cryopreserved bone marrow.
Flow Cytometry: Aliquots of the ex vivo produced cells (approximately 10 x 10/6/) will be removed at 12 days, placed in a tube containing sterile buffered medium, and shipped by overnight mail carrier to Aastrom Biosciences, Inc., Domino's Farms, 24 Frank Lloyd Wright Drive, Lobby L, Ann Arbor, MI 48105. These cells will be analyzed for the presence of several cell surface markers (CD34, CD11b, CD15, CD33, CD3, CD4, CD8, CD19, CD71, and glycophorin A and other appropriate markers) in the laboratory at Aastrom as potential correlates for the cell production process. The Aastrom Laboratory operates under GLP guidelines.
Release Criteria: Cells produced in the Aastrom CPS will be considered eligible for release and reinfusion if greater than 1.6 x 10/9/ nucleated cells/kg are recovered after the expansion period and cell washing, and if greater than 80% of the nucleated cells are viable as judged by exclusion of Trypan blue dye. Microbial contamination studies collected from the expansion on Day 10 must be negative.
If the expansion is not deemed sufficient, a patient will receive her backup marrow instead, without infusion of the expanded cells.
5.4 High Dose CBT and Infusion of Ex Vivo Produced Cells
5.4.1 The CBT Regimen
Cyclophosphamide 2.0 gm/m/2/ IV Days -7, -6, -5 (total dose 6 gm/m/2/) with Mesna 500 mg/m/2/ IV 1/2 hour before the first dose of Cyclophosphamide then 2 gm/m/2/ as a continuous infusion over 24 hours for 3 days. Thiotepa 240 mg/m/2/ (total 720 mg/m/2/) will be diluted in normal saline and given over 4 hours daily Days -7, -6, -5. BCNU 150 mg/m/2/ will be dissolved in 100 ml of D5W and given IV piggyback on Days -7, -6, -5 over 40 minutes (total dose 450 mg/m/2/). The ex vivo-produced cells are infused intravenously on Day 0 (the 7th day after the start of chemotherapy). Patients will be premedicated with Tylenol 650 mg PO, Benadryl 50 mg IVPB and Hydrocortisone 50 mg IVPB prior to each infusion.
5.4.2 Post-Transplant Growth Factor Support
G-CSF (5 mcg/kg/d) will be administered SQ until granulocytes greater than 2.0 x 10/9//I or greater than 1.0 x 10/9//I for 3 days. If granulocytes fall to less than 1.0 x 10/9//I, hematopoietic growth factor treatment can be resumed as indicated to maintain an absolute granulocyte count greater than 1.0 x 10/9/L. GM-CSF 250 mg/m2/d may be used in patients intolerant to G-CSF.
5.4.3 Neutrophil Engraftment and Stopping Rules
Neutrophil engraftment is defined as recovery of granulocytes to 0.5 x 10/9//I. Back-up autologous bone marrow will be infused intravenously per the following stopping rules:
5.4.3.1 Background
. back-up cells will always be administered to subjects on Day + 16 if ANC is less than 0.5 x 10/9//I;
. if back-up cells are administered to a subject on Day +16, it is reasonable to assume that an ANC level of 0.5 x 10/9//I can only be reached between Day +16 and Day +20 if the cells produced in the CPS alone contribute to a subject's recovery, because the administration of back-up cells would not be expected to impact engraftment so rapidly, between Days +16 and +20;
. it is relevant to point out that ANC recovery in the Day +16 to +20 timeframe is often experienced in standard bone marrow transplantation.
5.4.3.2 Stopping Rules
With the above as background, stopping rules will be as follows:
. the trial will be stopped and reevaluated if two subjects fail to reach ANC 0.5 x 10/9//I by Day +20, even with the administration of back-up cells on Day +16;
. the trial will also be stopped and reevaluated if four of the first five subjects, or if any five of the ten total subjects, required the administration of back-up cells because they failed to reach ANC 0.5 x 10/9//I on or before Day +16.
6.0 PRETREATMENT EVALUATION
6.1 Complete history and physical examination, including Zubrod
performance status (Appendix C)
6.2 CBC, diff, and platelet count
6.3 SMA 12 and electrolytes
6.4 PT, PTT
6.5 Cardiac ejection fraction
6.6 Pulmonary function - DLCO
6.7 HIV, hepatitis, HTLV-1 (1764 panel)
6.8 Pregnancy test (in fertile women)
6.9 Tumor staging as indicated including bone scan with Xray of hot spots,
CXR, CT scan abdomen, tumor markers, such as CEA will be assessed.
6.10 Bilateral bone marrow aspirate and biopsy
7.0 STUDY PROCEDURES AND EVALUATIONS
7.1 Interim history, physical examination and toxicity assessment daily
while in hospital and at least weekly until WBC greater than 3000 and
platelets greater than 100,000. Toxicity assessment will be made pre-
infusion and 2 and 24 hours post-infusion of both the expanded and
unexpanded bone marrow cells.
7.2 CBC, diff, platelet counts daily while hospitalized and at least twice
per week as an outpatient until WBC greater than 3000/mcl and
platelets greater than 100,000/mcl.
7.3 SMA twice per week while hospitalized. Electrolytes as indicated.
7.4 Tumor restaging as indicated including bone scan with Xray of hot spots, CXR, CT scan of abdomen, and CEA, at day 60. Subsequent follow up is as indicated for patients with this malignancy
7.5 Criteria for discharge: A study subject will be eligible for discharge
from the hospital when she meets the following criteria:
afebrile for 2 or more consecutive days, ANC greater than 500 for 3
consecutive days and Zubrod status of 0, 1 or 2.
All study subjects will receive follow-up care and treatment (as appropriate) by their physician. The subjects' medical records will be available to medical study monitors should additional information be required.
8.0 DATA COLLECTION
8.1 General Information
Data will be recorded using the MD Anderson PDMS system at the time of each evaluation. Data must be recorded for all subjects from whom an Informed Consent is obtained.
8.2 Contents
Data to be collected at each of the study time period is as follows:
- Eligibility criteria
- Demographic data
- Medical history
- Physical examination
- Laboratory profile
- Bone marrow biopsy
- toxicity status
- Laboratory profile
- Bone marrow/cultured cell profile
- Transfusion record
- Toxicity assessment
- Vital signs
- Concomitant medication(s)
- Infection reporting and adverse effects greater than grade 3 - report
immediately to sponsor as event occurs.
- Laboratory profile
- Transfusion record
- Toxicity assessment (note preinfusion, 2 hour and 24 post infusion
toxicity assessment above)
- Vital signs
- Concomitant medications
- Infection reporting and grade greater than or equal to 2 adverse
effects - report immediately to sponsor as event occurs.
- Laboratory profile
- Vital signs
- Toxicity assessment
- Concomitant medications
- Infection reporting and Adverse Effects grade greater than or equal to
3 - Report immediately to sponsor as event occurs.
- Laboratory profile
- Assessment of late toxicity
- Transfusion record
- Vital signs
- Concomitant medications
- Study completion questionnaire
8.3 Quality System
Quality system procedures are designed to ensure that complete, timely, and accurate data are submitted, that protocol requirements are followed, and that complications and/or adverse reactions are immediately identified.
The study monitors will promptly review all incoming data to identify
inconsistent or missing data and adverse effects. Data problems will be
addressed in telephone calls and correspondence to the investigational site
and during site visits. Clinical monitoring procedures are described in
Section 12 of this protocol. The Medical Monitor will receive immediate
notification of adverse reactions Grade greater than or equal to 3. Both the
site and Aastrom will maintain secure hard copy Case Record Forms and data
files.
9.0 ADVERSE EFFECTS
All adverse effects, whether or not considered anticipated, must be recorded in PDMS. Unanticipated effects, as defined below, must be reported promptly to
the sponsor for further evaluation and adequate required reporting to IRBs and investigators.
9.1 Anticipated Adverse Effects
The preliminary clinical experience has not identified any serious adverse effects on health or safety caused by or associated with the CPS and no adverse effects related to the ex vivo use flt3 ligand are anticipated. Patients undergoing high dose chemotherapy are anticipated to experience anorexia, nausea, vomiting, mucositis, pancytopenia and associated infections while neutropenia. Some patients may develop organ toxicities from high dose therapy. The anticipated events are therefore those associated with bone marrow transplantation and/or chemotherapy.
9.2 Unanticipated Adverse Effects
An unanticipated adverse effect is:
- Any serious effect on health or safety or any life-threatening problem, or
death caused by, or associated with, a device, if that effect, problem, or
death was not previously identified in nature, severity, or degree of
incidence in the investigational plan, or any other unanticipated serious
problem that relates to the rights, safety or welfare of subjects.
[21 CFR 812.3(s)]
- In particular, any unexpected grade III or IV toxicities or any other serious event that might be attributable to the infusion of the expanded hematopoietic cells.
Reporting requirements:
- Unanticipated adverse effects should be reported to the Aastrom Study Director, Thomas E. Muller, Ph.D., Vice President Regulatory Affairs, immediately by the Investigator and subsequently to BRI.
- Aastrom requires an immediate telephone report followed by a written report within 5 days.
- An investigator shall submit to Aastrom and the reviewing IRB a report of
any unanticipated adverse device effect occurring as soon as possible, but
no later than 10 working days after the investigator learns of the effect
[21 CFR 812.150(a)(1)]. Aastrom shall immediately conduct an evaluation
and report the results of the evaluation to FDA and to reviewing IRB's and
participating investigator(s) within 10 working days after the sponsor
first receives the notice of the effect [21 CFR 812.150(b)(1)]. If Aastrom
determines that an unanticipated adverse effect presents an unreasonable
risk to subjects, all
investigations or parts of investigations presenting that risk shall be terminated as soon as possible [21 CFR 812.46(b)].
9.3 DEPARTURE FROM PROTOCOL
When a situation occurs which requires a departure from the protocol, the Principal Investigator or other physician in attendance will contact the Medical Monitor by telephone:
Thomas E. Muller, Ph.D.
Vice President Regulatory Affairs
Aastrom Biosciences, Inc.
24 Frank Lloyd Wright, Lobby L
Ann Arbor, MI 48105
Telephone: 313-930-5555
Fax: 313-665-0485
Contact with the Medical Monitor will be made as soon as possible in order to discuss the situation and agree on an appropriate course of action. The patient's medical records and source documents will describe the departure from the protocol and the circumstance requiring it.
10. STATISTICAL CONSIDERATIONS AND DATA ANALYSIS
10.1 Evaluation of the Data
All subjects will be evaluated. Descriptive statistics will be presented for demographic variables and baseline characteristics such as age, sex, medical history, physical examination results, cost information (especially as this relates to morbidity).
The primary endpoint is the safety of the cells produced in the CPS. To assess the hematopoietic recovery post-infusion with ex vivo-produced cells, the day of engraftment is defined by the first day on which granulocytes are greater than 0.5 times 10/9//I are observed. Other secondary endpoints include nadir WBC and platelet count, febrile days, treatment related complications, antitumor response, and survival.
Secondary Endpoints:
a. The day of platelet transfusion independence with platelet count greater
than 20,000/mm/3/, 50,000/mm/3/ and 100,000/mm/3/ as defined by first of
two consecutive time points on which platelet counts meet these endpoints
not related to transfusion
b. Packed red blood cell transfusion and platelet transfusion requirements.
c. Number of documented infections.
d. Number of bleeding episodes.
e. Number of days of hospitalization.
f. Tumor response and response duration
g. Patient survival at 90 days post transplant.
10.2 Safety variables
Safety variables summarized will include incidence of adverse effects (including duration, severity, and outcome). Other safety variables reported will include the incidence and types of laboratory abnormalities. When the frequencies are sufficiently large, a Fisher's exact test or Chi-square test may be used to compare enrolled subjects and historical controls including approximately 65 patients receiving autologous bone marrow transplants without expansion using the same preparative regimen (DM92-060).
10.3 Biological Effect Variables
The following biological effects will be summarized:
- Incidence of febrile neutropenia
- Time to platelet transfusion independence
- Antibiotic usage:
Number of days on antibiotics
Number of total antibiotic days (Number antibiotics times number
days)
Number of days on antifungals
Number of days on antivirals
- Number of documented infections
- Time to neutrophil engraftment
- Length of initial hospital stay
11.0 CLINICAL SUPPLIES
A complete CPS description is provided in the Operator's Manual.
11.1 Materials and Supplies
11.1.1 CPS
Aastrom will supply the CPS, which includes the cell culture device. This device consists of three rigid plastic parts (top, cell bed, and base), and a gas-permeable, water-impermeable membrane. Additional components include the means to facilitate air removal, seals to maintain leak-tight integrity, and mechanical fasteners.
11.1.2 Growth Medium
The culture medium is prepared at the clinical site by supplementing a custom medium, produced to Aastrom specifications in a FDA-registered facility in compliance with cGMPs (21 CFR 820), with glutamine and growth factors in
accordance with a standard operating procedure. Medium components are shipped to or procured by the clinical trial site according to instuctions, specifications and acceptance criteria defined by Aastrom.
11.1.3 Supporting Tubing and Materials
Aastrom will supply the supporting tubing, harvest container, and waste container. These components will be supplied in sterile packages (for single use only).
11.2 Packaging and Labeling
The package labeling includes the statement "Caution, Investigational Device-Limited by United States Law to Investigational Use," Lot Number, "Sterile unless unit package is opened or damaged," and "Manufactured for Aastrom Biosciences, Inc."
11.3 Assembly
Components of the CPS will be received at the clinical test sites in sterile packages. The elements of the system will be connected under a laminar flow hood using aseptic technique provided in the Instructions for Use. The instructions for use will be provided by Aastrom.
11.4 Storage Requirements
The devices may be stored indefinitely under typical laboratory conditions (50 degrees F to 90 degrees F) and may be transported at temperatures up to 125 degrees F.
11.5 Retrieval and/or Disposal of Investigational Materials
At the completion of the cell production process and harvest, the devices will be considered biohazardous waste and disposed of in accordance with standard procedures at the test site. Record will be made of the date of disposal and initials of the individual responsible for their disposition.
12.0 STUDY MONITORING
12.1 Medical Monitor
The Medical Monitor will review the investigational plan, review adverse reactions and/or unanticipated device effects as reported by the Investigator and interpret clinical results. The Medical Monitor for this study is:
Thomas E. Muller, Ph.D.
Vice President Regulatory Affairs
Aastrom Biosciences, Inc.
Domino's Farms
24 Frank Lloyd Wright Dr., Lobby L
Ann Arbor, MI 48105
Telephone: 313-930-5555
Fax: 313-665-0485
12.2 Clinical Monitor
Aastrom has designated BRI International, Inc., as Clinical Monitor for this study. The Clinical Monitor is qualified by training and experience to oversee the conduct of the study. The Clinical Monitor's responsibilities include maintaining regular contact with the investigational site, through telephone contact, correspondence and on-site visits, to ensure that the investigational plan and FDA regulations are followed, that complete, timely and accurate data are submitted, that problems with inconsistent and incomplete data are addressed, and that the site facilities continue to be adequate. Any questions regarding these matters should be addressed to:
Diane Goleb, Senior Project Director
BRI International, Inc.
15825 Shady Grove Road
Rockville, MD 20850
Telephone: 301-548-0500
Fax: 301-548-0519 12.3 Monitoring Procedures 12.3.1 Preinvestigational Site Visit |
The Preinvestigational Site Visit, conducted by the Clinical Monitor, will involve review of relevant FDA regulations and inspection procedures, the investigational plan, requirements for IRB review and approval, completion and submission of forms, record keeping requirements, and administrative reports.
The adequacy of the facilities, the availability of the investigators, the potential number of study participants, and the provisions for staff support will also be assessed during the Preinvestigational Site Visit.
12.3.2 Routine Monitoring Visits
Regular clinical monitoring visits to the investigational site will be conducted by Aastrom and BRI.
To ensure that the Principal Investigator and his staff understand and accept their defined responsibilities, the Clinical Monitor will maintain regular correspondence and perform periodic site visits during the course of the study to verify the continued acceptability of the facilities, compliance with the
investigational plan and relevant FDA regulations, and the maintenance of complete records. Clinical monitoring will include review and resolution of missing or inconsistent results and source document checks (i.e., comparison of submitted study results to original reports) to assure the accuracy of the reported data.
The Clinical Monitor will evaluate and summarize the results of each site visit in written reports, identifying any repeated data problems with any investigator and specifying recommendations for resolution of noted deficiencies.
12.3.3 Termination/Close-out Procedures
The Clinical Monitor, BRI, will notify the investigator in writing of study completion/termination. The letter will include the reason for termination, document unresolved study discrepancies, and remind the investigator of her obligation to retain records according to FDA regulations.
BRI will be responsible for meeting the FDA regulations with regards to record keeping and records retention.
BRI will conduct a standard closure monitoring site visit. The objectives of the closing visit are:
- verify compliance with protocol and FDA regulations;
- ensure accuracy and completeness of subject and administrative files;
- resolve any outstanding questions/problems;
- verify accountability for the test devices;
- ensure the proper disposition of test devices and completed case
report forms;
- confirm the investigator's understanding of his/her regulatory
obligations, including record retention requirements.
13.0 INVESTIGATOR OBLIGATIONS
13.1 Principal Investigator Responsibilities
13.1.1 Compliance
The Principal Investigator is responsible for ensuring that the study is conducted according to the signed Investigator Agreement, the investigational plan, and applicable FDA regulations for protecting the rights, safety and welfare of subjects under the Investigator's care. The Principal Investigator must follow the Investigator Agreement, the investigational plan, and all conditions of FDA and IRB approval.
13.1.2 Awaiting Approval
Written confirmation of IRB approval must be provided to Aastrom prior to the start of the study. The Principal Investigator may determine whether potential subjects would be interested in participating in a study but may not request signature of the Informed Consent or allow any subject to participate until FDA and the reviewing IRB have approved the study.
13.1.3 Supervising Device Use
The Principal Investigator must supervise all use of the CPS involving human subjects and may not supply the device to any person not specifically authorized to receive it according to the investigational plan and applicable regulations.
13.1.4 Informed Consent
The Principal Investigator shall make known to each subject the nature, expected duration, and purpose of the study; the administration and hazards of treatment; and available alternative therapy. Signed, written Informed Consent must be obtained prior to treatment. The original will be kept by the Principal Investigator and will be subject to review by Aastrom. Subjects will be informed that their medical records will be subject to review by Aastrom and the FDA. Subjects shall be informed that they are free to refuse participation in this clinical investigation; and if they participate, that they may withdraw from the study at any time without prejudicing future care.
13.1.5 Device Disposal
Upon completion or termination of the study or the Principal Investigator's participation in this study, or at Aastrom's request, the Principal Investigator must return to Aastrom the device(s) or otherwise dispose of the device(s) as Aastrom directs.
13.1.6 Reporting Requirements
Any life-threatening and/or unexpected serious (grade 3 or 4) toxicities will be reported immediately to the Study Chairman who, in turn, will notify the IRB (Surveillance Committee) and the study sponsor.
13.1.7 Inspections and Records
In accordance with the Investigator Agreement, the Principal Investigator shall permit authorized FDA employees to enter and inspect any site where the device or records pertaining to the device are held, and to inspect and copy all records relating to an investigation, included subject records.
13.1.8 Investigator Records
The Principal Investigator will maintain complete, accurate and current study records, including the following materials:
- Correspondence with FDA, Aastrom, BRI, and the IRB;
- Record of receipt of the device;
- Instructions for device use;
- Subject Records, including Informed Consent, copies of Case Report Forms
and supporting documents (laboratory reports, medical records, etc.);
- Log Book;
- Current study protocol and a log of any significant protocol deviations
(e.g., lack of informed consent or treatment of ineligible subjects);
- Adverse event reports;
- Certification that the investigational plan has been approved by all of
the necessary approving authorities;
- The approved blank informed consent form and blank subject report forms.
- Signed Investigator's Agreement with CV's of the Principal Investigator
and all participating sub-investigators attached.
These records shall be maintained for a period of 2 years after the latter of the following two dates: the date on which the investigation is terminated or completed, or the date that the records are no longer required for purposes of supporting a premarket approval application or notice of completion of a product development protocol.
13.1.9 Investigator Reports
The Principal Investigator will be responsible for the following reports:
13.1.9.1 Unanticipated Adverse Effects
The Investigator will report any serious adverse effect, death or life- threatening problems that may reasonably be regarded as caused by the CPS to Aastrom and the reviewing IRB as soon as possible but no later than 10 working days after the event. All anticipated serious adverse effects should be documented with an explanation of any medical treatment administered.
An unanticipated serious adverse effect is defined as any serious adverse effect on health or safety, or any life-threatening problem or death caused by, or associated with this device, if that effect, problem, or death was not previously identified in nature, severity, or degree of incidence in this investigational plan.
13.1.9.2 Withdrawal of IRB Approval
The Principal Investigator will immediately notify to Aastrom (within 5 working days) if, for any reason, the IRB withdraws approval to conduct the investigation.
The report will include a complete description of the reason(s) for which approval was withdrawn.
13.1.9.3 Departure from Protocol
The Principal Investigator shall notify Aastrom and the IRB of any deviation from the investigational plan made to protect the life or physical well- being of a subject in an emergency. A full report should be made as soon as possible and in no case later than 5 working days after the emergency. NOTE: Except in such an emergency, prior approval by Aastrom is required for changes in, or deviations from, the investigational plan. If such changes or deviations may affect the scientific soundness of the plan or the rights, safety or welfare of subjects, FDA and IRB approval are also required.
13.1.9.4 Progress Reports
The Principal Investigator is required to submit progress and administrative reports to Aastrom, and to the reviewing IRB. Reports will include the number of study subjects, a summary of all adverse reactions, and a general description of the study's progress.
13.1.9.5 Final Report
The Principal Investigator will submit a final report to Aastrom within four weeks following termination of the study or that site's participation in the study, and within three months to the IRB.
13.1.9.6 Other Reports
Upon request, the Principal Investigator will provide accurate, complete, and current information to Aastrom Biosciences, Inc., the FDA, and to the reviewing IRB.
13.1.9.7 Investigator Materials Accountability
All devices received and used by the Principal Investigator will be inventoried and accounted for throughout the study. The devices will be stored in a secured area. Upon study completion, all unused devices will be returned to Aastrom. A final inventory will then be performed.
13.1.9.8 Laboratory Normal Values
The investigational site must maintain a current copy of normal values used by that site's clinical laboratory. The Principal Investigator must assess the clinical significance of all abnormal laboratory values. All clinically significant abnormalities must be characterized by the Principal Investigator as treatment-
related, not treatment-related, or of uncertain etiology; all abnormalities judged treatment-related or of uncertain etiology must be repeated. Any abnormal values that persist should be followed at the Principal Investigator's discretion. In some cases, significant changes within the normal range will require similar judgment.
13.1.9.9 Disclosure of Data
All information concerning this clinical study are considered confidential. The Principal Investigator agrees to use this information only to accomplish this study and will not use it for other purposes without Aastrom's written consent.
It is understood by the Principal Investigator that the information developed in the clinical study may be disclosed as required to the United States Food and Drug Administration.
In order to allow for the use of the information derived from the clinical studies, it is understood that there is an obligation to provide Aastrom with complete test results and all data developed in the study.
Aastrom has no objection to the publication of the results of this study by the investigator. However, a pre-publication manuscript must be provided to Aastrom at least 30 days before the manuscript is submitted to a publisher.
Aastrom agrees that before it publishes any results of the study, a pre- publication manuscript will be provided to the investigator for review at least 30 days prior to the submission to a publisher.
13.1.10 Records Retention and Access
FDA regulations require that, following completion of a clinical trial, a copy of all subject and administrative records pertaining to that study be maintained by the Investigator for 2 years after FDA approval of the investigational device, or, if no application for approval is filed or intended to be filed, for 2 years after all investigations have been completed, terminated, or discontinued, whichever time period is longer.
Completed data records must be made available for review by Aastrom, the Clinical Monitor, and FDA. To ensure the accuracy of data submitted, it is mandatory that representatives of Aastrom and of the FDA have access to source documents (i.e., subject medical records, charts, laboratory reports, etc.). Subject confidentiality will be protected at all times.
Aastrom reserves the right to terminate the study for refusal of the Principal Investigator to supply source documentation of work performed in this study.
14.0 REFERENCES
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APPENDIX A
TOXICITY CRITERIA
(Bearman et al., J Clin Oncol, 6:1562, 1988)
Grade 1 Grade 2 Grade 3 Cardiac Mild EKG abnormality, Moderate EKG Severe EKG not requiring medical abnormalities abnormalities with no intervention; or noted requiring and or only partial heart enlargement on responding to medical response to medical CXR with no clinical intervention; or intervention; or symptoms requiring continuous heart failure with no monitoring without or only minor treatment; or response to medical congestive heart intervention; or failure responsive decrease in voltage to digitalis or by more than 50% diuretics Bladder Macroscopic hematuria Macroscopic hematuria Hemorrhagic cystitis after 2 d from last after 7 d from last with frank blood, chemotherapy dose with chemotherapy dose not necessitating no subjective symptoms caused by infection; or invasive local of cystitis and not hematuria after 2 d intervention with caused by infection with subjective with instillation of symptoms of cystitis scierosing agents, not caused by infection nephrostomy or other surgical procedure Renal Increase in creatinine Increase in Requires dialysis up to twice the creatinine above baseline value recorded twice baseline but before start of not requiring conditioning dialysis Lung Dyspnea without CXR CXR with extensive Interstitial changes changes not caused by localized infiltrate requiring mechanical infection or congestive moderate interstitial ventilatory support heart failure; or CXR changes combined with or greater than 50% showing isolated dyspnea and not oxygen by facemask infiltrate or mild caused by infection and not caused by interstitial changes or CHF; or decrease infection or CHF without symptoms not in PO2 greater than caused by infection or 10% from baseline but congestive heart not requiring failure mechanical vertilation or greater than 50% O2 by facemask and not caused by infection or CHF Hepatic Mild dysfunction with Moderate dysfunction Severe dysfunction bilirubin 2.1-6 mg/dl; with bilirubin 6.1-20 with bilirubin greater or weight gain greater mg/dl; or weight gain than 20 mg/dl; or than 2.5-5% from greater than 5% from hepatic encephalopathy; baseline of baseline of or ascites compromising noncardiac origin; or noncardiac origin; respiratory function SGOT/SGPT increase or SGOT/SGPT increase more than 2-fold but greater than 5-fold less that 5-fold from from the lowest the lowest preconditioning; or preconditioning clinical ascites or image documented ascites |
APPENDIX B
Patient Evaluation
Tests Pre During Study Post History & Physical X CBC, diff & platelets X daily weekly SMA 12 X twice per week weekly PT,PTT X as indicated Cardiac ejection fraction & EKG X Pulmonary function-DLCO X Pregnancy test X HIV, hepatitis, HTLV-1 X Bone marrow aspirate and biopsy X Tumor Staging-Bone scan +Xray of X 3,6,12,18,24 hot spots, CT Abdomen, CXR, and as indicated CEA, CA-125 as indicated |
THE UNIVERSITY OF TEXAS
M.D. ANDERSON CANCER CENTER
INFORMED CONSENT
PROTOCOL TITLE: CLINICAL FEASIBILITY STUDY OF EXPANDED
PROGENITOR CELLS FOR HEMATOPOIETIC ENGRAFTMENT
IN PATIENTS WITH BREAST CANCER
1. ____________________________ ____________________ PARTICIPANT'S NAME I.D. NUMBER You have the right to know about the procedures that are to be used in your participation in clinical research so as to afford you an opportunity to make the decision whether or not to undergo the procedure after knowing the risks and hazards involved. This disclosure is not meant to frighten or alarm you; it is simply an effort to make you better informed so you may give or withhold your consent to participate in clinical research. This informed consent does not supersede other informed consents you may have signed.
The goal of this clinical research study is to determine whether we can speed up recovery after high-dose chemotherapy and bone marrow transplant in patients with breast cancer growing the cells in the laboratory before infusion.
3. DESCRIPTION OF RESEARCH:
This study will include patients with stage 4 breast cancer. 12 days before
treatment begins, about 100 cc of bone marrow will be removed from
patient's hip with a syringe and needle while under general anesthesia. A
sample of the marrow will be placed in an investigational device that will
increase (expand) the number of blood-forming cells (stem cells). Patients
will also have a full bone marrow harvest under anesthesia, (approximately
1 quart), collected at the same time or another occasion. This will be
saved as a back up to be given back by vein in case of poor recovery of
blood counts after infusion of the expanded cells.
The patient will stay in the hospital during the high-dose chemotherapy and transplant procedure. The chemotherapy drugs in this treatment plan are cyclophosphamide, carmustine (BCNU), and thiotepa. These drugs in lower doses are FDA-approved and commercially available. These drugs, at the same or higher doses, have been used in other bone marrow transplant studies at M.D. Anderson and are considered active against breast cancer and reasonably safe. Before treatment begins, a catheter (a special tube) will be inserted into a vein in the patient's chest. The chemotherapy drugs, fluids,
antibiotics, bone marrow, and other blood products will be given through the catheter.
Each drug will be given to the patient for 3 days. One week after the start of chemotherapy, the patient will receive the expanded blood-forming cells. Patients will undergo frequent blood tests over the next several weeks to monitor their recovery and to check for side effects of the treatment. The patient will probably be in the hospital for about 3 weeks. About 10 patients will take part in this study.
4. RISKS, SIDE EFFECTS, AND DISCOMFORTS TO PARTICIPANTS:
Most of these side effects can occur even at standard doses of these drugs. However, using high doses makes it more likely that patients will have bleeding, infection, and other side effects.
After the high-dose chemotherapy, the patient's blood cell counts fall to very low values. When blood cell counts are low, the patient is at high risk for bleeding and infection. At this point, the patient usually requires antibiotics and transfusions of red blood cells and platelets. (Red blood cells carry oxygen through the body, and platelets help control bleeding). Approximately 5% of patients who receive an autologous transplant for breast cancer die of complications from the transplant, usually a side effect of the high dose chemotherapy or an infection that develops while blood counts are low.
This clinical research study may involve unforeseeable risks to the
participant.
4a. This clinical research may involve unforeseeable risks to unborn
children; therefore, the participants should practice adequate
methods of birth control throughout the period of their involvement
in the clinical research study if they are sexually active. To help
prevent injury to children, female participants should refrain from
breast feeding during participation in the clinical research study.
5. POTENTIAL BENEFITS: The expanded blood-forming cells to the bone marrow that is transplanted may help the bone marrow recover and start producing new blood cells faster. This would reduce the risk of bleeding and infection. By starting with a smaller amount of bone marrow and the effects of the cell culture, it is expected that the chance of malignant cells being infused is reduced.
Using high doses of the drugs may cause the cancer to shrink more than it would if lower doses of the same drugs were used.
6. ALTERNATE PROCEDURES OR TREATMENTS:
Common drugs used to treat breast cancer include mitomycin, methotrexate,
doxorubicin, 5-fluorouracil, vinblastine, cyclophosphamide, taxol. Instead
of taking part in the clinical research study described above, patients
could receive one or a combination of these drugs at standard doses. Also,
patients might be able to take part in clinical research studies of other
drugs. Patients could also have a blood stem cell or bone marrow transplant
without receiving the expanded blood-forming cells.
7. I have been given an opportunity to ask any questions concerning the treatment involved and the investigator has been willing to reply to my inquiries. This treatment will be administered under the above numbered and described clinical research protocol at this institution. I hereby authorize Dr. ______________, the attending physician/investigator, and designated associates to administer the treatment.
8. I have been told and understand that my participation in this clinical research study is voluntary. I may decide not to participate, or withdraw my consent and to discontinue my participation in this study at any time. Such action will be without prejudice and there shall be no penalty or loss of benefits to which I may otherwise be entitled, and I will continue to receive treatment by my physician at this institution.
Should I decide not to participate or withdraw from this clinical research if, I have been advised that I should discuss the consequences or effects of my decision with the physician.
In addition, I understand that the investigator may discontinue the clinical research study if, in the sole opinion and discretion of the investigator, the study or treatment offers me little or no future benefit, or the supply of medication ceases to be available or other causes prevent continuation of the clinical research study. The investigator will notify me should such circumstances arise and my physician will advise me about available treatments which may be of benefit at that time.
I will be informed of any new findings developed during the course of this clinical research study which may relate to my willingness to continue participation in this study.
9. I have been assured that confidentiality will be preserved except that qualified monitors from Aastrom Biosciences and the Food and Drug Administration (FDA) may review my medical record if appropriate and necessary. Qualified monitors shall include assignees authorized by the Surveillance Committee of this institution provided that confidentiality is assured and preserved. My name will not be revealed in any reports or publications resulting from this study, without my expresses consent. In special circumstances, the FDA might be required to reveal the names of participants.
10. I have been informed that should I suffer any injury as a result of participation in this research activity, reasonable medical facilities are available for treatment at this institution. I understand, however, that I cannot expect to receive any credit or reimbursement for expenses from this institution or any financial compensation from this institution for such injury.
11. I have been informed that I should inquire of the attending physician whether or not there are any services, investigational agents or devices, and/or medications being offered by the sponsor of this clinical research project at reduced cost or without cost. Should the investigational agent become commercially available during the course of the study. I understand that I may be required to cover the cost of subsequent doses.
Costs related to my medical care including expensive drugs, tests or procedures that may be specifically required by this clinical research study shall be my responsibility unless the sponsor or other agencies contribute toward said costs. I have been given the opportunity to discuss the expenses or costs associated with my participation in this research activity.
12. It is possible that this research project will result in the development of beneficial treatments, new drugs, or possible patentable procedures, in which event I cannot expect to receive any compensation or benefits from the subsequent use of information acquired and developed through participation in this research project.
13. I understand that refraining from breast feeding and practicing effective contraception are medically necessary and a prerequisite for my participation in this clinical research study. Should contraception be interrupted or if there is any suspicion of pregnancy, my participation in this clinical research study will be terminated at the sole discretion of the investigator.
14. I may discuss any questions or problems during or after this study with Dr. Richard Champlin at 713-792-3611. In addition, I may discuss any problems I may have or any questions regarding my rights during or after this study with the Chairman of the Surveillance Committee at 713-792-3220 and may in the event any problem arises during this clinical research contact the parties named above.
CONSENT
Based upon the above, I consent to participate in the research and have received a copy of the consent form.
______________________________ ________________________________ DATE SIGNATURE OF PARTICIPANT _____________________________ ________________________________ WITNESS OTHER THAN PHYSICIAN SIGNATURE OF PERSON RESPONSIBLE OR INVESTIGATOR AND RELATIONSHIP |
I have discussed this clinical research study with the participant and/or his or her authorized representative, using a language which is understandable and appropriate. I believe that I have fully informed this participant of the nature of this study and its possible benefits and risks, and I believe the participant understood this explanation.
APPENDIX D
THE UNIVERSITY OF TEXAS
M.D. ANDERSON CANCER CENTER
INFORMED CONSENT
PROTOCOL TITLE: FEASIBILITY STUDY OF EXPANDED PROGENITOR CELLS FOR
HEMATOPOIETIC ENGRAFTMENT IN PATIENTS WITH
BREAST CANCER
1. _________________________________ __________________________________ PARTICIPANT'S NAME I.D. NUMBER
You have the right to know about the procedures that are to be used in your participation in clinical research so as to afford you an opportunity to make the decision whether or not to undergo the procedure after knowing the risks and hazards involved. This disclosure is not meant to frighten or alarm you; it is simply an effort to make you better informed so you may give or withhold your consent to participate in clinical research. This informed consent does not supersede other informed consents you may have signed.
2. PURPOSE OF STUDY: Chemotherapy at standard or usual doses does not always kill all the cancer cells. In such cases, higher doses of chemotherapy may be helpful. However, these higher doses may destroy normal bone marrow as well as cancer cells, so a bone marrow transplant is done to replace the damaged bone marrow.
The goal of this clinical research study is to determine whether we can speed up recovery after high-dose chemotherapy and bone marrow transplant in patients with breast cancer growing the cells in the laboratory before infusion. (See Section 4.1, Risks of Experimental Protocol.)
3. DESCRIPTION OF RESEARCH:
This study will include patients with breast cancer that has spread to the lymph nodes or to other organs. Twelve days before treatment begins, a full bone marrow harvest, approximately one quart, will be obtained from the patients under general anesthesia. An aliquot of the marrow, less than 10%, will be used to innoculate the investigational device, the Cell Production System (CPS), and the bulk of the harvest, other 90%, will be cryopreserved and saved as back-up in case of poor recovery of blood counts after the infusion of the cells produced in the CPS, or for later therapeutic use, if necessary.
The patients will stay in the hospital during the high-dose chemotherapy and transplant procedure. The chemotherapy drugs in this treatment plan are cyclophosphamide, carmustine (BCNU), and Thiotepa. These drugs in lower doses are FDA-approved and commercially available. These drugs, at the same or higher doses, have been used in other bone marrow transplant studies at M.D. Anderson and are considered active against breast cancer and reasonably safe. Before treatment begins, a catheter (a special tube) will be inserted into a vein the patient's chest. The chemotherapy drugs, fluids, antibiotics, bone marrow, and other blood products will be given through the catheter.
Each drug will be given to the patient for 3 days. One week after the start of chemotherapy, the patient will receive the expanded blood-forming cells. Patients will undergo frequent blood tests over the next several weeks to monitor their recovery and to check for side effects of the treatment. The patient will probably be in the hospital for about 3 weeks. About 14 patients will take part in this study.
4. RISKS, SIDE EFFECTS, AND DISCOMFORTS TO PARTICIPANTS:
I have been advised that the Cell Production System, used in this experimental protocol, has been evaluated previously in a clinical feasibility (safety) study without any adverse events (see Section 4.4). Nevertheless, I understand that this experimental protocol may represent a relatively high risk clinical procedure that may cause delayed neutropenia (low white cell counts) and thrombocytopenia (low platelet counts), and delayed engraftment of my transplant. Prolongation of low white counts or platelet counts may increase the risk of infection and bleeding, may prolong hospitalization and can potentially increase the risk of death. However, the risk of these complications is unknown, and experience with transplants that have prolonged low white counts and platelet counts do not appear to have an increased risk of fatal complications. Prolonged time to engraftment and loss of engraftment can be occasionally seen even when standard sources of stem cells are used, such as unexpanded bone marrow or peripheral blood stem cells.
I also understand that every effort will be used to ensure my safety and recovery, including the availability and potential administration of back- up bone marrow obtained as part of my bone marrow harvest. The additional back-up marrow will be given if there is a delay in blood count recovery, or if blood counts decrease after initial engraftment. I understand that I have an option to select to have my physician employ alternate procedures of treatment for my disease, as outlined in Section 6 of this document.
Bone marrow is collected (harvested) from several places in the hip with a syringe and needle while the patient is under general anesthesia. The patient may have pain at the sites that the marrow was taken from. Rarely, patients have a reaction to the anesthesia (sometimes fatal), bleeding, infection, or injury to the sciatic nerve, which runs along the leg.
Anti-cancer drugs injure normal tissues as well as cancer cells. Side effects of these drugs may include: hair loss, nausea, vomiting, diarrhea, mount ulcers (sores), skin rashes, bleeding and infection, weakness, slight risk of damage of the heart, lung, liver, kidney, or nervous system.
Most of these side effects can occur even at standard doses of these drugs. However, using high doses makes it more likely that patients will have bleeding, infection, and other side effects.
In a preliminary study involving 10 patients none had any side effects from the expanded cell infusion. Potential risks of infusing expanded blood- forming cells include: shortness of breath, strain on the heart, and allergic reaction to the chemicals used while processing or storing the expanded blood-forming cells.
After the high-dose chemotherapy, the patient's blood cell counts fall to very low values. When blood cell counts are low, the patient is at high risk for bleeding and infection. At this point, the patient usually requires antibiotics and transfusions of red blood cells and platelets. (Red blood cells carry oxygen through the body, and platelets help control bleeding.) Approximately 5% of patients who receive an autologous transplant for breast cancer die of complications from the transplant, usually a side effect of the high dose chemotherapy or an infection that develops while blood counts are low.
This clinical research study may involve unforeseeable risks to the participant.
This clinical research may involve unforeseeable risks to unborn children; therefore, the participants should practice adequate methods of birth control throughout the period of their involvement in the clinical research study if they are sexually active. To help prevent injury to children, female participants should refrain from breast feeding during participation in the clinical research study.
5. POTENTIAL BENEFITS:
The expanded blood-forming cells from the bone marrow that is transplanted may help the bone marrow recover and start producing new blood cells faster. This would reduce the risk of bleeding and infection. By starting with a smaller amount of bone marrow it is expected that the chances of malignant cells being in the marrow collection is less.
Using higher doses of the drugs may cause the cancer to shrink more than it would if lower doses of the same drugs were used.
The back-up bone marrow, obtained as part of my bone marrow harvest, may be available for my further treatment later, should this become necessary.
6. ALTERNATE PROCEDURES OR TREATMENTS:
Common drugs used to treat breast cancer include mitomycin, methotrexate, doxorubicin, 5-fluorouracil, vinblastine, cyclophosphamide, taxol. Instead of taking part in the clinical research study described above, patients could receive one or several of these drugs at standard doses. Also, patients might be able to take part in clinical research studies of other drugs. Patients could also have a blood stem cell or bone marrow transplant without receiving the expanded blood-forming cells.
7. I have been given an opportunity to ask any questions concerning the treatment involved and the investigator has been willing to reply to my inquiries. This treatment will be administered under the above numbered and described clinical research protocol at this institution. I hereby authorize Dr. ___________________, the attending physician/investigator, and designated associates to administer the treatment.
8. I have been told and understand that my participation in this clinical research study is voluntary. I may decide not to participate, or withdraw my consent and to discontinue my participation in this study at any time. Such action will be without prejudice and there shall be no penalty or loss of benefits to which I may otherwise be entitled, and I will continue to receive treatment by my physician at this institution.
Should I decide not to participate or withdraw from this clinical research if, I have been advised that I should discuss the consequences or effects of my decision with the physician.
In addition, I understand that the investigator may discontinue the clinical research study if, in the sole opinion and discretion of the investigator, the study or treatment offers me little or no future benefit, or the supply of medication ceases to be available or other causes prevent continuation of the clinical research study. The investigator will notify me should such circumstances arise and my physician will advise me about available treatments which may be of benefit at that time.
I will be informed of any new findings developed during the course of this clinical research study which may relate to my willingness to continue participation in this study.
9. I have been assured that confidentiality will be preserved except that qualified monitors from or representing Aastrom Biosciences and the Food and Drug Administration may review my medical and hospital records if appropriate and necessary. Qualified monitors shall include assignees authorized by the Surveillance Committee of this institution provided that confidentiality is assured and preserved. My name will not be revealed in any reports or publications resulting from this study; without my express consent.
10. I have been informed that should I suffer any injury as a result of participation in this research activity, reasonable medical facilities are available for treatment at this institution. I understand, however, that I cannot expect to receive any credit or reimbursement for expenses from this institution or any financial compensation from this institution for such injury.
11. I have been informed that I should inquire of the attending physician whether or not there are any services, investigational agents or devices, and/or medications being offered by the sponsor of this clinical research project at reduced cost or without cost. Should the investigational agent become commercially available during the course of the study, I understand that I may be required to cover the cost of subsequent doses.
Costs related to my medical care including expensive drugs, tests or procedures that may be specifically required by this clinical research study shall be my responsibility unless the sponsor or other agencies contribute toward said costs. I have been given the opportunity to discuss the expenses or costs associated with my participation in this research activity.
12. It is possible that this research project will result in the development of beneficial treatments, new drugs, or possible patentable procedures, in which event I cannot expect to receive any compensation or benefits from the subsequent use of information acquired and developed through participation in this research project.
13. I understand that refraining from breast feeding and practicing effective contraception are medically necessary and a prerequisite for my participation in this clinical research study. Should contraception be interrupted or if there is any suspicion of pregnancy, my participation in this clinical research study will be terminated at the sole discretion of the investigator.
14. I may discuss any questions or problems during or after this study with Dr. Richard Champlin at 713/792-3611. In addition, I may discuss any problems I may have or any questions regarding my rights during or after this study with the Chairman of the Surveillance Committee at 713/792-3220 and may in the event of any problem arises during this clinical research contact the parties named above.
Based upon the above, I consent to participate in the research and have received a copy of the consent form.
- ----------------------------- ----------------------------------- DATE SIGNATURE OF PARTICIPANT - ----------------------------- ----------------------------------- WITNESS OTHER THAN SIGNATURE OF PERSON RESPONSIBLE PHYSICIAN OR INVESTIGATOR AND RELATIONSHIP |
I have discussed this clinical research study with the participant and/or his or her authorized representative, using a language which is understandable and appropriate. I believe that I have fully informed this participant of the nature of this study and its possible benefits and risks, and I believe the participant understood this explanation.
PHYSICIAN/INVESTIGATOR
APPENDIX E
CASE REPORT FORMS
- -------------------------------------------------------------------------------- ELIGIBILITY AASTROM BIOSCIENCES, INC. + FORM 1 + CPS Replacement Feasibility Trial AAS02 - -------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_]FI [_]MI [_]LI ---------------- Social Security Number/Hospital I.D. BRIDOCID: [_][_][_][_][_][_][_][_][_] P.I. Name Visit Date AAS-2-ELIG-12/1/95 [_][_][_][_][_][_][_][_] [_][_]M [_][_]D [_][_]Y --------------------- - -------------------------------------------------------------------------------- INCLUSION CRITERIA - -------------------------------------------------------------------------------- |
Yes No N/A ("X" one) 1. Subject is female and is greater than or equal to 18 years old and less than or equal to 65 years old........[_]1 [_]2 2. Subject is not pregnant, not lactating, and has a negative serum pregnancy test (within last 2 weeks)........[_]1 [_]2 [_]3 3. Subject is diagnosed with stage II, III, or IV breast carcinoma and has received no more than two chemotherapy regimens, is currently chemoresponsive or has stable disease................................[_]1 [_]2 4. Subject has a Zubrod performance status of 0 or 1............................................................[_]1 [_]2 5. Subject's baseline laboratory tests are within protocol specified limits (HIV negative and estimated creatine clearance greater than 50 mL/min; SGOT, SGPT, and bilirubin less than 2x normal: normal cardiac ejection fraction and DLCO greater than 50% predicted; WBC greater than 3,000/mm/3/ and platelet count greater than 100,000/mm/3/)...................................................................[_]1 [_]2 6. Subject is a candidate for autologous bone marrow transplantation............................................[_]1 [_]2 7. Subject is willing and able to comply with protocal and follow-up requirements...............................[_]1 [_]2 8. Subject or authorized representative has signed informed consent.............................................[_]1 [_]2 Questions 1 - 8 must be marked "Yes" for study participation. - ------------------------------------------------------------------------------------------------------------------------------------ EXCLUSION CRITERIA - ------------------------------------------------------------------------------------------------------------------------------------ Yes No ("X" one) 9. Subject has known bone marrow involvement with tumor, as demonstrated by standard histopathological examination of bilateral iliac marrow biopsies (within last 2 weeks).......................[_]1 [_]2 10. Subject has history of central nervous system (CNS) disease..................................................[_]1 [_]2 11. Subject has known hypersensitivities to bovine and/or horse serum............................................[_]1 [_]2 12. Subject is currently involved in another clinical trial that affects engraftment.............................[_]1 [_]2 13. Subject has been treated with growth factors within the last week (7 days)...................................[_]1 [_]2 14. Subject has had previous pelvic radiotherapy.................................................................[_]1 [_]2 15. Subject has been previously treated with BCNU, mitomycin-C...................................................[_]1 [_]2 16. Subject has a co-morbid condition which, in the view of the Investigator, renders the subject at high risk from treatment complications................................................[_]1 [_]2 Questions 9 - 16 must be marked "No" for study participation. - ---------------------------------------------------------------------------------------------------------------------------- |
+ + / / -------------------------------- -------------------------- Investigator Signature Date Signed - -------------------------------------------------------------------------------- Copyright BRI. |
- ----------------------------------------------------------------------------------------------------------------------- PRETREATMENT MEDICAL AASTROM BIOSCIENCES, INC. HISTORY CPS Replacement Feasibility Trial AAS02 FORM 2 + + - ----------------------------------------------------------------------------------------------------------------------- FF FOR BRI USE ONLY Subject Initials: ---------------- [_] FI [_] MI [_] LI BRIDOCID: Social Security Number/Hospital I.D. [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name AAS-2-PTH-11/14/95 [_] [_] [_] [_] [_] [_] [_] [_] ------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- ALL ITEMS MUST BE COMPLETED. MISSING OR INCORRECTLY COMPLETED ITEMS WILL REQUIRE ADDITIONAL FOLLOW-UP. - ---------------------------------------------------------------------------------------------------------------------- VISIT DATE - ----------------------------------------------------------------------------------------------------------------------- 1. Visit Date:................................................................. [_] [_] [_] [_] [_] [_] Month Day Year - ----------------------------------------------------------------------------------------------------------------------- MEDICAL HISTORY - ----------------------------------------------------------------------------------------------------------------------- IF SUBJECT HAS CURRENT DIAGNOSIS OF CONDITION, PLEASE INDICATE BY MARKING ABNORMAL AND DESCRIBING THE CONDITION IN THE SPACE PROVIDED. ("X" one) Specify abnormalities other than those associated with Normal Abnormal the leukemia/lymphoma 2. Skin.......................... [_]1 [_]2 2. ___________________________________________________________ 3. Eyes, Ears, Nose, Throat...... [_]1 [_]2 3. ___________________________________________________________ 4. Ophthalmic.................... [_]1 [_]2 4. ___________________________________________________________ 5. Mouth and Gum................. [_]1 [_]2 5. ___________________________________________________________ 6. Respiratory................... [_]1 [_]2 6. ___________________________________________________________ 7. Cardiovascular................ [_]1 [_]2 7. ___________________________________________________________ 8. Musculoskeletal .............. [_]1 [_]2 8. ___________________________________________________________ 9. Gastrointestinal.............. [_]1 [_]2 9. ___________________________________________________________ 10. Hepatic....................... [_]1 [_]2 10. ___________________________________________________________ 11. Urogenital.................... [_]1 [_]2 11. ___________________________________________________________ 12. Renal......................... [_]1 [_]2 12. ___________________________________________________________ 13. Endocrine and Metabolic....... [_]1 [_]2 13. ___________________________________________________________ 14. Neurological.................. [_]1 [_]2 14. ___________________________________________________________ 15. Psychological................. [_]1 [_]2 15. ___________________________________________________________ 16. Hematopoietic/Lymphatic....... [_]1 [_]2 16. ___________________________________________________________ 17. Extremities................... [_]1 [_]2 17. ___________________________________________________________ 18. Allergies..................... [_]1 [_]2 18. ___________________________________________________________ 19. Other......................... [_]1 [_]2 19. ___________________________________________________________ - ----------------------------------------------------------------------------------------------------------------------- + + ______________________________________________ __________/__________/__________ Recorder Signature Date Signed - ----------------------------------------------------------------------------------------------------------------------- Copyright BRI. |
- ----------------------------------------------------------------------------------------------------------------------- PRETREAT, PHYSICAL EXAM AASTROM BIOSCIENCES, INC. + FORM 3 + CPS Replacement Feasibility Trial AAS02 - ----------------------------------------------------------------------------------------------------------------------- Subject Initials: FOR BRI USE ONLY [_] FI [_] MI [_] LI BRIDOCID: ---------------- Social Security Number/Hospital I.D. [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name Visit Date AAS-2-FS-12/05/95 [_] [_] [_] [_] [_] [_] [_] [_] [_] [_] M [_] [_] D [_] [_] Y ------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- PHYSICAL EXAMINATION - ---------------------------------------------------------------------------------------------------------------------- 1. HEIGHT....[_][_][_] . [_] cm 2. Weight....[_][_][_] . [_] kg 3. Vital signs: Temperature Respirations Pulse Blood Pressure (degrees Celsius) (breaths/min) (beats/min) (mm Hg) systolic diastolic [_][_] . [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] ("X" one) Normal Abnormal Specify abnormalities 4. Skin.......................... [_]1 [_]2 _______________________________________________________________ 5. Eyes, Ears, Nose, Throat...... [_]1 [_]2 _______________________________________________________________ 6. Respiratory................... [_]1 [_]2 _______________________________________________________________ 7. Cardiovascular................ [_]1 [_]2 _______________________________________________________________ 8. Musculoskeletal............... [_]1 [_]2 _______________________________________________________________ 9. Abdomen....................... [_]1 [_]2 _______________________________________________________________ 10. Gastrointestinal.............. [_]1 [_]2 _______________________________________________________________ 11. Genitourinary................. [_]1 [_]2 _______________________________________________________________ 12. Lymphatic..................... [_]1 [_]2 _______________________________________________________________ 13. Neurological.................. [_]1 [_]2 _______________________________________________________________ 14. Extremities................... [_]1 [_]2 _______________________________________________________________ 15. Liver: Palpable [_]1 Non-palpable [_]2 [_][_]cm below right costal margin 16. Spleen: Palpable [_]1 Non-palpable [_]2 [_][_]cm below left costal margin 17. Date ECG taken (within the last 60 days): [_][_] M [_][_] D [_][_] Y Results: Normal [_]1 Abnormal [_] If abnormal, specify:_________________________________ 18. a. Breast cancer stage: I [_]1 II [_]2 III [_]3 IV [_]4 b. Disease status: No evidence of disease [_]1 Residual bone lesion [_]2 No-osseous disease [_]3 19. Zubrod status: [_] 20. Cardiac ejection fraction (within 2 months of harvest date): [_][_]% 21. Pulmonary function (within 2 months of harvest date): DLCO [_][_]% - ----------------------------------------------------------------------------------------------------------------------- RECORD OF PREPARATIVE REGIMEN - ----------------------------------------------------------------------------------------------------------------------- 22. Number of previous Chemo and/or Radio Therapy regimens [_][_] 23. Preparative regimen: Chemo/Radio Total Date Started Date Stopped Total Dose Therapy Daily Dose Administered __________________________ ________________ ____ M ____ D ____ Y ____ M ____ D ____ Y _______________________ __________________________ ________________ ____ M ____ D ____ Y ____ M ____ D ____ Y _______________________ __________________________ ________________ ____ M ____ D ____ Y ____ M ____ D ____ Y _______________________ __________________________ ________________ ____ M ____ D ____ Y ____ M ____ D ____ Y _______________________ __________________________ ________________ ____ M ____ D ____ Y ____ M ____ D ____ Y _______________________ - ----------------------------------------------------------------------------------------------------------------------- + + ______________________________________________ __________/__________/__________ Recorder Signature Date Signed - ----------------------------------------------------------------------------------------------------------------------- Copyright BRI. |
- ------------------------------------------------------------------------------------------------------- LABORATORY AASTROM BIOSCIENCES, INC. + FORM 4 + CPS Replacement Feasibility Trial AAS02 - ------------------------------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_]FI [_]MI [_]LI ------------------ Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name Date AAS-2-LAB-12/07/95 [_] [_] [_] [_] [_] [_] [_] [_] [_][_]M [_][_]D [_][_]Y ----------------------------------- - ------------------------------------------------------------------------------------------------------- LABORATORY TEST RESULTS - ------------------------------------------------------------------------------------------------------- 1. CBC: a. Hemoglobin (gm/dl)..............................................................[_][_][.][_][_] b. Hematocrit (%)..................................................................[_][_][.][_][_] c. Platelet Count (x10/3/ per cumm)................................................ [_][_][_] d. WBC (x10/3/ per cumm)...........................................................[_][_][.][_][_] WBC differential: 1) Neutrophils (%)............................................................. [_][_] 2) Lymphocytes (%)............................................................. [_][_] 3) Monocytes (%)............................................................... [_][_] 4) Eosinophils (%)............................................................. [_][_] 5) Basophils (%)............................................................... [_][_] 6) Bands (%)................................................................... [_][_] 7) ANC......................................................................... [_][_][_][_] 2. Coagulation: a. PT (sec)........................................................................ [_][_][.][_] b. PTT (sec).......................................................................[_][_][_][.][_] Chemistry: a. Sodium (mEq/L).................................................................. [_][_][_] b. Potassium (mEq/L)............................................................... [_][.][_] c. Chloride (mEq/L)................................................................ [_][_][_] d. CO\2\(mEq/L).................................................................... [_][_][.][_] e. BUN (mg/dl)..................................................................... [_][_] f. Creatinine (mg/dl).............................................................. [_][_][.][_] g. Glucose (mg/dl)................................................................. [_][_][_] h. Total Protein (g/dl)............................................................ [_][_][.][_] i. Albumin (g/dl).................................................................. [_][.][_] j. Calcium (mg/dl)................................................................. [_][_][.][_] k. Uric Acid (mg/dl)............................................................... [_][_][.][_] l. Total Bilirubin (mg/dl)......................................................... [_][.][_] m. ALT (SGPT) (IU/L)............................................................... [_][.][_] n. LDH (IU/L)...................................................................... [_][_][_][_] o. Alk. Phosphatase (IU/L)......................................................... [_][_][_] p. Magnesium (mEq/L)............................................................... [_][_][.][_] 4. Other (at pretreatment only) (check one) POS NEG a. HIV.................................................................................[_] [_] b. Hepatitis Hepatitis B surface antigen......................................................[_] [_] Hepatitis B core antibody........................................................[_] [_] Hepatitis C virus................................................................[_] [_] c. HTLV-1 (1764 panel).................................................................[_] [_] d. Pregnancy test (if applicable)......................................................[_] [_] e. CMV antibody........................................................................[_] [_] . If any of the abnormal values are clinically significant, also report on Adverse Event Form - ------------------------------------------------------------------------------------------------------- Copyright BRI. |
- ------------------------------------------------------------------------------------------------------- BM HARVEST PROFILE AASTROM BIOSCIENCES, INC. + FORM 5 + CPS Replacement Feasibility Trial AAS02 - ------------------------------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_] FI [_]MI [_]LI ---------------- Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name AAS-2-BMH-12/05/95 [_] [_] [_] [_] [_] [_] [_] [_] -------------------------- - ------------------------------------------------------------------------------------------------------- PRE-TREATMENT BONE MARROW EVALUATION - ------------------------------------------------------------------------------------------------------- 1. Bone Marrow Evaluation a. Type of bone marrow specimen: Aspirate [_]1 Biopsy [_]2 Both [_]3 b. Percent cellularity: [_][_]% (Estimate to nearest 10%) c. Biopsy results: Marrow involvement [_]1 No marrow involvement [_]2 - ------------------------------------------------------------------------------------------------------- BONE MARROW HARVEST - ------------------------------------------------------------------------------------------------------- 2. Date of harvest: [_][_]M [_][_]D [_][_]Y 3. Total cells obtained: [_____]x10/9/ per kg Volume obtained: [_____]cc Cell concentration: [_____] 10/9/ per ml Cells cryopreserved (for back-up): [_____]x10/9/ per kg - ------------------------------------------------------------------------------------------------------- CELL EXPANSION PROFILE - ------------------------------------------------------------------------------------------------------- 4. Days of cell expansion: [_][_] 5. Results of preharvest culture: Positive [_]1 Negative [_]2 6. Cell viability: [_][_]% 7. Cell markers: (Forward sample to Aastrom Biosciences, Inc. for analysis) 8. Were the expanded cells infused to subject? Yes [_]1 No [_]2 If yes: Date: [_][_]M [_][_]D [_][_]Y Time: (24 hours clock): [_][_] : [_][_] 9. Total number of expanded cells transfused [_____]x 10/9/ - ------------------------------------------------------------------------------------------------------- BACK-UP MARROW INFUSION - ------------------------------------------------------------------------------------------------------- 10. Was the back-up marrow infused to subject? Yes [_]1 No[_]2 If yes: Date: [_][_]M [_][_]D [_][_]Y Time: (24 hours clock): [_][_] : [_][_] 11. Total number of Back-up marrow cells infused: [_____]x 10/9/ - ------------------------------------------------------------------------------------------------------- + + / / ---------------------------------------------- ------------------------- Investigator Signature Date Signed - ------------------------------------------------------------------------------------------------------- |
Copyright BRI. Forward WHITE and YELLOW copies to BRI. Retain PINK copy for your files.
- ---------------------------------------------------------------------------------------------------------------- TOXICITY Page 1 of 1 AASTROM BIOSCIENCES, INC. AAS02 FORM 6 + CPS Replacement Feasibility Trial + - ---------------------------------------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_]FI [_]MI [_]LI ----------------- Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name AAS-2-F6-4/3/96 [_] [_] [_] [_] [_] [_] [_] [_] ----------------------------------------- - ---------------------------------------------------------------------------------------------------------------- INFUSION TOXICITY GRADING - ---------------------------------------------------------------------------------------------------------------- 1. Assessment Pretreatment............. [_][_]M [_][_]D [_][_]Y 24 Hour.................. [_][_]M [_][_]D [_][_]Y Day 0 Pre-Infusion:...... [_][_]M [_][_]D [_][_]Y Day [_][_] (Insert Day) [_][_]M [_][_]D [_][_]Y 0-2 Hours Post-infusion of Expanded Cells:....... [_][_]M [_][_]D [_][_]Y OTHER:................... [_][_]M [_][_]D [_][_]Y TOXICITY ASSESSMENT EFFECT Maximum Toxicity Date Maximum Treatment Treatment Grade at Grade Relatedness Received? Toxicity? Assessment Occurred (See codes A-E) Yes No New Ongoing 2. Cardiac............... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 3. Bladder............... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 4. Renal................. [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 5. Pulmonary............. [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 6. Hepatic............... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 7. CNS................... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 8. Stomatitis............ [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 9. GI.................... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 (Questions 2-9 use Bearman, et al toxicity grading) 10. Circulatory a. Hypertension...... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 b. Hypotension....... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 11. Dermatologic a. Local............. [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 b. Skin rash......... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 c. Blistering........ [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 d. Erythama.......... [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 12. Allergy [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 13. Miscellaneous a. Weight gain........ [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 b. Weight loss........ [_] [_][_]M [_][_]D [_][_]Y [_]1 [_]1 [_]2 [_]1 [_]2 (Questions 10-13 use SWOG toxicity grading) - -------------------------------------------------------------------------------------------------------------------- For toxicity grade criteria, please see protocol Treatment relatedness: A-definitely related B-probably related C-possibly related D-unrelated E-unknown - -------------------------------------------------------------------------------------------------------------------- + + / / ----------------------------------------------------- ------------------------------- Investigator Signature Date Signed - -------------------------------------------------------------------------------------------------------------------- Copyright BRI. |
- ------------------------------------------------------------------------------------------------------------ VITAL SIGNS AASTROM BIOSCIENCES, INC. + FORM 8 + CPS Replacement Feasibility Trial AAS02 - ------------------------------------------------------------------------------------------------------------ Subject Initials FOR BRI USE ONLY [_]FI [_]MI [_]LI ---------------- Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name AAS-2-VIT-11/15/95 [_] [_] [_] [_] [_] [_] [_] [_] ----------------------------------------- - ------------------------------------------------------------------------------------------------------------ VITAL SIGNS - ------------------------------------------------------------------------------------------------------------ Maximum Fever Date Temperature Code* Respirations Pulse Blood Pressure (degrees Celsius) (see below) (breaths/min) (beats/min) (mm Hg) systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] * Code fever in text field on clinical evaluation form. FEVER CODES: 1=No fever 3=treatment/medication 5=presumed infection 2=blood products 4=documented infection (positive culture) 9=unexplained - ------------------------------------------------------------------------------------------------------------ + + / / - --------------------------------------- -------------------------------- Recorder Signature Date Signed - ----------------------------------------------------------------------------------------------------------- Copyright BRI. |
- ------------------------------------------------------------------------------------------------------- BM HARVEST PROFILE AASTROM BIOSCIENCES, INC. + FORM 5 + CPS Replacement Feasibility Trail AAS02 - ------------------------------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_] FI [_]MI [_]LI ---------------- Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name AAS-2-BMH-12/05/95 [_] [_] [_] [_] [_] [_] [_] [_] -------------------------- - ------------------------------------------------------------------------------------------------------- PRE-TREATMENT BONE MARROW EVALUATION - ------------------------------------------------------------------------------------------------------- 1. Bone Marrow Evaluation a. Type of bone marrow specimen: Aspirate [_]1 Biopsy [_]2 Both [_]3 b. Percent cellularity: [_][_]% (Estimate to nearest 10%) c. Biopsy results: Marrow involvement [_]1 No marrow involvement [_]2 - ------------------------------------------------------------------------------------------------------- BONE MARROW HARVEST - ------------------------------------------------------------------------------------------------------- 2. Date of harvest: [_][_]M [_][_]D [_][_]Y 3. Total cells obtained: [_____]x10/9/ per kg Volume obtained: [_____]cc Cell concentration: [_____] 10/9/ per ml Cells cryopreserved (for back-up): [_____]x10/9/ per kg - ------------------------------------------------------------------------------------------------------- CELL EXPANSION PROFILE - ------------------------------------------------------------------------------------------------------- 4. Days of cell expansion: [_][_] 5. Results of preharvest culture: Positive [_]1 Negative [_]2 6. Cell viability: [_][_]% 7. Cell markers: (Forward sample to Aastrom Biosciences, Inc. for analysis) 8. Were the expanded cells infused to subject? Yes [_]1 No [_]2 If yes: Date: [_][_]M [_][_]D [_][_]Y Time: (24 hours clock): [_][_] : [_][_] 9. Total number of expanded cells transfused [_____]x 10/9/ - ------------------------------------------------------------------------------------------------------- BACK-UP MARROW INFUSION - ------------------------------------------------------------------------------------------------------- 10. Was the back-up marrow infused to subject? Yes [_]1 No[_]2 If yes: Date: [_][_]M [_][_]D [_][_]Y Time: (24 hours clock): [_][_] : [_][_] 11. Total number of Back-up marrow cells infused: [_____]x 10/9/ - ------------------------------------------------------------------------------------------------------- + + / / ---------------------------------------------- ------------------------- Investigator Signature Date Signed - ------------------------------------------------------------------------------------------------------- |
Copyright BRI. Forward WHITE and YELLOW copies to BRI. Retain PINK copy for your files.
- ------------------------------------------------------------------------------------------------------- TRANSFUSIONS AASTROM BIOSCIENCES, INC. + FORM 7 + CPS Replacement Feasibility Trial AAS02 - ------------------------------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_]FI [_]MI [_]LI ---------------- Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. NAME AAS-2-TRAN-11/15/95 [_] [_] [_] [_] [_] [_] [_] [_] ------------------------------- - ------------------------------------------------------------------------------------------------------- TRANSFUSION OF BLOOD PRODUCTS - ------------------------------------------------------------------------------------------------------- [_]1 "X" If NO transfusions have been given Product For Platelet Date Platelet RBC Specify Type of Product [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y [_]1 [_]2 -------------- [_][_]M [_][_]D [_][_]Y "1 = random donor, 2 = single donor, 3 = HLA matched Note: 4 units per transfusion event - ------------------------------------------------------------------------------------------------------- + + / / --------------------------------------------- --------------------------------- Recorder Signature Date Signed - ------------------------------------------------------------------------------------------------------- |
Copyright BRI.
- ---------------------------------------------------------------------------------------------------------------- VITAL SIGNS AASTROM BIOSCIENCES, INC. + FORM 8 CPS Replacement Feasibility Trial AAS02 - ---------------------------------------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_]FI [_]MI [_]LI ---------------- Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name AAS-2-VIT-11/15/95 [_] [_] [_] [_] [_] [_] [_] [_] ----------------------------------------- - ---------------------------------------------------------------------------------------------------------------- VITAL SIGNS - ---------------------------------------------------------------------------------------------------------------- Maximum Fever Date Temperature Code* Respirations Pulse Blood Pressure (degrees Celsius) (see below) (breaths/min) (beats/min) (mm Hg) systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] systolic diastolic [_][_]M [_][_]D [_][_]Y [_][_] . [_] [_] [_][_] [_][_][_] [_][_][_] / [_][_][_] * Code fever in text field on clinical evaluation form. EVER CODES: 1=No fever 3=treatment/medication 5=presumed infection 2=blood products 4=documented infection (positive culture) 9=unexplained - ---------------------------------------------------------------------------------------------------------------- + + / / --------------------------------------- ---------------------------------- Recorder Signature Date Signed - ---------------------------------------------------------------------------------------------------------------- Copyright BRI |
- ---------------------------------------------------------------------------------------------------------------- CONCOMITANT MEDICATIONS AASTROM BIOSCIENCES, INC. + FORM 5 + CPS Replacement Feasibility Trial AAS02 - ---------------------------------------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_] [_] [_] [_] ----------------- Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name AAS-2-MED-11/15/95 [_] [_] [_] [_] [_] [_] [_] [_] ----------------------------------------- - ---------------------------------------------------------------------------------------------------------------- CONCOMITANT MEDICATIONS - ---------------------------------------------------------------------------------------------------------------- List all concomitant medications (including antibiotics, antifungals, and antivirals) taken by the subject during the study, i.e., pretreatment through hospital discharge. - ---------------------------------------------------------------------------------------------------------------- Medication Start date Stop date Indication - ---------------------------------------------------------------------------------------------------------------- 1.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 2.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 3.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 4.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 5.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 6.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 7.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 8.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 9.__________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ 10._________________________ [_][_]M [_][_]D [_][_]Y [_][_]M [_][_]D [_][_]Y _______________________ - ---------------------------------------------------------------------------------------------------------------- + + / / ------------------------------------------------- --------------------------- Recorder Signature Date Signed - ---------------------------------------------------------------------------------------------------------------- |
Copyright BRI.
FORM 10 + CPS Replacement Feasibility Trial AAS02 - -------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_]FI [_]MI [_]LI ------------------ Social Security Number/Hospital I.D. [_] [_] [_] [_] [_] [_] [_] [_] [_] BRIDOCID: P.I. Name [_] [_] [_] [_] [_] [_] [_] [_] AAS-2-INF-11/15/95 ------------------------- INFECTION EVALUATION - -------------------------------------------------------------------------------- 1. Date of onset................[_][_]M [_][_]D [_][_]Y 2. Site of infection: ("X" one) blood.................................................................[_]1 urninary tract........................................................[_]2 pulmonary.............................................................[_]3 GI tract..............................................................[_]4 |
other (specify)_______________________________________________________[_]5
3. Has infrection been resolved? Yes [_]1 No [_]2
If yes, date ended...........[_][_]M [_][_]D [_][_]Y
4. Infection Type: ("X" one) viral (specify agent)_________________________________________________[_]1 bacterial (specify agent)_____________________________________________[_]2 fungal (specify agent)________________________________________________[_]3 protozoan (specify agent)_____________________________________________[_]4
5. Means of diagnosis: ("X" one) presumed..............................................................[_]1 documented............................................................[_]2 if documented, specify means: ("X" all that apply) clinical.........................................................[_]1 radiographic.....................................................[_]1 blood culture....................................................[_]1 bronchoscopy specimen............................................[_]1 swab culture.....................................................[_]1 other biopsy specimen............................................[_]1 urinalysis.......................................................[_]1 |
other (specify)__________________________________________________[_]1
6. Was treatment given? Yes [_]1 No [_]2 If yes, specify treatment ___________________________________________
+ + / / --------------------------------------- --------------------- Investigator Signature Date Signed - -------------------------------------------------------------------------------- Copyright BRI. |
- ------------------------------------------------------------------------------------------------------- ADVERSE EFFECT AASTROM BIOSCIENCES, INC. + FORM 11 + CPS Replacement Feasibility Trial AAS02 - ------------------------------------------------------------------------------------------------------- Subject Initials FOR BRI USE ONLY [_]FI [_]MI [_]LI ---------------- Social Security Number/Hospital I.D. BRIDOCID: [_] [_] [_] [_] [_] [_] [_] [_] [_] P.I. Name AAS-2-11-11/15/95 [_] [_] [_] [_] [_] [_] [_] [_] ---------------------------------- - ------------------------------------------------------------------------------------------------------- ADVERSE EFFECT - ------------------------------------------------------------------------------------------------------- COMPLETE THIS FORM FOR EACH UNANTICIPATED ADVERSE DEVICE EFFECT EXPERIENCED. An UNANTICIPATED adverse effect is any serious effect or health or safety or any life-threatening problem caused by, or associated with, a device, if that effect problem, or death was not previously identified in nature, severity, or degree of incidence in the investigational plan. For this study, this includes: hypotension, anaphylaxis, serositis, dyspnea and/or hypoxemia, renal or hepatic dysfunction, or sudden death - ------------------------------------------------------------------------------------------------------- Serious and unanticipated device effects should be reported by the investigator to Aastrom immediately. The investigator must report the event to Aastrom and the IRB in writing within 10 working days of learning of the event. - ------------------------------------------------------------------------------------------------------- 1. Description of effect: ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- 2. a. Onset date: [_][_]M [_][_]D [_][_]Y 5. Action taken: ("X" all that apply) b. Has the event ended? Yes [_]1 Continuing [_]2 None.............................. [_]1 Medication (specify) [_]1 If YES date --------------- ended: [_][_]M [_][_]D [_][_]Y Other (specify) [_]1 -------------------- ----------------------------------- ----------------------------------- 3. Severity of adverse effect: ("X" one) 6. Results: Mild................................. [_]1 ("X" one) Moderate............................. [_]2 Resolved with treatment........... [_]1 Severe............................... [_]3 Resolved without treatment........ [_]2 Not resolved, continuing.......... [_]3 4. Relationship of adverse effect to treatment: Death............................. [_]4 ("X" one) Outcome unknown................... [_]5 Definitely........................... [_]1 Probably............................. [_]2 7. Assessment: Possibly............................. [_]3 ("X" one) Unlikely............................. [_]4 Non-Serious....................... [_]1 Not known............................ [_]5 Serious, expected................. [_]2 Serious, unanticipated............ [_]3 - ------------------------------------------------------------------------------------------------------- + + / / - ------------------------------------------- -------------------------------- Investigator Signature Date Signed - ------------------------------------------------------------------------------------------------------- Copyright BRI. |
EXHIBIT C
SCHEDULE OF LABORATORY AND CLINICAL EQUIPMENT
BB-IDE-6427, MDA DM 96-075 EQUIPMENT BUDGET Page 1 of 1
======================================================================================================================== Item Supplier Cat. No. UNIT QTY: UNIT/PKG: PKG: COST/PKG: Total Cost: ======================================================================================================================== Equipment: - ------------------------------------------------------------------------------------------------------------------------ CCD Handling Fixture Aastrom 1 1 2 $750.00 $1,500.00 - ------------------------------------------------------------------------------------------------------------------------ CCD Support Clamp Aastrom 1 1 6 $50.00 $300.00 - ------------------------------------------------------------------------------------------------------------------------ CO2 Incubator Forma Scientific 3956 1 1 1 $7,000.00 $7,000.00 - ------------------------------------------------------------------------------------------------------------------------ Incubator Organizer Aastrom 2 1 2 $850.00 $1,700.00 - ------------------------------------------------------------------------------------------------------------------------ 4 degree C Refrigerator Fisher Scientific 126GW-2 1 1 1 $3,500.00 $3,500.00 - ------------------------------------------------------------------------------------------------------------------------ Media Supply Pump Watson Marlow 202U/AA 3 1 3 $1,400.00 $4,200.00 - ------------------------------------------------------------------------------------------------------------------------ Media Supply Pump Head Watson Marlow 202U/AA 3 1 3 $1,200.00 $3,600.00 - ------------------------------------------------------------------------------------------------------------------------ Electrical Power Strip Aastrom 1 1 1 $14.95 $14.95 - ------------------------------------------------------------------------------------------------------------------------ 18 degree C to 50 degree C thermometer SP 2 1 2 $36.00 $72.00 - ------------------------------------------------------------------------------------------------------------------------ neg 5 degree C to 20 degree C thermometer SP 2 1 2 $21.91 $43.82 - ------------------------------------------------------------------------------------------------------------------------ P-1000 Pipetman Gilson 1 1 1 $219.50 $219.50 - ------------------------------------------------------------------------------------------------------------------------ P-200 Pipetman Gilson 1 1 1 $219.50 $219.50 - ------------------------------------------------------------------------------------------------------------------------ P-20 Pipetman Gilson 1 1 1 $219.50 $219.50 - ------------------------------------------------------------------------------------------------------------------------ Gas Regulator Assembly Aastrom 6 1 6 $360.00 $2,160.00 - ------------------------------------------------------------------------------------------------------------------------ Repeater Plpet Eppendorf 1 1 1 $350.00 $350.00 - ------------------------------------------------------------------------------------------------------------------------ Tubing Stretcher Aastrom 1 1 1 $18.00 $18.00 - ------------------------------------------------------------------------------------------------------------------------ Pliers Aastrom 1 1 1 $8.00 $8.00 - ------------------------------------------------------------------------------------------------------------------------ Gas Flow Indicator Aastrom 1 1 1 $130.00 $130.00 - ------------------------------------------------------------------------------------------------------------------------ Gas Humidifier Cap Adapter Aastrom 9 1 9 $6.00 $54.00 - ------------------------------------------------------------------------------------------------------------------------ Nikon Dark Field Microscope 1 1 1 $2,600.00 $2,600.00 - ------------------------------------------------------------------------------------------------------------------------ modification of incubator organizer for horizontal waste shelves 1 $1,000.00 $1,000.00 - ------------------------------------------------------------------------------------------------------------------------ horizontal waste shelves 8 1 8 $100.00 $800.00 - ------------------------------------------------------------------------------------------------------------------------ CPS Processor Aastrom 1 1 1 $26,940.00 $26,940.00 - ------------------------------------------------------------------------------------------------------------------------ CPS Incubator Aastrom 5 1 5 $15,518.00 $77,590.00 - ------------------------------------------------------------------------------------------------------------------------ Interim Monitor Aastrom 1 1 1 $3,000.00 $3,000.00 - ------------------------------------------------------------------------------------------------------------------------ 18 degree C to 50 degree C thermometer SP 2 1 2 $36.00 $72.00 - ------------------------------------------------------------------------------------------------------------------------ neg 5 degree C to 20 degree C thermometer SP 2 1 2 $21.91 $43.82 - ------------------------------------------------------------------------------------------------------------------------ Gas Cylinder Support Scott Medical Stand 1 1 1 $25.00 $25.00 - ------------------------------------------------------------------------------------------------------------------------ Gas Regulator Assembly Aastrom 3 1 3 $360.00 $1,080.00 - ------------------------------------------------------------------------------------------------------------------------ Tubing Heat Sealer Sebra 1 1 1 $3,298.00 $3,298.00 - ------------------------------------------------------------------------------------------------------------------------ Incubator Rack Metro 2 1 2 $346.00 $692.00 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ Manual + Automated CPS Equipment Cost/Study: $142,450.09 - ------------------------------------------------------------------------------------------------------------------------ |
Prepared By: Judy Douville 5/17/96
EXHIBIT D
SCHEDULE OF CLINICAL TRIAL BUDGET AND MILESTONE PAYMENTS
Aastrom agrees to provide, according to the terms and conditions set forth herein, and contingent upon conducting the Study as specified by the Protocol, a total compensation of Fifty-Five Thousand and No/100 U.S. Dollars ($55,000.00 U.S.), or Five Thousand Five Hundred and No/100 U.S. Dollars ($5,500.00 U.S.) per subject according to the compensation schedule set forth below in Section 2 of this Exhibit D. The $5,500 per subject compensation includes an indirect cost of 25%, and represents any and all compensations associated with the Study. The total compensation amount is based upon the actual number of subject to be completed and may be adjusted based upon the actual number of subjects actually completed. If a subject is dropped from the Study for any reason, payment for that subject will be prorated.
The payee identified in Section 3 of this Exhibit D below will be remunerated according to the following schedule:
Percentage Amount ---------- ------------ (U.S. DOLLARS) Initial Payment 25% $13,750.00 ------------ 50% Subjects Completed 25% $13,750.00 ------------ All Subjects Completed 25% $13,750.00 ------------ 100% Subjects Case Report Forms Completed and Submitted 15% $ 8,250.00 ------------ Final Report 10% $ 5,500.00 ------------ |
Payment made to: The University of Texas M.D. Anderson Cancer Center Atten: Manager, Sponsored Programs P.O. Box 297402 Houston, TX 77297
If either the Institution or Aastrom terminates the Study prior to its originally planned termination date, Aastrom shall compensate the Institution based upon the portion of the Study completed at the date of termination. This partial payment will be prorated according to the number of satisfactorily completed subject visits.
EXHIBIT E
INVESTIGATOR AGREEMENTS
(See Section 13 of Protocol)
EXHIBIT 10.17
ATTACHMENT 1
RESEARCH AGREEMENT
UM/Ann Arbor Stromal
LICENSE AGREEMENT
By this Agreement, Ann Arbor Stromal, Inc. (hereinafter "Ann Arbor Stromal") and the Regents of The University of Michigan, a constitutional corporation of the State of Michigan (hereinafter "University") agree as follows:
Incorporated by reference with full force and effect to the provisions, definitions, terms and conditions of this License Agreement (hereinafter "License") are the provisions, definitions, terms and conditions of the Research Agreement to which this License is attached, including the Option Agreement and its Appendices.
2.1 "Effective Date" of this License shall be the date of completed execution by both Parties in accordance with the provisions of Article 9 entitled "License", in the abovementioned Research Agreement to which this License is attached.
2.2 "Parties", in singular or plural usage as required by the context, means Ann Arbor Stromal and/or University.
2.3 "Territory" means all countries of the world.
2.4 "Licensed Technology" means all patentable inventions and Know-how for the production of red blood cells, white blood cells, platelets and bone marrow cells, which are either described in University Project proposal, or conceived or reduced to practice as part of Project, or conceived or reduced to practice, whether or not pursuant to or as part of the Project, by Drs. Stephen G. Emerson, Michael F. Clarke or Bernhard O. Palsson, or those working under their direction, during the term of their participation in the Project and Ann Arbor Stromal's funding of the Project.
2.5 "Licensed Patent(s)" means any and all pending patent applications(s) included within Licensed Technology, whether now existing or hereafter filed, both domestic and foreign, and any patents issuing therefrom.
2.6 "Valid Claim(s)" means any claim(s) pending in a patent application or in an unexpired patent included within the Licensed Patents which has not been held unenforceable, unpatentable, or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer. If in any country there should be two or more such decisions conflicting with respect to the validity of the same claim, the decision of the higher or highest tribunal shall thereafter control;
however, should the tribunals be of equal rank, then the decision or decisions upholding the claim shall prevail when the conflicting decisions are equal in number, and the majority of decisions shall prevail when the conflicting decisions are unequal in number.
2.7 "Know-How" means (a) all information, data and knowledge contained in patent applications or patents which are at anytime included in the definition of Licensed Patents, and (b) any other methods, procedures, processes, compositions of matter, biological materials, trade secrets, experience, work products technical information, inventions, discoveries, improvements, reports, data, results from experiments, developmental efforts and demonstrations and subject matter related to the Project, whether or not contained in Licensed Patents.
2.8 "Product(s)" means any red blood cells, white blood cells, platelets and bone marrow cells as well as any components, by-products, progeny or derivatives thereof and any factor, composition, substance, equipment, mechanism, device or other property and combinations thereof, the manufacture, use or sale of which would, but for this License, comprise an infringement of one or more Valid Claims.
2.9 "Combination Sales" shall mean sales of Product by Ann Arbor Stromal, its Affiliates or subsidiaries as a combined package comprised in part of Product and in part of one or more other products or parts which constitute either an
active ingredient or a significant delivery system or mechanism and which could readily be sold by Ann Arbor Stromal, its Affiliates or subsidiaries and used for their intended purpose by their purchasers without the incorporation or use of Product.
2.10 "Net Sales" means the sum, over the term of this License, of all amounts of monies received and all other consideration received (when in a form other than cash or its equivalent, the fair market value thereof when received) by Ann Arbor Stromal, its Affiliates or subsidiaries from purchasers or users from or by reason of the sale, distribution or use of Product, less any amounts collected for taxes, including sales and use taxes, customer charges, allowances (including any allowance for bad debts), import and export duties and other governmental charges, prompt payment or other customary trade discounts allowed or taken, credits or refunds for goods returned and transportation and delivery charges (including insurance premiums).
If Product is sold in Combination Sales, then Net Sales shall be computed in the following manner: First, gross revenues from the Combination Sales shall be reduced by any applicable deductions itemized in the first paragraph of this definition in order to arrive at "Combination Net Sales"; second, Net Sales shall be calculated by employing the following formulas:
C - p = Net Sales.
In the above formula, "p" is the fair market value of all other products or parts which constitute an active ingredient or significant delivery system or mechanism within the Combination Sale and C is equal to Combination Net Sales.
All fair market value calculations made by Ann Arbor Stromal hereunder shall be in good faith determined by Ann Arbor Stromal in the event no market price is available. In the event the University disagrees with any aspect of Ann Arbor Stromal's implementation of this definition, University may request that such dispute be submitted to arbitration as described in Article 17 and Ann Arbor Stromal hereby agrees to promptly grant and fully cooperate with such request.
2.11 "Affiliate" shall mean any corporation, partnership, proprietorship or other entity controlled by, controlling, or under common control with Ann Arbor Stromal, and shall include any corporation, partnership, proprietorship or other entity directly or indirectly owning, owned by or under common ownership with the party in question to the
extent of twenty-five percent (25%) or more of the equity or voting shares, including shares owned beneficially by such party.
2.12 "Calendar Quarters" means the three (3) months ending on the last day of March, June, September and December of each year.
3.1 Subject to the conditions and provisions of this License, University hereby grants to Ann Arbor Stromal an exclusive world-wide license, without the right to grant sublicenses, except as described in paragraph 3.2 below, under Licensed Patents and to use Know-How to make, use, and sell Product(s), except that University hereby retains the right to use Licensed Patents and Know-How solely for research purposes, and except that to the extent funding from federal agencies results in Licensed Technology or Licensed Patents in addition to Project funding, the federal government may have its standard license rights with respect to such Licensed Technology or Licensed Patents.
3.2 If at any time Ann Arbor Stromal wishes to grant sublicense rights under its exclusive license rights granted herein, University and Ann Arbor Stromal shall negotiate in good faith in order to allow Ann Arbor Stromal to enter into such sublicensing arrangements with a royalty return on Product(s) to University comparable to royalties earned by
University under this License. Subject only to this understanding and the need to have any sublicensing arrangements reflect a fair market value return to Ann Arbor Stromal as in an arms length transaction, it is the understanding of the parties that Ann Arbor Stromal should be able to make its own decisions as to the appropriate mechanisms, including sublicensing, for exploiting the Licensed Technology.
3.3 The University and Ann Arbor Stromal hereby assert that, to the best of their knowledge as of the date of execution of the Option Agreement, there do not exist any University patents or pending patents, other than the Licensed Patents of this License Agreement, which would be infringed by the practice of the Licensed Patents of this License or which would otherwise prevent the practice of any of the Valid Claims. If, however, such University patents or patent applications are subsequently found to have existed prior to the date of the Option Agreement, University shall use reasonable efforts to grant to Ann Arbor Stromal a nonexclusive license to such patents and/or patent applications, to the extent necessary for the practice of the Licensed Technology of this License.
4.1 The license rights granted to Ann Arbor Stromal herein are subject to Ann Arbor Stromal's payment of royalties to University according to the provisions of this Section 4.
4.2 For Product(s) defined in 2.8 herein, Ann Arbor Stromal will pay University a royalty equal to two percent (2%) of Net Sales of such Product(s) by Ann Arbor Stromal and Affiliates for the life of the last to expire of Licensed Patents.
4.3 Where Net Sales form the basis upon which payment to University is derived, the obligation to pay University under this Section 4 is imposed only once with respect to the same unit of Product regardless of the number of Valid Claims, Licensed Patents or items of Know-How covering the same; however, for purposes of determination of payments due hereunder, whenever the term Product may apply to a property during various stages of manufacture, use or sale, Net Sales, as otherwise defined shall be derived from the sale, distribution or use of such Product by Ann Arbor Stromal and Affiliates at the stage of its highest invoiced value to unrelated third parties.
4.4 If at any time or from time to time an unrelated third party in any country shall, under right of a compulsory license granted or ordered to be granted by a competent governmental authority, manufacture, use or sell any Product with respect to which royalties shall be payable pursuant to Paragraph 4.2 of this Section, then Ann Arbor Stromal, upon notice to University and during the period such compulsory license shall be effective, shall have the right to reduce such royalty on each unit of Product sold
in such country to an amount no greater than the amount payable by said third party in consideration of its compulsory license.
5.1 Within sixty (60) days after the close of each Calendar Quarter during
the term of this License (including the last day of any such Calendar
Quarter following any termination of this License), Ann Arbor Stromal
shall report to University all royalties accruing to University under
Section 4 during such Calendar Quarter. Such quarterly reports shall
indicate for each Calendar Quarter the gross sales and Net Sales of
Product; such reports shall also indicate Net Sales with respect to
which payments are due and the amount of such payments, as well as the
various calculations used to arrive at said amounts, including the
quantity, description (nomenclature and type designation), country of
sale and country of manufacture of Product(s). In case no payment is
due for any such period, Ann Arbor Stromal shall so report.
5.2 Ann Arbor Stromal covenants that it will promptly establish and consistently employ a system of specific nomenclatures and type designations for Product(s) so that the various types can be identified and segregated, and Ann Arbor Stromal and Affiliates will consistently employ such system when rendering invoices thereon and henceforth agrees to inform University, or its auditors, when requested as to
the details concerning such nomenclature system as well as to all additions thereto and changes therein.
5.3 Ann Arbor Stromal shall keep and it shall cause its Affiliates to keep, true and accurate records and books of account containing data reasonably required for the computation and verification of payments to be made as provided by this License, which records and books shall be open for inspection upon reasonable notice during business hours by inspectors selected by and at the expense of University for the purpose of verifying the amount of payments due and payable. Said right of inspection will exist for six (6) years from the date of origination of any such record and this requirement and right of inspection shall survive any termination of this License for a period of three (3) years after such termination. However, in the event that such inspection reveals an underpayment of royalties to University in excess of five percent (5%), then said inspection shall be at Ann Arbor Stromal's expense and such underpayment shall become immediately due and payable to University.
5.4 The reports provided hereunder shall be certified by an authorized representative of Ann Arbor Stromal to be correct to the best of Ann Arbor Stromal's knowledge and information.
6.1 Payments accrued at the close of each Calendar Quarter shall be due and payable in Ann Arbor, Michigan on the date each quarterly report, provided for under Section 5 above, is due and shall be paid in United States dollars. Ann Arbor Stromal agrees to make all payments due hereunder to University by check addressed to the University's Intellectual Properties Office or by wire transfer to the bank account designated by University with telephonic confirmation of receipt thereof.
6.2 On all amounts outstanding and payable to University, interest shall
accrue from the date such amounts are due and payable at a rate of two
(2) points above the prime lending rate as established by the Chase
Manhattan Bank, N.A. in New York City, New York, or at such lower rate
as may be required by law.
6.3 Any United States currency payments hereunder shall be determined by converting foreign currencies into their equivalent in United States dollars at the exchange rate of such currency as reported (or if erroneously reported, as subsequently corrected) in the Wall Street Journal on the last business day of the Calendar Quarter during which such payments accrue (or if not reported on that date, as quoted by the Chase Manhattan Bank, N.A. in New York City, New York).
7.1 Ann Arbor Stromal agrees to use commercially reasonable efforts in proceeding with the development, manufacture, marketing and sale of Products to commercially exploit the Licensed Technology and in creating a supply and demand for same; provided, however, Ann Arbor Stromal shall be entitled to exercise prudent business judgment in meeting its obligations hereunder.
7.2 Where Ann Arbor Stromal engages in continuing development with respect to Product(s), Ann Arbor Stromal shall keep University informed of such developments in writing. Ann Arbor Stromal shall promptly inform University of any patent applications, or similar applications, relating to Product(s) or improvements thereon, filed by or on behalf of Ann Arbor Stromal or Affiliates anywhere in the world.
8.1 In the event a third party is infringing a Valid Claim by making, using or selling Product(s) as defined herein, Ann Arbor Stromal shall have the right to bring suit in its own name. University agrees to use reasonable efforts to cooperate in the prosecution of such suit. Ann Arbor Stromal shall bear the expense of any such litigation and, except as described in Paragraph 8.5 below, shall have full authority to negotiate a settlement on such terms as Ann Arbor Stromal shall determine. Ann Arbor Stromal shall
[COPY TO COME]
8.3 In the event that during the term hereof there be made against Ann Arbor Stromal, any charge for infringement of any third-party patent by reason of Ann Arbor Stromal's or Affiliate's manufacture or sale of a Product or any customer's use of the Product which charge is grounded essentially on an asserted domination by that third-party patent of the manufacture, sale or use of such Product, Ann Arbor Stromal shall give written notice thereof to University. Ann Arbor Stromal agrees to effectuate, if possible, an acceptable change in the Product to avoid such alleged infringement. If no such satisfactory change can be effectuated, University and Ann Arbor Stromal agree to collaborate and enter into discussions with said third party for the purposes of negotiating a settlement. If no settlement can be agreed upon by Ann Arbor Stromal, University and the third party, Ann Arbor Stromal shall have the right, but not the obligation, to defend any suit for infringement brought against it by the third party, and if required by law or if requested by University, to join University as a party defendant. If Ann Arbor Stromal shall elect not to defend such infringement suit, Ann Arbor Stromal shall promptly notify University to that effect and University shall thereafter have the obligation to defend the suit provided Ann Arbor Stromal reimburses the University within thirty (30) days of invoicing for all cost and expenses (including reasonable attorney fees), and if required by law or if requested by Ann Arbor Stromal, to join Ann Arbor Stromal as a party defendant.
8.4 Ann Arbor Stromal will bear the cost of defending claims of infringement or pursuing infringers, except as allowed in Paragraph 8.2 above. However, Ann Arbor Stromal can be reimbursed for up to one-half of the unrecovered amount of such actual and reasonable expenses in the following manner: Ann Arbor Stromal can deduct from royalties otherwise due and payable to University under the License, up to fifty percent (50%) until such time as Ann Arbor Stromal has recovered one-half of its actual, reasonable, and otherwise unrecovered expenses. University's "obligation" of bearing one-half of Ann Arbor Stromal's expenses shall not exceed the ability of the above-described mechanism (i.e., a 50% reduction in royalty payments due and payable) to reimburse such expenses and University royalty payments otherwise due shall never be reduced by more than 50%. Ann Arbor Stromal will make an accounting to University of all such expenses as part of its reporting obligations under Section 5.
8.5 Neither University nor Ann Arbor Stromal shall compromise or settle any claim or action in any manner that would affect the rights of the other Party without the consent of said other Party.
9.1 With respect to any termination of this License, and except as provided herein to the contrary, all rights and
obligations of the Parties hereunder shall cease with respect thereto, except as follows:
9.1.1 Obligations to pay royalties and other sums accruing hereunder up to the day of such termination; 9.1.2 Obligations to pay royalties on Net Sales, subsequent to said date of termination of Product(s) in Stock at the date of termination with respect to which stock Ann Arbor Stromal shall have a reasonable time to sell or liquidate in a reasonable manner as deemed necessary by Ann Arbor Stromal under the circumstances; 9.1.3 Obligations for record keeping and accounting reports for so long as Product(s) are sold pursuant to Paragraph 9.1.2 above. At such time as there are no sales or other dispositions of Product(s) upon termination of this License, Ann Arbor Stromal shall render a final report and royalty payment; 9.1.4 University's rights to audit books and records as described in Section 5 herein; 9.1.5 Obligations of indemnity under Section 18; 9.1.6 Any cause of action or claim of Ann Arbor Stromal or University accrued or to accrue because of any breach or default by the other Party hereunder; |
9.2 This License will become effective on its Effective Date and, unless terminated under another, specific provision of
this License, will remain in effect until and terminate upon the expiration of the later of Ann Arbor Stromal's obligation to pay royalties under Paragraph 4.3 herein or the last to expire of Licensed Patents. After such full-term termination of this License, Ann Arbor Stromal shall have the right to make, use and sell Product(s) without further payment to University hereunder.
9.4 In the event that Ann Arbor Stromal desires to terminate this License, Ann Arbor Stromal shall serve upon University a notice of termination, including a statement of reasons for such termination, at least six (6) months before a termination date established by Ann Arbor Stromal. Such notice shall be deemed by the parties to be final, and immediately upon service of such notice of termination,
University shall have the right to begin negotiations and enter into agreements with others for the manufacture, sale and use of the Product(s), and may, at its option, disclose to said others any and all information related to Product(s) other than Confidential Information generated or developed solely by Ann Arbor Stromal. During the period of time from the notice of termination until termination pursuant to this provision, Ann Arbor Stromal shall continue to commercialize Product(s) and to make them reasonably available to the public at fair market value.
This License shall not be transferable or assignable by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld; and any attempt to transfer or assign this License without such consent shall be void from the beginning. No transfer or assignment may be made by Ann Arbor Stromal unless and until the intended transferee or assignee agrees in writing to accept all of the terms and conditions of this License. For purposes of implementing this clause the University's consent may only be withheld:
i) if the University reasonably believes that implementing the terms of the proposed transfer or assignment could economically discriminate against the University or its employees holding equity in Ann Arbor Stromal as compared to any of the other shareholders or investors in Ann Arbor Stromal or their principals; or
ii) if the University reasonably believes that the proposed transfer or assignment is to a third party which is not in a financial and technical position at least equivalent to that of Ann Arbor Stromal for purposes of exploiting and commercializing the Licensed Technology.
11.1 If the terms of this License, or any assignment or license under this License are or become such as to require or make it appropriate that the Agreement or license or any part thereof be registered with or reported to a national or supranational agency of any area in which Ann Arbor Stromal, or Affiliates would do business, Ann Arbor Stromal will, at its expense, undertake such registration or report. Prompt notice and appropriate verification of the act of registration or report of any agency ruling resulting from it will be supplied by Ann Arbor Stromal to University.
11.2 Any formal recordation of this Agreement or any license herein granted which is required by the law of any country of the Territory as a prerequisite to enforceability of the Agreement or license in the courts of any such country or for other reasons shall also be carried out by Ann Arbor Stromal at its expense, and appropriately verified proof of recordation shall be promptly furnished to University.
12.1 The Export Regulations of the United States Department of Commerce prohibit the exportation from the United States of certain types of technical data and commodities (listed in the Export Administration Regulations), unless the exporter (e.g., Ann Arbor Stromal or Affiliates) has received the required General License or Validated License, whichever is applicable. In addition, the exporter may be required to obtain certain written assurances regarding re-export from the foreign importer for certain types of technical data and commodities. Prior to its engaging in any export activity, Ann Arbor Stromal has advised University that it will receive a copy of the then current Export Administration Regulations of the United States Department of Commerce and will arrange for a subscription under which it will receive Supplementary Bulletins from the United States Department of Commerce upon their issuance. Ann Arbor Stromal hereby agrees to comply with, and to require Affiliates to comply with, the Export Administration Regulations of the United States Department of Commerce; and Ann Arbor Stromal hereby gives University the assurances called for in the Export Administration Regulations, including the assurances called for in Part 379.4 and any successor provisions of such regulations.
12.2 This License shall be subject to all United States Government laws and regulations now or hereafter applicable to the subject matter of this License.
Any notice, request, report, or payment required or permitted to be given or made under this License by any Party shall be given by sending such notice by prepaid certified mail, return receipt requested, or by facsimile transmission to the address set forth below or such other address as such party shall have specified by written notice given in conformity herewith. Any notice not so given shall not be valid unless and until actually received, and any notice given in accordance with the provisions of this paragraph shall be effective when mailed:
TO University: The University of Michigan Intellectual Properties Office 475 East Jefferson, Room 2354 Ann Arbor, Michigan 48109-1248 Attention: File No. 433
TO Ann Arbor Stromal: Robert Kunze General Partner H&Q Life Science Technology Fund I One Bush Street San Francisco, California 94104
With copy provided to: Kenneth L. Guernsey Attorney at Law Cooley, Godward, Castro, Huddleson & Tatum One Maritime Plaza, 20th Floor San Francisco, CA 94111-3580
In the event that any term, provision, or covenant of this License shall be determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable, that term will be curtailed, limited, or deleted, but only to the extent necessary
to remove such invalidity, illegality, or unenforceability, and the remaining terms, provisions, and covenants shall not in any way be affected or impaired thereby. In the event that the time period of any covenant shall be held unenforceable as a matter of law, said covenant will be interpreted to be effective for an enforceable time period.
This License contains the entire understanding of the Parties with respect to the matter contained herein, and supersedes all prior agreements, oral or written, and all other communication between them relating to the subject matter hereof. The Parties hereto may, from time to time during the continuance of this License, modify, vary or alter any of the provisions of this License, but only by an instrument duly executed by authorized officials of both Parties hereto.
This License and the relationships between the Parties shall be governed in all respects by the law of the State of Michigan, the United States of America, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent has been granted.
Any dispute relating to the interpretation or performance of this Agreement or the grounds for the termination hereof shall be resolved at the request of either party through final and binding arbitration by a single arbitrator in accordance with the Commercial Arbitration rules of the American Arbitration Association ("AAA"). Such arbitrator shall be selected by the mutual agreement of the parties or, failing such agreement, shall be selected according to the relevant AAA rules. The parties shall bear the costs of such arbitrator and arbitration equally. The prevailing party in any such arbitration shall be entitled to its reasonable attorney's fees and costs solely at the discretion of the arbitrator in addition to any other amount of recovery ordered by such arbitrator. The arbitrator or court, as the case may be, shall determine which party is the "prevailing party" for purposes of this section. If judicial enforcement or review of such arbitrator's award is sought by either party, judgment may be entered upon such award in any court of competent jurisdiction. Ann Arbor Stromal hereby consents to venue and personal jurisdiction in Ann Arbor, Michigan for any such arbitration proceeding and for any court proceeding. The duty of the parties to arbitrate any dispute relating to the interpretation or performance of this Agreement or the grounds for the termination thereof shall survive any termination of this Agreement.
18.1 Ann Arbor Stromal shall defend, indemnify and hold harmless and shall require Affiliates to defend, indemnify and hold harmless University, its fellows, officers, employees and agents, for and against any and all claims, demands, damages, losses, and expenses of any nature (including attorneys' fees and other litigation expenses), resulting from, but not limited to, death, personal injury, illness, property damage or products liability arising from or in connection with, any of the following:
18.1.1 Any manufacture, use, sale or other disposition by Ann Arbor Stromal, Affiliates, or other transferees of Products; 18.1.2 The direct or indirect use of Products by any person; 18.1.3 The use by Ann Arbor Stromal or Affiliates of any invention, discovery, data, information, product or process related to Licensed Patents or Know-How. |
18.2 University shall be entitled to participate at its option and expense through counsel of its own selection, and may join in any legal actions related to any such claims, demands, damages, losses and expenses under Paragraph 18.1.
19.1 UNIVERSITY MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ASSUMES NO RESPONSIBILITIES WHATEVER WITH RESPECT TO DESIGN, DEVELOPMENT, MANUFACTURE, USE, SALE OR OTHER DISPOSITION BY ANN ARBOR STROMAL OR AFFILIATES OF PRODUCTS. Regardless of any testing which may have been done at University, University makes no representations regarding how Product can or should be used in any specific process.
19.2 THE ENTIRE RISK AS TO PERFORMANCE OF PRODUCTS IS ASSUMED BY ANN ARBOR STROMAL AND AFFILIATES. Every user of Product must do its own verification testing and define for itself any processes for its use of Product. In no event shall University be responsible or liable for any direct, indirect, special, incidental, or consequential damages or lost profits to Ann Arbor Stromal, Affiliates, users or any other individual or entity regardless of legal theory. The above limitations on liability apply even though University may have been advised of the possibility of such damage.
19.3 University represents that to the best of its knowledge and belief it has the lawful right to grant the license set forth herein without breaching the terms or conditions of any agreements with any third parties.
Ann Arbor Stromal agrees to refrain from using and to require Affiliates to refrain from using quotes or opinions attributed or attributable to University or any employee of University in publicity, advertising, or news releases without the prior written approval of an authorized representative of University. Reports in scientific literature and presentations of joint research and development work are not considered publicity.
Ann Arbor Stromal and Affiliates agree to mark Products with the appropriate patent notice as approved by University.
No waiver, no matter how long continuing or how many times extended, by either Party of a breach of any term or condition of this License shall be considered as a permanent waiver or as an amendment to this instrument.
The Article headings herein are for purposes of convenient reference only and shall not be used to construe or modify the terms written in the text of this agreement.
Neither Party hereto shall be deemed to be in default of any provision of this License, or for any failure in performance, resulting from acts or events beyond the reasonable control of such Party. For purposes of this License, such acts shall include, but not be limited to, acts of Good, acts of civil or military authority, civil disturbance, war, strikes, fires, power failures, other catastrophes, or other "force majeure" events beyond the Parties' reasonable control.
Except as clearly and specifically provided under the terms and provisions of this License, neither Party shall be deemed to be an agent of the other in connection with the exercise of any rights hereunder, and neither shall have any right or authority to assume or create any obligation or responsibility on behalf of the other.
26.1 University and Ann Arbor Stromal each agree not to disclose or use, except as required by law or contemplated by this License and the Research Agreement to which this License is attached, the following ("Confidential Information"): (i) any of the terms of this License and the Exhibits hereto (except for disclosure of basic terms which may be required under University policy), or (ii) except as otherwise
provided for in the Research Agreement's Article 7 (Publications), any Project related Know-How, data, process, technique, drawing, formula, future development, or engineering or manufacturing development of either party and any marketing, business plan, servicing, financial or personnel matter relating to the other party, its present or future products, sales, suppliers, customers, employees, investors or business except as Ann Arbor Stromal finds reasonably necessary to conduct its business or raise capital or (iii) any information received from the other party which is in written form and marked "Confidential", "Proprietary", "Secret" or the like. 26.2 The parties hereto agree that the provisions of this Article 26 shall survive, whether or not the other provisions hereof remain in full force and effect, for a period of three (3) years after any termination of this License. 26.3 Confidential Information shall not include and neither party shall be obligated to hold in confidence or restrict the use of any information (i) which is or becomes public knowledge without breach of this License, (ii) which is or becomes available without a confidentiality restriction and without breach of this License from a source other than a party hereto, (iii) which is produced in response to a court order or government action, (iv) which is disclosed with the other party's prior written approval, (v) which is independently developed by the party receiving the Confidential Information from the other party, or (vi) which is known by other means to the party receiving the 28 |
Confidential Information at the time of disclosure of same, and in the case of (v) and (vi), can be established by documentary evidence. |
IN WITNESS WHEREOF, each of the Parties hereto has caused this entire agreement to be executed in duplicate originals by its duly authorized officer or representative.
FOR THE REGENTS OF FOR ANN ARBOR STROMAL, INC. THE UNIVERSITY OF MICHIGAN By /s/ R. DOUGLAS ARMSTRONG By /s/ ROBERT F. GAVIN --------------------------- --------------------------- (authorized representative) (authorized representative) |
Typed Name R. Douglas Armstrong Typed Name Robert F. Gavin -------------------- --------------- Title President and CEO Title Director, Intellectual Properties ----------------- --------------------------------- Date 3/13/92 Date 3/13/92 ------- ------- |
FIRST AMENDMENT TO LICENSE AGREEMENT
RECITATIONS
The following is a recital of facts underlying this Agreement:
B. The parties now wish to amend the License Agreement in certain respects.
NOW, THEREFORE, in consideration of their mutual promises, the parties hereto agree as follows:
1. The License Agreement is hereby amended as follows.
(a) Licensed Technology includes:
i) all patent applications, including related foreign patent applications, and patents issuing therefrom identified in Exhibit A attached hereto;
ii) all Know-How included in patents and patent applications of Exhibit A and grant proposals, papers, abstracts and other documents described in Exhibit B attached hereto; and
iii) all additional patentable inventions and Know-How for the production of red blood cells, white blood cells, platelets and bone marrow cells, which is either described in University Project proposal, or conceived or reduced to practice as part of Project, or conceived or reduced to pratice, whether or not pursuant to or as part of the Project, by Drs. Stephen G. Emerson, Michael F. Clarke or Bernhard O. Palsson, or those working under their direction, during the term of their participation in the Project and Aastrom's funding of the Project.
(b) Section 3.2 of the License Agreement hereby is amended to read in its entirety as follows:
3.2 Aastrom shall have the right to grant one or more sublicenses for third parties to use the rights granted to Aastrom under its exclusive
license rights granted in this License Agreement; and, subject to approval by Aastrom, sub-sublicense agreements may also be granted by a third party sublicensee. All sublicenses and sub-sublicenses, if any, shall provide that the sublicensee and sub-sublicensee shall comply fully with all provisions of this License Agreement, including without limitation, paying the same royalty to the University as is specified in this License Agreement. Notwithstanding any such sublicensing, Aastrom shall still remain fully responsible and liable for compliance with all terms of this License Agreement, including compliance by any and all sublicensees and sub-sublicensees. No consent from University is required for any sublicense or sub-sublicense, as described above; however, Aastrom shall provide timely notice of each sublicense hereunder along with copies of all sublicense agreements. Should Aastrom propose to enter into a sublicense which reduces any royalties payable to University, or which otherwise modifies any of the rights of University under this License Agreement, then no such sublicense can be entered into without the prior written consent of University and any
such sublicense entered into without prior written consent of University shall be void from the beginning. For example, if the proposed sublicensee is to issue stock to Aastrom in lieu of royalties, or if a proposed sublicensee is to make a lump sum front- end payment as a set-off against or in lieu of future royalties, then there shall be negotiations between Aastrom and University for an equitable allocation of said consideration in lieu of royalties, with the mutual consent of Aastrom and University required for any such non-conforming sublicense agreement.
2. Article 13 of the License Agreement, entitled "Notices", is amended as follows:
i) Provision for notice to Robert Kunze and Kenneth Guernsey is hereby deleted; and
ii) Notice to Aastrom shall be provided to:
Aastrom Biosciences, Inc.
President/CEO
P.O. Box 130469
Ann Arbor, Michigan 48113-0469
3. As amended hereby, the License Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute and deliver this First Amendment as of the date set forth above.
FOR THE REGENTS OF FOR AASTROM BIOSCIENCES, INC. THE UNIVERSITY OF MICHIGAN By /s/ R. DOUGLAS ARMSTRONG By /s/ ROBERT F. GAVIN --------------------------- -------------------------- (authorized representative) (authorized representative) Typed Name R. Douglas Armstrong Typed Name Robert F. Gavin -------------------- --------------- Title President and CEO Title Director, Intellectual Properties ----------------- --------------------------------- |
EXHIBIT A
License Agreement Amendment dated March 13, 1992 between UM and Aastrom Biosciences
DOCUMENTATION FOR LICENSE AMENDMENT AGREEMENT
1. The following U.S. patent applications and all related foreign applications:
A. U.S. APPLICATION, SER. #07/366,639, OSMMN REF. #2363-022-55 Methods, Compositions and Devices for Growing Cells. Filed: 6/15/89
B. U.S. APPLICATION, SER. #07/628,343, OSMMN REF. #2363-023-55 CIP Methods and Compositions for the Ex Vivo Replication of Stem Cells and for the Optimization of Hematopoietic Progenitor Cell Cultures. Filed: 12/17/90
E. U.S. APPLICATION, SER. #07/737,024, OSMMN REF. #2363-034-55 Methods and Compositions for the Ex Vivo Replication of Stem Cells, for the Optimization of Hematopoietic Progenitor Cell Cultures, and for Increasing the Metabolism, GM-CSF Secretion and/or IL-6 Secretion of Human Stromal Cells. Filed: 7/29/91
F. U.S. APPLICATION, SER. #07/740,590, OSMN REF. #2363-035-55 Methods for Human Gene Therapy, Including Methods and Compositions for the Ex Vivo Replication and Stable Genetic Transformation of Human Stem Cells, for the Optimization of Human Hematopoietic Progenitor Cell Cultures and Stable Genetic and/or IL-6 Secretion of Human Stromal Cells. Filed: 8/5/91
H. U.S. APPLICATION, SER. #07,815,513, OSMMN REF. #2363-036-55 Methods for Regulating the Specific Lineages of Cells Produced in a Human Hematopoietic Cell Culture, Methods for Assaying the Effect of Substances on Lineage-Specific Cell Production, and Cell Compositions Produced by these Cultures. Filed: 1/2/92
I. U.S. APPLICATION, SER. #07/822,136, OSMMN REF. #2363-055-55 Targeted Virus. Filed: 1/17/92
J. PENDING U.S. APPLICATION, OSMMN REF. #2363-043-55
Methods, Compositions and Devices for Maintaining and Growing Human
Stem and/or Hematopoietic Cells.
Filed: 3/4/92
2/4/92
DESCRIPTION AUTHOR DATE ----------- ------ ---- 2. Business Plan and Strategy AASTROM Biosciences, Inc. Dec., 1991 3. Research Plan AASTROM Biosciences, Inc. Sept., 1991 4. Goals, Science/Business, Ann Arbor Stromal, Inc. Undated Personnel & Structure 5. Research Agreement Appendix C to Option 3/24/89 Agreement 6. SBIR Proposal: Hematopoietic R. Douglas Armstrong 12/12/91 Cell Expansion System 7. NRA-91-OSSA-18 Proposal: Bernard O. Palsson 11/25/91 Shear Sensitivities of Human Bone Marrow Cultures 8. ACS Proposal: Hematopoietic Bernard O. Palsson 10/30/91 Bioreactor System to Improve Bone Marrow Transplantation for Treatment of Cancer 9. Aastrom System One (Version Bernard O. Palsson 10/19/91 1.00 - Draft) 10. NRA-91-OSSA-13 Proposal: Bernard O. Palsson 8/15/91 Reconstructing Human Bone Marrow Ex Vivo 11. NSF Proposal: Optimal Growth Bernard O. Palsson 7/3/90 Factor Combinations for Human Bone Marrow Cultures and Large- Scale Cell Production 12. Naval Medical Command Proposal: Bernard O. Palsson 2/20/89 Ex vivo Bone Marrow: Construction of a Perfusion Device 13. SBIR Proposal: Bioreactor for R. Douglas Armstrong 12/12/91 Retrovirus Infection of hemato- poietic Cells 14. Experiment (Clarke) Michael F. Clarke 1/9/92 15. NIH Proposal: In Vitro Stephen G. Emerson 1/16/92 Expanded Hematopoietic Progenitors for ABMT 16. NIH Proposal: Stromal Cell Stephen G. Emerson 9/20/91 CSF Regulation and Hematopoiesis 17. Aplastic Anemia Foundation Stephen G. Emerson 7/1/92 (beg. of America (Postdoctoral date) application): Leslie G. Blesecker |
Documentation for License Amendment Agreement
2/4/92
DESCRIPTION AUTHOR DATE ----------- ------ ---- 18. The Leukemia Society of Stephen G. Emerson 8/29/89 America (Scholarship application): Stem Cell Cytoadhesion Molecules in Chronic Myelogenous Leukemia 19. The Leukemia Society of America Stephen G. Emerson 4/26/91 (Scholarship application - continuation) Stem Cell Cytoadhesion Molecules in Chronic Myelogenous Leukemia 20. NIH Proposal: Optimization and Stephen G. Emerson 7/20/90 Manipulation of Human Marrow Cultures 21. NSF Proposal: (Research Experience Stephen G. Emerson 1/30/89 for Undergraduates) Effect of Serum Concentration and Perfusion Rate on Stromal Cell Metabolism 22. NSF Proposal: Contruction and Stephen G. Emerson 5/15/89 Maintenance of Functioning Bone Marrow Tissue Ex Vivo 23. NSF Proposal: Construction of a Stephen G. Emerson 5/10/88 High Efficiency Ex Vivo Bone Marrow 24. NRA-88-OSSA-5 Proposal: Development Stephen G. Emerson 8/15/88 of a Device for the Large-Scale Cultivation of Human Bone Marrow: Space Flight Applications 25. Presidential Initiations Proposal: Stephen G. Emerson Undated Development of an Artificial Bone Marrow 26. Paper: In Vitro Myelopoiesis Schwartz RM, Emerson Blood, Stimulated by Rapid Medium Exchange SG, Clarke MF, Palsson 78:12, pp and Supplementation with hemato- BO 3155-3161, poietic Growth Factors (12/15/91) 27. Paper: Can Dexter Cultures Support Varma A, El-Awar FY, Experi- Stem Cell Proliferation? Palsson BO, Emerson SG, mental Clarke MF Hematology, 20:87-91 (1992) 28. Paper: Rapid medium perfusion rate Schwartz RM, Palsson PNAS, significantly increases the BO, Emerson SG 88:6760- productivity and longevity of human 6764 bone marrow cultures (8/91) 29. Paper: The Construction of High Emerson SG, Palsson BO, J Cell. Efficiency Human Bone Marrow Tissue Clarke MF Biochem Ex Vivo 45:268- 272 (1991) |
Documentation for License Amendment Agreement
2/4/92
DESCRIPTION AUTHOR DATE ----------- ------ ---- 30. Paper: Culture Perfusion Schedules Caldwell J, J Cell Phys Influence the Metabolic Activity and Palsson BO, 147:344-353 Granulocyte-Macrophage Colony- Locey B, (1991) Stimulating Factor Production Rates Emerson SG of Human Bone Marrow Stromal Cells 31. Paper: Influence of Medium Exchange Caldwell J, Biotechnol. Schedules of Metabloic, Growth, and Locey B, Progress GM-CSF Secretion Rates of Genetically Clarke MF, Vol. 7, No.1 Engineering NIH-3T3 Cells Emerson SG Jan/Feb, 1991 Palsson BO 32. Paper: The Influence of Extra-Cellular Schwartz RM, Submitted to Matrix and Stroma Remodeling on the Caldwell J, Cytotechnology Productivity of Long-Term Human Bone Clarke MF, Sept., 1991 Marrow Cultures Emerson SG, Palsson BO 33. Advanced Technology Program Proposal: R. Douglas 9/24/91 ATP 91-01: Human Stem Cell and Armstrong Hematopoietic Expansion Systems 34. Thesis: Optimization of Human Long- Richard M. 1991 Term Bone Marrow Cultures Schwartz 35. Chapter: The Role of Physiologic Caldwell J, Undated Perfusion in the Metabolism and Palsson BO, Genetic Regulation of Cytokine Clarke MF, Production in Mesenchymal Stromal Cells Emerson SG 36. UM Disclosure #715 "Mouse Tyrosine Emerson SG Biotechnol Kinare partial CDNA sequences A1, A8, P4, P7, P21" |
Documentation for License Amendment Agreement
2/4/92
SECOND AMENDMENT TO
LICENSE AGREEMENT
This Second Amendment to License Agreement is entered into as of October 8, 1993, by and between Aastrom Biosciences, Inc. (formerly Ann Arbor Stromal, Inc., a Michigan corporation, hereinafter called "Aastrom"), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (hereinafter called "University").
RECITATIONS
The following is a recital of facts underlying this Agreement.
A. In August, 1989, the parties hereto entered into a certain Research Agreement (the "Research Agreement") pursuant to which Aastrom provided funding to the University for the University to conduct a certain research project. Pursuant to an Extension Agreement dated March 2, 1992, the parties extended the term of the Research Agreement until June 30, 1993, and extended the scope of the research projects and funding under the Research Agreement. As used hereinafter, the term "Research Agreement" shall include said Extension Agreement. Pursuant to the Research Agreement, Aastrom is entitled to an exclusive license to utilize any and all inventions, technology, and know-how (i) resulting from the research projects funded by Aastrom at the University, or (ii) related to the research projects (subject to certain qualifications).
B. On March 13, 1992, the parties entered into a certain License Agreement (the "License Agreement"), as contemplated by the Research Agreement; and on March 13, 1992, the parties also entered into that certain First Amendment to License Agreement (the "First Amendment to License Agreement") for the purpose of modifying and clarifying certain terms in the original License Agreement. As used hereinafter, the term "License Agreement" shall include said First Amendment.
C. Subsequent to entering into the First Amendment to License Agreement, some additional patent rights, technology, know-how and other intellectual property rights have been identified which are to be licensed to Aastrom pursuant to the License Agreement. This Second Amendment is being entered into for the purpose of identifying said additional rights.
NOW THEREFORE, in consideration of their mutual promises, the parties hereto agree as follows:
1. LICENSED TECHNOLOGY. In addition to all other Licensed Technology (as defined in the License Agreement) which is already identified as being covered by the License Agreement, the Licensed Technology shall also include the additional patent-
related matters identified in Exhibit A attached hereto, as well as the additional technology and know-how identified in the documents described in Exhibits B (1) and B(2) attached hereto, which technology and know-how have resulted from research pursuant to the Research Agreement.
2. EFFECT. Excepting only as otherwise expressly set forth above, all other terms and provisions of the License Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute and deliver this Second Amendment as of the date set forth above.
FOR: FOR: THE REGENTS OF AASTROM BIOSCIENCES, INC. THE UNIVERSITY OF MICHIGAN BY: /s/ R. DOUGLAS ARMSTRONG BY: /s/ ROBERT L. ROBB --------------------------- ----------------------------------- R. DOUGLAS ARMSTRONG, PH.D. PRESIDENT AND CEO ITS: Director Technology/Management Office |
EXHIBIT A
PATENT MATTERS
All of the following patent applications and patent matters, including all related foreign patent rights and all patents issued and patent rights related thereto:
A. U.S. APPLICATION #07/990,299, CAMPBELL & FLORES REF.#P-UM 9380
Novel Embryonic Tyrosine Kinase Sequences and Uses Thereof
Biesecker, Leslie G.; Emerson, Stephen Gx.
filed: 12/8/92
B. PENDING U.S. APPLICATION, CAMPBELL & FLORES REF. #P-UM 9430
P53-Mediated Apoptosis for the Therapeutic Treatment of Diseases
Clarke, Michael F.
C. PENDING U.S. APPLICATION, CAMPBELL & FLORES REF. #P-AA 9609
Directed Motion of Gene-Transfer Vectors for Increased Infectivities
Palsson, Bernhard O.
EXHIBIT B (1)
Know-how and Technology Items
All of the following and attached grant proposals, papers, abstracts and other
documents, together with all inventions, know-how and/or technology described
therein or resulting therefrom:
DESCRIPTION AUTHOR DATE 1. PAPER: BONE MARROW GUBA, SC; SARTOR, BLOOD STROMAL FIBROBLASTS SECRETE CL; GOTTSCHALK, LR; 80(5):1190-1198 INTERLEUKIN-6 AND YE-HE,J; SEPT., 1992) GRANULOCYTE-MACROPHAGE MULLIGAN,T; COLONY-STIMULATING FACTOR EMERSON,SG IN THE ABSENCE OF INFLAMMATORY STIMULATION: DEMONSTRATION BY SERUM-FREE BIOASSAY, ENZYME-LINKED IMMUNOSORBENT ASSAY, AND REVERSE TRANSCRIPTASE POLYMERASE CHAIN REACTION 2. ABSTRACT: MOLECULAR GOTTSCHALK, LR; ASH, 1992 REGULATION OF THE HUMAN GIANNOLA, DM; IL-3 GENE IN T-CELLS: EMERSON, SG EXPRESSION REQUIRES AN INTACT AP-1 AND ELF-1 NUCLEAR PROTEIN BINDING SITE 3. ABSTRACT: EX VIVO PALSSON, BO; ASH, 1992 EXPANSION OF HEMATOPOIETIC SCHWARTZ, RM; PROGENITOR CELLS AND LTCIC PALSSON, M; BY CONTINUOUS PERFUSION ARMSTRONG, RD; CULTURE CLARKE, MF; EMERSON, SG 4. ABSTRACT: IL-1 ALPHA CALDWELL, J; ASH, 1992 AND TNF-ALPHA ACT EMERSON, SG SYNERGISTICALLY TO STIMULATE PRODUCTION OF MYELOID COLONY-STIMULATING FACTORS BY CULTURED HUMAN BONE MARROW STROMAL CELLS AND CLONED STROMAL CELL STRAINS 5. ABSTRACT: THE CLONING BIESECKER, LG; ASH, 1992 OF 5 NOVEL TYROSINE KINASE GOTTSCHALK, LR; PARTIAL CDNAS ENCODING EMERSON, SG CANDIDATE STEM CELL CYTOKINE RECEPTORS 6. PAPER: IDENTIFICATION BIESECKER, L.G., ET AL PNAS OF FOUR MURINE CDNAS 90, 7044-7048 ENCODING PUTATIVE PROTEIN (1993) KINASES FROM PRIMITIVE EMBRYONIC STEM CELLS DIFFERENTIATED IN VITRO |
7. PAPER: INTERLEUKIN 6 IS A BIESECKER, LG; EXPERIMENTAL COMPONENT OF HUMAN UMBILICAL EMERSON, SG HEMATOLOGY, CORD SERUM AND STIMULATES 21:774-778 HEMATOPOIESIS IN EMBRYONIC STEM 1993 CELLS IN VITRO 8. PAPER: MOLECULAR REGULATION GOTTSCHALK, LR; JOURNAL OF OF THE HUMAN IL-3 GENE: GIANNOLA, DM; EXPERIMENTAL INDUCIBLE T-CELL RESTRICTED EMERSON, SG MEDICINE EXPRESSION REQUIRES INTACT AP-1 IN PRESS AND ELF-1 NUCLEAR PROTEIN NOV., 1993 BINDING SITES 9. PAPER: IL-1 ALPHA AND CALDWELL, J; JOURNAL OF TNF-ALPHA ACT SYNERGISTICALLY TO EMERSON, SG CELLULAR STIMULATE PRODUCTION OF MYELOID PHYSIOLOGY COLONY-STIMULATING FACTORS BY ACCEPTED CULTURED HUMAN BONE MARROW 1994 STROMAL CELLS AND CLONED STROMAL CELL STRAINS 10. ABSTRACT: PHASE I SILVER, SM; ASH, 1993 EVALUATION OF EX VIVO EXPANDED ADAMS, PT; HEMATOPOIETIC CELLS PRODUCED BY HUTCHINSON, RJ; PERFUSION CULTURES IN AUTOLOGOUS DOUVILLE, JW; BONE MARROW TRANSPLANTATION PAUL, LA; CLARKE, (BMT). MF; PALSSON, BO; EMERSON, SG 11. ABSTRACT: EXPANSION IN VAN ZANT, G; ASH, 1993 BIOREACTORS OF HUMAN PROGENITOR LARSON, DB; POPULATIONS FROM CORD BLOOD AND DRUBACHEVSKY, I; MOBILIZED PERIPHERAL BLOOD PALSSON, M; EMERSON, SG 12. ABSTRACT: CLINICAL SCALE ARMSTRONG, RD; ASH, 1993 PRODUCTION OF STEM AND KOLLER, MR; PAUL, HEMATOPOIETIC CELLS EX VIVO L; DOUVILLE, J; MALUTA, J; FISH, R; PALSSON, BO; VAN ZANT, G; EMERSON,SG 13. ABSTRACT: EXPANSION OF RUMMEL, SA; ASH, 1993 HUMAN HEMATOPOIETIC EMERSON, SG; VAN STEM/PROGENITOR CELLS RESISTANT ZANT, G TO TREATMENT WITH 4-HYDROPEROXYCYCLOPHOSPHAMIDE 14. ABSTRACT: BIOREACTOR KOLLER, MR; ASH, 1993 EXPANSION OF WHOLE, NEWSOM, B; VAN DENSITY-SEPARATED, AND ZANT, G; EMERSON, CD34-ENRICHED HUMAN BONE MARROW SG, PALSSON, BO 15. SEMINAR: PROGRESS REPORT PETER G. EIPERS 10/19/92 16. PAPER: MEL CELLS, THE CLARKE, MF SUBMITTED TO ONCOGENE C-MYB NATURE 1/93 |
17. PAPER: CELL CYCLE ANALYSIS RYAN, JJ; RIZWAN, MOLECULAR AND OF P53-INDUCED CELL DEATH IN D; GOTTLIEB, CA; CELLULAR BIOLOGY MURINE ERYTHROLEUKEMIA CELLS CLARKE, MF 13(1) (JAN, 1993) 18. SEMINAR: MY PRIMARY OBJECT.. ALICE CURRY 1/25/93 19. SEMINAR: PROGRESS REPORT, PETER G. EIPERS 3/8/93 FEB. 1993 20. SEMINAR: CONSTRUCTION OF A FAISAL EL-AWAR 4/19/93 RETROVIRUS PACKAGING CELL LINE 21. SEMINAR: FIRST CD 18 PETER G. EIPERS 6/14/93 INFECTION........................ 22. SEMINAR: GENERATION OF AN ALICE M. CURRY 7/26/93 HIV-BASED PACKAGING LINE 23. PROGRESS REPORTS ALICE M. CURRY JAN., APR., MAY, JULY, 1993 24. PAPER: EFFECT OF STROMAL AGE EL-AWAR, FY; SUBMITTED TO ON HEMATOPOIESIS IN HUMAN EMERSON, SG; EXP. HEMATOLOGY LONG-TERM BONE MARROW CULTURES CLARKE, MF 25. ABSTRACT: EIPERS, PG; ASH, 1993 RETROVIRUS-MEDIATED GENE KRAUSS, JC; TODD, TRANSFER IN HUMAN BONE MARROW RF; EMERSON, SG; MONONUCLEAR CELLS GROWN IN PALSSON, BO; CONTINUOUS PERFUSION CULTURES CLARKE, MF 26. NIH GRANT APPLICATION: MICHAEL F. CLARKE 9/30/93 ANALYSIS OF THE KINETICS OF HEMATOPOIETIC CELL DIVISION BY RETROVIRUS TAGGING 27. ABSTRACT: FLOW CYTOMETRIC ROGERS, CE; ASH, 1993 ANALYSIS OF BIOREACTOR EXPANDED BRADLEY, MS; HUMAN BONE MARROW; ERYTHROID PALSSON, BO; DEVELOPMENT AND CORRELATION WITH KOLLER, MR BURST-FORMING UNIT-ERYTHROID (BFU-E). 28. ABSTRACT: EXTENDED GROWTH OH, DJ; KOLLER, ASH, 1993 OF STEM AND PROGENITOR CELLS MR; PALSSON, BO FROM ADULT HUMAN BONE MARROW IN SEQUENTIAL BIOREACTOR CULTURES 29. ABSTRACT: GROWTH FACTOR PALSSON, BO; ASH, 1993 CONSUMPTION AND PRODUCTION IN EX BRADLEY, MS; VIVO PERFUSION CULTURES OF HUMAN KOLLER, MR BONE MARROW 30. SEMINAR: INTRO TO MINETTE LEVEE 10/13/92 MICROENCAPSULATION |
31. SEMINAR: FLOW CYTOMETRY & CLARE ROGERS 11/30/92 HUMAN MARROW 32. SEMINAR: CULTIVATION OF DUK JAE OH 1/18/93 BONE MAROW CELLS IN HEMOGEN 107 (DIAMOND SHAPE) REACTORS 33. SEMINAR: ENCAPSULATED BONE LEVEE, MG; LEE, 3/29/93 MARROW CULTURES AS A POTENTIAL GM; PAEK, SH; ASSAY FOR HUMAN HEMATOPOIETIC PALSSON, BO PROGENITORS 34. SEMINAR: FLOW CYTOMETRIC ROGERS, CE; 3/29/93 ANALYSIS OF HUMAN MYELOID BRADLEY, S; LINEAGE DEVELOPMENT IN KOLLER, MR; HEMATOPOIETIC BIOREACTOR SYSTEMS PALSSON, BO 35. SEMINAR: OXYGEN TRANSPORT PENG, CA; 4/5/93 IN THE HEMOGEN BIOREACTORS PALSSON, BO 36. SEMINAR: TISSUE ENGINEERING BERNHARD O. 4/12/93 PALSSON 37. SEMINAR: DYNAMICS OF CELL PENG, CA; ROGERS, 6/7/93 GROWTH AND DIFFERENTIATION IN C; OH, DJ; HEMOGENS BRADLEY, S; PALSSON, BO 38. SEMINAR: METABOLIC STUDY IN DUK JAE OH 8/23/93 BONE MARROW CULTURE 39. MINUTES & NOTES, GENE BERNHARD O. 6/21/93 THRU THERAPY PROJECT MEETINGS PALSSON ET AL 9/28/93 40. SBIR GRANT APPLICATION: A MANFRED R. KOLLER 8/14/92 CLONAL HEMATOPOIETIC PROGENITOR CELL ASSAY 41. SBIR GRANT APPLICATON: HIGH R. DOUGLAS 8/14/92 TITER RETROVIRAL SUPERNATANTS ARMSTRONG |
DESCRIPTION AUTHOR DATE ----------- ------ ---- PROPOSALS: 1. American Cancer Society - Development Bernhard O. Palsson 10/15/92 of a Clinical Hematopoietic Bioreactor System to Improve Bone Marrow Transplan- tation 2. National Science Foundation - Bernhard O. Palsson 1/27/93 Hematopoietic Bioengineering and Biotechnology 3. NIH - Bernhard O. Palsson 1/28/93 Hematopoietic Tissue Engineering 4. NIH - Bernhard O. Palsson 5/27/93 Human Hematopoietic Differentiation and Lineage Development Ex Vivo PAPERS: 5. The Influence of Extra-Cellular Matrix Schwartz, R.M., Cytotechnology and Stroma Remodeling on the Productivity Caldwell, J., Clarke, 10:217-224 of Long-Term Human Bone Marrow Cultures M.F., Emerson, S.G., (1993) and Palsson, B.O. 6. Expansion of Human Bone Marrow Progenitor Palsson, B.O., et al Bio/Technology Cells in a High Cell Density Continuous 11,368-372 Perfusion System (1993) 7. Large-Scale Expansion of Human Stem and Koller, M.R., Emerson, Blood Progenitor Cells from Bone Marrow Mono- S.G., and Palsson, B.O. 82,378-384 nuclear Cells in Continuous Perfusion (1993) Cultures 8. Retroviral Gene Transfer into Human Clarke, M.F., et al The Cancer Bulletin Hematopoietic Cells Using Rapidly 45:2, 153-158 Perfused Long-Term Bone Marrow Cultures (1993) 9. Tissue Engineering: Reconstitution of Koller, M.R. and Biotechnology & Human Hematopoiesis Ex Vivo Palsson, B.O. Bioengineering 42, in press (1993) |
7(a)
DESCRIPTION AUTHOR DATE ----------- ------ ---- 10. Kinetics of Retroviral Production from Shen, B.O., Clarke, M.F., Biotechnology & Bioengineering the Amphotropic VCRIP Murine Producer Palsson, B.O. Accepted with revisions Cell Line 11. Microencapsulated Bone Marrow Cultures Levee, M.G., Lee, G-M., Biotechnology & Bioengineering as a Potential Assay for Human Hemato- Paek, S-H., Submitted poietic Progenitor Cells 12. Unilineage Model of Hematopoiesis Peng, C-A., Koller, M.R., Biotechnology & Bioengineering Predicts Self-Renewal of Stem and and Palsson, B.O. Submitted Progenitor Cells from Observed Ex Vivo Growth Patterns 13. Extended Growth of Adult Mononuclear Oh, D.J., Koller, M.F. To be submitted Human Bone Marrow Cells Through and Palsson, B.O. Repeated Harvesting and Replating REPORTS: 14. Development of the HemoGen 106 Bone B.O. Palsson and S-H Paek April 15, 1992 Marrow Expansion System 15. Research and Development Program for B.O. Palsson September 22, 1992 the HemoGen 106 Bioreactor System (Unfinished document) 16. The HemoGen 107/108 Series: Progress R.M. Schwartz and B.O. October 27, 1992 Report Palsson 17. Progress Report on Residence Time C-A. Peng and B.O. Palsson December 17, 1992 Distribution 18. Partial Cell Harvesting and Replating D.J. Oh and B.O. Palsson December 17, 1992 Experiments 19. Oxygen Transport in the HemoGen C-A. Peng and B.O. Palsson April 5, 1993 Bioreactors 20. Growth Factor Delivery in the HemoGen B.O. Palsson and C-A. Peng May 21, 1993 Bioreactors: 21. Slides to accompany 16 above B.O. Palsson April 12, 1993 22. Dynamics of Cell Growth and B.O. Palsson June 7, 1993 Differentiation in HemoGens |
BD
7/20/93
7(b)
Additionally, as specified in the Research Agreement, University hereby licenses to Aastrom, pursuant to the terms of the License Agreement, all of the inventions, technology and know-how which are either (i) described in the Research Projects referenced in the Research Agreement, or (ii) conceived or reduced to practice as part of said Research Projects, or (iii) conceived or reduced to practice, whether or not pursuant to or as part of said Research Projects, by Drs. Stephen G. Emerson, Michael F. Clarke or Bernhard O. Palsson, or those working under their direction (including without limitation, research scientists, technicians, and/or post-doctoral training fellows), during the term of their participation in the Research Projects and Company's funding of the Research Projects, provided that such inventions, technology and know-how are related to the work described in said Research Projects. Further, the parties hereby acknowledge that Drs. Emerson, Clarke and Palsson serve as consultants to Company, as well as employees of University, and that inventions, know-how and technology conceived, reduced to practice or developed by these scientists in the course of their consulting work for Company shall be included in subparagraph (iii) above, such that they shall be covered by this License Agreement as Licensed Technology.
THIRD AMENDMENT TO
LICENSE AGREEMENT
This Third Amendment to License Agreement is entered into as of June 21, 1995, by and between Aastrom Biosciences, Inc. (formerly Ann Arbor Stromal, Inc., a Michigan corporation, hereinafter called "Aastrom"), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (hereinafter called "University").
RECITATIONS
The following is a recital of facts underlying this Agreement.
A. In August, 1989, the parties hereto entered into a certain Research Agreement (the "Research Agreement") pursuant to which Aastrom provided funding to the University for the University to conduct a certain research project. On March 2, 1992, the parties extended the term of the Research Agreement until June 30, 1993. Pursuant to a further Extension Agreement dated October 20, 1993, and Request Letter dated June 13, 1994, the term of the Agreement was further extended to June 30, 1994, and December 31, 1994, respectively, and the scope of the research projects and funding under the Research Agreement extended accordingly. As used hereinafter, the term "Research Agreement" shall include said Extension Agreements and Letter. Pursuant to the Research Agreement, Aastrom is entitled to an exclusive license to utilize any and all inventions, technology, and know-how (i) resulting from the research projects funded by Aastrom at the University, or (ii) related to the research projects (subject to certain qualifications).
B. On March 13, 1992, the parties entered into a certain License Agreement (the "License Agreement"), as contemplated by the Research Agreement; and on March 13, 1992, the parties also entered into that certain First Amendment to License Agreement (the "First Amendment to License Agreement") for the purpose of modifying and clarifying certain terms in the original License Agreement. On October 8, 1993, the parties entered into a Second Amendment to License Agreement. As used hereinafter, the term "License Agreement" shall include said First and Second Amendments and this Third Amendment.
C. Subsequent to entering into the First and Second Amendments to License Agreement, some additional patent rights, technology, know-how and other intellectual property rights have been identified which are to be licensed to Aastrom pursuant to the License Agreement. This Third Amendment is being entered into for the purpose of identifying said additional rights.
NOW THEREFORE, in consideration of their mutual promises, the parties hereto agree as follows:
1. LICENSED TECHNOLOGY. In addition to all other Licensed Technology (as defined in the License Agreement) which is already identified as being covered by the License Agreement, the Licensed Technology shall also include the additional patent-related matters identified in Exhibit A attached hereto, as well as the additional technology and know-how identified in the documents described in Exhibits B (1) and B(2) attached hereto, to the extent such technology and know-how are described by Section E of the Extension Agreement.
2. EFFECT. Excepting only as otherwise expressly set forth above, all other terms and provisions of the License Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute and deliver this Third Amendment as of the date set forth above.
FOR: FOR: THE REGENTS OF AASTROM BIOSCIENCES, INC. THE UNIVERSITY OF MICHIGAN BY: /s/ R. DOUGLAS ARMSTRONG BY: /s/ ROBERT L. ROBB - ------------------------------ --------------------------------- R. Douglas Armstrong, Ph.D. President and CEO ITS: Director, Technology Management Office |
EXHIBIT A
Patent Matters
All of the following patent applications and patent matters, including all related foreign patent rights and all patents issued and patent rights related thereto:
A. U.S. APPLICATION NO. 08/100,337 Filed: 7/30/93; (Continuation to U.S. App. #07/628,343) B. U.S. APPLICATION NO. 08/164,779 Filed: 12/10/93; (Continuation to U.S. App. #07/737,024) Amendment filed: 8/1/94 C. AMENDMENT TO U.S. APP. #07/740,590 Filed: 8/9/94 D. U.S. APP. NO. 08/178,433 Filed: 1/6/94 (Continuation to U.S. App. #07/845,969) E. U.S. APPLICATION, SER. #08/143,751 Methods and Compositions for the ex vivo Replication of Stem Cells, for the Optimization of Hematopoietic Progenitor Cell Cultures, and for Increasing the Metabolism, GM-CSF Secretion and/or IL-6 Secretion of Human Stromal Cells Filed: 11/1/93 as a divisional of 07/845,969 (ex vivo mitotic stem cells) ------ F. U.S. APPLICATION, SER. #08/187,509 Methods and Compositions for the ex vivo Replication of Stem Cells, for the Optimization of Hematopoietic Progenitor Cell Cultures, and for Increasing the Metabolism, GM-CSF Secretion and/or IL-6 Secretion of Human Stromal Cells Filed: 1/28/94 as a continuation of 8/100,337, 7/628,343, 7/366,639; to ------ declare interference with Gillis et al patents. G. U.S. APPLICATION, SER. #08/307,862 Stabilized Virus for Gene Therapy Filed: 9/15/94 ------ H. U.S. APPLICATION, SER. #08/353,531 Methods, Compositions and Apparatus for Cell Transfection Filed: 12/9/94 ------ |
EXHIBIT B (1)
KNOW-HOW AND TECHNOLOGY ITEMS
ALL OF THE FOLLOWING AND ATTACHED GRANT PROPOSALS, PAPERS, ABSTRACTS AND OTHER DOCUMENTS, TOGETHER WITH ALL INVENTIONS, KNOW-HOW AND/OR TECHNOLOGY DESCRIBED THEREIN TO THE EXTENT DESCRIBED BY SECTION E OF THE EXTENSION AGREEMENT:
DESCRIPTION AUTHOR DATE 1. NIH GRANT APPLICATION: MICHAEL F. CLARKE 1/11/94 ANALYSIS OF HEMATOPOIETIC CELL DIVISION BY RETROVIRUS TAGGING* 2. PAPER: EIPERS,P; KRAUSS,J; REC'D. 8/1/94 RETROVIRAL-MEDIATED GENE PALSSON,B; EMERSON,S; TODD,R; TRANSFER IN HUMAN BONE CLARKE, M. MARROW CELLS GROWN IN CONTINUOUS PERFUSION CULTURE VESSEL* 3. PAPER: TISSUE BERNHARD PALSSON REC'D. 11/21/93 ENGINEERING: ENGINEERING CHALLENGES 4. PAPER: GROWTH FACTOR BERNHARD PALSSON 1/20/94 CONSUMPTION AND PRODUCTION IN AASTROM'S PERFUSION BIOREACTOR SYSTEMS 5. MANUSCRIPT: KINETICS OF ANDREADIS, STYLIANOS; 7/8/94 RETROVIRAL INFECTION AND PALSSON, BERNHARD O. THE INFLUENCE OF CELL CYCLE: IMPLICATIONS FOR GENE THERAPY 6. FOLDER: ALICE CURRY ALICE CURRY 5/31/94 NOTES (75 PAGES) 7. PROGRESS REPORTS ALICE M. CURRY NOV, 1993; JAN. & FEB, 1994 8. ABSTRACT: LTC-IC KOLLER,M.R.; PALSSON, M.A.; ASH, 1994 EXPANSION REQUIRES RAPID MANCHEL,I; NEWSOM,B.S.; MEDIUM EXCHANGE COMBINED PALSSON, BERNHARD O. WITH THE PRESENCE OF STROMAL AND OTHER ACCESSORY CELLS 9. ABSTRACT: EXPANSION KOLLER,M.R.; MANCHEL, I; ASH, 1994 POTENTIAL OF CD34+ CELLS PALSSON, M.A.; BROTT,D.A.; FROM PATIENTS IS LOWER AND SILVER,S.M.; PALSSON,B.O. MORE STROMAL-DEPENDENT THAN FROM NORMAL DONORS |
*These materials especially may include some inventions, know-how and technology not described by Section E of the Extension Agreement (and thus not included in Licensed Technology); including inventions, know-how and technology developed by or under the direction of Dr. Robert Todd related to leukocyte adhesion deficiency disease.
10. SBIR GRANT APPLICATION: BERNHARD O. PALSSON 4/14/94 NOVEL APPROACHES TO (PHASE I) ENHANCING RETROVIRAL STABILITY 11. SBIR GRANT APPLICATION: BERNHARD O. PALSSON 4/14/94 HEMATOPOIETIC CELL (PHASE II) EXPANSION SYSTEM 12. ATP GRANT APPLICATION: R. DOUGLAS ARMSTRONG 6/21/94 GENE TRANSFER SYSTEM FOR ENABLEMENT OF HUMAN GENE THERAPY 13. SEMINAR: CD18 CELL PETER EIPERS 10/25/93 EXPANSION* 14. THESIS: MEETING ALICE CHUCK 6/29/94 PRESENTATION 15. THESIS: MEETING ALICE CHUCK 9/28/93 PRESENTATION 16. PAPER: GROWTH FACTOR M.R.KOLLER, M.S. SUBMITTED TO EXP. CONSUMPTION AND PRODUCTION BRADLEY, B.O.PALSSON HEMATOLOGY, 9/28/94 IN PERFUSION BIOREACTOR CULTURES OF HUMAN BONE MARROW CORRELATES WITH SPECIFIC CELL PRODUCTION 17. ABSTRACT: M.R.KOLLER, B.NEWSOM, KEYSTONE CONFERENCE, CHARACTERIZATION OF HUMAN C.E.ROGERS, G.VAN TAOS, NM, 2/94 STEM AND PROGENITOR CELL ZANT, S.G.EMERSON, EXPANSION IN BIOREACTORS B.O.PALSSON 18. PAPER: GROWTH FACTOR M.R.KOLLER, B.O.PALSSON 6/13/94 CONSUMPTION AND PRODUCTION IN PERFUSION BIOREACTOR CULTURES OF HUMAN BONE MARROW 19. INTERNAL REPORT: TIMOTHY M. EISFELD 8/29/94; REVISED RETROVIRUS PRODUCTION AND 8/30/94 CONCENTRATION PROJECT: EXPERIENCE WITH THE OPTICELL SYSTEM; FILE NO. 4.3.1-001 20. INTERNAL REPORT: TIMOTHY M. EISFELD 8/22/94 SUMMARY REPORT ON VIRUS STABILIZATION PROJECT: JANUARY 1994 TO PRESENT; FILE NO. 4.3.2-001 21. PAPER: BIOREACTOR KOLLER,M.R. SUBMITTED TO BLOOD, EXPANSION OF HUMAN BONE 1994 (MANUSCRIPT NO. MARROW: COMPARISON OF 1-94-5-192) UNPROCESSED, DENSITY-SEPARATED, AND CD34-ENRICHED CELLS |
*These materials especially may include some inventions, know-how and technology
not described by Section E of the Extension Agreement (and thus not included in
Licensed Technology); including inventions, know-how and technology developed by
or under the direction of Dr. Robert Todd related to leukocyte adhesion
deficiency disease.
22. PAPER: IL-1A REGULATES JERRY CALDWELL, BLOOD 84 (10), EXPRESSION OF THE 75 KDA STEPHEN G. EMERSON SUPPLEMENT 1, BUT NOT THE 55 KDA TNF 11/15/94 RECEPTOR BY CDCL STROMAL (NO. 1109) CELLS: IMPLICATIONS FOR IL-1/TNF SYNERGY. |
*These materials especially may include some inventions, know-how and technology not described by Section E of the Extension Agreement (and thus not included in Licensed Technology); including inventions, know-how and technology developed by or under the direction of Dr. Robert Todd related to leukocyte adhesion deficiency disease.
EXHIBIT B(2)
DESCRIPTION AUTHOR DATE - ----------- ------ ---- PEER-REVIEWED PAPERS: 2. Microencapsulated Human Bone Marrow Cultures: A M. Levee, G.M. Lee, S.H. Paek, Biotechnology & Bioengineering Potential Culture System for the Clonal Outgrowth B.O. Palsson 43, 734-739 (1994) of Hemalopoietic Progenitor Cells 3. Retroviral Infection is Limited by Brownian Motion A.S. Chuck, C.A. Peng, M.F. Clarke Submitted to Science Dec. 1993 B.O. Palsson 4. Frequent Harvesting from Perfused Bone Marrow D.J. Oh, M.R. Koller, B.O. Palsson Biotechnology & Bioengineering Cultures Results in Increased Overall Cell and 44, 609-616 (1994) Progenitor Expansion 5. Replating of Bioreactor-Expanded Human Bone Marrow D.J. Oh, B.O. Palsson, M.R. Koller Submitted to Experimental Results in Extended Growth of Primitive and Mature Hematology Cells May 1994 6. Bioreactor Expansion of Human Bone Marrow: M.R. Koller, I. Manchel et al Submitted to J. Hematotherapy Comparison of Unprocessed, Density-Separated 9/6/94 and CD34-enriched Cells 7. Unilineage Model of Hematopoiesis Predicts Self- C.A. Peng, M.R. Koller, and Submitted to Biotechnology & Renewal of Stem and Progenitor Cells from Observed B.O. Palsson Bioengineering 9/93 ex vivo Growth Patterns |
EXHIBIT B(2)
DESCRIPTION AUTHOR DATE - ----------- ------ ---- CHAPTERS IN BOOKS: 8. The Role of Physiological Perfusion in the J. Caldwell, B.O. Palsson, M.F. Clarke, Johns Hopkins University Press Metabolism and Genetic Regulation of Cytokine and S.G. Emerson 1993 Baltimore Production in Mesenchymal Stromal Cells in The Hematopietic Microenvironment: Eds. M. W. Long and M.S. Wicha The Functional and Structural Basis of Blood Cell Development ABSTRACTS: 9. Biomedical Expansion of Human Stem and Progenitor M.R. Koller, B. Newsom, G. Van NIH Workshop on Hematopoletic Cells is More Efficient with Mononuclear Cells Zant, S.G. Emerson, B.O. Palsson Stem Cell Purification and Than with CD34-Enriched Cells Biology, Rockville, MD., 9/21/1993 10. Growth Factor Consumption and Production in ex B.O. Palsson, M.S. Bradley, and ASH Meeting, St. Louis, MO vivo Perfusion Cultures of Human Bone Marrow M.R. Koller Dec. 1993 11. Extended Growth of Stem and Progenitor Cells from B.O. Palsson, D.J. Oh, and M.R. ASH Meeting, St. Louis, MO Adult Human Bone Marrow in Sequential Bioreactor Koller Dec. 1993 Cultures 12. Bioreactor Expansion of Whole, Density-Separated, M.R. Koller, B. Newsom, G. Van ASH Meeting, St. Louis, MO and CD34-Enriched Human Bone Marrow Zant, S.G. Emerson, B.O. Palsson Dec. 1993 13. Flow Cytometric Analysis of Bioreactor Expanded C.E. Rogers, M.S. Bradley, B.O. ASH Meeting, St. Louis, MO Human Bone Marrow: Erythroid Development and Palsson, and M.R. Koller Dec. 1993 Correlation with Burst-Forming Unit-Erythroid (BFU-E) 14. Clinical Scale Production of Stem and Hemato- R.D. Armstrong, M.R. Koller, L. ASH Meeting, St. Louis, MO poietic Cells Ex Vivo Paul, J. Douville, J. Maluta, R. Fish, Dec. 1993 B.O. Palsson, G. Van Zant, S.G. Emerson |
EXHIBIT B(2)
DESCRIPTION AUTHORS DATE - ----------- ------- ---- 15. Hematopoletic Bioreactor Engineering for B.O. Palsson Engineering Foundation Conference: Transplantation Rapid Detection and Control Cell Culture Engineering IV, San Diego, of Progenitor Cell Production CA, March 7-12, 1994 16. Growth Factor Consumption and Production in B.O. Palsson and M.R. Koller American Chemical Soc. Spring Ex Vivo Perfusion Cultures of Human Bone National Meeting, San Diego, CA Marrow March 7-12, 1994 |
Prepared by
Barbara Dunn
8/10/94
EXHIBIT 10.18
AASTROM BIOSCIENCES, INC.
In consideration of my employment or continued employment by AASTROM BIOSCIENCES, INC. (the "Company"), and the compensation now and hereafter paid to me, I hereby agree as follows:
The term "Proprietary Information" shall mean trade secrets, confidential knowledge, data or any other proprietary information of the Company. By way of illustration but not limitation, "Proprietary Information" includes (a) inventions, mask works, trade secrets, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, cell lines, know-how, improvements, discoveries, developments, designs and techniques (hereafter collectively referred to as "Inventions"); and (b) plans for research, development, new products, marketing and selling; information regarding business plans, budgets, and unpublished financial statements; licenses; prices and costs; information regarding suppliers and customers; and information regarding the skills and compensation of employees of the Company.
a. I hereby assign to the Company all my right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable
or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of and within the scope of my employment with the Company. I agree that all such Inventions are the sole property of the Company.
b. I hereby also assign to or as directed by the Company all my right, title and interest in and to any and all Inventions, full title to which is required to be in the United States by a contract between the Company and the United States or any of its agencies.
c. I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment and which are protectable by copyright are "works made for hire," as that term is defined in the United States Copyright Act (17 U.S.C., Section 101). Inventions assigned to or as directed by the Company by this paragraph 3 are hereinafter referred to as "Company Inventions."
In the event the Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in the preceding paragraph, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph thereon with the same legal force and effect as if executed by me. I hereby waive and quit claim to the Company any and all claims, of any nature whatsoever, which I now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.
I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I MAKE DURING MY EMPLOYMENT, AND RESTRICTS MY RIGHT TO DISCLOSE OR USE THE COMPANY'S CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO MY EMPLOYMENT.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.
Dated: 3/30 , 1992 ---------- -- ________________________________________ Signature /s/ R. Douglas Armstrong ---------------------------------------- R. Douglas Armstrong, Ph.D. 845 Arlington Blvd., ---------------------------------------- Address Ann Arbor, MI 48104 ---------------------------------------- |
ACCEPTED AND AGREED TO:
AASTROM BIOSCIENCES, INC.
By /s/ Robert Kunze ----------------------------------- Robert Kunze, Chairman |
Schedule I
AASTROM BIOSCIENCES, INC.
University of Michigan
3074 H. H. Dow Building
Ann Arbor, Michigan 48109-2136
Gentlemen:
1. The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by, and/or services as a director or an officer to, AASTROM BIOSCIENCES, INC., (the "Company") that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company:
Due to confidentiality agreements with prior employer, I cannot ----- disclose certain inventions that would otherwise be included on the above-described list.
2. I propose to bring to my employment/service as a director or officer the following device(s), material(s), and document(s) of a former employer or other person to whom I have an obligation of confidentiality that are not generally available to the public, which device(s), material(s) and document(s) may be used in my employment pursuant to the express written authorization of my former employer or such other person (a copy of which is attached hereto):
_____ No devices, materials or documents
_____ See below:
_____ Additional sheets attached
Date: July 23 , 1991 ------------------ Very truly yours, /s/ R. Douglas Armstrong --------------------------- R. Douglas Armstrong, Ph.D. |
PATENT
Our Docket: P31 8461
IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
In re application of: ) R. DOUGLAS ARMSTRONG ) ) Filed: Herewith ) ) For: QUEUINE-tRNA EXPRESSION ) AS A DIAGNOSTIC AND ) PROGNOSTIC MARKER OF ) 444 South Flower Street DIFFERENTIATION-RELATED ) Suite 2000 DISEASES ) Los Angeles, California 90071 Hon. Commissioner of Patents and Trademarks Washington, D.C. 20231 |
Dear Sir:
Enclosed is an executed Assignment for the above-identified United States Patent Application.
A check in the amount of $323.00 is enclosed, $8.00 of which covers the recordation of the Assignment.
The Commissioner is hereby authorized to charge any additional fees which may be required, or credit any overpayment to Deposit Account No. 16-2460. A duplicate copy of this sheet is enclosed.
Respectfully submitted,
/s/ Theresa A. Brown -------------------------------------- Theresa A. Brown Reg. No. 32,547 Telephone: (619) 535-9001 Facsimile: (619) 535-8949 |
PRETTY SCHROEDER,
BRUEGGEMANN & CLARK
444 South Flower Street
Suite 2000
Los Angeles, California 90071
This Assignment is made by R. Douglas Armstrong of 311 Cole Ranch Road, Encinitas, California, Assignor, to THE LA JOLLA CANCER RESEARCH FOUNDATION, Assignee, having a place of business at 10901 N. Torrey Pines Road, La Jolla, California 92037.
WHEREAS, Assignor has invented a new and useful QUEUINE-tRNA EXPRESSION AS A DIAGNOSTIC AND PROGNOSTIC MARKER OF DIFFERENTIATION-RELATED DISEASES, for which an application for United States Letters Patent is filed herewith in the United States Patent and Trademark Office;
WHEREAS, Assignor believes himself to be the original inventor of the invention disclosed and claimed in said application for Letters Patent; and
WHEREAS, the parties desire to have a recordable instrument assigning the entire right, title and interest in and to said invention, said application and any Letters Patent that may be granted for said invention in the United States and throughout the world;
NOW, THEREFORE, in accordance with the obligations to assign the invention and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor sells, assigns, and transfers to Assignee, the entire right, title, and interest in and to said invention, said application and any Letters Patent that may be granted for said invention in the United States and throughout the world, including the right to file foreign applications directly in the name of the Assignee and to claim for any such foreign applications any priority rights to which such applications are entitled under international conventions, treaties, or otherwise.
Assignor agrees that, upon request and without further compensation, but at no expense to Assignor, he and his legal representatives and assigns will do all lawful acts, including the execution of papers and the giving of testimony, that may be necessary or desirable for obtaining, sustaining, reissuing, or enforcing Letters Patent in the United States and throughout the world for said invention, and for perfecting, recording, or maintaining the title of Assignee, its successors and assigns, to said invention, said application, and any Letters Patent granted for said invention in the United States and throughout the world.
Assignor represents and warrants that he has not granted and will not grant to others any rights inconsistent with the rights granted herein.
Assignor authorizes and requests the Commissioner of Patents and Trademarks of the United States and of all foreign countries to issue any Letters Patent granted for said invention, whether on said application or on any subsequently filed division, continuation, continuation-in-part or reissue application, to Assignee, its successors and assigns, as the assignee of the entire interest in said invention.
IN WITNESS WHEREOF, Assignor has executed this Assignment on the date first above written.
Assignor: R. DOUGLAS ARMSTRONG
/s/ R. DOUGLAS ARMSTRONG ------------------------------------------ STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) |
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
/s/ Crystal K. Herndon ----------------------------------------- Notary Public in and/for said County and State ______________________________ | OFFICIAL SEAL | | CRYSTAL K. HERNDON | | NOTARY PUBLIC CALIFORNIA | | SAN DIEGO COUNTY | | MY COMM. EXPIRES MAR. 7, 1996| |______________________________| |
EXHIBIT 10.19
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of June 19, 1992, by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Employer") and JAMES MALUTA ("Employee").
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT Employer hereby engages Employee, and Employee hereby accepts such engagement, upon the terms and conditions set forth herein.
2. DUTIES Employee is engaged as Vice President, Product Development. Employee shall perform faithfully and diligently the duties customarily performed by persons in the position for which employee is engaged, together with such other reasonable and appropriate duties as Employer shall designate from time to time. Employee shall devote Employee's full business time and efforts to the rendition of such services and to the performance of such duties. As a full-time employee of Employer, Employee shall not be entitled to provide consulting services or other business or scientific services to any other party, without the prior written consent of Employer.
3. COMPENSATION
3.1 BASE SALARY During the term of this Agreement, as compensation for the proper and satisfactory performance of all duties to be performed by Employee hereunder, Employer shall pay Employee a salary of $90,000 per year, payable in arrears in equal bi-weekly installments, less required deductions for state and federal withholding tax, Social Security and all other employee taxes and payroll deductions. The base salary shall be subject to review and adjustment on an annual basis.
3.2 BONUS COMPENSATION Employee may receive bonus in the form of a stock option, stock, or cash, the amount and timing of which shall be determined in the sole discretion of the Board of Directors of Employer.
4. TERM
4.1 COMMENCEMENT The employment relationship pursuant to this Agreement shall commence no later than August 1, 1992.
4.2 TERMINATION AT WILL Although Employer and Employee anticipate a long and mutually rewarding employment relationship, either party may terminate this Agreement, without cause, upon fourteen (14) days' prior written notice delivered to the other. It is expressly understood and agreed that the employment relationship is "at will", and with no agreement for employment for any specified term, and with no agreement for employment for so long as Employee performs satisfactorily. Provided, however, before Employer
exercises this right of termination at will, Employer shall first either (i) discuss with Employee the needs of Employer and why Employee no longer meets those needs, or (ii) discuss with Employee any concerns or dissatisfactions which Employer has with Employee's performance, and give to Employee a reasonable opportunity to remedy those concerns or dissatisfactions, to the reasonable satisfaction of Employer.
4.3 TERMINATION FOR CAUSE Either party may terminate this employment relationship immediately upon notice to the other party in the event of any good cause, such as a default, dishonesty, neglect of duties, failure to perform by the other party, or death or disability of Employee.
4.4 PAYMENT OF COMPENSATION UPON TERMINATION Upon termination for cause, Employee shall be entitled to the compensation set forth as "base salary" herein, prorated to the effective date of such termination as full compensation for any and all claims of Employee under this Agreement.
5. FRINGE BENEFITS
5.1 CUSTOMARY FRINGE BENEFITS Employee shall be entitled to such fringe benefits as Employer customarily makes available to employees of Employer engaged in the same or similar position as Employee ("Fringe Benefits"). Such Fringe Benefits may include vacation leave, sick leave, and health insurance coverage. Employer reserves the right to change the Fringe Benefits on a prospective basis, at any time, effective upon delivery of written notice to Employee.
5.2 ACCUMULATION Employee shall not earn and accumulate unused vacation and sick leave, or other Fringe Benefits in excess of an unused amount equal to twice the amount earned for one year. Further, Employee shall not be entitled to receive payments in lieu of said Fringe Benefits, other than for unused vacation leave earned and accumulated at the time the employment relationship terminates.
6. INVENTION, TRADE SECRETS AND CONFIDENTIALITY
6.1 DEFINITIONS
6.1.1 Invention Defined. As used herein "Invention" means inventions, discoveries, concepts, and ideas, whether patentable or copyrightable or not, including but not limited to processes, methods, formulas, techniques, devices, designs, programs (including computer programs), computer graphics, apparatus, products, as well as improvements thereof or know-how related thereto, relating to any present or anticipated business or activities of Employer.
6.1.2 Trade Secret Defined. As used herein "Trade Secret" means, without limitation, any document or information relating to Employer's products, processes or services, including documents and information relating to Inventions, and to the research, development, engineering or manufacture of
Inventions, and to Employer's purchasing, customer or supplier lists, which documents or information have been disclosed to Employee or known to Employee as a consequence of or through Employee's employment by Employer (including documents, information or Inventions conceived, originated, discovered or developed by Employee), which is not generally known in the relevant trade or industry.
6.2 INVENTIONS
6.2.1 Disclosure. Employee shall disclose promptly to Employer each Invention, whether or not reduced to practice, which is conceived or learned by Employee (either alone or jointly with others) during the term of his employment with Employer. Employee shall disclose in confidence to Employer all patent applications filed by or on behalf of Employee during the term of his employment and for a period of three (3) years thereafter. Any disclosure of an Invention, or any patent application, made within one (1) year after termination of employment shall be presumed to relate to an Invention made during Employee's term of Employment with Employer, unless Employee clearly proves otherwise.
6.2.2 Employer Property; Assignment. Employee acknowledges and agrees that all Inventions which are discovered, conceived, developed, made, produced or prepared by Employee (alone or in conjunction with others) during the duration of Employee's employment with Employer shall be the sole property of Employer. Said property rights of Employer include without limitation all domestic and foreign patent rights, rights of registration or other protection under the patent and copyright laws, and all other rights pertaining to the Inventions. Employee further agrees that all services, products and Inventions that directly or indirectly result from engagement with Company shall be deemed "works for hire" as that term is defined in Title 17 of the United States Codes, and accordingly all rights associated therewith shall vest in the Company. Notwithstanding the foregoing, Employee hereby assigns to Employer all of Employee's right, title and interest in any such services, products and Inventions, in the event any such services, products and Inventions shall be determined not to constitute "works for hire."
6.2.3 Exclusion Notice. The Assignment by Employee of Inventions under this Agreement does not apply to any Inventions which are owned or controlled by Employee prior to the commencement of employment of Employee by Employer (all of which are set forth on Exhibit "A" hereto). Additionally, Employee is not required to assign an idea or invention where the invention or idea meets all of the following criteria; namely if the invention or idea: (i) was created or conceived without the use of any of Employer's equipment, supplies, facilities, or trade secret information, and (ii) was developed entirely on Employee's own time, and (iii) does not relate to the business of Employer, and (iv) does not relate to Employer's actual or demonstrably anticipated research or development, and (v) does not result from any work performed by Employee for Employer.
6.2.4 Patents and Copyrights; Attorney-in Fact. Both before and
after termination of this Agreement (and with reasonable compensation paid by
Employer to Employee after termination), Employee agrees to assist the Employer
to apply for, obtain and enforce patents on, and to apply for, obtain and
enforce copyright protection and registration of, the Inventions described in
Section 6.2.2 in any and all countries. To that end, Employee shall (at
Employer's request) without limitation, testify in any proceeding, and execute
any documents and assignments determined to be necessary or convenient for use
in applying for, obtaining, registering and enforcing patent or copyright
protection involving any of the Inventions. Employee hereby irrevocably appoints
Employer, and its duly authorized officers and agents, as Employee's agent and
attorney-in-fact, to act for and in behalf of Employee in filing all patent
applications, applications for copyright protection and registration,
amendments, renewals, and all other appropriate documents in any way related to
the Inventions described in Section 6.2.2.
6.3 TRADE SECRETS
6.3.1 Acknowledgment of Proprietary Interest. Employee recognizes the proprietary interest of Employer in any Trade Secrets of Employer. Employee acknowledges and agrees that any and all Trade Secrets of Employer, whether developed by Employee alone or in conjunction with others or otherwise, shall be and are the property of Employer.
6.3.2 Covenant Not to Divulge Trade Secrets. Employee acknowledges and agrees that Employer is entitled to prevent the disclosure of Trade Secrets of Employer. As a portion of the consideration for the employment of Employee and for the compensation being paid to Employee by Employer, Employee agrees at all times during the term of the employment by Employer and thereafter to hold in strictest confidence, and not to use, disclose or allow to be disclosed to any person, firm, or corporation, Trade Secrets of Employer, including Trade Secrets developed by Employee, other than disclosures to persons engaged by Employer to further the business of Employer, and other than use in the pursuit of the business of Employer.
6.3.3 Confidential Information of Others. Employee represents and warrants that if Employee has any confidential information belonging to others, Employee will not use or disclose to Employer any such information or documents. Employee represents that his employment with Employer will not require him to violate any obligation to or confidence with any other party.
6.4 NO ADVERSE USE Employee will not at any time use Employer's Trade Secrets or Inventions in any manner which may directly or indirectly have an adverse effect upon Employer's business, nor will Employee perform any acts which would tend to reduce Employer's proprietary value in Employer's Trade Secrets or Inventions.
6.5 RETURN OF MATERIALS AT TERMINATION In the event of any termination of Employee's employment, Employee will promptly deliver to Employer all materials, property, documents, data, and other information belonging to Employer or pertaining to Trade Secrets or Inventions. Employee shall not take any materials, property, documents or other information, or any reproduction or excerpt thereof, belonging to Employer or containing or pertaining to any Trade Secrets or Inventions.
6.6 REMEDIES UPON BREACH In the event of any breach by Employee of the provision in this Section 6, Employer shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to enjoin Employee from violating any of the terms of this Section 6, to enforce the specific performance by Employee of any of the terms of this Section 6, and to obtain damages for any of them, but nothing herein contained shall be construed to prevent such remedy or combination of remedies as Employer may elect to invoke. The failure of Employer to promptly institute legal action upon any breach of this Section 6 shall not constitute a waiver of that or any other breach hereof.
7. COVENANT NOT TO COMPETE Employee agrees that, during Employee's employment, Employee will not directly or indirectly compete with Employer in any way, and that Employee will not act as an officer, director, employee, consultant, shareholder, lender or agent of any other entity which is engaged in any business of the same nature as, or in competition with, the business in which Employer is now engaged, or in which Employer becomes engaged during the term of Employee's employment, or which is involved in science or technology which is similar to Employer's science or technology.
8. GENERAL PROVISIONS
8.1 ATTORNEYS' FEES In the event of any dispute or breach arising with respect to this Agreement, the party prevailing in any negotiations or proceedings for the resolution or enforcement thereof shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs incurred therein.
8.2 AMENDMENTS No amendment or modification of the terms or conditions of this Agreement shall be valid unless in writing and signed by both parties hereto. There shall be no implied-in-fact contracts modifying the terms of this Agreement.
8.3 ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties with respect to the employment of Employee. This Agreement supersedes all prior agreements, understandings, negotiations and representation with respect to the employment relationship.
8.4 SUCCESSORS AND ASSIGNS The Rights and obligations of Employer under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of Employer. Employee shall not be entitled to assign any of Employee's rights or obligations under this Agreement.
8.5 WAIVER Either party's failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.
8.6 SEVERABLE PROVISIONS The provisions of this Agreement are severable, and if any or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
9. EMPLOYEE'S REPRESENTATIONS Employee represents and warrants that Employee (i) is free to enter into this Agreement and to perform each of the terms and covenants contained herein, (ii) is not restricted or prohibited, contractually or otherwise, from entering into and performing this Agreement, and (iii) will not be in violation or breach of any other agreement by reason of Employee's execution and performance of this Agreement.
10. SUPPLEMENTAL MATTERS Pursuant to a separate letter agreement, Employee shall be entitled to reimbursement for certain relocation costs. Subject to ultimate decision by Employer's Board of Directors, Employee may receive a stock option agreement for 125,000 (one hundred twenty five thousand) shares of Employer's common stock.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
EMPLOYER:
Aastrom Biosciences, Inc.
By: /s/ R. DOUGLAS ARMSTRONG --------------------------- R. Douglas Armstrong, Ph.D. President/CEO |
EMPLOYEE:
/s/ James Maluta - ---------------- James Maluta |
Address: 29253 Thimbleberry Lane
Evergreen, CO 80439
Exhibit A
List of Prior Inventions
(Section 6.2.3)
None, other than the following:
EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of December 8, 1995, by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Employer") and TODD E. SIMPSON, C.P.A. ("Employee").
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT Employer hereby engages Employee, and Employee hereby accepts such engagement, upon terms and conditions set forth herein.
2. DUTIES Employee is engaged as a Vice President Finance & Administration and Chief Financial Officer. Employee shall perform faithfully adn diligently the duties customarily performed by persons in the position for which employee is engaged, together with such other reasonable and appropriate duties as Employer shall designate from time to time. Employee shall devote Employee's full business time and efforts to the rendition of such services or other business or scientific services to any other party, without the prior written consent of Employer.
3. COMPENSATION
3.1 BASE SALARY During the term of this Agreement, as compensation for the proper and satisfactory performance of all duties to be performed by Employee hereunder, Employer shall pay Employee at an annual salary rate of One Hundred Twenty-Two Thousand Five Hundred Dollars ($122,500), payable in arrears in equal bi-weekly installments, less required deductions for state and federal withholding tax, Social Security and all other employee taxes and payroll deductions. The base salary shall be subject to review and adjustment on an annual basis.
4. TERM
4.1 COMMENCEMENT The employment relationship pursuant to this Agreement shall commence on or before January 2, 1996.
4.2 TERMINATION AT WILL Although Employer and Employee anticipate a
long and mutually rewarding employment relationship, either party may terminate
this Agreement, without cause, upon fourteen (14) days' prior written notice
delivered to the other. It is expressly understood and agreed that the
employment relationship is "at will", and with no agreement for employment for
any specified term, and with no agreement for employment for so long as Employee
performs satisfactorily. Provided, however, before Employer exercises this
right of termination at will, Employer shall first either (i) discuss with
Employee the needs of Employer and why Employee no longer meets those needs, or
(ii) discuss with Employee any concerns or dissatisfactions which
Employer has with Employee's performance, and give to Employee a reasonable opportunity to remedy those concerns or dissatisfactions, to the reasonable satisfaction of Employer.
4.3 TERMINATION FOR CAUSE Either party may terminate this employment relationship immediately upon notice to the other party in the event of any good cause, such as a default, dishonesty, neglect of duties, failure to perform by the other party, or death or disability of Employee.
4.4 PAYMENT OF COMPENSATION UPON TERMINATION Upon termination for cause, Employee shall be entitled to the compensation set forth as "base salary" herein, prorated to the effective date of such termination as full compensation for any and all claims of Employee under this Agreement.
5. FRINGE BENEFITS
5.1 CUSTOMARY FRINGE BENEFITS Employee shall be entitled to such fringe benefits as Employer customarily makes available to employees of Employer engaged in the same or similar position as Employee ("Fringe Benefits"). Such Fringe Benefits may include vacation leave, sick leave, and health insurance coverage. Employer reserves the right to change the Fringe Benefits on a prospective basis, at any time, effective upon delivery of written notice to Employee.
5.2 ACCUMULATION Employee shall not earn and accumulate unused vacation in excess of Fifteen (15) days. Employee shall not earn and accumulate sick leave or other Fringe Benefits in excess of an unused amount equal to twice the amount earned for one year. Further, Employee shall not be entitled to receive payments in lieu of said Fringe Benefits, other than for unused vacation leave earned and accumulated at the time the employment relationship terminates.
6. INVENTION, TRADE SECRETS AND CONFIDENTIALITY
6.1 DEFINITIONS
6.1.1 Invention Defined. As used herein "Invention" means inventions, discoveries, concepts, and ideas, whether patentable or copyrightable or not, including but not limited to processes, methods, formulas, techniques, materials, devices, designs, programs (including computer programs), computer graphics, apparatus, products, as well as improvements thereof or know- how related thereto, relating to any present or anticipated business or activities of Employer.
6.1.2 Trade Secret Defined. As used herein "Trade Secret" means, without limitation, any document or information relating to Employer's products, processes or services, including documents and information relating to Inventions, and to the research, development, engineering or manufacture of Inventions, and to Employer's purchasing, customer or supplier lists, which
documents or information have been disclosed to Employee or known to Employee as a consequence of or through Employee's employment by Employer (including documents, information or Inventions conceived, originated, discovered or developed by Employee), which is not generally known in the relevant trade or industry.
6.2 INVENTIONS
6.2.1 Disclosure. Employee shall disclose promptly to Employer each Invention, whether or not reduced to practice, which is conceived or learned by Employee (either alone or jointly with others) during the term of his employment with Employer. Employee shall disclose in confidence to Employer all patent applications filed by or on behalf of Employee during the term of his employment and for a period of three (3) years thereafter. Any disclosure of an Invention, or any patent application, made within one (1) year after termination of employment shall be presumed to relate to an Invention made during Employee's term of Employment with Employer, unless Employee clearly proves otherwise.
6.2.2 Employer Property; Assignment. Employee acknowledges and agrees that all Inventions which are discovered, conceived, developed, made, produced or prepared by Employee (alone or in conjunction with others) during the duration of Employee's employment with Employer shall be the sole property of Employer. Said property rights of Employer include without limitation all domestic and foreign patent rights, rights of registration or other protection under the patent and copyright laws, and all other rights pertaining to the Inventions. Employee further agrees that all services, products and Inventions that directly or indirectly result from engagement with Company shall be deemed "works for hire" as that term is defined in Title 17 of the United States Codes, and accordingly all rights associated therewith shall vest in the Company. Notwithstanding the foregoing, Employee hereby assigns to Employer all of Employee's right, title and interest in any such services, products and Inventions, in the event any such services, products and Inventions shall be determined not to constitute "works for hire."
6.2.3 Exclusion Notice. The Assignment by Employee of Inventions under this Agreement does not apply to any Inventions which are owned or controlled by Employee prior to the commencement of employment of Employee by Employer (all of which are set forth on Exhibit "A" hereto). Additionally, Employee is not required to assign an idea or invention where the invention or idea meets all of the following criteria; namely if the invention or idea: (i) was created or conceived without the use of any of Employer's equipment, supplies, facilities, or trade secret information, and (ii) was developed entirely on Employee's own time, and (iii) does not relate to the business of Employer, and (iv) does not relate to Employer's actual or demonstrably anticipated research or development, and (v) does not result from any work performed by Employee for Employer.
6.2.4 Patents and Copyrights; Attorney-in Fact. Both before and after termination of this Agreement (and with reasonable
compensation paid by Employer to Employee after termination), Employee agrees to assist the Employer to apply for, obtain and enforce patents on, and to apply for, obtain and enforce copyright protection and registration of, the Inventions described in Section 6.2.2 in any and all countries. To that end, Employee shall (at Employer's request) without limitation, testify in any proceeding, and execute any documents and assignments determined to be necessary or convenient for use in applying for, obtaining, registering and enforcing patent or copyright protection involving any of the Inventions. Employee hereby irrevocably appoints Employer, and its duly authorized officers and agents, as Employee's agent and attorney-in-fact, to act for and in behalf of Employee in filing all patent applications, applications for copyright protection and registration, amendments, renewals, and all other appropriate documents in any way related to the Inventions described in Section 6.2.2.
6.3 TRADE SECRETS
6.3.1 Acknowledgment of Proprietary Interest. Employee recognizes the proprietary interest of Employer in any Trade Secrets of Employer. Employee acknowledges and agrees that any and all Trade Secrets of Employer, whether developed by Employee alone or in conjunction with others or otherwise, shall be and are the property of Employer.
6.3.2 Covenant Not to Divulge Trade Secrets. Employee acknowledges and agrees that Employer is entitled to prevent the disclosure of Trade Secrets of Employer. As a portion of the consideration for the employment of Employee and for the compensation being paid to Employee by Employer, Employee agrees at all times during the term of the employment by Employer and thereafter to hold in strictest confidence, and not to use, disclose or allow to be disclosed to any person, firm, or corporation, Trade Secrets of Employer, including Trade Secrets developed by Employee, other than disclosures to persons engaged by Employer to further the business of Employer, and other than use in the pursuit of the business of Employer.
6.3.3 Confidential Information of Others. Employee represents and warrants that if Employee has any confidential information belonging to others, Employee will not use or disclose to Employer any such information or documents. Employee represents that his employment with Employer will not require him to violate any obligation to or confidence with any other party.
6.4 NO ADVERSE USE Employee will not at any time use Employer's Trade Secrets or Inventions in any manner which may directly or indirectly have an adverse effect upon Employer's business, nor will Employee perform any acts which would tend to reduce Employer's proprietary value in Employer's Trade Secrets or Inventions.
6.5 RETURN OF MATERIALS AT TERMINATION In the event of any termination of Employee's employment, Employee will promptly deliver to Employer all materials, property, documents, data, and other information
belonging to Employer or pertaining to Trade Secrets or Inventions. Employee shall not take any materials, property, documents or other information, or any reproduction or excerpt thereof, belonging to Employer or containing or pertaining to any Trade Secrets or Inventions.
6.6 REMEDIES UPON BREACH In the event of any breach by Employee of the provision in this Section 6, Employer shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to enjoin Employee from violating any of the terms of this Section 6, to enforce the specific performance by Employee of any of the terms of this Section 6, and to obtain damages for any of them, but nothing herein contained shall be construed to prevent such remedy or combination of remedies as Employer may elect to invoke. The failure of Employer to promptly institute legal action upon any breach of this Section 6 shall not constitute a waiver of that or any other breach hereof.
7. COVENANT NOT TO COMPETE Employee agrees that, during Employee's employment, Employee will not directly or indirectly compete with Employer in any way, and that Employee will not act as an officer, director, employee, consultant, shareholder of more than 2 1/2 percent, lender or agent of any other entity which is engaged in any business of the same nature as, or in competition with, the business in which Employer is now engaged, or in which Employer becomes engaged during the term of Employee's employment, or which is involved in science or technology which is similar to Employer's science or technology.
8. GENERAL PROVISIONS
8.1 ATTORNEYS' FEES In the event of any dispute or breach arising with respect to this Agreement, the party prevailing in any negotiations or proceedings for the resolution or enforcement thereof shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs incurred therein.
8.2 AMENDMENTS No amendment or modification of the terms or conditions of this Agreement shall be valid unless in writing and signed by both parties hereto. There shall be no implied-in-fact contracts modifying the terms of this Agreement.
8.3 ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties with respect to the employment of Employee. This Agreement supersedes all prior agreements, understandings, negotiations and representation with respect to the employment relationship.
8.4 SUCCESSORS AND ASSIGNS The Rights and obligations of Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Employer. Employee shall not be entitled to assign any of Employee's rights or obligations under this Agreement.
8.5 WAIVER Either party's failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.
8.6 SEVERABLE PROVISIONS The provisions of this Agreement are severable, and if any or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
9. EMPLOYEE'S REPRESENTATIONS Employee represents and warrants that Employee (i) is free to enter into this Agreement and to perform each of the terms and covenants contained herein, (ii) is not restricted or prohibited, contractually or otherwise, from entering into and performing this Agreement, and (iii) will not be in violation or breach of any other agreement by reason of Employee's execution and performance of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
EMPLOYER:
Aastrom Biosciences, Inc.
By: /s/ R. DOUGLAS ARMSTRONG ------------------------------------- R. Douglas Armstrong, Ph.D. President and Chief Executive Officer |
EMPLOYEE:
/s/ TODD E. SIMPSON - ----------------------- Todd E. Simpson, C.P.A. |
Address: 12623 Salmon River Road
San Diego, CA 92125
Exhibit A
List of Prior Inventions
(Section 6.2.3)
None, other than the following:
EXHIBIT 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of February 10, 1994, by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Employer") and WALTER C. OGIER ("Employee").
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT Employer hereby engages Employee, and Employee hereby accepts such engagement, upon the terms and conditions set forth herein.
2. DUTIES Employee is engaged as Director of Marketing. Employee shall perform faithfully and diligently the duties customarily performed by persons in the position for which employee is engaged, together with such other reasonable and appropriate duties as Employer shall designate for time to time. Employee shall devote Employee's full business time and efforts to the rendition of such services and to the performance of such duties. As a full-time employee of Employer, Employee shall not be entitled to provide consulting services or other business or scientific services to any other party, without the prior written consent of Employer.
3. COMPENSATION
3.1 BASE SALARY During the term of this Agreement, as compensation for the proper and satisfactory performance of all duties to be performed by Employee hereunder, Employer shall pay Employee at an annual salary rate of Eighty-Seven Thousand Five Hundred Dollars ($87,500), payable in arrears in equal bi-weekly installments, less required deductions for state and federal withholding tax, Social Security and all other employee taxes and payroll deductions. The base salary shall be subject to review and adjustment on an annual basis.
4. TERM
4.1 COMMENCEMENT The employment relationship pursuant to this Agreement shall commence on or before March 21, 1994.
4.2 TERMINATION AT WILL Although Employer and Employee anticipate a long and mutually rewarding employment relationship, either party may terminate this Agreement, without cause, upon fourteen (14) days' prior written notice delivered to the other. It is expressly understood and agreed that the employment relationship is "at will", and with no agreement for employment for any specified term, and with no agreement for employment for so long as Employee performs satisfactorily. Provided, however, before Employer exercises this right of termination at will, Employer shall first either (i) discuss with Employee the needs of Employer and why Employee no longer meets those needs, or (ii) discuss with Employee any concerns or dissatisfactions which
Employer has with Employee's performance, and give to Employee a reasonable opportunity to remedy those concerns or dissatisfactions, to the reasonable satisfaction of Employer.
4.3 TERMINATION FOR CAUSE Either party may terminate this employment relationship immediately upon notice to the other party in the event of any good cause, such as a default, dishonesty, neglect of duties, failure to perform by the other party, or death or disability of Employee.
4.4 PAYMENT OF COMPENSATION UPON TERMINATION Upon termination for cause, Employee shall be entitled to the compensation set forth as "base salary" herein, prorated to the effective date of such termination as full compensation for any and all claims of Employee under this Agreement.
5. FRINGE BENEFITS
5.1 CUSTOMARY FRINGE BENEFITS Employee shall be entitled to such fringe benefits as Employer customarily makes available to employees of Employer engaged in the same or similar position as Employee ("Fringe Benefits"). Such Fringe Benefits may include vacation leave, sick leave, and health insurance coverage. Employer reserves the right to change the Fringe Benefits on a prospective basis, at any time, effective upon delivery of written notice to Employee.
5.2 ACCUMULATION Employee shall not earn and accumulate unused vacation in excess of Fifteen (15) days. Employee shall not earn and accumulate sick leave or other Fringe Benefits in excess of an unused amount equal to twice the amount earned for one year. Further, Employee shall not be entitled to receive payments in lieu of said Fringe Benefits, other than for unused vacation leave earned and accumulated at the time the employment relationship terminates.
6. INVENTION, TRADE SECRETS AND CONFIDENTIALITY
6.1 DEFINITIONS
6.1.1 Invention Defined. As used herein "Invention" means inventions, discoveries, concepts, and ideas, whether patentable or copyrightable or not, including but not limited to processes, methods, formulas, techniques, materials, devices, designs, programs (including computer programs), computer graphics, apparatus, products, as well as improvements thereof or know- how related thereto, relating to any present or anticipated business or activities of Employer.
6.1.2 Trade Secret Defined. As used herein "Trade Secret" means, without limitation, any document or information relating to Employer's products, processes or services, including documents and information relating to Inventions, and to the research, development, engineering or manufacture of Inventions, and to Employer's purchasing, customer or supplier lists, which
documents or information have been disclosed to Employee or known to Employee as a consequence of or through Employee's employment by Employer (including documents, information or Inventions conceived, originated, discovered or developed by Employee), which is not generally known in the relevant trade or industry.
6.2 INVENTIONS
6.2.1 Disclosure. Employee shall disclose promptly to Employer each Invention, whether or not reduced to practice, which is conceived or learned by Employee (either alone or jointly with others) during the term of his employment with Employer. Employee shall disclose in confidence to Employer all patent applications filed by or on behalf of Employee during the term of his employment and for a period of three (3) years thereafter. Any disclosure of an Invention, or any patent application, made within one (1) year after termination of employment shall be presumed to relate to an Invention made during Employee's term of Employment with Employer, unless Employee clearly proves otherwise.
6.2.2 Employer Property; Assignment. Employee acknowledges and agrees that all Inventions which are discovered, conceived, developed, made, produced or prepared by Employee (alone or in conjunction with others) during the duration of Employee's employment with Employer shall be the sole property of Employer. Said property rights of Employer include without limitation all domestic and foreign patent rights, rights of registration or other protection under the patent and copyright laws, and all other rights pertaining to the Inventions. Employee further agrees that all services, products and Inventions that directly or indirectly result from engagement with Company shall be deemed "works for hire" as that term is defined in Title 17 of the United States Codes, and accordingly all rights associated therewith shall vest in the Company. Notwithstanding the foregoing, Employee hereby assigns to Employer all of Employee's right, title and interest in any such services, products and Inventions, in the event any such services, products and Inventions shall be determined not to constitute "works for hire."
6.2.3 Exclusion Notice. The Assignment by Employee of Inventions under this Agreement does not apply to any Inventions which are owned or controlled by Employee prior to the commencement of employment of Employee by Employer (all of which are set forth on Exhibit "A" hereto). Additionally, Employee is not required to assign an idea or invention where the invention or idea meets all of the following criteria; namely if the invention or idea: (i) was created or conceived without the use of any of Employer's equipment, supplies, facilities, or trade secret information, and (ii) was developed entirely on Employee's own time, and (iii) does not relate to the business of Employer, and (iv) does not relate to Employer's actual or demonstrably anticipated research or development, and (v) does not result from any work performed by Employee for Employer.
6.2.4 Patents and Copyrights; Attorney-in Fact. Both before and after termination of this Agreement (and with reasonable compensation paid
by Employer to Employee after termination), Employee agrees to assist the Employer to apply for, obtain and enforce patents on, and to apply for, obtain and enforce copyright protection and registration of, the Inventions described in Section 6.2.2 in any and all countries. To that end, Employee shall (at Employer's request) without limitation, testify in any proceeding, and execute any documents and assignments determined to be necessary or convenient for use in applying for, obtaining, registering and enforcing patent or copyright protection involving any of the Inventions. Employee hereby irrevocably appoints Employer, and its duly authorized officers and agents, as Employee's agent and attorney-in-fact, to act for and in behalf of Employee in filing all patent applications, applications for copyright protection and registration, amendments, renewals, and all other appropriate documents in any way related to the Inventions described in Section 6.2.2.
6.3 TRADE SECRETS
6.3.1 Acknowledgment of Proprietary Interest. Employee recognizes the proprietary interest of Employer in any Trade Secrets of Employer. Employee acknowledges and agrees that any and all Trade Secrets of Employer, whether developed by Employee alone or in conjunction with others or otherwise, shall be and are the property of Employer.
6.3.2 Covenant Not to Divulge Trade Secrets. Employee acknowledges and agrees that Employer is entitled to prevent the disclosure of Trade Secrets of Employer. As a portion of the consideration for the employment of Employee and for the compensation being paid to Employee by Employer, Employee agrees at all times during the term of the employment by Employer and thereafter to hold in strictest confidence, and not to use, disclose or allow to be disclosed to any person, firm, or corporation, Trade Secrets of Employer, including Trade Secrets developed by Employee, other than disclosures to persons engaged by Employer to further the business of Employer, and other than use in the pursuit of the business of Employer.
6.3.3 Confidential Information of Others. Employee represents and warrants that if Employee has any confidential information belonging to others, Employee will not use or disclose to Employer any such information or documents. Employee represents that his employment with Employer will not require him to violate any obligation to or confidence with any other party.
6.4 NO ADVERSE USE Employee will not at any time use Employer's Trade Secrets or Inventions in any manner which may directly or indirectly have an adverse effect upon Employer's business, nor will Employee perform any acts which would tend to reduce Employer's proprietary value in Employer's Trade Secrets or Inventions.
6.5 RETURN OF MATERIALS AT TERMINATION In the event of any termination of Employee's employment, Employee will promptly deliver to Employer all materials, property, documents, data, and other information
belonging to Employer or pertaining to Trade Secrets or Inventions. Employee shall not take any materials, property, documents or other information, or any reproduction or excerpt thereof, belonging to Employer or containing or pertaining to any Trade Secrets or Inventions.
6.6 REMEDIES UPON BREACH In the event of any breach by Employee of the provision in this Section 6, Employer shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to enjoin Employee from violating any of the terms of this Section 6, to enforce the specific performance by Employee of any of the terms of this Section 6, and to obtain damages for any of them, but nothing herein contained shall be construed to prevent such remedy or combination of remedies as Employer may elect to invoke. The failure of Employer to promptly institute legal action upon any breach of this Section 6 shall not constitute a waiver of that or any other breach hereof.
7. COVENANT NOT TO COMPETE Employee agrees that, during Employee's employment, Employee will not directly or indirectly compete with Employer in any way, and that Employee will not act as an officer, director, employee, consultant, shareholder, lender or agent of any other entity which is engaged in any business of the same nature as, or in competition with, the business in which Employer is now engaged, or in which Employer becomes engaged during the term of Employee's employment, or which is involved in science or technology which is similar to Employer's science or technology.
8. GENERAL PROVISIONS
8.1 ATTORNEYS' FEES In the event of any dispute or breach arising with respect to this Agreement, the party prevailing in any negotiations or proceedings for the resolution or enforcement thereof shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs incurred therein.
8.2 AMENDMENTS No amendment or modification of the terms or conditions of this Agreement shall be valid unless in writing and signed by both parties hereto. There shall be no implied-in-fact contracts modifying the terms of this Agreement.
8.3 ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties with respect to the employment of Employee. This Agreement supersedes all prior agreements, understandings, negotiations and representation with respect to the employment relationship.
8.4 SUCCESSORS AND ASSIGNS The Rights and obligations of Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Employer. Employee shall not be entitled to assign any of Employee's rights or obligations under this Agreement.
8.5 WAIVER Either party's failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.
8.6 SEVERABLE PROVISIONS The provisions of this Agreement are severable, and if any or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
9. EMPLOYEE'S REPRESENTATIONS Employee represents and warrants that Employee (i) is free to enter into this Agreement and to perform each of the terms and covenants contained herein, (ii) is not restricted or prohibited, contractually or otherwise, from entering into and performing this Agreement, and (iii) will not be in violation or breach of any other agreement by reason of Employee's execution and performance of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
EMPLOYER:
AASTROM BIOSCIENCES, INC.
By: /s/ R. DOUGLAS ARMSTRONG --------------------------- R. Douglas Armstrong, Ph.D. President and CEO |
EMPLOYEE:
/s/ WALTER OGIER - -------------------------------- Walter Ogier |
Address: 26101 Tono
Mission Viejo, CA 92692
Exhibit A
List of Prior Inventions
(Section 6.2.3)
None, other than the following:
EXHIBIT 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of April 19, 1994, by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Employer") and THOMAS E. MULLER, PH.D. ("Employee").
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT Employer hereby engages Employee, and Employee hereby accepts such engagement, upon the terms and conditions set forth herein.
2. DUTIES Employee is engaged as Vice President Regulatory Affairs. Employee shall perform faithfully and diligently the duties customarily performed by persons in the position for which employee is engaged, together with such other reasonable and appropriate duties as Employer shall designate from time to time. Employee shall devote Employee's full business time and efforts to the rendition of such services and to the performance of such duties. As a full-time employee of Employer, Employee shall not be entitled to provide consulting services or other business or scientific services to any other party, without the prior written consent of Employer.
3. COMPENSATION
3.1 BASE SALARY During the term of this Agreement, as compensation for the proper and satisfactory performance of all duties to be performed by Employee hereunder, Employer shall pay Employee at an annual salary rate of One Hundred Ten Thousand Dollars ($110,000), payable in arrears in equal bi-weekly installments, less required deductions for state and federal withholding tax, Social Security and all other employee taxes and payroll deductions. The base salary shall be subject to review and adjustment on an annual basis.
4. TERM
4.1 COMMENCEMENT The employment relationship pursuant to this Agreement shall commence no later than May 9, 1994.
4.2 TERMINATION AT WILL Although Employer and Employee anticipate a long and mutually rewarding employment relationship, either party may terminate this Agreement, without cause, upon fourteen (14) days' prior written notice delivered to the other. It is expressly understood and agreed that the employment relationship is "at will", and with no agreement for employment for any specified term, and with no agreement for employment for so long as Employee performs satisfactorily. Provided, however, before Employer exercises this right of termination at will, Employer shall first either (i) discuss with Employee the needs of Employer and why Employee no longer meets those needs, or (ii) discuss with Employee any concerns or dissatisfactions which
Employer has with Employee's performance, and give to Employee a reasonable opportunity to remedy those concerns or dissatisfactions, to the reasonable satisfaction of Employer.
4.3 TERMINATION FOR CAUSE Either party may terminate this employment relationship immediately upon notice to the other party in the event of any good cause, such as a default, dishonesty, neglect of duties, failure to perform by the other party, or death or disability of Employee.
4.4 PAYMENT OF COMPENSATION UPON TERMINATION Upon termination for cause, Employee shall be entitled to the compensation set forth as "base salary" herein, prorated to the effective date of such termination as full compensation for any and all claims of Employee under this Agreement.
5. FRINGE BENEFITS
5.1 CUSTOMARY FRINGE BENEFITS Employee shall be entitled to such fringe benefits as Employer customarily makes available to employees of Employer engaged in the same or similar position as Employee ("Fringe Benefits"). Such Fringe Benefits may include vacation leave, sick leave, and health insurance coverage. Employer reserves the right to change the Fringe Benefits on a prospective basis, at any time, effective upon delivery of written notice to Employee.
5.2 ACCUMULATION Employee shall not earn and accumulate unused vacation in excess of fifteen (15) days. employee shall not earn and accumulate sick leave or other fringe benefits in excess of an unused amount equal to twice the amount earned for one year. Further, employee shall not be entitled to receive payments in lieu of said fringe benefits, other than for unused vacation leave earned and accumulated at the time the employment relationship terminates.
6. INVENTION, TRADE SECRETS AND CONFIDENTIALITY
6.1 DEFINITIONS
6.1.1 Invention Defined. As used herein "Invention" means inventions, discoveries, concepts, and ideas, whether patentable or copyrightable or not, including but not limited to processes, methods, formulas, techniques, materials, devices, designs, programs (including computer programs), computer graphics, apparatus, products, as well as improvements thereof or know- how related thereto, relating to any present or anticipated business or activities of Employer.
6.1.2 Trade Secret Defined. As used herein "Trade Secret" means, without limitation, any document or information relating to Employer's products, processes or services, including documents and information relating to Inventions, and to the research, development, engineering or manufacture of Inventions, and to Employer's purchasing, customer or supplier lists, which
documents or information have been disclosed to Employee or known to Employee as a consequence of or through Employee's employment by Employer (including documents, information or Inventions conceived, originated, discovered or developed by Employee), which is not generally known in the relevant trade or industry.
6.2 INVENTIONS
6.2.1 Disclosure. Employee shall disclose promptly to Employer each Invention, whether or not reduced to practice, which is conceived or learned by Employee (either alone or jointly with others) during the term of his employment with Employer. Employee shall disclose in confidence to Employer all patent applications filed by or on behalf of Employee during the term of his employment and for a period of three (3) years thereafter. Any disclosure of an Invention, or any patent application, made within one (1) year after termination of employment shall be presumed to relate to an Invention made during Employee's term of Employment with Employer, unless Employee clearly proves otherwise.
6.2.2 Employer Property; Assignment. Employee acknowledges and agrees that all Inventions which are discovered, conceived, developed, made, produced or prepared by Employee (alone or in conjunction with others) during the duration of Employee's employment with Employer shall be the sole property of Employer. Said property rights of Employer include without limitation all domestic and foreign patent rights, rights of registration or other protection under the patent and copyright laws, and all other rights pertaining to the Inventions. Employee further agrees that all services, products and Inventions that directly or indirectly result from engagement with Company shall be deemed "works for hire" as that term is defined in Title 17 of the United States Codes, and accordingly all rights associated therewith shall vest in the Company. Notwithstanding the foregoing, Employee hereby assigns to Employer all of Employee's right, title and interest in any such services, products and Inventions, in the event any such services, products and Inventions shall be determined not to constitute "works for hire."
6.2.3 Exclusion Notice. The Assignment by Employee of Inventions under this Agreement does not apply to any Inventions which are owned or controlled by Employee prior to the commencement of employment of Employee by Employer (all of which are set forth on Exhibit "A" hereto). Additionally, Employee is not required to assign an idea or invention where the invention or idea meets all of the following criteria; namely if the invention or idea: (i) was created or conceived without the use of any of Employer's equipment, supplies, facilities, or trade secret information, and (ii) was developed entirely on Employee's own time, and (iii) does not relate to the business of Employer, and (iv) does not relate to Employer's actual or demonstrably anticipated research or development, and (v) does not result from any work performed by Employee for Employer.
6.2.4 Patents and Copyrights; Attorney-in Fact. Both before and after termination of this Agreement (and with reasonable compensation paid
by Employer to Employee after termination), Employee agrees to assist the Employer to apply for, obtain and enforce patents on, and to apply for, obtain and enforce copyright protection and registration of, the Inventions described in Section 6.2.2 in any and all countries. To that end, Employee shall (at Employer's request) without limitation, testify in any proceeding, and execute any documents and assignments determined to be necessary or convenient for use in applying for, obtaining, registering and enforcing patent or copyright protection involving any of the Inventions. Employee hereby irrevocably appoints Employer, and its duly authorized officers and agents, as Employee's agent and attorney-in-fact, to act for and in behalf of Employee in filing all patent applications, applications for copyright protection and registration, amendments, renewals, and all other appropriate documents in any way related to the Inventions described in Section 6.2.2.
6.3 TRADE SECRETS
6.3.1 Acknowledgment of Proprietary Interest. Employee recognizes the proprietary interest of Employer in any Trade Secrets of Employer. Employee acknowledges and agrees that any and all Trade Secrets of Employer, whether developed by Employee alone or in conjunction with others or otherwise, shall be and are the property of Employer.
6.3.2 Covenant Not to Divulge Trade Secrets. Employee acknowledges and agrees that Employer is entitled to prevent the disclosure of Trade Secrets of Employer. As a portion of the consideration for the employment of Employee and for the compensation being paid to Employee by Employer, Employee agrees at all times during the term of the employment by Employer and thereafter to hold in strictest confidence, and not to use, disclose or allow to be disclosed to any person, firm, or corporation, Trade Secrets of Employer, including Trade Secrets developed by Employee, other than disclosures to persons engaged by Employer to further the business of Employer, and other than use in the pursuit of the business of Employer.
6.3.3 Confidential Information of Others. Employee represents and warrants that if Employee has any confidential information belonging to others, Employee will not use or disclose to Employer any such information or documents. Employee represents that his employment with Employer will not require him to violate any obligation to or confidence with any other party.
6.4 NO ADVERSE USE Employee will not at any time use Employer's Trade Secrets or Inventions in any manner which may directly or indirectly have an adverse effect upon Employer's business, nor will Employee perform any acts which would tend to reduce Employer's proprietary value in Employer's Trade Secrets or Inventions.
6.5 RETURN OF MATERIALS AT TERMINATION In the event of any termination of Employee's employment, Employee will promptly deliver to Employer all materials, property, documents, data, and other information
belonging to Employer or pertaining to Trade Secrets or Inventions. Employee shall not take any materials, property, documents or other information, or any reproduction or excerpt thereof, belonging to Employer or containing or pertaining to any Trade Secrets or Inventions.
6.6 REMEDIES UPON BREACH In the event of any breach by Employee of the provision in this Section 6, Employer shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to enjoin Employee from violating any of the terms of this Section 6, to enforce the specific performance by Employee of any of the terms of this Section 6, and to obtain damages for any of them, but nothing herein contained shall be construed to prevent such remedy or combination of remedies as Employer may elect to invoke. The failure of Employer to promptly institute legal action upon any breach of this Section 6 shall not constitute a waiver of that or any other breach hereof.
7. COVENANT NOT TO COMPETE Employee agrees that, during Employee's employment, Employee will not directly or indirectly compete with Employer in any way, and that Employee will not act as an officer, director, employee, consultant, shareholder, lender or agent of any other entity which is engaged in any business of the same nature as, or in competition with, the business in which Employer is now engaged, or in which Employer becomes engaged during the term of Employee's employment, or which is involved in science or technology which is similar to Employer's science or technology.
8. GENERAL PROVISIONS
8.1 ATTORNEYS' FEES In the event of any dispute or breach arising with respect to this Agreement, the party prevailing in any negotiations or proceedings for the resolution or enforcement thereof shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs incurred therein.
8.2 AMENDMENTS No amendment or modification of the terms or conditions of this Agreement shall be valid unless in writing and signed by both parties hereto. There shall be no implied-in-fact contracts modifying the terms of this Agreement.
8.3 ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties with respect to the employment of Employee. This Agreement supersedes all prior agreements, understandings, negotiations and representation with respect to the employment relationship.
8.4 SUCCESSORS AND ASSIGNS The Rights and obligations of Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Employer. Employee shall not be entitled to assign any of Employee's rights or obligations under this Agreement.
8.5 WAIVER Either party's failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.
8.6 SEVERABLE PROVISIONS The provisions of this Agreement are severable, and if any or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
9. EMPLOYEE'S REPRESENTATIONS Employee represents and warrants that Employee (i) is free to enter into this Agreement and to perform each of the terms and covenants contained herein, (ii) is not restricted or prohibited, contractually or otherwise, from entering into and performing this Agreement, and (iii) will not be in violation or breach of any other agreement by reason of Employee's execution and performance of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
EMPLOYER:
Aastrom Biosciences, Inc.
By: /s/ R. DOUGLAS ARMSTRONG --------------------------- R. Douglas Armstrong, Ph.D. President and CEO |
EMPLOYEE:
/s/ THOMAS E. MULLER - ----------------------- Thomas E. Muller, Ph.D. |
Address: 388 Lowell Road
Concord, MA 01742
Exhibit A
List of Prior Inventions
(Section 6.2.3)
None, other than the following:
1- T.E. Muller and C.B. Purves "Xanthation", Technical Report No. 192, Pulp and Paper Research Institute of Canada (July, 1960).
2- T.E. Muller and C.B. Purves "Xanthation and Dexanthation of Cellulose and Related Glucose Derivatives", Canadian Textile Journal 42 (March, 1963).
3- T.E. Muller and C. B. Purves "Xanthation", Chapter 43 in "Methods in Carbohydrate Chemistry", Vol. III, Academic Press, Inc., NY (1963).
10- R.L. Mitchell, T.E. Muller, H.D. Stevens and R.S. Tabke "Process and Forming Hydroxyl Cellulose Fibers Having Water Absorption and High Water Retention Properties", U.S. Patent 3,670,069 (June 13, 1972); British Patent 1,324,373 (July 25, 1973).
11- H.L. Hergert, T.E. Muller and S.E. Church "Chemical Cellulose for High Performance Rayon", TAPPI 1973 Dissolving Pulps Conference Preprints (Oct., 1973).
12- H.D. Stevens and T.E. Muller "Process for Producing High Performance Crimped Rayon Staple Fiber", U.S. Patent 3,720,743 (March 13, 1973); German Patent 1,342,805 (Jan. 3, 1974); Canadian Patent 960,422 (Jan. 7, 1975).
13- R.L. Mitchell, T.E. Muller, H.D. Stevens and R.S. Tabke "Wet Spinning of Cellulosic Products", U.S. Patent 3,865,918 (Feb. 11, 1975).
14- T.E. Muller, D.G. Unrau and L.L. Nejelski "The New Rayons", 33rd Annual Technical Conference Society Plastics Engineers, Atlanta, GA (May 5-8, 1975).
16- J.B. Dykes and T.E. Muller "World Textile Fiber Demand Projected to 2000
A.D.; Technology for the Production of a Chemically Crimped HWM Rayon
Fiber", SASMIRA Conference, New Delhi, India (Jan. 19-21, 1976);
"Proceedings of the International Conference on Man-Made Fibres for
Developing Countries" (1976).
17- T.E. Muller and J.B. Dykes "Process Technology and Applications for a Chemically Crimped HWM Rayon Fiber", Eighth Shirley International Seminar, Manchester, England (April 27-29, 1976).
18- T.E. Muller "Man-Made Cellulosic Fibers - A View in 1976", Comite International de la Rayonne et des Fibres Synthetiques, Paris, France (Oct. 14, 1976).
19- T.E. Muller "Review of Modern Viscose Processing and Recovery Techniques" Seminars Presented at the U.S. Embassy, Moscow (Jan. 10-12, 1978).
20- H.L. Hergert and T.E. Muller "Modified Cellulosics - An Overview of the Future", Modified Cellulosics, Academic Press, Inc., NY (1978).
21- T.E. Muller "Research, Development and Production of Silvichemicals", Natl. Meeting Am. Inst. Chem. Eng., Philadelphia, PA (June 7, 1978).
22- T.E. Muller "Energy and Chemical Requirements for the Manufacture of Chemical Cellulose from Wood, HWM Rayon Staple Fiber and Polyester Staple Fiber", Comite International de la Rayonne et des Fibres Synthetiques, Paris, France (Oct. 1978).
23- T.E. Muller "Cellulosics", Seminars Presented for Chinese Industry, Shanghai, China (May 20-21, 1979).
24- T.E. Muller "High Wet Modulus Rayon Fiber (Prima)", Industrial Research IR-100 Award (Oct., 1979).
26- T.E. Muller "Developments in the Manufacture of Regenerated Cellulose Fibers and Films", Chairman, TAPPI Dissolving Pulps Conference, Vienna, Austria (Oct. 9, 1980).
27- H.O. Jauregui, C. J-P. Mullon, T.E. Muller and B.A. Solomon "Hollow Fiber Liver Support System", Am. Inst. Chem. Eng. Annual Meeting, San Francisco, CA (Nov. 5-10, 1989).
28- T.E. Muller, B.A. Solomon, T. Maki, S.J. Sullivan, K.M. Borland, A.P.
Monaco and W.L. Chick "The Hybrid Perfused Pancreas: Successful Treatment
of Severely Diabetic Pancreatectomized Dogs", Tenth Workshop of the
European Association for the Study of Diabetes, Amsterdam, The Netherlands
(Jan. 27-29, 1991).
29- Thomas E. Muller "Maintenance of Normoglycemia in Diabetic Dogs with an Artificial Pancreas", Presented at Swiss Federal Institute of Technology (ETH), Zurich, Switzerland (Jan. 31, 1991).
34- Takashi Maki, Mauro Carretta, Hiroki Ohzato, Susan J. Sullivan, Robert P.
Lanza, Kermit M. Borland, Thomas E. Muller, Barry A. Solomon, William L.
Chick and Anthony P. Monaco "Islet Xenotransplantation Without Immuno-
suppression Utilizing the Hybrid Artificial Pancreas", Third International
Symposium on Islet Transplantation, Perugia, Italy, (Sept. 26-29, 1991);
Diab. Nutr. Metab. (in Press).
38- T.E. Muller, B.A. Solomon, A.P. Monaco, T. Maki, W.L. Chick, and S.J.
Sullivan "Maintenance of Normoglycemia in Diabetic Dogs with an Artificial
Pancreas", Study Group of the European Association for the Study of
Diabetes, Igls, Austria (Jan. 26-28, 1992).
40- S.J. Sullivan, T. Maki, M. Carretta, H. Ohzato, M.D. Mahoney, B.A.
Solomon, T.E. Muller, A.P. Monaco and W.L. Chick "Implantation of the
Biohybrid Pancreas in Diabetic Dogs", Third International Congress on
Pancreatic and Islet Transplantation Symposium on Artificial Insulin
Delivery System, Lyon, France, (June 6-8, 1991); Transplantation
Proceedings 24 (3), 942-944 (1992).
43- Thomas E. Muller "Combination Medical Products", Presented at the Joint FDA-HIMA Conference, Washington, DC (February 11-12, 1992).
44- S. Sullivan, R. Lanza, K. Borland, T. Maki, M. Carretta, H. Ohzato, P.
Lodge, T. Muller, A. Monaco, B. Solomon and W. Chick "Pancreatic Islet
Transplantation Using an Immunoprotective Membrane", 38th Annual Meeting
of the ASAIO Nashville, TN (May 7-9, 1992).
46- S. Sullivan, K. Borland, T. Maki, M. Carretta, H. Ohzato, P. Lodge, T.
Muller, A. Monaco, B. Solomon and W. Chick, "Islet Transplantation Using
an Immuno-protective Vascular Device", First Int. Congress Cell Transplant
Society, Pittsburgh, PA, (May 31-June 3, 1992).
47- H.O. Jauregui, D. Trenkler, S. Naik, B. Monfils, C. Mullon, T. Muller and B. Solomon "Use of Artificial (Hybrid) Liver Support System to Treat the Galactosamine Rabbit Model of Hepatic Encephalopathy", International Association for the Study of the Liver Biennial Scientific Meeting, Brighton, England (June 3-6, 1992).
48- R.P. Lanza, K.M. Borland, S.J. Sullivan, P. Lodge, M. Carretta, T.E.
Muller, B.A. Solomon, T. Maki, A.P. Monaco and W.L. Chick, "Treatment of
Severely Diabetic, Pancreatectomized Dogs Using a Diffusion-based Hybrid
Artificial Pancreas", 16th Annual Meeting of American Diabetes
Association, San Antonio, TX, (June 20-23, 1992); Diabetes 41, 886-89
(1992).
49- R.P. Lanza, P. Lodge, K.M. Borland, M. Carretta, S.J. Sullivan, A.M.
Beyer, T.E. Muller, B.A. Solomon, T. Maki, A.P. Monaco and W.L. Chick
"Transplantation of Islet Allografts Using a Diffusion-Based Biohybrid
Artificial Pancreas: Long-Term Studies in Diabetic, Pancreatectomized
Dogs", XIVth International Congress of the Transplantation Society, Paris,
France (August 16-21, 1992); Transplantation Proceedings 25 (1), 978-980
(1993). --
50- Thomas E. Muller "New Combination Therapies", Inst. International Res.
Seminar, Washington, DC, January 25-27 (1993).
51- Thomas E. Muller "Medical Therapies Based on Advanced Biomedical Engineering Technologies", Visiting Professor Lecture, INFA (International Faculty of Artificial Organs) Symposium, Univ. Gent. Belgium (Oct. 1, 1993).
52- R.P. Lanza, K.M. Borland, J.E. Staruk, B.A. Solomon, T.E. Muller, B.A.
Solomon, T. Maki, A.P. Monaco and W.L. Chick "Transplantation of Canine
Islets Into Spontaneously Diabetic BB/Wor Rats Without Immuno-
suppression", Endocrinology (in Press).
53- Hugo O. Jauregui, Claudy J. Mullon, Donna M. Trenkler, Sharda Naik, Henry
A. Santangini, Philip J. Press, Thomas E. Muller and Barry A. Solomon
"Hollow Fiber Liver Assist Device for Extracorporeal Treatment of
Experimental Fulminant Hepatic Failure", Proceedings of the National
Academy of Sciences (Submitted).
EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of 26 October 1995, by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Employer") and ALAN K. SMITH ("Employee").
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT Employer hereby engages Employee, and Employee hereby accepts such engagement, upon the terms and conditions set forth herein.
2. DUTIES Employee is engaged as a Vice President Research. Employee shall perform faithfully and diligently the duties customarily performed by persons in the position for which employee is engaged, together with such other reasonable and appropriate duties as Employer shall designate from time to time. Employee shall devote Employee's full business time and efforts to the rendition of such services and to the performance of such duties. As a full-time employee of Employer, Employee shall not be entitled to provide consulting services or other business or scientific services to any other party, without the prior written consent of Employer.
3. COMPENSATION
3.1 BASE SALARY During the term of this Agreement, as compensation for the proper and satisfactory performance of all duties to be performed by Employee hereunder, Employer shall pay Employee at an annual salary rate of One Hundred Twenty Two Thousand Five Hundred Dollars ($122,500), payable in arrears in equal bi-weekly installments, less required deductions for state and federal withholding tax, Social Security and all other employee taxes and payroll deductions. The base salary shall be subject to review and adjustment on an annual basis.
4. TERM
4.1 COMMENCEMENT The employment relationship pursuant to this Agreement shall commence November 13, 1995.
4.2 TERMINATION AT WILL Although Employer and Employee anticipate a
long and mutually rewarding employment relationship, either party may terminate
this Agreement, without cause, upon fourteen (14) days' prior written notice
delivered to the other. It is expressly understood and agreed that the
employment relationship is "at will", and with no agreement for employment for
any specified term, and with no agreement for employment for so long as Employee
performs satisfactorily. Provided, however, before Employer exercises this
right of termination at will, Employer shall first either (i) discuss with
Employee the needs of Employer and why Employee no longer meets those needs, or
(ii) discuss with Employee any concerns or dissatisfactions which
Employer has with Employee's performance, and give to Employee a reasonable opportunity to remedy those concerns or dissatisfactions, to the reasonable satisfaction of Employer. Should, for some reason, Employee's involuntary termination without cause be necessary, severance compensation equal to four (4) months' salary will be paid, along with compensation for any accumulated vacation time.
4.3 TERMINATION FOR CAUSE Either party may terminate this employment relationship immediately upon notice to the other party in the event of any good cause, such as a default, dishonesty, neglect of duties, failure to perform by the other party, or death or disability of Employee.
4.4 PAYMENT OF COMPENSATION UPON TERMINATION Upon termination for cause, Employee shall be entitled to the compensation set forth as "base salary" herein, prorated to the effective date of such termination as full compensation for any and all claims of Employee under this Agreement.
5. FRINGE BENEFITS
5.1 CUSTOMARY FRINGE BENEFITS Employee shall be entitled to such fringe benefits as Employer customarily makes available to employees of Employer engaged in the same or similar position as Employee ("Fringe Benefits"). Such Fringe Benefits may include vacation leave, sick leave, and health insurance coverage. Employer reserves the right to change the Fringe Benefits on a prospective basis, at any time, effective upon delivery of written notice to Employee.
5.2 ACCUMULATION Employee shall not earn and accumulate unused vacation in excess of Fifteen (15) days. Employee shall not earn and accumulate sick leave or other Fringe Benefits in excess of an unused amount equal to twice the amount earned for one year. Further, Employee shall not be entitled to receive payments in lieu of said Fringe Benefits, other than for unused vacation leave earned and accumulated at the time the employment relationship terminates.
6. INVENTIONS, TRADE SECRETS AND CONFIDENTIALITY
6.1 DEFINITIONS
6.1.1 Invention Defined. As used herein "Invention" means inventions, discoveries, concepts, and ideas, whether patentable or copyrightable or not, including but not limited to processes, methods, formulas, techniques, materials, devices, designs, programs (including computer programs), computer graphics, apparatus, products, as well as improvements thereof or know- how related thereto, relating to any present or anticipated business or activities of Employer.
6.1.2 Trade Secret Defined. As used herein "Trade Secret" means, without limitation, any document or information relating to Employer's
products, processes or services, including documents and information relating to Inventions, and to the research, development, engineering or manufacture of Inventions, and to Employer's purchasing, customer or supplier lists, which documents or information have been disclosed to Employee or known to Employee as a consequence of or through Employee's employment by Employer (including documents, information or Inventions conceived, originated, discovered or developed by Employee), which is not generally known in the relevant trade or industry.
6.2 INVENTIONS
6.2.1 Disclosure. Employee shall disclose promptly to Employer each Invention, whether or not reduced to practice, which is conceived or learned by Employee (either alone or jointly with others) during the term of his employment with Employer. Employee shall disclose in confidence to Employer all patent applications filed by or on behalf of Employee during the term of his employment and for a period of three (3) years thereafter. Any disclosure of an Invention, or any patent application, made within one (1) year after termination of employment shall be presumed to relate to an Invention made during Employee's term of Employment with Employer, unless Employee clearly proves otherwise .
6.2.2 Employer Property; Assignment. Employee acknowledges and agrees that all Inventions which are discovered, conceived, developed, made, produced or prepared by Employee (alone or in conjunction with others) during the duration of Employee's employment with Employer shall be the sole property of Employer. Said property rights of Employer include without limitation all domestic and foreign patent rights, rights of registration or other protection under the patent and copyright laws, and all other rights pertaining to the Inventions. Employee further agrees that all services, products and Inventions that directly or indirectly result from engagement with Company shall be deemed "works for hire" as that term is defined in Title 17 of the United States Codes, and accordingly all rights associated therewith shall vest in the Company. Notwithstanding the foregoing, Employee hereby assigns to Employer all of Employee's right, title and interest in any such services, products and Inventions, in the event any such services, products and Inventions shall be determined not to constitute "works for hire."
6.2.3 Exclusion Notice. The Assignment by Employee of Inventions under this Agreement does not apply to any Inventions which are owned or controlled by Employee prior to the commencement of employment of Employee by Employer (all of which are set forth on Exhibit "A" hereto). Additionally, Employee is not required to assign an idea or invention where the invention or idea meets all of the following criteria; namely if the invention or idea: (i) was created or conceived without the use of any of Employer's equipment, supplies, facilities, or trade secret information, and (ii) was developed entirely on Employee's own time, and (iii) does not relate to the business of Employer, and (iv) does not relate to Employer's actual or demonstrably anticipated research or development, and (v) does not result from any work performed by Employee for Employer.
6.2.4 Patents and Copyrights; Attorney-in-Fact. Both before and
after termination of this Agreement (and with reasonable compensation paid by
Employer to Employee after termination), Employee agrees to assist the Employer
to apply for, obtain and enforce patents on, and to apply for, obtain and
enforce copyright protection and registration of, the Inventions described in
Section 6.2.2 in any and all countries. To that end, Employee shall (at
Employer's request) without limitation, testify in any proceeding, and execute
any documents and assignments determined to be necessary or convenient for use
in applying for, obtaining, registering and enforcing patent or copyright
protection involving any of the Inventions. Employee hereby irrevocably appoints
Employer, and its duly authorized officers and agents, as Employee's agent and
attorney-in-fact, to act for and in behalf of Employee in filing all patent
applications, applications for copyright protection and registration,
amendments, renewals, and all other appropriate documents in any way related to
the Inventions described in Section 6.2.2.
6.3 TRADE SECRETS
6.3.1 Acknowledgment of Proprietary Interest. Employee recognizes the proprietary interest of Employer in any Trade Secrets of Employer. Employee acknowledges and agrees that any and all Trade Secrets of Employer, whether developed by Employee alone or in conjunction with others or otherwise, shall be and are the property of Employer.
6.3.2 Covenant Not to Divulge Trade Secrets. Employee acknowledges and agrees that Employer is entitled to prevent the disclosure of Trade Secrets of Employer. As a portion of the consideration for the employment of Employee and for the compensation being paid to Employee by Employer, Employee agrees at all times during the term of the employment by Employer and thereafter to hold in strictest confidence, and not to use, disclose or allow to be disclosed to any person, firm, or corporation, Trade Secrets of Employer, including Trade Secrets developed by Employee, other than disclosures to persons engaged by Employer to further the business of Employer, and other than use in the pursuit of the business of Employer.
6.3.3 Confidential Information of Others. Employee represents and warrants that if Employee has any confidential information belonging to others, Employee will not use or disclose to Employer any such information or documents. Employee represents that his employment with Employer will not require him to violate any obligation to or confidence with any other party.
6.4 NO ADVERSE USE Employee will not at any time use Employer's Trade Secrets or Inventions in any manner which may directly or indirectly have an adverse effect upon Employer's business, nor will Employee perform any acts which would tend to reduce Employer's proprietary value in Employer's Trade Secrets or Inventions.
6.5 RETURN OF MATERIALS AT TERMINATION In the event of any termination of Employee's employment, Employee will promptly deliver to Employer all materials, property, documents, data, and other information belonging to Employer or pertaining to Trade Secrets or Inventions. Employee shall not take any materials, property, documents or other information, or any reproduction or excerpt thereof, belonging to Employer or containing or pertaining to any Trade Secrets or Inventions.
6.6 REMEDIES UPON BREACH In the event of any breach by Employee of the provision in this Section 6, Employer shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to enjoin Employee from violating any of the terms of this Section 6, to enforce the specific performance by Employee of any of the terms of this Section 6, and to obtain damages for any of them, but nothing herein contained shall be construed to prevent such remedy or combination of remedies as Employer may elect to invoke. The failure of Employer to promptly institute legal action upon any breach of this Section 6 shall not constitute a waiver of that or any other breach hereof.
7. COVENANT NOT TO COMPETE Employee agrees that, during Employee's employment, Employee will not directly or indirectly compete with Employer in any way, and that Employee will not act as an officer, director, employee, consultant, shareholder, lender or agent of any other entity which is engaged in any business of the same nature as, or in competition with, the business in which Employer is now engaged, or in which Employer becomes engaged during the term of Employee's employment, or which is involved in science or technology which is similar to Employer's science or technology.
8. GENERAL PROVISIONS
8.1 ATTORNEYS' FEES In the event of any dispute or breach arising with respect to this Agreement, the party prevailing in any negotiations or proceedings for the resolution or enforcement thereof shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs incurred therein.
8.2 AMENDMENTS No amendment or modification of the terms or conditions of this Agreement shall be valid unless in writing and signed by both parties hereto. There shall be no implied-in-fact contracts modifying the terms of this Agreement.
8.3 ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties with respect to the employment of Employee. This Agreement supersedes all prior agreements, understandings, negotiations and representation with respect to the employment relationship.
8.4 SUCCESSORS AND ASSIGNS The Rights and obligations of Employer under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of Employer. Employee shall not be entitled to assign any of Employee's rights or obligations under this Agreement.
8.5 WAIVER Either party's failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.
8.6 SEVERABLE PROVISIONS The provisions of this Agreement are severable, and if any or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
9. EMPLOYEE'S REPRESENTATIONS Employee represents and warrants that Employee (i) is free to enter into this Agreement and to perform each of the terms and covenants contained herein, (ii) is not restricted or prohibited, contractually or otherwise, from entering into and performing this Agreement, and (iii) will not be in violation or breach of any other agreement by reason of Employee's execution and performance of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
EMPLOYER:
Aastrom Biosciences, Inc.
By: /s/ R. DOUGLAS ARMSTRONG --------------------------- R. Douglas Armstrong, Ph.D. President and CEO |
EMPLOYEE:
/s/ ALAN K. SMITH 10/26/95 - ----------------------------- Alan K. Smith |
Address: 6964 Corte Antonio
Pleasanton, CA 94566
Exhibit A
List of Prior Inventions
(Section 6.2.3)
None, other than the following:
Kabori, Deans, Al-Abdaly, Smith, Guillermo, Angal, "Methods for Identification of Peptides for Release of Selected Cells" (patent pending, submitted 1994)
AL-Abdaly, Guillermo and Smith, "Positive Selection of Human CD34+ Cells Using Cell Specific Antibody-Desthiobiotin Conjugate/Anti-biotin Antibody Coated Paramagnetic Beads" (patent pending, submitted 1993)
Y. A. Chang, A. Gee, A. Smith, W. Lake, "Activation of Hydroxyl Groups of Polymeric Carriers Using 4-Fluorobenzenesulfonyl Chloride", European Patent #91915059.9- (Issued 1992).
A. K. Smith, "Iron supplementation of Calf Serum" U. S. Patent (Issued 1987)
Jarrett, McCain, Vickers and Smith, "Development of a Biocompatible Polymer Using Methyl Acrylamidoglycolate Methyl Ether"
Hardwick, Smith, Lake and Chenoweth, U. S. Patent for "Method and Useful Apparatus for Preparing Pharmaceutical Compositions" (Issued 1991)
EXHIBIT 10.24
PROMISSORY NOTE
Ann Arbor, Michigan
$120,000 November 18, 1993 11/96
1. As repayment for a cash loan made by Aastrom Biosciences, Inc., a Michigan Corporation ("AASTROM"), to R. Douglas Armstrong ("Maker"), Maker hereby promises to pay to the order of AASTROM, at Ann Arbor, Michigan, or at such other place as AASTROM may direct in writing, the principal amount of $120,000, together with interest on the outstanding principal balance owing from time to time at the rate of four percent (4%) per annum.
2. Accrued interest shall be payable on each anniversary date of this Note.
4. If any installment of interest owing on this Note is not paid within ten (10) days after Maker receives a written notice of default, then Aastrom may accelerate the maturity date and declare all sums of principal and accrued interest immediately due and payable.
5. If this Note is not paid when due, Maker promises to pay all costs incurred by Aastrom in collecting amounts due on this Note, including reasonable attorney's fees.
6. Payments owing on this note shall be payable (i) in lawful money of the United States of America or, (ii) at the option of Maker, by Maker's surrender of common stock of Aastrom owned by Maker, with said common stock being valued at the public trading price for Aastrom's common stock on the date the stock is surrendered, if Aastrom's common stock is publicly traded; or if Aastrom's common stock is not publicly traded, then the value of the stock shall be the fair market value of the common stock as determined by the Board of Directors of Aastrom, or (iii) at the option of Maker, by Maker's surrender of vested stock options to purchase common stock of Aastrom, with said stock options valued at the "spread" between the then current fair market value of the stock (as determined above) and the option exercise price.
7. This Note has been executed and delivered by Maker in the State of Michigan, and shall be governed by and construed in accordance with the laws of the State of Michigan.
8. Maker acknowledges that Maker has personal liability on this Note, and that this Note is a "full recourse" note.
MAKER:
/s/ R. DOUGLAS ARMSTRONG - --------------------------- R. Douglas Armstrong, Ph.D. |
FIRST AMENDMENT TO PROMISSORY NOTE
This Amendment (the "Amendment") to the Promissory Note (the "Note") dated November 18, 1993, payable to Aastrom Biosciences, Inc., a Michigan corporation (the "Company"), executed by R. Douglas Armstrong ("Maker"), is dated as of October 30, 1996.
WHEREAS, Section 3 of the Note provides that all principal and accrued but unpaid interest is due and payable on the third anniversary of the date of the Note (i.e. November 18, 1996).
WHEREAS, the Company desires to amend the Note to provide that all principal and accrued but unpaid interest shall be due and payable on June 30, 1997.
NOW, THEREFORE, the Company hereby amends the Note as follows:
1. Section 3 of the Note is hereby amended to read in its entirety as follows:
"The principal and all unpaid accrued interest owing on this Note shall mature and be fully due and payable on June 30, 1997. Maker may prepay any or all of the principal and interest owing on this Note at any time without penalty or premium."
2. All other provisions of the Note shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed by its duly authorized officer as of the date set forth above.
AASTROM BIOSCIENCES, INC.
By: /s/ Todd E. Simpson ------------------------------------- Todd E. Simpson, Vice President, Finance and Administration |
EXHIBIT 10.25
PROMISSORY NOTE
Ann Arbor, Michigan
1. As payment for the purchase of common stock in Aastrom Biosciences, Inc., a Michigan corporation ("Aastrom"), the undersigned, Stephen G. Emerson ("Maker"), hereby promises to pay to the order of Aastrom, at Ann Arbor, Michigan, or at such other place as Aastrom may direct in writing, the principal amount of Forty Seven Thousand Three Hundred Three dollars ($47,303), together with interest on the outstanding principal balance owing from time to time at the rate of six percent (6%) per annum.
2. Accrued interest shall be payable on each anniversary date of this Note.
4. If any installment of interest owing on this Note is not paid within ten
(10) days after Maker receives a written notice of default, then Aastrom
may accelerate the maturity date and declare all sums of principal and
accrued interest immediately due and payable.
5. If this Note is not paid when due, Maker promises to pay all costs incurred by Aastrom in collecting amounts due on this Note, including reasonable attorney's fees.
6. Payments owing on this Note shall be payable in lawful money of the United States of America. This Note has been executed and delivered by Maker in the State of Michigan, and shall be governed by and construed in accordance with the laws of the State of Michigan.
7. As collateral security for the performance of maker's obligation to pay this Note, Maker hereby grants to Aastrom a security interest in the shares of common stock in Aastrom which Maker is purchasing with this Note, namely 388,031 shares of common stock (the "Shares"). As the secured party having a security interest in the Shares, Aastrom shall have all rights of a secured party pursuant to the Michigan Uniform Commercial Code. To perfect Aastrom's security interest in the Shares, Maker hereby authorizes Aastrom to retain physical possession of the Certificate evidencing the Shares, and Maker hereby delivers to Aastrom a "Stock Assignment Separate from Certificate" signed by Maker, and Aastrom is authorized to utilize said Assignment if, and only if, there is a default on this Note and Aastrom pursues its remedies to foreclosure upon its security interest in the Shares in accordance with applicable law. In the event Maker desires to sell some of the Shares prior to Maker's paying off this Note, Maker must use all of the proceeds of such a sale (up to the outstanding balance owing on this Note) to make payments on this Note; and Maker shall be entitled to a partial release of Aastrom's security interest in the Shares to permit such a sale.
MAKER:
/s/ STEPHEN G. EMERSON - ---------------------- Stephen G. Emerson |
FIRST AMENDMENT TO PROMISSORY NOTE
This Amendment (the "Amendment") to the Promissory Note (the "Note") dated October 20, 1993, payable to Aastrom Biosciences, Inc., a Michigan corporation (the "Company"), executed by Stephen G. Emerson ("Maker"), is dated as of October 30, 1996.
WHEREAS, Section 3 of the Note provides that all principal and accrued but unpaid interest is due and payable on the third anniversary of the date of the Note (i.e. October 20, 1996).
WHEREAS, the Company desires to amend the Note to provide that all principal and accrued but unpaid interest shall be due and payable on June 30, 1997.
NOW, THEREFORE, the Company hereby amends the Note as follows:
1. Section 3 of the Note is hereby amended to read in its entirety as follows:
"The principal and all unpaid accrued interest owing on this Note shall mature and be fully due and payable on June 30, 1997. Maker may prepay any or all of the principal and interest owing on this Note at any time without penalty or premium."
2. All other provisions of the Note shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed by its duly authorized officer as of the date set forth above.
AASTROM BIOSCIENCES, INC.
By: /s/ R. Douglas Armstrong ---------------------------------- R. Douglas Armstrong, President and CEO |
EXHIBIT 10.26
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into as of July 1, 1995, by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Company") and STEPHEN G. EMERSON, M.D., Ph.D. ("Consultant"), with respect to the following facts:
RECITALS
A. Consultant is an employee of the University of Pennsylvania ("Employer").
B. Company desires to obtain the consulting services of Consultant, and Consultant desires to provide such consulting services, as set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, the parties agree as follows:
1. ENGAGEMENT. Company hereby appoints Consultant, and Consultant hereby accepts such appointment, upon the terms and conditions set forth herein.
2. ASSIGNMENT. Consultant is engaged as a consultant for the following described assignments:
2.1 Assist Company in the planning, design, direction, supervision and implementation of Company's research programs and clinical trials.
2.2 Assist Company with investor relations, financing and other needed presentations.
2.3 Assist Company in such other matters and areas as may be mutually approved by Consultant and Company.
Consultant shall perform such consulting services at times and places which are mutually convenient to Company and Consultant, with Consultant making himself available for at least approximately eight (8) hours per month at Company's facility.
3. RESTRICTIONS. Consultant shall not perform any consulting or other services for any other commercial party which is engaged in research, development, technology, or products which are similar to or competing with that of Company.
4. COMPENSATION. As compensation for Consultant performing the consulting services pursuant to this Agreement, Company shall pay to Consultant a consulting fee of $3,125 (Three Thousand One Hundred Twenty Five Dollars) per calendar quarter, payable quarterly in arrears, as of the last day of the months of September, December, March and June. Consultant shall be entitled to reimbursement for necessary out-of-pocket expenditures incurred in the performance of his consulting services, but subject to Consultant's obtaining the preapproval of Company prior to Consultant incurring said expenditures.
5. TERM. The term of this Agreement shall commence on July 1, 1995, and shall continue until June 30, 1996, unless sooner terminated in accordance with the provisions hereof.
6. TERMINATION.
6.1 Termination Without Cause. Either party may terminate this Agreement without cause upon not less than thirty (30) days' prior written notice delivered to the other. The death of Consultant shall automatically terminate this Agreement.
6.2 Termination for Cause. The non-defaulting party shall have the right to terminate this Agreement upon the occurrence of any of the following events, and the expiration of any applicable period of cure: (a) the failure of Company to make any payment within ten (10) days after the date of receipt of a written notice from Consultant stating that a payment is past due; (b) the failure of Consultant to perform the assignment to the reasonable satisfaction of Company; (c) the failure of a party to comply with any other term or condition of this Agreement, and the expiration of ten (10) days after written notice thereof, specifying the nature of such default, without cure; and (d) any attempt by Consultant to assign or otherwise transfer Consultant's rights hereunder.
the following: retirement benefits, medical insurance coverage, life insurance coverage, disability insurance coverage, severance pay benefits, paid vacation and sick pay, overtime pay, or any of them. Consultant understands and agrees that Company will not pay or withhold from the compensation paid to Consultant pursuant to this Agreement any sums customarily paid or withheld for or on behalf of employees for income tax, unemployment insurance, social security, workers' compensation or any other withholding tax, insurance, or payment pursuant to any law or governmental requirement, and all such payments as may be required by law are the sole responsibility of Consultant. Consultant agrees to hold Company harmless against and indemnify Company for any of such payments of liabilities for which Company may become liable with respect to such matters. This Agreement shall not be construed as a partnership agreement. Company shall have no responsibility for any of Consultant 's debts, liabilities or other obligations or for the intentional, reckless or negligent acts or omissions of Consultant or Consultant's employees or agents.
8. CONFIDENTIALITY.
8.1 Acknowledgment of Proprietary Interest. Consultant recognizes the proprietary interest of Company in any Trade Secrets of Company. As used herein, the term "Trade Secrets" includes all of Company's confidential or proprietary information, including without limitation any confidential information of Company encompassed in any reports, investigations, experiments, research or developmental work, inventions, technology, experimental work, work in progress, drawings, designs, plans, proposals, codes, marketing and sales programs, financial projections, cost summaries, pricing formula, and all concepts or ideas, materials or information related to the business, products or sales of the Company or the Company's customers which has not previously been released to the public at large by duly authorized representatives of the Company, whether or not such information would be enforceable as a trade secret or the copying of which would be enjoined or restrained by a court as constituting unfair competition. Consultant acknowledges and agrees that any and all Trade Secrets of Company, learned by Consultant during the course of the engagement by Company or otherwise, whether developed by Consultant alone or in conjunction with others or otherwise, shall be and is the property of Company.
8.2 Ownership of Work. All inventions, patents, discoveries, reports and ideas arising from Consultant's services to Company hereunder shall be the sole property of Company and shall be Company's Trade Secrets. Consultant agrees to assign and hereby assigns to Company, its successors or assigns, all Consultant's right, title and interest in and to said Trade Secrets, inventions or discoveries and any patent application or letters parent thereon. Consultant agrees to reasonably cooperate with Company, at no expense to Consultant, to effect such ownership rights. Consultant hereby irrevocably appoints Company and its officers as his agent and attorney-in-fact to execute and file any patent applications and related documents pertaining to said Trade Secrets if he is deemed to be an "inventor" of an invention which is part of Company's Trade Secrets.
8.3 Publication. Any publications and reports by Consultant concerning Consultant's scientific work may be released in accordance with Employer's customary practices, policies and agreements. Provided, however, Consultant shall not publish any manuscript or other document, solely or in co-authorship with others, pertaining to Company's Trade Secrets or Company's other information attributable to any project undertaken by Company, without Company's prior written consent.
8.4 Covenant Not to Divulge Trade Secrets. Consultant acknowledges and agrees that Company is entitled to prevent the disclosure of Trade Secrets of Company. As a portion of the consideration for the appointment of Consultant and for the compensation being paid to Consultant by company, Consultant agrees at all times during the term of the engagement with Company and thereafter to hold in strictest confidence, and not to disclose or allow to be disclosed to any person, firm or corporation, other than to persons engaged by Company to further the business of Company, and not to use except in the pursuit of the business of Company, Trade Secrets of Company, without the prior written consent of Company, including Trade Secrets developed by Consultant.
8.5 Return of Materials at Termination. In the event of any termination of Consultant's appointment, with or without cause, Consultant will promptly deliver to Company all materials, property, documents or other information, or any reproduction or excerpt thereof, belonging to Company or containing or pertaining to any Trade Secrets.
8.6 Remedies Upon Breach. In the event of any breach of this Agreement by Consultant, Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to enjoin Consultant from violating any of the terms of this Agreement, to enforce the specific performance by Consultant of any of the terms of this Agreement, and to obtain damages, or any of them, but nothing herein contained shall be construed to prevent such remedy or combination of remedies as Company may elect to invoke. The failure of Company to promptly institute legal action upon any breach of this Agreement shall not constitute a waiver of that or any other breach hereof.
9. MISCELLANEOUS.
9.1 Governing Law. This Agreement shall be interpreted, construed, governed and enforced according to the laws of the State of Michigan.
9.2 Attorneys' Fees. In the event of any litigation concerning any controversy, claim or dispute between the parties hereto, arising out of or relating to this Agreement or the breach hereof, or the interpretation hereof, the prevailing party shall be entitled to recover from the losing party reasonable expenses, attorneys' fees, and costs incurred therein or in the enforcement or collection of any judgment or award rendered therein.
9.3 Amendments. No amendment or modification of the terms or conditions of this Agreement shall be valid unless in writing and signed by the parties hereto.
9.4 Successors and Assigns. The rights and obligations of Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Company. Consultant shall not be
entitled to assign any of Consultant's rights or obligations under this Agreement.
9.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the appointment of Consultant.
9.6 Employer Policies. Consultant represents, warrants and covenants that Consultant's performance of the obligations under this Agreement does not and will not violate the terms of any of Consultant's agreements with Employer or any other party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
COMPANY: CONSULTANT: AASTROM BIOSCIENCES, INC. By: /s/ R. DOUGLAS ARMSTRONG /s/ STEPHEN G. EMERSON --------------------------- ------------------------------- R. Douglas Armstrong, Ph.D. Stephen G. Emerson, M.D., Ph.D. President and CEO |
EXHIBIT 10.27
This Clinical Trial Agreement ("Agreement") is entered into as of the 28 day of August, 1996 (the "Effective Date"), by and among Aastrom Biosciences, Inc. ("Aastrom"), located at 24 Frank Lloyd Wright Dr., Lobby L, Ann Arbor, MI 48105, and Loyola University Medical Center Cancer Center (the "Institution"), located at 2160 South First Avenue, Maywood, IL 60153. Definitions shall have the meaning as set forth in Exhibit A.
RECITALS
WHEREAS, Aastrom is the developer, manufacturer and/or licensee of medical devices and materials, such as a Cell Production System ("CPS") device and related materials and device, which have potential medical application for use in subjects care and research;
WHEREAS, Aastrom desires to conduct a human clinical trial ("Study") of the CPS in subjects in accordance with a protocol entitled "A Pilot Trial of Autologous Transplantation For Patients With Advanced Breast Cancer Using Marrow Cells Expanded Ex Vivo" ("Protocol") which is incorporated herein by reference as Exhibit B attached hereto;
WHEREAS, the Institution has research, clinical and medical facilities, technical capabilities and expertise in order to conduct the Study in accordance with the Protocol;
WHEREAS, the Study contemplated by this Agreement is of mutual interest and benefit to the Institution and to Aastrom such that the parties hereto desire to have the Institution conduct the Study under the qualified direction of Patrick J. Stiff, M.D. (the "Principal Investigator"); and
WHEREAS, Aastrom and the Institution agree to conduct the Study in accordance with the terms and conditions hereinafter set forth.
AGREEMENT
I. CLINICAL TRIAL DESCRIPTION
The Institution agrees to undertake and complete the Study described in the Protocol (Exhibit B) in compliance with all applicable laws, rules and regulations relating to the Study, including without limitation, all laws, rules and regulations concerning or promulgated by the Food and Drug Administration ("FDA").
Aastrom agrees to provide the Institution the laboratory and clinical equipment listed in the Schedule of Laboratory and Clinical Equipment on Exhibit C which are reasonably necessary for the Institution to conduct the Study. Aastrom shall retain title to all such equipment which shall promptly be returned to Aastrom upon request by Aastrom.
II. FUNDING
Aastrom shall provide payments to the Institution in accordance with the terms contained in the Clinical Trial Budget (Exhibit D) and the Schedule of Clinical Trial Milestone Payments (Exhibit D) incorporated herein.
III. CONDUCT OF STUDY
The Study shall be conducted only at the following locations: Loyola University Medical Center Cancer Center, 2160 South First Avenue, Maywood, IL 60153. The CPS and other Study materials may not be transferred to any other location or to any third party without the prior written consent of Aastrom.
The Institution agrees that the Study will be conducted under the direction of the Principal Investigator in accordance with the Protocol and the Investigator Agreement (see Section 13.0 of the Clinical Protocol) and incorporated herein by reference. The Principal Investigator may, subject to the prior written consent of Aastrom, designate a clinical coordinator and one or more subinvestigators to assist in conducting the Study. The Institution acknowledges that the Principal Investigator and subinvestigators have each executed an Investigator Agreement, copies of which are included in Exhibit E. In the event that additional subinvestigators are added to the Study, such subinvestigators must execute and deliver an Investigator Agreement which shall be deemed incorporated by reference into this Agreement. In the event the Principal Investigator can no longer function in such capacity, then Aastrom and the Institution shall attempt to agree on a replacement. If a mutually acceptable replacement cannot be agreed upon, this Agreement and the Study at the Institution shall terminate. The Institution agrees that it will use its best efforts to recruit qualified subjects for enrollment in the Study consistent with the guidelines contained in the Protocol and the best interest of the subject; however, no subjects shall be enrolled in the Study if they are currently enrolled in another investigational study without the prior written consent of Aastrom.
Any changes to the Protocol may only be made with the prior written agreement of Aastrom; provided that during the Study, if the Principal Investigator feels that it is necessary to deviate from the Protocol in order to protect the life or physical well-being of a Study subject before written approval can be obtained, he/she may do so in accordance with the procedures detailed in the Protocol.
The Institution will obtain: (i) the approval of the governing
Institutional Review Board ("IRB") prior to initiating the Study and
thereafter as required by applicable laws, rules and regulations; and
(ii) prior written informed consent of all subjects and/or their legal
guardians in a form that is substantially the same as provided in the
Protocol and satisfactory to both the governing IRB and Aastrom and in
compliance with applicable laws, rules and regulations.
The Institution shall immediately notify Aastrom (Thomas E. Muller, Ph.D., Vice President Regulatory Affairs at 313/930-5555 and/or by fax at 313/930-5520) of any unanticipated adverse effect, whether ascribed to the investigational device or not, in accordance with the instructions provided in the Protocol.
IV. STUDY MONITORING AND ACCESS TO FACILITIES
Aastrom's designated representatives and/or authorized representatives of regulatory agencies may, at all reasonable times, visit the Institution in order to: (i) determine the adequacy of the facilities, (ii) validate case reports against original data in the subject medical records and the files of the Principal Investigator, and (iii) monitor the conduct of the Study to determine whether the Study is being conducted in compliance with the Protocol and all applicable laws, rules and regulations. The Institution agrees to obtain any required subject release(s) to allow Aastrom's designated representatives, and/or authorized representatives of regulatory agencies, to conduct such review prior to enrolling each subject in the Study.
V. REPORTS
The Institution agrees to have the Principal Investigator submit reports to Aastrom and the reviewing IRB in accordance with the Protocol and all applicable laws, rule and regulations.
VI. PROPRIETARY RIGHTS
The Institution understands and agrees that the underlying rights to the CPS and other intellectual property and materials which are the subject of the Protocol belong to Aastrom. The parties agree that the Institution shall retain control over the CPS and Study materials, and further agree not to allow access to, disclose the existence or nature of, or transfer the CPS or Study materials to third parties without advance written approval of Aastrom. Aastrom reserves the right to distribute the CPS and Study materials to others and to use them for its own purposes. Title to the CPS and Study materials shall remain with Aastrom. Further, the Institution agrees that data and materials derived as a direct result of the Study described in the Protocol (hereinafter referred to as "Clinical Trial Information") whether generated by the Institution, the Principal Investigator, and/or their agents or employees, either solely or jointly with others, is the property of Aastrom; provided that the Institution and the Principal Investigator may utilize the Clinical Trial Information in furtherance of academic publications authorized by this Agreement and for subject care purposes.
The Institution agrees that the Study results and any inventions or
discoveries by the Institution, the Principal Investigator or their
agents or employees during the Study that are modifications,
improvements or new uses applicable to the CPS or that are a direct
result of the performance of the Study in accordance with the detailed
testing Protocol provided by Aastrom to Institution and which are
dependent on, or relate to, the Study, the claims of Aastrom's
patentable inventions, the use of the cells processed through the CPS
or Aastrom's Confidential Information shall be the property of
Aastrom. Any invention arising out of the work performed under this
Study solely by the Institution and not covered in the previous
sentence shall be the exclusive property of the Institution (the
"Institution Invention") and shall not be considered a part of
Aastrom's Confidential Information. The Institution shall promptly
disclose each such Institution Invention and the terms under which the
Institution would be prepared to license it. Aastrom shall have a
right of first refusal to exclusively develop, license and
commercialize such Institution Invention. Aastrom shall have sixty
(60) days after receipt of such disclosure to exercise its right of
first refusal, and if so exercised, the parties shall thereafter
negotiate a mutually acceptable licensing agreement in good faith. If
the Institution at any time
offers such Institution Invention on terms different than those disclosed to Aastrom, the Institution shall offer such Institution Invention to Aastrom on such different terms in accordance with the first right refusal herein. The Institution and Principal Investigator shall not obtain, or attempt to obtain, patent coverage on the CPS or its use without the express written consent of Aastrom. The Institution and the Principal Investigator shall assist Aastrom in prosecuting any Aastrom patent applications and shall execute and deliver any and all instruments necessary to make, file and prosecute all such applications, divisions, continuations, continuations-in-part or reissues thereof.
VII. WARRANTIES AND REPRESENTATIONS
It is understood that the CPS is experimental in nature, has not been approved for commercial distribution and is provided hereunder for investigational purposes only. NEITHER THE INSTITUTION NOR AASTROM MAKES ANY REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION WITH RESPECT TO SAFETY, EFFICACY, MERCHANTABILITY, FITNESS FOR ANY PURPOSE OR NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS, WITH RESPECT TO THE PRODUCT OR INFORMATION PROVIDED TO THE OTHER HEREUNDER.
Each party hereto represents that it has right to enter into and perform its respective obligations under this Agreement.
The Institution represents that: (i) it has adequate facilities and staff to conduct the Study in accordance with the Protocol; (ii) the governing IRB is qualified to review and approve the Study; and (iii) the Principal Investigator is qualified by education and training to conduct the Study and has not been disqualified, or otherwise limited, as a clinical investigator by the FDA or any other regulatory or administrative body. The Institution represents that the Principal Investigator and all other investigators and personnel that may perform services hereunder are its employees and shall abide by the terms and conditions of this Agreement as if each were a party hereto.
VIII. LIMITATIONS OF LIABILITY
In no event shall any party be liable to the other party hereto for any incidental, special or consequential damages.
IX. INDEMNIFICATION
Aastrom agrees to indemnify, defend and hold harmless the Institution, the Loyola University System, and their Regents, officers, agents and employees from and against any and all claims, suits, and liabilities (collectively "Liabilities") arising out of or resulting from the activities to be carried out pursuant to the obligations of this
Agreement, including but not limited to the use by Aastrom of the results of the Study; provided that such Liabilities do not arise from:
i. a failure to adhere to the Protocol or written instructions relative to use of the CPS of other materials utilized in the Study;
ii. a failure to comply with any applicable law, rule or regulation relating to the Study, including without limitation, all FDA regulations or other governmental requirements; or
iii. the negligence or willful misconduct by the regents, officers, agents or employees of the Institution or the Loyola University System.
The Institution agrees, to the extent allowed by the Constitution and the laws of the State of Illinois, to indemnify, defend and hold harmless Aastrom and its directors, officers, agents and employees from and against any and all Liabilities they may suffer in connection with the Study which arise out of the negligent acts or omissions of the Institution, its employees or agents pertaining to the activities to be carried out pursuant to the obligations of this Agreement; provided, however, that Institution shall not hold Aastrom harmless from claims arising out of the negligence or willful malfeasance of Aastrom, its directors, officers, agents or employees, or any person or entity not subject to Institution supervision or control.
The Institution and Aastrom each agree to notify the other in writing as soon as they become aware of a claim or action and to, subject to the statutory duties of the Illinois Attorney General, cooperate with the management and defense of such claim or action. The indemnifying party agrees, at its own expense, subject to the statutory duties of the Illinois Attorney General, to provide attorneys of its own selection to defend against any actions brought or filed against the indemnified party with respect to the subject of indemnity contained herein. The indemnifying party shall, subject to the statutory duties of the Illinois Attorney General, control the defense of any action; however the indemnified party may, at its own expense, participate by providing attorneys of its own selection. No indemnified party shall compromise or settle any claim of action without the prior written approval of the indemnifying party.
X. RESTRICTIONS ON USE; COMPLIANCE WITH LAWS
The Institution and the Principal Investigator agree that the CPS will be used for clinical research purposes only in connection with the Study by the Principal Investigator and his/her subinvestigators at the facility(ies) described in Section III.A. under suitable containment conditions. Neither the Institution nor the Principal Investigator shall use the CPS for any commercial purposes, including screening, production or sale. The CPS will not be used in the treatment or diagnosis of human or animals except for the purpose of conducting the Study as described in the Protocol. The Institution agrees to comply with all laws, rules and regulations applicable to the Study and the handling, use and disposal of any Study materials. The CPS is to be used with caution and prudence since all of its characteristics are not known.
XI. CONFIDENTIALITY
The Institution agrees that it will not disclose or use Confidential
Information for any purpose other than the purpose of conducting the
Study, obtaining any required review of the Protocol or its conduct,
or ensuring proper medical treatment of any subject or subjects. The
Institution agrees to limit distribution of Aastrom's Confidential
Information to Institution personnel on a need-to-know basis. The
Institution agrees to ensure that its personnel abide by the
confidentiality obligations as set forth herein in accordance with
Section VII.C. The obligations set forth in this Section XI.A. shall
survive for a period of five (5) years following the termination or
expiration of this Agreement.
The term "Confidential Information" shall mean any and all oral, written or tangible proprietary or confidential ideas, inventions, information, data, plans, materials and know-how or the like owned, controlled or developed by Aastrom or developed under the Agreement and disclosed to Institution. Aastrom shall attempt to identify the confidential status of Confidential Information disclosed hereunder, but the failure to so mark or identify shall not destroy the confidential nature of such Confidential Information. Without limiting the generality of the foregoing, Confidential Information shall include, without limitation, all clinical trial plans, protocols, information, data analyses, proprietary equipment, and materials related to the Confidential Information. Confidential Information shall not include any information which the Institution can demonstrate:
i. Was known to the Institution prior to receipt from Aastrom, provided that the Institution promptly notifies Aastrom in writing of the same promptly after disclosure by Aastrom;
ii. Is or becomes part of the public domain through no act by or on behalf of the Institution;
iii. Was lawfully received by the Institution or the Principal Investigator from a third party who had a legal right to disclose the same; or
iv. Is required by law or regulation to be disclosed.
In the event that Confidential Information is required to be disclosed pursuant to subsection iv., the Institution will notify Aastrom to allow Aastrom to assert whatever exclusions or exemptions may be available to it under such law or regulation.
No publicity, new releases, or other public announcement, written or oral, relating to the Agreement, to any amendment hereto or to performance hereunder or to the existence of an arrangement between the parties, shall be originated by either party without the prior written approval, such approval not to be unreasonably withheld, of the other party except as shall be required by law.
No Party shall use or publicly disclose the name of another party hereto without the prior written consent, such consent not to be unreasonably withheld, of such other party except that the name of a party may be disclosed to regulatory bodies such as the FDA, Securities and Exchange Commission or as required by law.
XII. PUBLICATION RIGHTS
At least thirty (30) days prior to submission for publication, the Institution agrees to provide Aastrom a final draft of any manuscript describing the results obtained by the Institution from the Study. Aastrom shall be permitted to advise as to the implications of such manuscripts upon patentability of any inventions or the potential effects on commercialization. The Institution shall, upon Aastrom's request, delete any of Aastrom's Confidential Information and shall consider all reasonable editorial suggestions based on sound scientific and clinical judgment, Aastrom acknowledges that Institution shall have the final authority to determine the scope and content of any publication, provided that such authority shall be exercised with reasonable regard for the commercial interests of Aastrom. Subject to Aastrom's right to delete such Confidential Information and to propose mutually agreeable modification of such manuscripts, the Institution shall have the right to submit the manuscript for publication. However, if Aastrom determines that any invention disclosed therein is patentable and that a patent application should be filed on such invention, Aastrom shall notify the Institution in writing and the Institution shall postpone publication for a period not to exceed sixty (60) days from said notice (unless otherwise mutually agreed in writing) to provide time for patent applications to be filed.
XIII. TERM AND TERMINATION
Except as otherwise provided in this section, this Agreement shall commence on the Effective Date hereof and continue for the period necessary to satisfy the requirements of the Protocol.
Aastrom and the Institution shall have the right to terminate this Agreement at any time without cause upon thirty (30) days prior written notice. Any party may terminate the Study at any time if, in its opinion, it is in the best interest of the Study subjects.
Any termination of this Agreement shall not relieve any party hereto of any obligation or liability accrued hereunder prior to such termination, or rescind or give rise to any right to rescind anything done hereunder prior to the time such termination becomes effective; nor shall such termination relieve any party from any obligation which, by its nature, survives termination including the obligations set forth in Articles IV through IX and X.D.
The parties further agree that all Study data and used and unused Study equipment, materials and supplies, including the CPS, provided to the Institution by Aastrom for the purpose of this Study will be returned to Aastrom promptly upon request by Aastrom.
XIV. MISCELLANEOUS
The Institution recognizes and agrees that it is operating as an independent contractor and not as an agent of Aastrom. The Agreement shall not constitute a partnership or joint venture, and no party may be bound by the other to any contract, or make any representations or warranties, express or implied, on behalf of another party, or otherwise create any liability against another party in any way for any purpose.
The rights and obligations of the parties under this Agreement shall bind and inure to the benefit of the successors, assigns and transferees of the parties; provided, however, this Agreement shall not be assignable by either party without the prior written consent of the other party.
This Agreement shall be construed and interpreted in accordance with and governed by the laws of the State of Illinois.
Any controversy or claim arising out of or relating to this Agreement or the breach thereof, including, without limitation, disputes relating to patent validity or infringement arising under this Agreement, shall be settled through use of an appropriate method of Alternative Dispute Resolution, including, without limitations, by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon an award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties shall be entitled to petition any court of competent jurisdiction in the event of any alleged breach of Article XI.
This Agreement contains the entire agreement and understanding between the parties and supersedes all prior agreements and understandings between them relating to the subject matter hereof.
The headings of this Agreement are to facilitate reference only, do not form a party of this Agreement and shall not effect the interpretation thereof.
If any provision of this Agreement or portion of this Agreement is construed or declared to be invalid, such provision or portion shall be deemed reformed to become valid in a manner consistent with the parties' intentions under this Agreement, and the validity of the remaining portions and provisions of this Agreement shall not be affected thereby and shall remain in full force and effect.
No waiver of a breach by a party of any provision of this Agreement shall be construed to be a waiver of any other breach of the same of any other provision.
No right or license to the CPS or to its use is granted by Aastrom or implied as a result of the transmission of the CPS to the Institution under the supervision of the Principal Investigator, except to the limited extent necessary to conduct the Study. The transfer of the CPS provided for herein does not constitute a public disclosure.
At the request of Aastrom, the Institution and the Principal Investigator shall execute any documents and take any actions which may be necessary, in the opinion of Aastrom, or its legal counsel, to evidence or perfect any rights of Aastrom hereunder.
This Agreement may be executed in counterparts all of which together shall constitute one and the same instrument.
All notices and other communications permitted or required under this Agreement shall be in writing and shall be deemed to have been given when received at the addresses set forth on the signature page hereof, or at such other address as may be specified by one party in writing to the other. Said written notice may be given by mail, telecopy, rush delivery service, telegram, telex, personal delivery or any other means to the parties at the addresses as follow:
If to the Institution: Lori Burlew ph: (708) 327-3307 Administrator, Division of Hematology/Oncology fx: (708) 327-3319 Loyola University Medical Cancer 2160 South First Avenue Maywood, IL 60153 If to the Principal Investigator: Patrick J. Stiff, M.D. Associate Professor of Medicine Loyola University Medical Center 2160 South First Avenue Cancer Center - Room 240 Maywood, IL 60153 ph: 708-327-3148 fx: 708-327-3220 If to Aastrom: Thomas E. Muller, Ph.D. Vice President Regulatory Affairs 24 Frank Lloyd Wright Drive, Lobby L Ann Arbor, MI 48105 ph: 313-930-5573 fx: 313-930-5520 |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date and year first above written.
INSTITUTION: AASTROM: LOYOLA UNIVERSITY AASTROM BIOSCIENCES, INC. MEDICAL CENTER By: /s/ By: /s/ R. DOUGLAS ARMSTRONG, PH.D. --------------------- -------------------------------------------- Name: R. Douglas Armstrong, Ph.D. Title: President and Chief Executive Officer Date:9/19/96 Date: 9/3/96 ------------------- ---------------------------------------- |
I have read this agreement and
understand my obligations hereunder:
By: /s/ PATRICK J. STIFF, M.D. --------------------------- Patrick J. Stiff, M.D. Principal Investigator Associate Professor of Medicine Director, Bone Marrow Transplantation Program |
EXHIBIT A
DEFINITIONS
EXHIBIT B
LOYOLA UNIVERSITY MEDICAL CENTER
BONE MARROW TRANSPLANT PROGRAM
A PILOT TRIAL OF AUTOLOGOUS TRANSPLANTATION FOR PATIENTS WITH ADVANCED
BREAST CANCER USING MARROW CELLS EXPANDED EX VIVO.
Principal Investigator
Patrick J. Stiff, M.D.
Director, BMT Program
Loyola University Medical Center
2160 South First Avenue
Maywood, Illinois 60153
Ph: 708-327-3148
Fax: 708-327-3220
Co-Investigators
BMT Ex Vivo Expansion Team: Robert Bayer, M.D., David Peace, M.D., Deepak Malhotra, M.D., Bahao Chen, M.D., David Oldenberg
June 21, 1996
REVISED AUGUST 5, 1996
1.0 OBJECTIVES
1.1 To assess the safety of the mixture of early-, mid-, and late-stage bone marrow-derived mononuclear cells produced in the Aastrom Cell Production System (CPS) when infused into patients with breast cancer.
1.2 To determine the biological effect in terms of hematopoietic recovery after infusion of ex vivo-produced hematopoietic cells following high dose chemotherapy as treatment of patients with breast cancer.
1.3 To record the clinical disease related outcome in these patients with advanced breast cancer- clinical tumor response, duration of responses, and disease free duration post-high dose chemotherapy.
2.0 BACKGROUND
2.1 Ex Vivo Expansion: Current Status June 1996 Autologous bone marrow transplantation has been increasingly employed as supportive therapy for subjects undergoing high dose chemotherapy or chemoradiotherapy for malignant diseases, including lymphoma, leukemia, and breast cancer. Breast cancer is now the most frequent indication for autologous bone marrow or blood progenitor cell transplantation.
Despite the use of cytokines such as granulocyte-macrophage colony- stimulating factor (GM-CSF) and granulocyte colony-stimulating factor (G-CSF) following bone marrow reinfusion, there is an obligate period of profound pancytopenia lasting 1-3 weeks, and delayed engraftment can occur, resulting in morbidity or mortality.
The safety, comfort, and cost of stem- and progenitor cell harvest are also concerns. The standard techniques employed to harvest bone marrow involves obtaining 500-1500 mL of bone marrow from the marrow donor, usually under general anesthesia. In addition to the discomfort caused by the hundreds of marrow aspirates performed, donors are subject to the risks of general anesthesia. Finally, the bone marrow harvest procedure is expensive. Alternatively, stem- and progenitor cells can be collected from peripheral blood by apheresis, but this requires chemotherapy and/or growth factors for mobilization and multiple collections are generally necessary, which are costly.
Recently, novel technology has been developed to produce stem- and progenitor cell populations in vitro, commonly referred to as ex vivo expansion. Hematopoietic cell expansions achieved with this technology are based upon the principles of continuous perfusion culture, a bioengineered metabolic environment, augmented by hematopoietic growth factors. Through this technology, a small bone marrow or peripheral blood mononuclear cell population can be perfused ex vivo so that total cell numbers, colony forming units (CFU-S) and long term culture initiating cells (LTC-ICs) increase up to 20 fold (1-17). In a preliminary study, Brugger et al recently reported that
expanded cells alone can reconstitute hematopoiesis after high dose chemotherapy (18).
Important differences exist among approaches, systems and devices used for ex
vivo expansion. This study utilizes the Aastrom CPS, which includes a cell
culture device and a biological environment designed to allow the establishment
of a stromal adherent layer, using constant perfusion with medium, and
relatively low concentrations of hematopoietic growth factors. Preliminary
studies at MD Anderson Cancer Center (DM94-127), using transplantation of ex
vivo-produced cells prepared with this system, in combination with a standard
autologous marrow transplant, indicate that ex vivo expansion can be performed
reliably and reproducibly, and that no toxicity occurs with intravenous infusion
(19). Ten patients, age 18-60 years with breast carcinoma, were entered into a
study transplanting bone marrow plus ex vivo-produced cells. Bone marrow was
harvested, collecting greater than 2 x 10/8/ nucleated cells/kg and greater than
0.5 x 10/6/ CD34+ cells/kg. Twelve days prior to the planned bone marrow
transplant, 2.25 x 10/8/ mononuclear cells were inoculated into a cell culture
device, part of the CPS, and continuously perfused with medium containing
PIXY321 (5 ng/mi), Epo (0.1 U/ml) and hydrocortisone (5 x 10-6 M). The expansion
reproducibly increased total nucleated cells, CFU-GM, and long term culture
initiating cells (LTC-IC). Patients received Cyclophosphamide 2.0 g/m2/d:
Thiotepa 240 mg/mi/d: BCNU 150 Mg/M2/d. Days -7, -6, -5, with reinfusion of the
cryopreserved bone marrow on Day 0 plus the ex vivo-produced cells four hours
later. No toxicity was observed from the expanded cell infusion. Nadir WBC was
less than 0.1/ul. All patients engrafted within narrow time ranges, with median
recovery of WBC greater than 200/ul on Day 8 (range 7-8) granulocytes greater
than 500/ul on Day 11 (range 10-13) and platelets greater than 25,000/ul on Day
16 (range 13-21) and greater than 50,000 on Day 20 (range 18-27). A median of 4
(range 1-9) platelet and 4 (range 2-9) RBC transfusions were administered. No
grade greater than 2 toxicity occurred from the chemotherapy or bone marrow
infusions. Four patients had infections unrelated to the infusion of the cells
produced in the CPS. These data compare favorably with 29 historical controls
receiving the same chemotherapy and autoBMT without cell expansion, in which
granulocytes recovered to greater than 500 on Day 11 (range 7-29) and platelets
to greater than 25,000 and greater than 50,000 on Days 24 (range 9-78) and 28
(range 9-147), respectively.
A potential advantage of collecting a relatively small marrow inoculum is that the number of contaminating malignant cells is reduced: additionally, growth of breast cancer cells is not stimulated under these expansion conditions (Brugger et al).
Application of this technology to autologous bone marrow and peripheral stem cells transplant offers a potentially attractive means to increase the efficacy and safety of autologous transplantation, while reducing its complexity and cost. In particular, this technology could eliminate the need for operative bone marrow
harvests, produce more rapid recovery of hematopoiesis post- transplant, reduce the length of post-transplant hospitalization, and could increase the purity of the stem- and progenitor cells transfused. In addition, the inclusion of cytokine-primed progenitors could result in accelerated hematopoietic recoveries.
2.2 Previous Pre-Clinical Research
During hematopoietic expansion culture, total cell numbers increase 8 to 11-fold over 12 days. This includes nonadherent, loosely adherent, and tightly adherent cells. Over 80% of the nucleated cells are viable, as shown by exclusion of propidium iodine stain (4) or Trypan blue dye. These cells have the morphological distribution of normal bone marrow cells, including blast cells and maturing granulocyte precursors, maturing erythroid cells, monocytes and macrophages.
These expanded cells also show typical immunophenotype characteristics
of normal granulocyte, erythroid, monocyte/macrophage megakaryocytic,
and blast cells (5). Cell surface antigens identified using this
technique include CD3, CD11b, CD15, CD20, CD33, CD71, and glycophorin
A. While there are minor variations in staining patterns from sample
to sample, the expanded cells are typically less than 3% CD3-.20-50%
CD11b-, less than 1% CD19-, and 40-70% CD71-. The frequency of mature
T and B lymphocytes in the expanded cell population is significantly
reduced.
As shown in the experiments summarized in the Table below, it was shown by Aastrom that varying the standard growth factor combination (IL-3-GM-CSF or PIXY321, Epo, SCF and flt3L) had a direct effect on the productivity of cells in the CPS, but the relative cell mixture composition remained substantially similar. These data were obtained in 36-well plate studies. This finding provided the original justification for selecting the growth factor combination (Epo - PIXY321 - flt3L) for this study to yield the desired relative composition and mixture of early-, mid- and late-stage cells produced in the pre-clinical experiments.
Product/cm/2/
Growth Factors CeilsX10/6/ CFU-GM LTC-IC n None 0.58 404 yes/3/ 7 Epo, GM-CSF, IL-3, SCF 2.35 4,790 48 23 Epo, GM-CSF, IL-3 1.13 21,060 yes/3/ 3 Epo, PIXY, SCF 1.72 69,960 yes/3/ 4 Epo, PIXY 1.31 3,140 94 3 Epo, PXY, fit3L 1.57 10,580 11 14 |
/2/LTC-IC were not evaluated, but in these conditions, 24 week CFU-GM producing cultures were obtained, representing an LTC-IC proxy.
Aastrom has projected, based on this pre-clinical research, that clinical-size CPSs are expected to yield a mean of 3.0 x 10/9/ cells, 17.7 x 10/6/ CFU-GM and 6.4 x 10/5/ LTC-IC per patient in this proposed clinical feasibility trial, and set the expected minimum per-patient cell yield from the CPS at 1.6 x 10/9/ total nucleated cells and 7.0 x 10/10/ CFU-GM. In an average 70 kg patient, this translates to a dose of 2 x 10/5/ CFU-GM/kg. The clinically standard ABMT engraving dose is reported to be 1 x 10/5/ CFU-GM/kg. Therefore, using the cell dose and the CFU-GM content in the cells produced in the CPS as a key progenitor marker, along with the reliable presence of early stage cells (e.g., LTC-IC, CD34-lin-), there is an expectation that the CPS-produced cells should provide a minimum full engraving dose for these subjects, with a greater number expected for most patients. Should the minimum cell number, 1.6 x 10/9/, not be attained, the cryopreserved back-up cells will be reconstituted and administered to a subject on Day 0.
It is anticipated that infusion of ex vivo-produced progenitors generated with the CPS will enhance engraftment and shorten time to recovery of granulocytes and platelets and, in so doing, reduce the incidence of infections, febrile episodes and the need for blood- and platelet transfusions.
Amended August 5, 1996: In several in vitro studies using tumor cells that are easy to detect in small quantities (neuroblastoma and B-cell CLL), the expansion process appeared to passively purge tumor cells of slightly less than one log to greater than three logs. When combined with the smaller inoculum of marrow needed to initiate the bioreactors as compared to a normal marrow harvest, the depletions appear to be as high as four to five logs. It is anticipated that since the marrows must be histologically normal for patients to enter this trial, i.e., undetectable amount of breast cancer cells, that expansion of tumor cells will not be important clinically. This is especially true since there is additional in vitro data to show that the cytokines used do not stimulate the growth of tumor cells when used whether in vitro or in vivo when used in closely monitored clinical trials.
The washing of the expanded cell products eliminates the amount of the cytokines to undetectable levels using a sensitive ELISA method. Only GMP (Good manufacturing process) cytokines are used for the expansion process, making it unlikely that any adverse clinical event will occur.
Microbial contamination has not been a problem in the patients treated to date and in preliminary studies done preclinically. This is likely because of the closed system setup, growth and collection of the expanded cells, the
use of antibiotics in the growth media, and the assays done 48 hours prior to the collection of the expanded cells (day 10). In addition, all patients will be on prophylactic antibiotics at the time of the cell infusions as per routine BMTU protocols.
2.3 High Dose Chemotherapy and Autologous Bone Marrow Transplant Breast Cancer
Breast cancer is responsive to initial combination chemotherapy for metastatic disease with a 50-800,10 response rate and a 10-20% complete response rate, but few patients are cured and median duration of response is generally less than one year (20-24). Once patients relapse, the response to second-line therapy is 20-40% with very few complete responses (CR) and a median duration of response of 2-3 months and a median survival of 12 months.
When patients with metastatic breast cancer receive high-dose chemotherapy, there is substantially higher complete response rate than that can be achieved with conventional treatment (25-38). Peters et al (39) used a regimen of Cyclophosphamide, Cisplatin, and BCNU or Melphalan in 22 ER-negative patients without prior induction chemotherapy, and reported a 54% CR rate and an overall response rate of 73% and a median duration of response of 7 months from the time of transplant. Antman et al recently reported similar results with a combination of high-dose Carboplatin. Cyclophosphamide and Thiotepa (26); each study reported approximately 20% 5-year disease-free survival. A recently published study that compared in a randomized fashion chemotherapy at conventional doses versus high dose therapy with stem cell rescue verified that this high dose approach is superior to conventional chemotherapy as measured both by progression-free as well as overall survival. Application of the same therapy to patients with Stage II breast cancer with greater than 10 positive nodes or Stage III disease has resulted in approximately 70% 5-year disease-free survival, substantially higher than that reported with standard adjuvant therapy in such patients.
3.0 BACKGROUND DRUG AND DEVICE INFORMATION
3.1 Description of the CPS
The single-use, sealed, sterile cell culture device in the Aastrom CPS consists of three rigid plastic parts separated by a gas- permeable, water-impermeable membrane. The lower cell culture chamber is continuously perfused by growth medium. The cells expand in culture on the plastic surface of the cell culture bed. The upper cell culture chamber is provided with a constant flow of gas, such that oxygenation of the cell culture bed is accomplished by diffusion across the membrane and through the culture medium. Carbon dioxide is removed by the same mechanism. The medium used to perfuse the cultured
cells is stored in a closed vessel in an adjacent refrigerator at 4 degrees C whose only external connection is by medical grade tubing. A "Y" connector, attached to the effluent line, allows sampling of the cell product prior to harvest, to test for bacterial and fungal contaminants. A detailed device description is provided in the Operators Manual provided by Aastrom. The system to be used will include dedicated Aastrom instruments, the Processor and incubators which replace standard laboratory equipment and perform all of the steps in the cell production automatically and more importantly sterily, and in a close system manner, after the initial inoculation of the cells into the CPS. The incubator contains a cold compartment for media storage for perfusion during the 12 day culture (perfusion begins on Day 3), and a 37 degrees C compartment in which the Cell Cassette is placed for the duration of the culture.
3.1.1 Cell Culture Conditions The hematopoietic cells are suspended in tissue culture medium composed of Iscove's Modified Dulbecco's Media supplemented with 10% fetal bovine serum, 10% horse serum, hydrocortisone (5x10/-6/ M), PIXY321 (5 ng/mi), glutamine (4 mM), Erythropoietin (Epo 0.1 U/ml), flt3L (5 ng/mi), gentamicin sulfate (5 Fg/ml), vancomycin (20 Fg/ml), sterile water for injection, and are inoculated into the CPS, starting after Day 3. The cells are cultured in the CPS for 12 days at 37 degrees C with the tissue culture medium continuously replaced with fresh medium. Sampling of the culture medium is carried out 48 hours prior to harvest, to allow testing for bacterial and fungal contaminants. The cell harvest is performed automatically, by a programmed schedule with the Processor. In this process, the non-adherent fraction is removed from the cell culture device by draining the growth medium from the cell culture device into the harvest bag. The chamber is then rinsed with 50 ml of Hank's Balanced Salt solution (HBSS). This is followed by agitation of the cell culture device and collection of the rinse into the harvest bag. The adherent layer is detached from the cell culture bed surface by injection of 50 ml of Trypsin-EDTA solution. This is also followed by agitation of the cell production device and collection of the rinse into the harvest bag. The chamber is then given a final rinse by injecting 50 ml of HBSS. This is followed by agitation of the cell production device and collection of the rinse into the harvest bag. Again this is done automatically, sterily in a closed system fashion. Following collection, the cells are washed free of culture medium as detailed in the Operator's Manual. The final product is suspended in appropriate media for immediate infusion. |
3.1.2 Cell Culture Media Information Studies by Aastrom and the University of Michigan have shown that, after the cell washing regimen, the added growth factors and other reagents are below detectable limits, using a very sensitive ELISA assay (R&D Systems, Minneapolis, MN, and Immunex Research Corporation, Seattle, WA). These levels are well below the level of biological activity. The horse and fetal calf sera are tested preclinically for contamination for bacteria, fungi, mycoplasma, endotoxin, and viruses. The expanded cell product is washed (See Operators Manual) prior to transfusion. Nonetheless, the human toxicities and contraindications identified for these drugs are included below: 3.1.2.1 Recombinant Human Epo Recombinant Human Erythropoietin: Epoetin Alfa, Procrit, NOC 0062-7402-01 Amgen, Thousand Oaks, CA. Human Toxicity: Toxicities have included hypertension, headache, fever, seizures, and skin rash. The majority of these subjects had chronic renal failure, and these adverse events are frequent sequelae of chronic renal failure and were not necessarily attributable to Epo. Contraindications: Epo is contraindicated in subjects with: uncontrolled hypertension, known hypersensitivity to mammalian- derived products, and known sensitivity to human albumin. 3.1.2.2 PIXY321 PIXY321 is a fusion protein of granulocyte-macrophage colony-stimulating factor (GM-CSF) and interleukin 3 (IL-3). 3.1.2.3 Recombinant GM-CSF Human Toxicity: Specific Toxicities include peripheral edema, pleural and/or pericardial effusions, fluid retention, sequestration of granulocytes in the lung, supraventricular arrhythmia, elevation of serum creatinine, and elevation of hepatic enzymes. Contraindications: GM-CSF is contraindicated in subjects with excessive leukemic blasts in the bone marrow or peripheral blood (greater than 10%), or with known hypersensitivity to GM-CSF, yeast-derived products, or any component of the product. |
3.1.2.4 Flt3 Ligand (flt3L) The manufacturer of flt3L, Immunex Research and Development Corporation, Seattle, WA, has advised that a biologic Master File is in preparation for clinical, in vivo grade flt3L, and that the Master File will be submitted to the FDA in 1996, and will be available as reference for the purposes of this clinical feasibility trial (Letter, Immunex to Aastrom, December 11, 1995). Immunex has also advised that flt3L appeared to be well tolerated when administered to mice and monkeys for 14 days, at doses up to 400@g/kg/day. Based on the safety profile established by Immunex, including the animal data generated to-date, flt3L has no apparent toxicities, and does not stimulate the proliferation and detrimental activation of mast cells. As indicated above, the cells produced in the CPS are washed four times, resulting in a 5-log reduction in the presence of media components, to levels below detectable limits. An ELISA, supplied by Immunex, is used to determine residual flt3L levels subsequent to cell washing. 3.1.2.5 Horse Serum Contraindications: Known hypersensitivity to horse serum. 3.1.2.6 Fetal Calf Serum Contraindications: Known hypersensitivity to bovine serum. 3.2 CHEMOTHERAPY AGENTS AND CYTOKINES rhG-CSF (Filgrastim: NSC-614629) 3.2.1 Chemistry: rhG-CSF is a protein produced in E. Coli into which the gene synthesized for high expression in E Coli has been inserted. The 175 amino acid protein has a molecular weight of about 18,800 daltons. rhG-CSF differs from the natural protein (M.W. 19,600 daltons) in that the N-terminal amino acid is a methionine and is not 0-glycosylated. 3.2.2 Mechanism of Action: rhG-CSF is a hematopoietic regulator which has the ability to modulate the growth and maturation of myeloid cells, and in particular the proliferation and differentiation of granulocytes both in vitro and in vivo. 3.2.3 Human toxicity: Specific toxicities include medullary bone pain. |
musculoskeletal symptoms (muscle cramps, back and or leg pain); exacerbation of preexisting inflammatory conditions (psoriasis, arthritis, vasculitis); splenomegaly and hair thinning with prolonged administration. Elevated leukocyte alkaline phosphatase, uric acid, and lactate dehydrogenase. Progression of patients with myelodysplasia to acute myeloid leukemia occurred rarely during treatment with this agent. 3.2.4 Pharmaceutical Data: rhG-CSF is supplied in colorless, glass, single use vials containing 1.6 ml of buffered solation at a concentration of 0.3 mg/ml. It is formulated as a sterile, colorless liquid in a 10 mM sodium acetate buffer at pH 4.0. Administration: rhG-CSF will be administered in this study subcutaneously. It will be undiluted and be drawn into 3 cc syringes. To reduce the possibility of bacterial contamination in this product which contains no preservatives, the syringes should be stored at 2-8 degrees C and used within 24 hours of preparation, rhG-CSF should not be frozen and vials or syringes that have been frozen should not be used. 3.2.5 Supplier: This agent will be supplied through AMGEN for the trial free of charge to the patients. 3.3 Carboplatin (NSC-241240) (CBCDA) 3.3.1 Human Toxicity: Side effects of Carboplatin (CBDCA) include myelosuppression, nausea, vomiting, loss of appetite. Rare toxicities include gross hematuria, hyponatremia, ageusia, allergic reaction, peripheral neuropathy, veno-occlusive disease, loss of hair, liver damage, kidney damage, hearing loss, dizziness and blurred vision. Two cases of optic neuritis have been reported in patients receiving carboplatin which were thought to be possible drug-related events. A single case of severe pulmonary toxicity has been reported. 3.3.2 Pharmaceutical Data: Formulation: CBDCA is supplied as a sterile lyophilized powder available in single-dose vials containing 50 mg, 150 mg and 450 mg of Carboplatin for administration by intravenous injection. Each vial contains equal parts by weight of Carboplatin and mannitol. Immediately before use, the content of each vial must be reconstituted with either Sterile Water for Injection. USP, 5% Dextrose in Water, or 0.9% Sodium Chloride Injection, USP, according to the insert. Diluent Volume |
50 mg 5 mL
150 mg 15 mL 450 mg 45 mL These dilutions all produce a Carboplatin concentration of 10 mg/ml. CBDCA can be further diluted to concentrations as low as 0.5 mg/ml with 5% Dextrose in Water or 0.9% Sodium Chloride Injection, USP (NS). 3.3.3 Storage & Stability: Unopened vials of CBDCA for injection are stable for the life indicated on the package when stored at controlled room temperature 150 - 300 C. and protected from light. When prepared as directed, CBDCA solutions are stable for 8 hours at room temperature. Since no anti-bacterial preservative is contained in the formulation, it is recommended that CBDCA solutions be discarded 8 hours after dilution. Parenteral drug products should be inspected visually for particulate matter and discoloration prior to administration. 3.3.4 Administration: Intravenous. 3.3.5 Supplier: CBDCA is commercially available and will be purchased through third party payers. |
3.4 Cyclophosphamide (NSC-26271)
3.4.1 Mechanism of Action: Cyclophosphamide is a very weak alkylating agent, but enzymatic oxidation and a series of undefined subsequent reactions produce one or more molecules with alkylating activity. In experimental animals, the first step of activation occurs more extensively in the liver than in the neoplasm or other tissues of the host. 3.4.2 Toxicities: Human toxicity includes alopecia, nausea and vomiting, stomatitis, leukopenia, anemia, thrombocytopenia, sterility or decreased gonadal function, hemorrhagic cystitis and fibrosis of the bladder. 3.4.3 Pharmaceutical Data: Formulation: Cyclophosphamide is supplied in 100, 200, and 500 mg ampules containing white powder. The drug can be reconstituted in normal saline or 5% dextrose and water. 3.4.4 Stability: Store at room temperature. Do not store at temperatures above 90 degrees F. 3.4.5 Supplier: This drug is commercially available for purchase by the third party. |
3.5 Thiotepa (Triethylene-thiophosphoramide) (NSC-6369)
3.5.1 Mechanism of Action: Thiotepa is a cytotoxic agent of the polyfunctional alkylating type related chemically and pharmacologically to nitrogen mustard. On the basis of tissue concentration studies, it is reported that Thiotepa has no differential affinity for neoplasms. Most of the drug appears to be excreted unchanged in the urine. 3.5.2 Human Toxicology: The major side effects of Thiotepa are pain at the site of injection, nausea and vomiting, anorexia, dizziness, headache, amenorrhea and interference with spermatogenesis. Febrile reaction and weeping from a subcutaneous lesion may occur as the result of a breakdown of tumor tissue. Allergic reactions are rare, but hives and skin rash have been noted occasionally. The serious complication of excessive Thiotepa therapy, or sensitivity to the effects of this agent, is bone marrow depression. If proper precautions are not observed, it may cause leukopenia, thrombocytopenia and anemia. The most reliable guide to Thiotepa toxicity is the white blood count. 3.5.3 Pharmaceutical Data: Formulation: Thiotepa is available in a powder form in 15 mg vials. The powder should be reconstituted in sterile water for injection. 3.5.4 Storage and Stability: Reconstituted solutions may be kept for five days in a refrigerator without a substantial loss of potency. Vials containing Thiotepa should be stored at 2-8 degrees C (35-46 degrees F). 3.5.5 Administration: The amount of diluent most often used is 1.5 ml resulting in a drug concentration of 5 mg in each 0.5 ml of solution. Thiotepa may be given by rapid intravenous administration or via continuous intravenous infusion. 3.5.6 Supplier: This drug is commercially available for purchase by the third party. |
3.6 Intended Use
The intended use of the CPS is to produce human stem- and hematopoietic progenitor cells to support subjects with compromised hematopoietic systems. A per-patient cell production procedure, beginning with 2.25 x 10/8/ nucleated bone marrow cells per device, will yield at least 1.6 x 10/9/ cells. The cells will not be infused if the cell yield is below this level; the back-up cells will be infused in such a case.
4.0 PATIENT ELIGIBILITY
4.1 Patients with histologically confirmed breast cancer with advanced disease as defined as high risk Stage II (greater than 10 LN), Stage III or stage IV (inflammatory, fixed to chest wall, or fixed axillary lymph nodes) or recurrent or metastatic disease.
4.2 Patients with measurable disease must have disease which is responsive to standard dose systemic chemotherapy administered prior to enrollment on study. Patients may have a maximum of two prior chemotherapy regimens for their disease. Patients with metastatic disease (beyond draining lymph nodes) with no evaluable or measurable disease following surgical resection, radiotherapy, or chemotherapy are still eligible.
4.3 Patients must have a Performance status of 0-1 by SWOG criteria (see appendix). As patient weight is used to calculate the minimum safe dose of CFU-GM to accomplish a transplant, and given the production capabilities of the CPS, patients in this initial trial must be less than 90 kg of actual body weight.
4.4 Patients must have received a cumulative adriamycin dose of less than 350 mg/m2 with no prior nitrosoureas, platinum or mitomycin C.
4.5 Patients must have recovered from prior therapy with at least 4 weeks since the last chemotherapy, 4 weeks since last radiotherapy, and 3 weeks since major surgery.
4.6 Patients must have adequate cardiac function as defined by a MUGA with an ejection fraction greater than or equal to 45%. Patients may not have active coronary disease as defined by angina or history of a myocardial infarction. In addition, patients must have no clinically apparent uncorrectable pulmonary disease such as corpulmonale or severe COPD, or be requiring oxygen therapy for any reason.
4.7 Patients with a history of or any evidence for brain metastases are ineligible. Head CT or MRI scans are not required if patients are asymptomatic.
4.8 Patients must have adequate organ function as defined by the following:
Serum creatinine less than or equal to 1.5 mg/dl or calculated Cr-CI or
greater than or equal to 60 ml/min: Hepatic function as defined by
Bilirubin less than or equal to 2.0 mg/dl and AST/ALT less than or equal to
2 x institutional normal values: hematologic functional as defined by WBC
greater than or equal to 3400/ul. Hgb greater than or equal to 9.0 gm/dl.
platelet count greater than or equal to 140,000/ul.
4.9 Exclusion Criteria include: History of hypersensitivity to horse serum or fetal calf serum: Concurrent involvement in any other clinical trial that affects engraftment (e.g. other hematopoietic growth factors); treatment with any growth factors within two weeks; Previous pelvic radiotherapy rendering the marrow hypocellular, any co-morbid condition which, in the view of the Principal Investigator, renders the patient at high risk from treatment complications.
4.10 Patients must undergo a BM biopsy and BM must be either free of disease by standard histologic exam, and a cellularity on biopsy of at least 35%.
4.11 Patients must be less than 65 years of age.
4.12 Patients must be HIV negative.
4.13 Pregnant or lactating women may not participate.
4.14 Patients with prior hemorrhagic cystitis are ineligible.
4.15 Patients must be free of active systemic infection at the time of initiating therapy. Patients must have had no episodes of systemic mycotic infections, nor have required Amphotericin B therapy in the previous 12 months.
4.16 Patients must be free of active CNS diseases (seizures, etc.)
4.17 Patients must have signed an IRB approved consent form prior to trial enrollment.
4.18 Patients may not have an active second malignancy within the previous 2 years except localized non-melanoma skin cancer or uterine cervical cancer in situ.
5.0 TREATMENT PLAN
5.1 Registration
All patients must be registered with the Data Management office at 708-327-3230 for entry on study. A total of 6-10 patients will be treated in this pilot study.
5.2 Bone Marrow Harvest
Patients will undergo back-up bone marrow harvest at any time prior to initiation of the ablative chemotherapy, with cryopreservation, using standard techniques. Patients must have greater than 2 x 10/8/ nucleated cells per kg harvested, including greater than 0.5 x 10/6/ CD34- cells/kg.
The bone marrow harvest will be performed by standard technique in an operating suite under general or epidural anesthesia. In a standard harvest, approximately 500-1500 ml of marrow is withdrawn. Patients will have the back-up bone marrow collected simultaneously with the cells for ex vivo production. If a sufficient number of cells are collected, the bone marrow collected will be processed and a small fraction utilized for the ex vivo culture described below, and the remainder of the cells will be cryopreserved per
standard technique and held as a back-up for use if the prescribed number of cells is not produced or if graft failure occurs. The cells for the expansion will be collected from the posterior iliac crest or from the sternum at the initiation of the harvest procedure. No more than 5 cc of marrow for the expansion will be aspirated from each bone puncture. Approximately 40 ml of marrow will be aspirated in this fashion.
5.3 Ex Vivo Cell Production
As mentioned in other parts of the Protocol, at the time of bone marrow harvest, all harvested marrow will be delivered to the bone marrow laboratory for processing. A portion of the harvested marrow will be used for cell production in the CPS and balance of the harvested marrow will be cryopreserved. Twelve days prior to the scheduled bone marrow transplant, 2.25 x 10/8/ mononuclear cells from freshly collected marrow will be placed into each CPS in the presence of PIXY321 (5 ng/mi), hydrocortisone (final concentration 5 x 10/-6/M), glutamine (4 mM), gentamicin sulfate (5 Fg/mi), vancomycin (20 Ff/mi), Epo (0.1 U/ml/day) and fit3L (5 ng/ml). The tissue culture medium will be supplemented with 1.0% fetal calf serum and 1.0% horse serum. All processing will be done using the dedicated CPS instrumentation. No standard laboratory equipment will be used for the expansion or processing of the cells. A sample of the harvested marrow will be sent for bacterial and fungal culture.
The cell production will be performed in the Aastrom CPS, which is operated
as a stand alone, dedicated piece of validated laboratory equipment
(incubator, refrigerator, gas pumps) which provide for constant temperature
(37C), pH (7.2-7.4), and delivery of sterile air (5% C02) to the
hematopoietic cells.
Two days prior to the completion of cell production, the cell culture effluent will be sampled to allow for bacterial and fungal testing including gram stain, endotoxin testing and mycoplasma. At the completion of the cell expansion process (12 days), the non-adherent fraction will be removed from the cell culture devices by draining the growth medium from the cell culture devices into the harvest bag. The devices will then be rinsed by using a syringe to inject 50 ml of an HBSS solution into an access port. This is followed by agitation of the cell culture device and collection of the rinse into the harvest bag. The adherent layer will be detached from the cell culture device surface by injection of 50 ml of Trypsin-EDTA solution via an access port. This is again followed by agitation of the cell culture device and collection of the rinse into the harvest bag. The chamber will be then given a final rinse with 50 ml of HBSS, again by injection via an access port. This is followed by agitation of the cell culture device and collection of the rinse into the harvest bag.
The expanded cells will be washed according to the procedure outlined in the Operators Manual.
All subjects will receive freshly harvested expanded cells. The expanded cells must be greater than 80% viable, as determined by Trypan blue dye, and the minimum total cell number, as
determined by an automated cell counter, will be 1.6 x 10/9/ cells.
As part of the standard laboratory in this Study, the total cell count, CFU-GM and LTC-IC will be determined for the starting and final cell number. The pre and post expansion sample will be sent for cytology and immunocytochemistry for breast cancer cells.
Pre-transplant Evaluation of the cultured Cells: 48 hours prior to the collection of the expanded cells, the effluent from the CPS will be tested for bacterial and fungal contamination, as described above. If the bone marrow cultures are either visibly contaminated or are positively cultured for bacterial or fungal contamination, or if the cultures die, the expanded cells will not be returned to the subject, who will then simply receive her cryopreserved bone marrow.
Flow Cytometry: Aliquots of the ex vivo produced cells (approximately 10 x 1 Or) will be removed at 12 days, placed in a tube containing sterile buffered medium, and shipped by overnight mail carrier to Aastrom Biosciences, Inc., Domino's Farms, 24 Frank Lloyd Wright Drive, Lobby L., Ann Arbor, MI, 48105. These cells will be analyzed for the presence of several cell surface markers (CD34, CD1 lb, CD15, CD33, CD3, CD4, CD8, CD19, CD71 and glycophorin A and other appropriate markers) in the laboratory at Aastrom as potential correlates for the cell production process. The Aastrom Laboratory operates under GLP (Good Laboratory Practices) guidelines.
Release Criteria: Cells produced in the Aastrom CPS will be considered eligible for release and reinfusion if greater than 1.6 x 10' nucleated cells/kg are recovered after the expansion period and cell washing, and if greater than 80% of the nucleated cells are viable as judged by exclusion of Trypan blue dye. Microbial contamination studies collected from the expansion on Day 10 must be negative.
If the expansion is not deemed sufficient, a patient will receive her backup marrow instead, without infusion of the expanded cells.
5.5 Transplant Regimen
5.4.1 High Dose Chemotherapy (STAMP V Regimen) Chemotherapy will begin a minimum of 48 hours following the last pheresis. Prior to the administration of chemotherapy, patients will receive anti-emetics including ondansetron and dexamethasone. Chemotherapy will consist of the following: Cylophosphamide 1500 mg/m2 Q day by continuous infusion (CI) for 4 days (d-7 through d-4) (96 hours) Total dose 6000 mg/m2 Thiotepa 125 mg/m2 Q day by CI for 4 days (d-7 through d-4) (96 |
hours) Total dose 500 mg/m2. Carboplatin 200 mg/m2 Q day CI for 4 days (d-7 through d-4) (96 hours) Total Dose 800 mg/m2. Supportive Issues: All patients will receive therapy through three separate lumens. The agents can not be mixed. Vigorous hydration will be included with a minimum of 200 cc/hour of IV fluids with diuretics as needed, while the chemotherapy is infusing and continuing till stem cell infusion. Patients will receive aggressive anti-emetic therapy with ondansetron, lorazepam, dexamethasone, etc. 5.4.2 Post-Transplant Growth Factor Support G-CSF (10 mcg/k/d) will be administered SQ until granulocytes greater than 2.0 x 1 O/9//l or greater than 1.0 x 1 O/9//l for 3 days. If granulocytes fall to less than 1.0 x 10/9//l, hematopoietic growth factor treatment can be resumed as indicated to maintain an absolute granulocyte count greater than 1.0 x 10/9//l. GM-CSF 250 mg/m2/d may be used in patients intolerant to G-CSF. Patients who require the administration of any myelosuppressive therapy in the first 7 days post transplant such as full dose Amphotericin B therapy will be required to receive the infusion of their back up marrow cells on that date. 5.4.3 Neutrophil Engraftment and Stopping Rules Neutrophil engraftment is defined as recovery as granulocytes to 0.5 x 10/9//l. Back-up autologous bone marrow will be infused intravenously per the following stopping rules: a. Back-up cells will always be administered to subjects on Day -21 if ANC is less than 0.5 x 10/9//l; if back-up cells are administered to a subject on Day-21, it is reasonable to assume that an ANC level of 0.5 x 10/9/ can only be reached between Day -21 and Day -25 if the cells produced in the CPS alone contribute to a subject's recovery, because the administration of back-up cells would not be expected to impact engraftment so rapidly, between Days -21 and-25. It is relevant to point out that ANC recovery in the Day -18-25 time frame is often experienced in standard bone marrow transplantation. b. If the ANC is greater than 500 on Day -28 but the platelet count is less than 20,000, the marrow cells will be infused on that date. c. If the patient is experiencing a severe infection or uncontrolled bleeding |
at any point during the period of pancytopenia, the back-up cells may be administered at the discretion of the investigator. 5.4.3.1 Stopping Rules With the above as background, stopping rules will be as follows: the trial will be stopped and reevaluated if two subjects fail to reach ANC 0.5 x 10/9/v/1 by Day +25, even with the administration of back-up cells on Day +21; The trial will also be stopped and reevaluated if four of the first five subjects, or if any five of the ten total subjects, required the administration of back-up cells because they failed to reach ANC 0.5 x 1 01/1 on or before Day +21. 6.0 PRETREATMENT EVALUATION 6.1 Complete history and physical examination, including SWOG performance status (Appendix C) 6.2 CBC, diff, and platelet count 6.3 SMA 12 and electrolytes 6.4 PT, PTT 6.5 Cardiac ejection fraction 6.6 Pulmonary function - DLCO 6.7 HIV, hepatitis, HTLV-1 (1764 panel) 6.8 Pregnancy test (in fertile women) 6.9 Tumor staging as indicated including bone scan with X ray of hot spots. Chest X-Ray, CT scan abdomen, tumor markers, such as CEA will be assessed. 6.10 Bilateral bone marrow aspirate and biopsy 7.0 STUDY PROCEDURES AND EVALUATIONS 7.1 Interim history, physical examination and toxicity assessment daily while in hospital and at least weekly until WBC greater than 3000 and platelets greater than 100,000. Toxicity assessment will be made pre-infusion and 2 and 24 hours post-infusion of both the expanded and unexpanded bone marrow cells. |
7.2 CBC, diff, platelet counts daily while hospitalized and at least twice per week as an outpatient until WBC greater than 3000/ul and platelets greater than 100,000/ul. 7.3 SMA twice per week while hospitalized. Electrolytes as indicated. 7.4 Tumor restaging as indicated including bone scan with X ray of hot spots, CXR, CT scan of abdomen, and CEA, at day 60. Subsequent follow up is as indicated for patients with this malignancy. 7.5 Criteria for discharge: A study subject will be eligible for discharge from the hospital when she meets the following criteria: afebrile for 2 or more consecutive days, ANC greater than 500 for 3 consecutive days and SWOG status of 0, 1 or 2. All study subjects will receive follow-up care and treatment (as appropriate) by their physician. The subjects' medical records will be available to medical study monitors should additional information be required. 8.0 DATA COLLECTION 8.1 General Information Data will be recorded using a standard 'Theredex' reporting system at the time of each evaluation. Data must be recorded for all subjects from whom an Informed Consent is obtained. 8.2 Contents Data to be collected at each of the study time period is as follows: Pre-treatment Evaluation ------------------------ Eligibility criteria Demographic data Medical history Physical examination Laboratory profile Bone marrow biopsy toxicity status Baseline (Day 0) ---------------- |
Laboratory profile Bone marrow/cultured cell profile Transfusion record Toxicity assessment Vital signs Concomitant medication(s) Infection reporting and adverse effects greater than grade 3 - report immediately to sponsor as event occurs. Daily Evaluations (Post-transplant) ----------------------------------- Laboratory profile Transfusion record Toxicity assessment (note preinfusion, 2 hour and 24 post infusion toxicity assessment above) Vital signs Concomitant medications Infection reporting and grade greater than 2 adverse effects - report immediately to sponsor as event occurs. Hospital Discharge (study completion) ------------------------------------- Laboratory profile Vital signs Toxicity assessment Concomitant medications Infection reporting and Adverse Effects grade greater than 3 - Report immediately to sponsor as event occurs. Early termination or D60 ------------------------ Laboratory profile Assessment of late toxicity Transfusion record Vital signs Concomitant medications Study completion questionnaire 8.3 Quality System |
Quality system procedures are designed to ensure that complete, timely, and accurate data are submitted, that protocol requirements are followed, and that complications and/or adverse reactions are immediately identified. The study monitors will promptly review all incoming data to identify inconsistent or missing data and adverse effects. Data problems will be addressed in telephone calls and correspondence to the investigational site and during site visits. Clinical monitoring procedures are described in Section 12 of this protocol. The Medical Monitor will receive immediate notification of adverse reactions Grade greater than 3. Both the site and -------------- Aastrom will maintain secure hard copy Case Record Forms and data files. 9.0 ADVERSE EFFECTS All adverse effects, whether or not considered anticipated, must be recorded on the data sheets. Unanticipated effects, as defined below, must be reported promptly to the sponsor for further evaluation and adequate required reporting to IRBs and investigators. 9.1 Anticipated Adverse Effects The preliminary clinical experience has not identified any serious adverse effects on health or safety caused by or associated with the CPS and no adverse effects related to the ex vivo use fit3 ligand are anticipated. Patients undergoing high dose chemotherapy are anticipated to experience anorexia, nausea, vomiting, mucositis, pancytopenia and associated infections while neutropenia. Some patients may develop organ toxicities from high dose therapy. The anticipated events are therefore those associated with bone marrow transplantation and/or chemotherapy. 9.2 Unanticipated Adverse Effects An unanticipated adverse effect is: Any serious effect on health or safety or any life-threatening problem, or death caused by, or associated with, a device, if that effect, problem, or death was not previously identified in nature, severity, or degree of incidence in the investigational plan, or any other unanticipated serious problem that relates to the rights, safety or welfare of subjects. [21 CFR 812.3 (s)]. In particular, any unexpected grade III or IV toxicities or any other serious event that might be attributable to the infusion of the expanded hematopoietic cells. Reporting requirements: |
Unanticipated adverse effects should be reported to the Aastrom Study Director, Thomas E. Muller, Ph.D., Vice President Regulatory Affairs, immediately by the Investigator and subsequently to BRI. Aastrom requires an immediate telephone report followed by a written report within 5 days. An investigator shall submit to Aastrom and the reviewing IRB a report of any unanticipated adverse device effect occurring as soon as possible, but no later than 10 working days after the investigator learns of the effect [21 CFR 812.150 (a) (1)]. Aastrom shall immediately conduct an evaluation and report the results of the evaluation to FDA and to reviewing IRB's and participating investigator(s) within 10 working days after the sponsor first receives the notice of the effect [21 CFR 812.150 (b) (1)]. If Aastrom determines that an unanticipated adverse effect presents an unreasonable risk to subjects, all investigations or parts of investigations presenting that risk shall be terminated as soon as possible [21 CFR 812.46 (b)]. 9.3 DEPARTURE FROM PROTOCOL When a situation occurs which requires a departure from the protocol, the Principal Investigator or other physician in attendance will contact the Medical Monitor by telephone: Thomas E. Muller, Ph.D. Vice President Regulatory Affairs Aastrom Biosciences, Inc. 24 Frank Lloyd Wright, Lobby L Ann Arbor, MI 48105 Telephone: 313-930-5555 Fax: 313-665-0485 Contact with the Medical Monitor will be made as soon as possible in order to discuss the situation and agree on an appropriate course of action. The patient's medical records and source documents will describe the departure from the protocol and the circumstance requiring it. 10.0 STATISTICAL CONSIDERATIONS AND DATA ANALYSIS 10.1 Evaluation of the Data |
All subjects will be evaluated. Descriptive statistics will be presented for demographic variables and baseline characteristics such as age, sex, medical history, physical examination results, cost information (especially as this relates to morbidity). The primary endpoint is the safety of the cells produced in the CPS. To assess the hematopoietic recovery post-infusion with ex vivo- produced cells, the day of engraftment is defined by the first day on which granulocytes less than 0.5 x 10/9//I are observed. Other secondary endpoints include nadir WBC and platelet count, febrile days, treatment related complications, antitumor response, and survival. Secondary Endpoints: a. The day of platelet transfusion independence with platelet count less than 20,000/MM3, 50,000/MM3 and 100,000/MM3 as defined by first of two consecutive time points on which platelet counts meet these endpoints not related to transfusion. b. Packed red blood cell transfusion and platelet transfusion requirements. c. Number of documented infections. d. Number of bleeding episodes. e. Number of days of hospitalization. Tumor response and response duration a. Patient survival at 90 days post transplant. 10.2 Safety variables Safety variables summarized will include incidence of adverse effects (including duration, severity, and outcome). Other safety variables reported will include the incidence and types of laboratory abnormalities. When the frequencies are sufficiently large, a Fishers exact test or Chi-square test may be used to compare enrolled subjects and historical controls including approximately 65 patients receiving autologous bone marrow transplants without expansion using the same preparative regimen. 10.3 Biological Effect Variables The following biological effects will be summarized: Incidence of febrile neutropenia Time to platelet transfusion independence Antibiotic usage: |
Number of days on antibiotics Number of total antibiotic days (# antibiotics x days) Number of days on antifungals Number of days on antivirals Number of documented infections Time to neutrophil engraftment Length of initial hospitalization 11.0 CLINICAL SUPPLIES A complete CPS description is provided in the Operators Manual. 1 11.1 Materials and Supplies 11.1.1 CPS Aastrom will supply the CPS, which includes the cell culture device. This device consists of three rigid plastic parts (top, cell bed, and base), and a gas-permeable, water- impermeable membrane. Additional components include the means to facilitate air removal, seals to maintain leak- proof integrity, and mechanical fasteners. 11.1.2 Growth Medium The culture medium is prepared at the clinical site by supplementing a custom medium, produced to Aastrom specifications in a FDA-registered facility in compliance with GMPs (21 CFR 820), with glutamine and growth factors in accordance with a standard operating procedure. Medium components are shipped to or procured by the clinical trial site according to instructions, specifications and acceptance criteria defined by Aastrom. 11.1.3 Supporting Tubing and Materials Aastrom will supply the supporting tubing, harvest container, and waste container. These components will be supplied in sterile packages (for single use only). 11.2 Packaging and Labeling The package labeling includes the statement "Caution. Investigational Device-Limited by United States Law to Investigational Use," Lot Number, "Sterile unless unit package is opened or damaged," and "Manufactured for Aastrom Biosciences, Inc." 11.3 Assembly |
Components of the CPS will be received at the clinical test sites in sterile packages. The elements of the system will be connected under a laminar flow hood using aseptic technique provided in the Instructions for Use. The instructions for use will be provided by Aastrom. 11.4 Storage Requirements The devices may be stored indefinitely under typical laboratory conditions (50 degrees to 90 degrees F) and may be transported at temperatures up to 125 degrees F. 11.5 Retrieval and/or Disposal of Investigational Materials At the completion of the cell production process and harvest, the devices will be considered biohazardous waste and disposed of in accordance with standard procedures at the test site. Record will be made of the date of disposal and initials of the individual responsible for their disposition. 12.0 STUDY MONITORING 12.1 Medical Monitor The Medical Monitor will review the investigational plan, review adverse - reactions and/or unanticipated device effects as reported by the Investigator and interpret clinical results. The Medical Monitor for this study is: Thomas E. Muller, Ph.D. Vice President Regulatory Affairs Aastrom Biosciences, Inc. Domino's Farms 24 Frank Lloyd Wright Dr., Lobby L Ann Arbor, MI 48105 Telephone: 313-930-5555 Fax: 313-665-0485 12.2 Clinical Monitor Aastrom has designated BRI International, Inc., as Clinical Monitor for this study. The Clinical Monitor is qualified by training and experience to oversee the conduct of the study. The Clinical Monitor's responsibilities include maintaining regular contact with the investigational site, through telephone contact, correspondence and on-site visits, to ensure that the investigational plan and FDA regulations are followed, that complete, timely and accurate data are addressed, and that the site facilities continue to be adequate. Any questions regarding |
these matters should be addressed to:
Diane Goleb, Senior Project Director
BRI International, Inc.
15825 Shady Grove Road
Rockville, MD 20850
Telephone: 301-548-0500
Fax: 301-548-0519
12.3 Monitoring Procedures
12.3.1 Preinvestigational Site Visit The Preinvestigational Site Visit, conducted by the Clinical Monitor, will involve review of relevant FDA regulations and inspection procedures, the investigational plan, requirements for IRB review and approval, completion and submission of forms, record keeping requirements, and administrative reports. The adequacy of the facilities, the availability of the investigators, the potential number of study participants, and the provisions for staff support will also be assessed during the Preinvestigational Site Visit. 12.3.2 Routine Monitoring Visits Regular clinical monitoring visits to the investigational site will be conducted by Aastrom and BRI. To ensure that the Principal Investigator and his staff understand and accept their defined responsibilities, the Clinical Monitor will maintain regular correspondence and perform periodic site visits during the course of the study to verify the continued acceptability of the facilities, compliance with the investigational plan and relevant FDA regulations, and the maintenance of complete records. Clinical monitoring will include review and resolution of missing or inconsistent results and source document checks (i.e., comparison of submitted study results to original reports) to assure the accuracy of the reported data. The Clinical Monitor will evaluate and summarize the results of each site visit in written reports, identifying any repeated data problems with any investigator and specifying recommendations for resolution of noted deficiencies. |
12.3.3 Termination/Close-out Procedures The Clinical Monitor, BRI, will notify the investigator in writing of study completion/termination. The letter will include the reason for termination, document unresolved study discrepancies, and remind the investigator of her obligation to retain records according to FDA regulations. BRI will be responsible for meeting the FDA regulations with regards to record keeping and records retention. BRI will conduct a standard closure monitoring site visit. The objectives of the closing visit are: verify compliance with protocol and FDA regulations; ensure accuracy and completeness of subject and administrative files; resolve any outstanding questions/problems; verify accountability for the test devices; ensure the proper disposition of test devices and completed case report forms; confirm the investigator's understanding of his/her regulatory obligations, including record retention requirements. 13.0 INVESTIGATOR OBLIGATIONS 13.1 Principal Investigator Responsibilities 13.1.1 Compliance The Principal Investigator is responsible for ensuring that the study is conducted according to the signed Investigator Agreement, the investigational plan, and applicable FDA regulations for protecting the rights, safety and welfare of subjects under the Investigators care. The Principal Investigator must follow the Investigator Agreement, the investigational plan, and all conditions of FDA and IRB approval. 13.1.2 Awaiting Approval Written confirmation of IRB approval must be provided to Aastrom prior to the start of the study. The Principal Investigator may determine whether potential subjects would be interested in participating in a study but may not request signature of the Informed Consent or allow any subject to participate until FDA and the reviewing IRB have approved the study. 13.1.3 Supervising Device Use |
The Principal Investigator must supervise all use of the CPS involving human subjects and may not supply the device to any person not specifically authorized to receive it according to the investigational plan and applicable regulations. 13.1.4 Informed Consent The Principal Investigator shall make known to each subject the nature, expected duration, and purpose of the study; the administration and hazards of treatment; and available alternative therapy. Signed, written Informed Consent must be obtained prior to treatment. The original will be kept by the Principal Investigator and will be subject to review by Aastrom. Subjects will be informed that their medical records will be subject to review by Aastrom and the FDA. Subjects shall be informed that they are free to refuse participation in this clinical investigation; and if they participate, that they may withdraw from the study at any time without prejudicing future care. 13.1.5 Device Disposal Upon completion or termination of the study of the Principal Investigators participation in the study, or at Aastrom's request, the Principal Investigator must return to Aastrom the device(s) or otherwise dispose of the device(s) as Aastrom directs. 13.1.6 Reporting Requirements Any life-threatening and/or unexpected serious (grade 3 or 4) toxicities will be reported immediately to the Study Chairman who, in turn, will notify the IRB (Surveillance Committee) and the study sponsor. 13.1.7 Inspections and Records In accordance with the Investigator Agreement, the Principal Investigator shall permit authorized FDA employees to enter and inspect any site where the device or records pertaining to the device are held, and to inspect and copy all records relating to an investigation, including subject records. 13.1.8 Investigator Records The Principal Investigator will maintain complete, accurate and current study records, including the following materials: Correspondence with FDA, Aastrom, BRI, and the IRB; Record of receipt of the device: |
Instructions for device use; Subject Records, including Informed Consent, copies of Case Report Forms and supporting documents (laboratory reports, medical records, etc.); Log Book; Current study protocol and a log of any significant protocol deviations (e.g., lack of informed consent or treatment of ineligible subjects); Adverse event reports; Certification that the investigational plan has been approved by all of the necessary approving authorities; The approved blank informed consent form and blank subject report forms. Signed Investigator's Agreement with CV's of the Principal Investigator and all participating sub-investigators attached. These records shall be maintained for a period of 2 years after the latter of the following two dates: the date on which the investigation is terminated or completed, or the date that the records are no longer required for purposes of supporting a premarket approval application or notice of completion of a product development protocol. 13.1.9 Investigator Reports The Principal Investigator will be responsible for the following reports: 13.1.9.1 Unanticipated Adverse Effects The Investigator will report any serious adverse effect, death or life-threatening problems that may reasonably be regarded as caused by the CPS to Aastrom and the reviewing IRB as soon as possible but no later than 10 working days after the event. All anticipated serious adverse effects should be documented with an explanation of any medical treatment administered. An unanticipated serious adverse effect is defined as any serious adverse effect on health or safety, or any life-threatening problem or death caused by, or associated with this device, if that effect, problem, or death was not previously identified in nature, severity, or degree of incidence in this investigational plan. 13.1.9.2 Withdrawal of IRB Approval The Principal Investigator will immediately notify to Aastrom (within 5 working days) if, for any reason, the IRB withdraws approval to conduct the investigation. The report will include a complete description of the |
reason(s) for which approval was withdrawn. 13.1.9.3 Departure from Protocol The Principal Investigator shall notify Aastrom and the IRB of any deviation from the investigational plan made to protect the life or physical well-being of a subject in an emergency. A full report should be made as soon as possible and in no case later than 5 working days after the emergency. NOTE: Except in such an emergency, prior approval by Aastrom is required for changes in, or deviations from, the investigational plan. If such changes or deviations may affect the scientific soundness of the plan or the rights, safety or welfare of subjects, FDA and IRB approval are also required. 13-1.9.4 Progress Reports The Principal Investigator is required to submit progress and administrative reports to Aastrom, and to the reviewing IRB. Reports will include the number of study subjects, a summary of all adverse reactions, and a general description of the study's progress. 13.1.9.5 Final Report The Principal Investigator will submit a final report to Aastrom within four weeks following termination of the study or that site's participation in the study, and within three months to the IRB. 13.1.9.6 Other Reports Upon request, the Principal Investigator will provide accurate, complete, and current information to Aastrom Biosciences, Inc., the FDA, and to the reviewing IRB. 13.1.9.7 Investigator Materials Accountability All devices received and used by the Principal Investigator will be inventoried and accounted for throughout the study. The devices will be stored in a secured area. Upon study completion, all unused devices will be returned to Aastrom. A final inventory will then be performed. 13.1.9.8 Laboratory Normal Values |
The investigational site must maintain a current copy of normal values used by that site's clinical laboratory. The Principal Investigator must assess the clinical significance of all abnormal laboratory values. All clinically significant abnormalities must be characterized by the Principal Investigator as treatment-related, not treatment-related, or of uncertain etiology; all abnormalities judged treatment- related or of uncertain etiology must be repeated. Any abnormal values that persist should be followed at the Principal Investigators discretion. In some cases, significant changes within the normal range will require similar judgment. 13.1.9.9 Disclosure of Data All information concerning this clinical study are considered confidential. The Principal Investigator agrees to use this information only to accomplish this study and will not use it for other purposes without Aastrom's written consent. It is understood by the Principal Investigator that the information developed in the clinical study may be disclosed as required to the United States Food and Drug Administration. In order to allow for the use of the information derived from the clinical studies, it is understood that there is an obligation to provide Aastrom with complete test results and all data developed in the study. Aastrom has no objection to the publication of the results of this study by the investigator. However, a pre-publication manuscript must be provided to Aastrom at least 30 days before the manuscript is submitted to a publisher. Aastrom agrees that before it publishes any results of the study, a pre-publication manuscript will be provided to the investigator for review at least 30 days prior to the submission to a publisher. 13.1.10 Records Retention and Access FDA regulations require that, following completion of a clinical trial, a copy of all subject and administrative |
records pertaining to that study be maintained by the Investigator for 2 years after FDA approval of the investigational device, or, if no application for approval is filed or intended to be filed, for 2 years after all investigations have been completed, terminated, or discontinued, whichever time period is longer. Completed data records must be made available for review by Aastrom, the Clinical Monitor, and FDA. To ensure the accuracy of data submitted, it is mandatory that representatives of Aastrom and of the FDA have access to source documents (i.e., subject medical records, charts, laboratory reports, etc.). Subject confidentiality will be protected at all times. Aastrom reserves the right to terminate the study for refusal of the Principal Investigator to supply source documentation of work performed in this study. 14.0 REFERENCES 1. Traycoff CM, Kosak ST, Grigsby S, Srour EF. Evaluation of ex vivo |
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9. McKenna HJ, De Vries P, Brasel K, Lyman SD, Williams DE. Effect of flt3 ligand on the ex vivo expansion of human CD34+ hematopoietic progenitor cells. Blood. 1995;86:3413-20.
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11. Koller MR, Bender JG, Miller WM, Papoutsakis ET. Expansion of primitive human hematopoietic progenitors in a perfusion bioreactor system with IL-3, IL-6, and stem cell factor. Sio Technology. 1993;1 1:358-63.
12. Brandt JE, Briddel RA, Srour EF, Leemhuis TS, Hoffman R. Role of c-kit ligand in the expansion of human hematopoietic progenitor cells. Blood. 1992;79:634.
13. Brugger W. Macklin W. Heimfeld S. Berenson RJ. Merteismann R. Kanz L. Ex vivo expansion of enriched peripheral blood CD34+ progenitor ce(Is by stem cell factor, interleukin-l b (IL-1 b), IL-6, IL-3, interferon-gamma, and erythropoietin. Blood. 1993;81:2579-84.
14. Killer MR, Emerson SG, Paisson BO. Large-scale expansion of human stem and progenitor cells from bone marrow mononuclear cells in continuous perfusion cultures. Blood. 1993;82:378-84.
15. Verfaillie CM, Catanzarro PM, Li W. Macrophage inflammatory protein la, interleukin 3 and diffusible marrow stromal factors maintain human hematopoietic stem cells for at least eight weeks in vitro. J Exp Med. 1994; 1 79:643-9.
16. Coutinho LH, Will A, Radford J, Schiro R, Testa NG, Dexter TM. Effects of recombinant human granulocyte colony-stimulating factor (CSF), human granulocyte macrophage-CSF, and Gibbon interleukin-3 on hematopoiesis in human long-term bone marrow culture. Blood. 1990;75:2118-29.
17. Shapiro F, Yao T-J, Raptis G, Reich L, Norton L, Moore MAS. Optimization of conditions for ex vivo expansion of CD34- cells from patients with stage IV breast cancer. Blood. 1994;84:3567-74.
18. Brugger W. Heimfeld S, Berenson RJ, Merteismann R, Kanz L. Reconstitution of hematopoiesis after high-dose chemotherapy by autologous progenitor cells generated ex vivo. NEJM. 1995;333:283-7.
19. Champlin RE, Mehra R, Gajewski J. et al. Ex vivo expanded progenitor cell transplantation in patients with breast cancer. Blood. 1995;(in press):(abs)
20. Hortobagyi GN, Bodey GP, Buzdar AU, et al. Evaluation of high dose versus standard FAC chemotherapy for advanced breast cancer in protected environment unit: a prospective randomized study. J Clin Oncol. 1987;5:354-64.
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27. Eddy DM. High-dose chemotherapy with autologous bone marrow transplantation for the treatment of metastatic breast cancer. J. Clin Oncol. 1992: 10:657-70.
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rescue as primary treatment for metastatic breast cancer: A randomized trial. Journal of Clinical Oncology. 1995;13:2483-9.
31. Rosti G, Lasset C, Albertazzi L, et al. The EBMT data on high-dose chemotherapy in breast cancer. Bone Marrow Transplant. 1992;10 Suppi. 2:37.
32. Hryniuk WM, Bush H. The importance of dose intensity in chemotherapy of metastatic breast cancer. J Clin Oncol. 1984;2:1281-7.
33. Peters WP, Ross M. Vredenburgh JJ, et al. High-dose chemotherapy and autologous bone marrow support as consolidation after standard-dose adjuvant for high-risk primary breast cancer. J Clin Oncol. 1993;1 1:1 132-43.
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37. Dunphy FR, Spitzer G, Buzdar AU, et al. Treatment of estrogen receptor-negative or hormonally refractory breast cancer with double high-dose chemotherapy intensification and bone marrow support. J Clin Oncol. 1990;8:1207-16.
38. Hortobagyi GN, Dunphy F. Buzdar AU, Spitzer G. Dose intensity studies in breast cancer-Autologous bone marrow transplantation. Prog Clin Biol Res. 1990;354B:1 95-209.
39. Peters WP, Shpall EJ, Jones RB, et al. High dose combination alkylating agents with bone marrow support as initial treatment for metastatic breast cancer. J Clin Oncol. 1998;6:1368-76.
40. Teicher S, Cucchi C, Lee J, et al. Alkylating agents. In vitro studies of
cross-resistence patterns in human tumor cell lines. Cancer Res. 1986;46:
4379-83.
41. Williams SF, Bitran JD, Kaminer 1, et al. A phase 1-11 study of bialkylator chemotherapy high-dose thioptepa and cyclophosphamide with autologous bone marrow reinfusion in patients with advanced cancer. J Clin Oncol. 1987;5:260-5.
42. Eder JP, Antman K, Elias A, et al. Cyclophosphamide and thiotepa with autologous bone marrow transplantation in patients with solid tumors. JNCI. 1988;80:1221-6.
LOYOLA UNIVERSITY MEDICAL CENTER EXHIBIT C
Schedule of Laboratory and Clinical Equipment
- ------------------------------------------------------------------------------------------------------------------------------------ Item Supplier Cat. No. UNIT QTY: UNIT/PKG: PKG: COST/PKG: Total Cost: - ------------------------------------------------------------------------------------------------------------------------------------ EQUIPMENT: - ------------------------------------------------------------------------------------------------------------------------------------ 18 degrees C to 50 degrees C thermometer SP 2 1 2 $36.00 $72.00 - ------------------------------------------------------------------------------------------------------------------------------------ neg 5 degrees C to 20 degrees C thermometer SP 2 1 2 $21.91 $43.82 - ------------------------------------------------------------------------------------------------------------------------------------ P-1000 Pipetman Gilson 1 1 1 $219.50 $219.50 - ------------------------------------------------------------------------------------------------------------------------------------ P-200 Pipetman Gilson 1 1 1 $219.50 $219.50 - ------------------------------------------------------------------------------------------------------------------------------------ P-20 Pipetman Gilson 1 1 1 $219.50 $219.50 - ------------------------------------------------------------------------------------------------------------------------------------ Repeater Pipet Eppendorf 1 1 1 $350.00 $350.00 - ------------------------------------------------------------------------------------------------------------------------------------ CPS Processor Aastrom 1 1 1 $26,940.00 $26,940.00 - ------------------------------------------------------------------------------------------------------------------------------------ CPS Incubator Aastrom 5 1 5 $15,518.00 $77,590.00 - ------------------------------------------------------------------------------------------------------------------------------------ Interim Monitor Aastrom 1 1 1 $3,000.00 $3,000.00 - ------------------------------------------------------------------------------------------------------------------------------------ Gas Regulator Assembly Aastrom 3 1 3 $360.00 $1,080.00 - ------------------------------------------------------------------------------------------------------------------------------------ Tubing Heat Sealer Sebra 1 1 1 $3,298.00 $3,298.00 - ------------------------------------------------------------------------------------------------------------------------------------ Incubator Rack Metro 2 1 2 $346.00 $692.00 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ $113,724.32 - ------------------------------------------------------------------------------------------------------------------------------------ |
EXHIBIT D
SCHEDULE OF CLINICAL TRIAL BUDGET
Item Cost per patient - ---- ---------------- Supplies $ 190.00 Reagents 167.52 Bone Marrow Transplant Laboratory 630.00 Other 128.00 Labor and fringes 2,454.45 --------- Subtotal 3,569.97 Indirect 680.03 --------- Total $4,250.00 ========= |
Institution shall invoice Aastrom on a monthly basis as patient marrows are harvested and expansion is initiated.
EXHIBIT D
SCHEDULE OF MILESTONE PAYMENTS
Aastrom agrees to provide, according to the terms and conditions set
forth herein, and contingent upon the conducting of the Study as specified
by the Protocol, a total compensation of Forty Two Thousand Five Hundred US
Dollars ($42,500), or Four Thousand Two Hundred Fifty US Dollars ($4,250)
per subject according to the compensation schedule set forth below in
Section 2 of this Exhibit D. The $4,250 per subject compensation
represents any and all compensations associated with the Study. The total
compensation amount is based upon the actual number of subjects to be
completed and may be adjusted based upon the actual number of subjects
actually completed. If a subject is removed from the Study for any reason,
payment for that subject will be prorated.
The payee identified in Section 3 of this Exhibit D below will be remunerated according to the following schedule:
Percentage Amount ----------- ------------ (US DOLLARS) Initial Payment 25% $10,625.00 50% Subjects Completed 25% $10,625.00 All Subjects Completed 25% $10,625.00 100% Subjects Case Report Forms Completed and Submitted 15% $ 6,375.00 Final Report 10% $ 4,250.00 |
Payment made to: Loyola University Medical Center Dr. Patrick Stiff Division of Hematology/Oncology 2160 South First Avenue Cancer Center - Room 240 Maywood, IL 60153 |
If either the Institution of Aastrom terminates the Study prior to its originally planned termination date, Aastrom shall compensate the Institution based upon the portion of the Study completed at the date of termination. This partial payment will be prorated according to the number of satisfactorily completed subject visits.
STOCK PURCHASE COMMITMENT AGREEMENT
(Series F Preferred Stock)
between
AASTROM BIOSCIENCES, INC.
and
COBE LABORATORIES, INC.
October 29, 1996
Page ---- 1. Definitions.............................................................. 1 2. Commitment to Purchase Shares............................................ 3 3. Closing.................................................................. 3 4. Representations and Warranties of the Purchaser.......................... 4 5. Representations and Warranties of the Company............................ 6 5.1. Organization, Qualifications and Corporate Power................. 6 5.2. Authorization of Agreement....................................... 7 5.3. Validity......................................................... 7 5.4. Authorized Capital Stock......................................... 8 5.5. Litigation....................................................... 8 5.6. Financial Statements............................................. 9 5.7. No Convictions................................................... 9 5.8. Brokers.......................................................... 9 5.9. Subsidiaries..................................................... 9 5.10. Directors and Officers........................................... 9 5.11. No Material Adverse Change....................................... 10 5.12. Taxes............................................................ 10 5.13. Employee Benefit Plans........................................... 10 5.14. Title to Properties.............................................. 11 5.15. Leasehold Interests.............................................. 11 5.16. Insurance........................................................ 11 5.17. Other Agreements................................................. 11 5.18. Patents, Trademarks, Etc......................................... 12 5.19. Proprietary Information of Third Parties......................... 12 5.20. Compliance With Law.............................................. 13 5.21. Loans and Advances............................................... 14 5.22. Assumptions, Guaranties, Etc. of Indebtedness of Other Persons... 14 5.23. Governmental Approvals........................................... 14 5.24. Disclosure....................................................... 14 5.25. Offering of Shares............................................... 15 5.26. Transactions With Affiliates..................................... 15 6. Covenants of the Company................................................. 15 |
6.1. Ordinary Course of Business...................................... 15
6.2. Updated Information............................................ 15 6.3. Board of Directors Seat........................................ 15 7. Stock Registration Rights.............................................. 15 9. Information Rights..................................................... 16 10. Company's Put Right.................................................... 16 11. Purchaser's Preemptive Rights.......................................... 16 13. General Provisions..................................................... 16 13.1. Irrevocability; Binding Effect................................. 16 13.2. Modification................................................... 17 13.3. Notices........................................................ 17 13.4. Assignability.................................................. 17 13.5. Applicable Law................................................. 17 13.6. Confidentiality................................................ 17 13.7. Entirety....................................................... 17 13.8. Survival....................................................... 18 13.9. Expenses....................................................... 18 13.10. Construction................................................... 18 13.11. Severability................................................... 18 13.12. Counterparts................................................... 19 |
EXHIBITS:
A Amended and Restated Articles of Incorporation B Opinion of Legal Counsel to the Company SCHEDULES: 5.5 Litigation 6.4 Stock Schedule |
STOCK PURCHASE COMMITMENT AGREEMENT
(Series F Preferred Stock)
This Agreement is entered into as of October 29, 1996, by and between Aastrom Biosciences, Inc., a Michigan corporation (the "Company"), and Cobe Laboratories, Inc., a Colorado corporation (the "Purchaser"), with respect to the factual recitals set forth below.
Certain terms used in this Agreement are defined in Section 1 of this Agreement.
RECITALS
A. The Company and the Purchaser previously entered into that certain Stock Purchase Agreement dated as of October 22, 1993 (the "1993 Stock Purchase Agreement"), pursuant to which the Purchaser purchased 10,000 shares of the Company's Series C preferred stock. Pursuant to Section 5.05 of the 1993 Stock Purchase Agreement, the Company has a "put right" which obligates the Purchaser to purchase up to $5 million of additional capital stock in the Company, under the terms and provisions set forth therein (the "Company's Put Right"). Pursuant to Section 5.04 of the 1993 Stock Purchase Agreement, the Company granted to the Purchaser certain preemptive rights to purchase additional shares of the Company's capital stock when the Company has its initial public offering ("IPO") of stock registered with the Securities and Exchange Commission or another equity financing (the "Purchaser's Preemptive Rights").
B. The Company has prepared Amended and Restated Articles of Incorporation, a copy of which is attached hereto as Exhibit A (the "Amended Articles"), which create 833,333 shares of Series F preferred stock (the "Shares") having rights, privileges and preferences as set forth in the Amended Articles.
WHEREFORE, the parties hereto mutually agree as follows:
1. Definitions.
"1993 Stock Purchase Agreement" is defined in Recital A hereof.
"Advisors" is defined in Section 4.4 hereof.
"Amended Articles" is defined in Recital B hereof.
"Closing" is defined in Sections 3.1 and 3.2 hereof.
"Common Stock" is defined in Section 4.1 hereof.
"Company's Put Right" is defined in Recital A hereof.
"Conversion Shares" is defined in Section 4.1 hereof.
"Disclosure Statement" is defined in Section 4.3 hereof.
"Financial Statements" is defined in Section 4.3 hereof.
"Investors' Rights Agreement is defined in Section 7 hereof.
"IPO" is defined in Recital A hereof.
"Most Recent Financial Statements" is defined in Section 4.3 hereof.
"Notice to Purchase" is defined in Section 2.3 hereof.
"Prospectus" is defined in Section 4.3 hereof.
"Purchaser's Preemptive Right" is defined in Recital A hereof.
"Qualifying Financing" means any one of the following:
a. the Company entering into (or completing) a term sheet agreement (or other agreement) with investors or an underwriter by December 1, 1997, which provides for: (i) a scheduled closing by February 1, 1998, (ii) a public sale (i.e., an IPO) or private sale of equity securities of the Company, the gross proceeds from which equity sale is to aggregate to at least $10 million, (iii) the proceeds of the sale are not designated by the investor for specified limited purposes, (iv) the price per share for the sale is set by mutual agreement between the Company and investors who invest at least $1 million, and (v) the sale of equity securities actually is consummated by February 1, 1998; or
b. the Company entering into (or completing) a term sheet agreement (or other agreement) by December 1, 1997 for the merger or sale of the Company at a value of at least $85 million, with (i) a scheduled closing for the merger or sale to be by February 1, 1998, and (ii) the merger or sale actually being consummated by February 1, 1998; or
c. the Company's Board of Directors adopting an Operational Plan for the Company to continue its operations in the ordinary course of business
through December 31, 1998, funded by the Company's own cash flow and other resources, without requiring outside equity or debt investment in the Company, and with said Operational Plan being consistent with the intent of the annual Product Development Plan ("PDP") that is part of the Distribution Agreement between the Company and the Purchaser.
"Securities Act" is defined in Section 4.1 hereof.
"Shares" is defined in Recital B hereof.
2. Commitment to Purchase Shares.
2.1. The Purchaser hereby commits to purchase from the Company up to 833,333 shares of Series F preferred stock, at $6.00 per share, for an aggregate of up to $5 million cash purchase price, in accordance with the Company's Notice to Purchase and the terms of this Agreement.
2.2. If the Company elects to sell any shares of Series F preferred stock to the Purchaser, in accordance with the terms of this Agreement, the Company shall give to the Purchaser a written notice (the "Notice to Purchase") which specifies the number of shares of Series F preferred stock which the Company is calling upon the Purchaser to purchase, and the scheduled date for the closing of said purchase. The Notice to Purchase may be given any time up through September 1, 1997, and shall specify a Closing date for consummating the purchase to be not less than 90 days after the Notice to Purchase is delivered to the Purchaser.
2.3. The Company may give to the Purchaser not more than two Notices to Purchase, such that the Purchaser is required to purchase the Shares in not more than two increments. Each increment shall be for not less than $1 million worth of the Shares, and the first increment may be for as much as $5 million worth of the Shares.
2.4. Upon the Company completing an IPO, the Purchaser's obligation to purchase additional shares of Series F preferred stock will terminate.
3. Closing.
3.1. At each closing (the "Closing") for the purchase and sale of an increment of the Shares pursuant to this Agreement, the parties shall execute and deliver all necessary documents to consummate the Closing as specified by this Agreement, and the Purchaser shall pay the full purchase price for the Shares specified in the Notice to Purchase, with payment by wire transfer to the Company's offices in Ann Arbor, Michigan.
3.2. At the Closing, to be held at the Company's offices in Ann Arbor, Michigan, the Company shall deliver to the Purchaser (a) a stock certificate representing the Shares purchased, (b) a copy of the Amended Articles, evidencing filing with the Corporations and Securities Bureau of the Department of Commerce of the State of Michigan, (c) a certificate signed by the Secretary of the Company evidencing that the necessary actions by the Company's Board of Directors and shareholders have been taken to approve the authorization, issuance and sale of the Shares pursuant to this Agreement, (d) an opinion of legal counsel to the Company substantially in the form attached hereto as Exhibit B, which opinion shall be addressed to the Purchaser and dated the date of the Closing, and (e) a certificate signed by the President of the Company confirming that the representations and warranties of the Company contained in this Agreement remain true and correct in all material respects at and as of the Closing, and that all of the covenants and agreements of the Company contained in this Agreement and required to be performed on or prior to the Closing shall have been performed in all material respects.
4. Representations and Warranties of the Purchaser. In order to induce the Company to sell the Shares to the Purchaser, the Purchaser hereby acknowledges, represents, warrants and agrees as follows:
4.1. None of the Shares of Series F Stock are (and the shares of common stock, no par value ("Common Stock") issuable upon conversion thereof ("Conversion Shares") will not be) registered under the Securities Act of 1933 (as amended, the "Securities Act") or any state securities laws. The Purchaser understands that the sale of the Shares is intended to be exempt from registration under Section 4(2) of the Securities Act and/or the provisions of Regulation D promulgated thereunder, based, in part, upon the representations, warranties and agreements contained in this Agreement.
4.2. Neither the Securities and Exchange Commission nor any state securities commission has approved any of the Shares or passed upon or endorsed the merits of this transaction.
4.3. Prior to its execution of this Agreement, the Purchaser has received from the Company (i) the draft Registration Statement on Form S-1 for the Company dated August, 1996, together with a supplemental update thereto dated October 3, 1996 (collectively called the "Disclosure Statement"), (ii) a copy of the Amended Articles, for the purpose of creating the Series F Stock, and (iii) the audited financial statements of the Company for the year ended June 30, 1996, and the unaudited financial statements of the Company for the month ended September 30, 1996 (the "Most Recent Financial Statements") (collectively, the "Financial Statements").
4.4. The Purchaser acknowledges that all documents, records and books pertaining to the investment in the Shares, including the Disclosure Statement, have been made available for inspection by the Purchaser, or by its attorney, accountant, purchaser representative and/or tax advisor (collectively, the "Advisors") and that the Purchaser and/or its Advisors have completed such review as they deem to be necessary to make the decision to purchase the Shares.
4.5. The Purchaser has reviewed the merits and risks of an investment in the Shares. The Purchaser and the Advisors have had a reasonable opportunity to ask questions of and receive answers from members of management of the Company concerning the offer and sale of the Shares and all such questions have been answered to the full satisfaction of the Purchaser.
4.6. In evaluating the suitability of an investment in the Shares, the Purchaser has not relied upon any representation or other information (oral or written) other than as contained in documents or answers to questions so furnished to the Purchaser or its Advisors by the Company.
4.7. No oral or written representations have been made or oral or written information furnished to the Purchaser or its Advisors in connection with this Agreement which were in any way inconsistent with the information provided to the Purchaser or its Advisors, including the Disclosure Statement.
4.8. The Purchaser, together with the Advisors, have such knowledge and experience in financial, tax and business matters so as to enable each of them to utilize the information made available to each of them in connection with the purchase of the Shares to evaluate the merits and risks of an investment in the Shares and to make an informed investment decision with respect thereto.
4.9. The Purchaser is not relying on the Company with respect to the tax and other economic considerations of an investment in the Shares, and the Purchaser has relied on the advice, or has consulted with, only its own Advisors concerning tax matters.
4.10. The Purchaser is acquiring the Shares solely for its own account, for investment, and not with a view to or for subdivision, resale or distribution, in whole or in part, and no other person has or will have a direct or indirect beneficial interest in the Shares, other than for any partner or shareholder owners of the Purchaser, if any.
4.11. The Purchaser must bear the economic risk of the investment
indefinitely because none of the Shares of Series F Stock (or Conversion Shares)
may be sold, hypothecated or otherwise disposed of unless (i) subsequently
registered under the Securities Act and applicable state securities laws, or
(ii) an exemption from registration is available at that time. Legends shall be
placed on the Shares (and the Conversion Shares) to the effect that they have
not been registered under the Securities Act or applicable state securities laws
and appropriate notations thereon will be made in the Company's stock books.
4.12. The Purchaser has adequate means of providing for the Purchaser's current financial needs and foreseeable contingencies and the Purchaser accepts the fact that an investment in the Shares will not be liquid.
4.13. The Purchaser is aware that an investment in the Shares involves a number of very significant risks and, in particular, acknowledges that the Company is in the development stage. The Purchaser understands that the risks associated with an investment in the Shares could result in, and the Purchaser can sustain, a complete loss of its investment.
4.14. The Purchaser is an "accredited investor" as such term is defined in the regulations promulgated under the Securities Act.
4.15. The Purchaser represents that it has full power and authority to execute and deliver this Agreement and all other related agreements and certificates and to carry out the provisions hereof and thereof and to purchase and hold the Shares, and this Agreement is a legal, valid and binding obligation of the Purchaser. The execution and delivery of this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound.
4.16. The Purchaser represents to the Company that the information contained herein may be relied upon by the Company in determining the availability of an exemption from registration under federal and state securities laws. The Purchaser further represents and warrants that it will notify the Company immediately upon the occurrence of any material change to the information contained herein occurring prior to the Company's issuance of the Shares.
4.17. The Purchaser is unaware of, and in no way relying on, any form of general solicitation or general advertising in connection with the offer and sale of the Shares.
4.18. The Purchaser agrees that the Shares may not be sold, mortgaged, pledged, hypothecated or otherwise transferred unless the Shares are
registered under the Securities Act and applicable state securities laws or are exempt from registration thereunder; and that the certificate evidencing the Shares will contain a customary Securities Act legend with respect to the foregoing transfer restriction.
5. Representations and Warranties of the Company. The Company represents and warrants to the Purchaser that:
5.1. Organization, Qualifications and Corporate Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Michigan and is duly licensed or qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which the nature of the business transacted by it or the character of the properties owned or leased by it requires such licensing or qualification. The Company has the corporate power and authority to own and hold its properties and to carry on its business as now conducted and as proposed to be conducted, to execute, deliver and perform this Agreement, to issue, sell and deliver the Series F Stock, and to issue and deliver the Conversion Shares as provided in the Amended Articles.
5.2. Authorization of Agreement.
a. The execution and delivery by the Company of this Agreement, the performance by the Company of its obligations hereunder, the issuance, sale and delivery of the Series F Stock and the issuance and delivery of the Conversion Shares have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government, the Amended Articles or the Bylaws of the Company (the "Bylaws"), or any provision of any indenture, agreement or other instrument to which the Company or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge, restriction, claim or encumbrance of any nature whatsoever upon any of the properties or assets of the Company.
b. The Series F Stock has been duly authorized and, when issued in accordance with this Agreement, will be validly issued, fully paid and nonassessable shares of the Company with no personal liability attaching to the ownership thereof and will be free and clear of all liens, charges, restrictions, claims and encumbrances imposed by or through the Company except as set forth herein. The Conversion Shares have been duly reserved for issuance upon conversion of the Series F Stock and, when so issued, will be duly authorized, validly issued, fully paid and nonassessable shares of Common Stock with no personal liability attaching to the ownership thereof and, so long as the Series F
Stock tendered for conversion is free and clear of liens or encumbrances, will be free and clear of all liens, charges, restrictions, claims and encumbrances imposed by or through the Company except as set forth herein. Neither the issuance, sale or delivery of the Series F Stock nor the issuance or delivery of the Conversion Shares is subject to any preemptive right of stockholders of the Company or to any right of first refusal or other right in favor of any person which right has not been waived.
5.3. Validity. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms.
5.4. Authorized Capital Stock. The authorized capital stock of
the Company consists of 12,200,000 shares of Preferred Stock, and 21,500,000
shares of Common Stock. Immediately prior to the Closing, 2,829,735 shares of
Common Stock and 9,451,766 shares of Preferred Stock will be validly issued and
outstanding, fully paid and nonassessable with no personal liability attaching
to the ownership thereof. The stockholders of record and holders of
subscriptions, warrants, options, convertible securities, and other rights
(contingent or other), if any, to purchase or otherwise acquire equity
securities of the Company prior to the Closing Date and the number of shares of
Common Stock and the number of such subscriptions, warrants, options,
convertible securities, and other such rights, if any, held by each, are as set
forth in the Disclosure Statement and/or in Schedule 6.4 attached hereto. The
designations, powers, preferences, rights, qualifications, limitations and
restrictions in respect of each class of authorized capital stock of the Company
are as set forth in the Amended Articles, a copy of which has previously been
delivered to the Purchaser, and all such designations, powers, preferences,
rights, qualifications, limitations and restrictions are valid, binding and
enforceable and in accordance with all applicable laws. Except as set forth in
the attached Schedule 6.4 or in the Disclosure Statement, (a) no person owns of
record or is known to the Company to own beneficially any share of Common Stock,
(b) no subscription, warrant, option, convertible security, or other right
(contingent or other) to purchase or otherwise acquire equity securities of the
Company is authorized or outstanding and (c) there is no commitment by the
Company to issue shares, subscriptions, warrants, options, convertible
securities, or other such rights or to distribute to holders of any of its
equity securities any evidence of indebtedness or asset. Except as provided for
in the Amended Articles or as set forth herein, the Company has no obligation
(contingent or other) to purchase, redeem or otherwise acquire any of its equity
securities or any interest therein or to pay any dividend or make any other
distribution in respect thereof. Except as set forth herein or in the Disclosure
Statement, there are no voting trusts or agreements, stockholders agreements,
pledge agreements, buy-sell agreements, rights of first refusal, preemptive
rights or proxies relating to any securities of the Company (whether or
not the Company is a party thereto). All of the outstanding securities of the Company were issued in compliance with all applicable Federal and state securities laws.
5.5. Litigation.
Except as disclosed in Schedule 5.5 delivered to the Purchaser, there is no (a) action, suit, claim, proceeding or investigation pending or, to the best of the Company's knowledge, threatened against or affecting the Company or its directors, officers, or management, at law or in equity, or before or by any Federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (b) arbitration proceeding relating to the Company pending under collective bargaining agreements or otherwise or (c) governmental inquiry pending or, to the best of the Company's knowledge, threatened against or affecting the Company (including without limitation any inquiry as to the qualification of the Company to hold or receive any license or permit), and, to the best knowledge of the Company, there is no basis for any of the foregoing. Without waiving any applicable attorney-client privilege, the Company has not received any opinion or memorandum or legal advice from legal counsel to the effect that it is exposed, from a legal standpoint, to any liability or disadvantage which may be material to its business, prospects, financial condition, operations, property or affairs. To the best knowledge of the Company, the Company is not in default with respect to any order, writ, injunction or decree known to or served upon the Company of any court or of any Federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.
5.6. Financial Statements. The Company has furnished to the Purchaser the Financial Statements. The Financial Statements are true and correct in all material respects and have been prepared in accordance with generally accepted accounting principles. The balance sheets included in the respective Financial Statements accurately reflect the financial condition and all assets and liabilities of the Company at the times referred to therein. The statements of income and cash flows accurately reflect the operations of the Company for the periods referred to therein. There are no undisclosed liabilities in the Financial Statements.
5.7. No Convictions. To the best of the knowledge of the Company, during the past ten (10) years, none of the directors, officers, or management of the Company have been arrested or convicted of any material crime, including any felony (whether material or not), have been indicted, have been bankrupt nor have any of them been restricted in any way from bidding on contracts with the government of the United States.
5.8. Brokers. The Company has no knowledge of any brokerage or finders fee due in conjunction with the transactions contemplated by this Agreement.
5.9. Subsidiaries. The Company has no subsidiaries. The Company does not (a) own of record or beneficially, directly or indirectly: (1) any shares of capital stock or securities convertible into capital stock of any corporation; or (2) any participating interest in any partnership, joint venture or other non-corporate business enterprise; or (b) control, directly or indirectly, any other entity.
5.10. Directors and Officers. The Disclosure Statement sets forth the names of the directors and officers of the Company, together with the title of each such person.
5.11. No Material Adverse Change. Since the date of the Most Recent Financial Statements, (a) there has been no material adverse change in the assets, liabilities or financial condition of the Company from that reflected in the Most Recent Financial Statements, except for changes in the ordinary course of business, and (b) none of the business, prospects, operations, property or affairs of the Company has been materially adversely affected by any occurrence or development, individually or in the aggregate, whether or not insured against.
5.12. Taxes. The Company has filed all tax returns, Federal, state, county and local, required to be filed by it, and the Company has paid all taxes shown to be due by such returns as well as all other taxes, assessments and governmental charges which have become due or payable, including without limitation all taxes which the Company is obligated to withhold from amounts owing to employees, creditors and third parties. All such taxes with respect to which the Company has become obligated pursuant to elections made by the Company in accordance with generally accepted practice have been paid and adequate reserves have been established for all taxes accrued but not yet payable. The Federal income tax returns of the Company have never been audited by the Internal Revenue Service. No deficiency assessment with respect to or proposed adjustment of the Company's Federal, state, county or local taxes is pending or, to the best of the Company's knowledge, threatened. There is no tax lien, whether imposed by any Federal, state, county or local taxing authority, outstanding against the assets, properties or business of the Company. Neither the Company nor, to the Company's knowledge, any of its stockholders, has ever filed consent pursuant to Section 341(f) of the Code, relating to collapsible corporations.
5.13. Employee Benefit Plans. To the knowledge of the Company, each of the Company's employee benefit plans (and each related trust or insurance contract) complies in form and in operation in all respects with the
applicable requirements of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986, as amended. To the knowledge of the Company, all required reports and descriptions have been filed or distributed appropriately with respect to each employee benefit plan. There have been no prohibited transactions with respect to any employee benefit plan. No fiduciary has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any employee benefit plans. No charge, complaint, action, suit, proceeding, hearing, investigation, claim, or demand with respect to the administration or the investment of the assets of any employee benefit plan (other than routine claims for benefits) is pending or, to the Company's knowledge, threatened. The Company and its directors and officers (and employees with responsibility for employee benefits matters) have no knowledge of any basis for any such charge, complaint, action, suit, proceeding, hearing, investigation, claim, or demand.
5.14. Title to Properties. The Company has good and marketable title to its properties and assets reflected in the Financial Statements or acquired by it since the date of the Financial Statements (other than for equipment leased pursuant to financing leases, and other than properties and assets disposed of in the ordinary course of business since the date of the Financial Statements), and all such properties and assets are free and clear of mortgages, pledges, security interests, liens, charges, claims, restrictions and other encumbrances, except for equipment financing leases, and for liens to secure payment of obligations reflected in the Financial Statements and for current taxes not yet due and payable, and minor imperfections of title, if any, not material in nature or amount and not materially detracting from the value or impairing the use of the property subject thereto or impairing the operations or proposed operations of the Company.
5.15. Leasehold Interests. Each lease or agreement to which the Company is a party under which it is a lessee of any property, real or personal is a valid and enforceable agreement without any material default of the Company thereunder and, to the best of the Company's knowledge, without any default by the Company of any material term thereunder; the Company has not been notified of any default and has no reason to believe that it is in default of any term thereunder. To the best of the Company's knowledge, no other party to any such lease or agreement is in default of a material term thereunder. No event has occurred and is continuing which, with due notice or lapse of time or both, would constitute a default or event of default by the Company under any such lease or agreement or, to the best of the Company's knowledge, by any other party thereto. The Company's possession of such property has not been disturbed and, to the best of the Company's knowledge, no claim has been asserted against the Company adverse to its rights in such leasehold interests.
5.16. Insurance. The Company maintains as to its properties and business, with financially sound and reputable insurers, insurance against such casualties and contingencies and of such types and in such amounts as is customary for companies similarly situated.
5.17. Other Agreements. With respect to each material contract to which the Company is a party, the Company and, to the best of the Company's knowledge, each other party thereto, have in all material respects performed all the obligations required to be performed by them to date, have received no notice of default and are not in default (with due notice or lapse of time or both) under any material lease, agreement or contract now in effect to which the Company is a party or by which it or its property may be bound. The Company has no present expectation or intention of not fully performing all its obligations under each such material lease, contract or other agreement and the Company has no knowledge of any breach or anticipated breach by the other party to any contract or commitment to which the Company is a party.
5.18. Patents, Trademarks, Etc.
a. The Disclosure Statement describes all material patents, patent rights, patent applications, trademarks, trademark applications, service marks, service mark applications, trade names and copyrights, and all material applications for such which are in the process of being prepared, owned by or registered in the name of the Company, or of which the Company is a licensor or licensee or in which the Company has any right, and in each case a brief description of the nature of such right. The Disclosure Statement contains an accurate and complete description of all material licenses. The Company is in compliance in all material respects with each of such licenses. The Company owns or possesses adequate licenses or other rights to use all patents, patent applications, trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, manufacturing processes, formulae, trade secrets and know how (collectively, "Intellectual Property") necessary to the conduct of its business as conducted, and no claim is pending or, to the best of the Company's knowledge, threatened to the effect that the operations of the Company infringe upon or conflict with the asserted rights of any other person under any Intellectual Property, and, to the best knowledge of the Company, there is no basis for any such claim (whether or not pending or threatened). No claim is pending or threatened to the effect that any such Intellectual Property owned or licensed by the Company, or which the Company otherwise has the right to use, is invalid or unenforceable by the Company, or that the Company is not in compliance with any term or condition of a license, and there is no basis for any such claim (whether or not pending or threatened). The Company has not granted or assigned to any other person or entity any right to manufacture, have manufactured, assemble or sell the products or proposed products or to provide
the services or proposed services of the Company except as set forth in the Disclosure Statement.
b. The Company has taken reasonable security measures to protect the secrecy, confidentiality, and value of the Company's trade secrets; any of their employees and any other persons who, either alone or in concert with others, developed, invented, discovered, derived, programmed, or designed these secrets, or who have knowledge of or access to information relating to them, have entered into agreements protecting the confidentiality thereof.
5.19. Proprietary Information of Third Parties. To the best of the Company's knowledge, no third party has claimed or has reason to claim that any person employed by or affiliated with the Company has (a) violated or may be violating any of the terms or conditions of his employment, non-competition or nondisclosure agreement with such third party, (b) disclosed or may be disclosing or utilized or may be utilizing any trade secret or proprietary information or documentation of such third party or (c) interfered or may be interfering in the employment relationship between such third party and any of its present or former employees. No third party has requested information from the Company which suggests that such a claim might be contemplated. To the best of the Company's knowledge, no person employed by or affiliated with the Company has employed or proposes to employ any trade secret or any information or documentation proprietary to any former employer, and to the best of the Company's knowledge, no person employed by or affiliated with the Company has violated any confidential relationship which such person may have had with any third party, in connection with the development, manufacture or sale of any product or proposed product or the development or sale of any service or proposed service of the Company, and the Company has no reason to believe there will be any such employment or violation. To the best of the Company's knowledge, none of the execution or delivery of this Agreement, or the carrying on of the business of the Company as officers, employees or agents by any officer, director or key employee of the Company, or the conduct or proposed conduct of the business of the Company, will conflict with or result in a breach of the terms, conditions or provisions of or constitute a default under any contract, covenant or instrument under which any such person is obligated.
5.20. Compliance With Law. To the best of the Company's knowledge, the Company has complied with all laws, rules, regulations and orders applicable to its business, operations, properties, assets, products and services, the violation of which would have a material adverse effect upon the Company, and the Company has all necessary permits, licenses and other authorizations required to conduct its business as it is now conducted. To the best of the Company's knowledge, there is no existing law, rule, regulation or order, and the
Company after due inquiry is not aware of any proposed law, rule, regulation or order, whether Federal or state, which would prohibit or restrict the Company from, or otherwise materially adversely affect the Company in, conducting its business, in which it is now conducting business or in which it proposes to conduct business, other than the customary governmental approvals required for medical products. Without limiting the foregoing in any manner, to the best of the Company's knowledge, the Company has complied in all material respects with all applicable laws relating to the employment of labor, including provisions relating to wages, hours, equal opportunity, collective bargaining and the payment of Social Security and other taxes, with the Employee Retirement Income Security Act of 1974, as amended, with the Occupational Health and Safety Act, and with the Americans With Disabilities Act. To the best of the Company's knowledge, the Company is in full compliance with the Immigration Reform and Control Act of 1986, as amended, and all key employees who are not United States citizens are currently authorized under United States immigration laws to hold United States employment and will continue to have such employment authorization throughout the term of the Series F Stock investment, and are otherwise in compliance with United States immigration laws.
5.21. Loans and Advances. The Company does not have any
outstanding loans or advances to any person and is not obligated to make any
such loans or advances, except as reflected on the Financial Statements, and
except, in each case, for advances to employees of the Company in respect of
reimbursable business expenses anticipated to be incurred by them in connection
with their performance of services for the Company. In the near future, the
Company expects to borrow funds from the State Treasurer of the State of
Michigan pursuant to a pending convertible loan commitment, as described in
Section 12 hereof.
5.22. Assumptions, Guaranties, Etc. of Indebtedness of Other Persons. Except as disclosed in the Financial Statements, the Company has not assumed, guaranteed, endorsed or otherwise become directly or contingently liable on any indebtedness of any other person (including, without limitation, liability by way of agreement, contingent or otherwise, to purchase, to provide funds for payment, to supply funds to or otherwise invest in the debtor, or otherwise to assure the creditor against loss), except for guaranties by endorsement of negotiable instruments for deposit or collection in the ordinary course of business.
5.23. Governmental Approvals. Subject to the accuracy of the representations and warranties of the Purchaser set forth in Section 4, no registration or filing with, or consent or approval of or other action by, any Federal, state or other governmental agency or instrumentality is or will be necessary for the valid execution, delivery and performance by the Company of this Agreement, the issuance, sale and delivery of the Series F Stock or, upon conversion of the Series F Stock, the issuance and delivery of the Conversion Shares, other than (a) filings pursuant to state securities laws (all of which filings have been or will be made by the Company) in connection with the sale of the Series F Stock and (b) with respect to the Registration Rights as set forth in Section 7 hereof, the registration of the shares covered thereby with the Commission and filings pursuant to state securities laws.
5.24. Disclosure. The Company's Disclosure Statement, contains only true and accurate facts and representations, and does not contain any untrue information and does not omit any material fact necessary to make the statements contained therein not misleading. Neither this Agreement, nor any Schedule or Exhibit to this Agreement, contains an untrue statement of a material fact or omits a material fact necessary to make the statements contained herein or therein not misleading. None of the statements, documents, certificates or other items prepared or supplied by the Company with respect to the transactions contemplated hereby contains an untrue statement of a material fact or omits a material fact necessary to make the statements contained therein not misleading. As of the date hereof, no facts have come to the attention of the Company which would, in its opinion, require the Company to revise or amplify the Disclosure Statement.
5.25. Offering of Shares. This Agreement is being made by the Company pursuant to an exemption from the registration requirements of the Securities Act.
5.26. Transactions With Affiliates. Except as set forth in the Disclosure Statement, no director, officer, employee or stockholder of the Company, or member of the family of any such person, or any corporation, partnership, trust or other entity in which any such person, or any member of the family of any such person, has a substantial interest in or is an officer, director, trustee, partner or holder of more than 5% of the outstanding capital stock thereof, is a party to any transaction with the Company, including any contract, agreement or other arrangement providing for the employment of, furnishing of services by, rental of real or personal property from or otherwise requiring payments to any such person or firm.
6. Covenants of the Company.
6.1. Ordinary Course of Business. From the date hereof through the last Closing under this Agreement, the Company shall continue to operate the Company's business in the ordinary course, expecting only for any extraordinary activity as may be approved by the Company's Board of Directors.
6.2. Updated Information. From the date hereof through the last Closing under this Agreement, the Company shall promptly inform the Purchaser of any new facts or circumstances which come to the attention of the Company and which are likely to have any material adverse effect on the Company or which constitute any material adverse variation from the representations made by the Company herein.
6.3. Board of Directors Seat. From the date hereof and continuing so long as the Purchaser owns at least 15% of the issued and outstanding common stock of the Company (calculated on the basis of all preferred stock being converted into common stock pursuant to the conversion formula set forth in the Company's Restated Articles of Incorporation), the Company will use reasonable and good faith efforts to cause to be elected as a member of the Company's Board of Directors one person nominated by the Purchaser; provided that the Board of Directors determines in the exercise of its fiduciary duties that the Purchaser's nominee is qualified to serve on the Board. If the Board so determines that the nominee is not qualified, then the Purchaser may make further nominations until the Board determines that the nominee is qualified.
7. Stock Registration Rights. The Shares shall be entitled to the benefits and subject to the terms of the stock registration rights provisions as set forth in Sections 2.4 through 2.14, inclusive, of the Company's Amended and Restated Investors' Rights Agreement dated as of April 7, 1992, as amended (the "Investors' Rights Agreement"), a copy of which has been furnished to the Purchaser.
8. Market Stand-off Restriction. The Purchaser (and any other holders of the Shares) shall abide by the 180-day "market stand-off" restriction on the sale of the Shares following the Company's public stock offering, as applicable to all other holders of the Company's preferred stock, and/or as required by the Investors' Rights Agreement.
9. Information Rights. The holder(s) of the Shares shall be entitled to receive the Company's information and financial statements as specified in Sections 3.1 through 3.7, inclusive, of the Investors' Rights Agreement.
10. Company's Put Right. To the extent that the Purchaser purchases shares of Series F preferred stock pursuant to this Agreement, the Purchaser's obligations under the Company's Put Right (as specified in Section 5.05 of the 1993 Stock Purchase Agreement) shall be reduced on a dollar for dollar basis. For example, if the Purchaser purchases $1 million of Series F preferred stock pursuant to the terms of this Agreement, then the Purchaser's obligation under the Company's Put Right shall be reduced from $5 million to $4 million.
11. Purchaser's Preemptive Rights. To the extent that the Purchaser purchases shares of Series F preferred stock pursuant to this Agreement, the shares of Series F Preferred Stock purchased by the Purchaser will be excluded from the determination of the Purchaser's percentage ownership of the Company for purposes of calculating the Purchaser's Preemptive Rights (as granted pursuant to Section 5.04 of the 1993 Stock Purchase Agreement).
12. Condition. The Purchaser's obligations under this Agreement are conditional upon the Company also entering into a Convertible Loan Commitment Agreement with the State Treasurer of the State of Michigan for $5,000,000, in substantially the same form and substance as was approved by the Company's Board of Directors in September 1996.
13. General Provisions.
13.1. Irrevocability; Binding Effect. The Purchaser hereby acknowledges and agrees that the commitment hereunder is irrevocable by the Purchaser, except as required by applicable law, and that this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, legal representatives, and permitted assigns.
13.2. Modification. This Agreement shall not be modified or waived except by an instrument in writing signed by the party against whom any such modification or waiver is sought.
13.3. Notices. A notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by any means, including without limitation, mail, express delivery service, or facsimile. Any notice or other communication shall be deemed given at the time it is received at the party's address set forth on the signature page of this Agreement, or at such other address as the party shall have furnished in writing in accordance with the provisions of this Section 13.3.
13.4. Assignability. This Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Purchaser,
except to an affiliate of the Purchaser who qualifies as an "accredited investor," and the Purchaser further agrees that the transfer or assignment of the Shares shall be made only in accordance with all applicable laws.
13.5. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the state of Michigan without regard to its conflicts of laws principles.
13.6. Confidentiality. The Purchaser acknowledges and agrees that any information or data it has acquired from or about the Company, including the information contained in the Disclosure Statement and the Financial Statements, but excluding any information which was in the public domain, was received in confidence. The Purchaser agrees not to divulge, communicate or disclose, except as may be required by law or for the performance of this Agreement, or use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any confidential information of the Company, including any scientific, technical, trade or business secrets of the Company and any scientific, technical, trade or business materials that are treated by the Company as confidential or proprietary, including, but not limited to, ideas, discoveries, inventions, developments and improvements belonging to the Company and confidential information obtained by or given to the Company about or belonging to third parties.
13.7. Entirety. This Agreement, together with the Exhibits, Schedules and other documents referenced herein, constitutes the entire agreement between the Purchaser and the Company with respect to the purchase and sale of the Series F Shares, and supersedes all prior oral or written agreements and understandings, if any, relating thereto. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions.
13.8. Survival. The Purchaser's representations and warranties made in this Agreement shall survive the execution and delivery hereof and of the Shares.
13.9. Expenses. Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated.
13.10. Construction. All pronouns and any variations thereof used herein shall be deemed to be to the masculine, feminine, neuter, singular or
plural as the identity of the person or persons referred to may require. Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text.
13.11. Severability. Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions hereof are determined to be invalid or contrary to applicable law, such invalidity shall not impair the operation of or affect the remaining portions of this Agreement, so long as the material economic benefits remain enforceable.
13.12. Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument. Signatures may be transmitted by facsimile.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date set forth on the first page of this Agreement.
COMPANY:
Aastrom Biosciences, Inc.,
a Michigan corporation
Domino's Farms, Lobby L
24 Frank Lloyd Wright Drive
Ann Arbor, MI 48105
Fax: 313/930-5546
By: /s/ R. Douglas Armstrong --------------------------- R. Douglas Armstrong, Ph.D., President |
PURCHASER:
Cobe Laboratories, Inc.,
a Colorado corporation
1185 Oak Street
Lakewood, CO 80215
Fax: 303/230-4195
By: /s/ Edward C. Wood ---------------------- |
SCHEDULE 5.5
Litigation
1. R. M. Schwartz. The Company has written letters to a former employee, Richard M. Schwartz, Ph.D. and Dr. Schwartz's new employer, SyStemix, (i) reminding them of Dr. Schwartz's duty to maintain strict confidentiality as to the Company's trade secrets; and (ii) asking if there has been any breach of this confidentiality obligation; and (iii) commenting that a new invention by Systemix's appears to be derived from the Company's trade secrets. Systemix and Dr. Schwartz have denied any use of the Company's trade secrets. The Company has reserved its rights in this matter, but does not presently contemplate pursuing this potential claim in the near future.
2. Sundberg-Ferar. The Company has commenced an arbitration proceeding against Sundberg-Ferar ("S-F") for what the Company asserts to be a breach by S- F of the contractual obligations of S-F to not solicit away from the Company's employment its employees. This arbitration is for the Company to seek damages recovery from S-F, although if the Company is not successful in this arbitration, then S-F may seek to recover its attorney's fees incurred in defending the arbitration proceedings.
SCHEDULE 6.4
Stock Schedule
Shares Issued and Outstanding Shares Authorized Preferred Stock Series A 2,500,000 2,500,000 Series B 3,030,000 3,030,000 Series C 10,000 10,000 Series D 2,500,001 3,000,000 Series E 1,617,647 1,617,647 Series F *833,333 833,333 Undesignated --- 1,209,020 Subtotals: 10,490,981 12,200,000 Common Stock 2,829,735 21,500,000 |
* Shares to be sold to Cobe Laboratories, Inc., pursuant to this Agreement.
EXHIBIT 10.29
CONVERTIBLE LOAN COMMITMENT AGREEMENT
This Agreement is entered into as of October 15, 1996, by and between Aastrom Biosciences, Inc., a Michigan corporation (the "Company"), and The State Treasurer of the State of Michigan, Custodian of the Michigan Public School Employees' Retirement System, State Employees' Retirement System, Michigan State Police Retirement System, and Michigan Judges Retirement System(the "State"), as follows:
"Funding Request" is defined in Section 2.3 hereof.
"IPO" shall mean an initial public offering of stock by the Company which is registered with the United States Securities and Exchange Commission, resulting in the sale of securities aggregating to at least $10 million.
"Loan" or "Loans" are described in Section 2 hereof.
"Maturity Date" is defined in Section 2.5 hereof.
"Qualifying Financing" shall mean any one of the following:
i. the Company entering into (or completing) a term sheet agreement (or other agreement) with investors or an underwriter by the Maturity Date, which provides for: (a) a scheduled closing by February 1, 1998, (b) a public sale (i.e., an IPO) or private sale of equity securities of the Company, the gross proceeds from which equity sale is to aggregate to at least $10 million, (c) the proceeds of the sale are not designated by the investor for specified limited purposes, (d) the price per share for the sale is set by mutual agreement between the Company and new investors who invest at least $1 million, and (e) the sale of equity securities actually is consummated by February 1, 1998; or
ii. the Company entering into (or completing) a term sheet agreement (or other agreement) by the Maturity Date for the merger or sale of the Company at a value of at least $85 million, with (a) a scheduled closing for the merger or sale to be by February 1, 1998, and (b) the merger or sale actually is consummated by February 1, 1998; or
iii. the Company's Board of Directors adopting an Operational Plan for the Company to continue its operations in the ordinary course of business through December 31, 1998, funded by the Company's own cash flow and other resources, without requiring outside equity or debt investment in the Company.
2.1. In accordance with and subject to the terms of this Agreement, the State agrees to make Loans to the Company, in accordance with Funding Requests, up to an aggregate principal balance owing on the Loans not to exceed $5 million.
2.2. Each Loan shall be for an amount not less than $1 million principal.
2.3. Each Funding Request shall be in writing and shall be submitted by the Company to the State requesting a Loan to be made from the State to the Company in 45 days from the date of the Funding Request (or such longer period as may be specified by the Company). The Company may not submit a Funding Request prior to October 15, 1996, nor after September 1, 1997. The Company may not submit more than three (3) Funding Requests.
2.4. As a precondition to the Company's first Funding Request, the Company must first have requested and obtained (or be in the process of obtaining) all of the $5 million equity investment from Cobe Laboratories, Inc. ("Cobe") for purchasing Series F preferred stock.
2.5. Each Loan shall be evidenced by a promissory note signed and delivered by the Company to the State, specifying the principal amount of the Loan as specified in the Funding Request, in the form of the promissory note attached hereto as Exhibit A. As specified in more detail in said promissory note, (a) simple interest shall accrue at 10% per annum and be payable with principal at maturity, (b) the Company shall have an option to prepay any or all of the principal and/or accrued interest at any time, without penalty, (c) in lieu of the Company repaying the promissory note in cash, the Company shall have the option to satisfy the promissory note by converting any unpaid principal and accrued interest owing on the promissory note into equity stock of the Company, in accordance with the provisions set forth in the promissory note, (d) if the Company does not elect to convert the promissory note into equity, then all principal and accrued interest owing on the promissory note shall mature and be fully due and payable on the Maturity Date, which shall be the earlier of (i) 60 days following consummation of the Company's IPO or Qualifying Financing or (ii) 12 months following the date when the State makes the first Loan to the Company, and all promissory notes shall have this same Maturity Date, (e) the Company's obligations on the promissory notes shall be senior to or in parity with all other unsecured debt owed by the Company, and (f) within 15 days following completion of an IPO or Qualifying Financing, the Company shall give written notice to the State specifying whether the Company will (i) repay the promissory note at the Maturity Date, or (ii) convert the promissory note into equity stock of the Company.
2.6. The parties acknowledge that the Company is obligated, pursuant to previously existing agreements, to offer to many of the Company's existing shareholders the right to participate and invest in the same convertible debt commitment as is set forth in this Agreement. In the event any of the Company's other shareholders elect to so participate, then the $5 million level of the State's commitment shall be reduced on a dollar for dollar basis by each dollar committed by another shareholder for this convertible debt investment. The number of Commitment Stock Warrants (hereinafter described) grant to the State shall also be reduced on a prorata basis to the extent the Company's other shareholders elect to so participate. For example, if the other shareholders commit in the aggregate to $1 million convertible debt on the same terms as set forth in this Agreement, then the State's commitment level pursuant to this Agreement shall be reduced from $5 million to $4 million, and the Commitment Stock Warrant shall be reduced from 104,167 warrant shares to 83,334 warrant shares (i.e., a one-fifth reduction).
2.7. Once the Company has submitted a Funding Request to the State in accordance with the foregoing, and met the conditions as specified in Section 3 hereof, the State shall make the requested loan to the Company by wiring funds to the Company's bank account, pursuant to wire transfer instructions furnished to the State by the Company.
2.8. Upon the Company completing an IPO, the State's obligation to make further loan advances will terminate.
a. the promissory note for said Loan, duly signed by the Company, with authority for the State to insert the date on said promissory note when the State advances the Loan proceeds to the Company;
b. a certificate signed by the President and the Chief Financial
Officer of the Company certifying that, (i) the Company is not in material
default under any of the Company's material obligations, and (ii) to the best of
their knowledge and belief, all items of the information furnished to the State
(via Joseph Taylor or such other representative as may be designed by the
State), including without limitation, financial statements, minutes of Board
meetings, draft Registration Statement on Form S-1 for the Company, dated August
1996, as supplemented by an update dated as of October 3, 1996 (collectively
called the "Disclosure Statement"), and all other written materials and oral
information, remain true and correct, and, when read together, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading, and
(iii) the Company's
Board of Directors has authorized the officers of the Company to execute and deliver the promissory note, and (iv) the Company has previously requested and obtained (or is in the process of obtaining) $5 million of equity funding from Cobe pursuant to that certain Stock Purchase Commitment Agreement between Cobe and the Company.
a. if, by the Maturity Date, the Company has an IPO or another Qualifying Financing, then the Company has the option to convert the principal and interest owing on the promissory notes into the Company's capital stock, consisting of common stock issued pursuant to the IPO or the preferred stock or other equity issued by the Company pursuant to the Qualifying Financing, at a conversion price equal to 90% of the price paid by the other investors in the IPO or Qualifying Financing (without deduction for underwriter's commissions and discounts).
b. if, by the Maturity Date, the Company has not yet had an IPO or another Qualifying Financing, and if the Company does not repay the promissory notes in cash by the Maturity Date, then the principal and accrued interest owing on the promissory notes shall be converted into a new series of the Company's preferred stock (to be designated as Series G preferred stock), at $4.65 per share, which preferred stock shall have a liquidation preference and conversion price of $4.65 per share, with a liquidation preference senior to all other preferred stock existing at the time of issuance of the Series G preferred stock, and with other rights, preferences and privileges comparable to the Company's Series E preferred stock. Said Series G preferred stock will include a customary weighted average anti-dilution protection provision applicable to the Company's next following sale of preferred stock of at least $1 million to new investors.
c. In the event the "Qualifying Financing" is an "Operational Plan" as described in subparagraph (iii) of the definition of a Qualifying Financing, , then the equity securities into which the principal and interest owing on the promissory notes shall be converted pursuant to Section 4 hereof shall be a new series of the Company's preferred stock (Series G) having rights, preferences and privileges comparable to those of the Company's Series E preferred stock, but with a conversion price and liquidation preference being equal to 90% of the then current fair market value of the Company's then most recently issued preferred stock sold to cash investors (excluding stock sold to RPR), and with a liquidation preference senior to all other preferred stock existing at the time of issuance of the Series G preferred stock. Said fair market value of said preferred stock shall be determined by mutual agreement between the Company and the State, but if no
mutual agreement can be reached, then said fair market value shall be determined by a nationally recognized investment banking firm which is mutually selected by the Company and the State, with the fees for obtaining said valuation determination to be borne equally by the Company and the State. Said Series G preferred stock will include a customary weighted average anti-dilution protection provision applicable to the Company's next following sale of preferred stock of at least $1 million to new investors.
5.1. As consideration for the State entering into this Agreement for
a $5 million commitment, the Company shall issue to the State a stock warrant
(the "Commitment Stock Warrant") entitling the State to purchase up to 104,167
shares of the Company's common stock (subject to reduction as specified in
Section 2.6 hereof), on the following terms:
i. the exercise price shall be the lesser of:
(a) $6.00 share, increasing by $2.00 per share on each anniversary of the date the Company completes its IPO; or
(b) 85% of the fair market value of the Company's stock at the time the stock warrant is exercised, which value shall be determined as follows:
(1) if the Company's common stock is traded in the public stock market at the time the stock warrant is exercised, then said fair market value shall be the public trading price, calculated using the average of the last trading price of the day for the 20 trading days preceding the date of exercise.
(2) if the exercise of the stock warrant is made prior to the Company completing an IPO, then said fair market value shall be the fair market value of the Company's then most recently issued preferred stock sold to cash investors (excluding stock sold to RPR), determined by mutual agreement between the Company and the State. If no such mutual agreement is reached, then the fair market value of said preferred stock shall be determined by a nationally recognized investment banking firm which is mutually selected by the Company and the State, with the fees for such determination to be borne equally between the Company and the State.
ii. The warrant shall become exercisable any time after the earlier of (a) 90 days after the Company completes its IPO or a Qualifying Financing, or (b) October 15, 1999 (provided that this date is not within 90 days
after the IPO is completed, in which event the warrant shall be exercisable at the end of said 90 days).
iii. The warrant shall expire on October 15, 2000, to the extent it has not been exercised prior thereto.
5.2. In addition to the Commitment Stock Warrant, the Company shall also issue to the State a "Funding Stock Warrant" applicable to each increment of Loan funding advanced by the State to the Company pursuant to Section 2 above, based upon a 7.5% coverage formula, namely: 12,500 warrant shares for each $1 million of principal Loan funds advanced, or an aggregate of 62,500 warrant shares if all $5 million of Loan funds are advanced. The terms of said Funding Stock Warrants shall be the same as the terms of the above-described Commitment Stock Warrant.
5.3. The form of the Commitment Stock Warrant and the Funding Stock Warrant shall be as set forth on Exhibit B attached hereto.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date set forth above.
COMPANY: STATE: AASTROM BIOSCIENCES, INC., THE STATE TREASURER OF THE STATE OF MICHIGAN, a Michigan corporation Custodian of the Michigan Public School Domino's Farms, Lobby L Employees' Retirement System, State Employees' 24 Frank Lloyd Wright Drive Retirement System, Michigan State Police Ann Arbor, MI 48105 Retirement System, and Michigan Judges Fax: 313/930-5546 Retirement System 430 W. Allegan St. Lansing, MI 48922 Fax: 517/335-3668 By: /s/ R. Douglas Armstrong By: /s/ Paul E. Rice ------------------------- ------------------------------ |
EXHIBIT A
Promissory Note
PROMISSORY NOTE
$_______________ Ann Arbor, Michigan ____________, 199_ |
a. Within 15 days following completion of an IPO or a Qualifying Financing, Maker shall give written notice to Lender specifying whether Maker will (1) repay this Promissory Note at the Maturity Date, or (2) convert this Promissory Note into equity stock pursuant to Section 6b hereof.
b. In lieu of Maker repaying this Promissory Note in cash, Maker shall have the option to convert any unpaid principal and interest owing on this Promissory Note into equity stock of Maker, in accordance with the following provisions:
(i) if, by the Maturity Date, Maker has an IPO or a Qualifying Financing (as defined below), then Maker has the option to convert the principal and interest owing on this Promissory Note into Maker's capital stock, consisting of common stock issued pursuant to the IPO or the preferred stock or other equity issued by Maker pursuant to the Qualifying Financing, at a conversion price equal to 90% of the price paid by the other investors in the IPO or Qualifying Financing (without deduction for underwriter's commissions and discounts).
(ii) if, by the Maturity Date, Maker has not yet had an IPO or a Qualifying Financing, and if Maker does not repay this Promissory Note in cash by the Maturity Date, then the principal and accrued interest owing on this Promissory Note shall be converted into a new series of Maker's preferred stock (to be designated as Series G preferred stock), at $4.65 per share, which preferred stock shall have a liquidation preference and conversion price of $4.65 per share, with a liquidation preference senior to all other preferred stock of Maker, and with other rights, preferences and privileges comparable to Maker's Series E preferred stock. Said Series G preferred stock will include a customary weighted average anti-dilution protection provision applicable to Maker's next following sale of preferred stock of at least $1 million to new investors.
c. As used in this Promissory Note, the term "Qualifying Financing" means any one of the following:
(i) Maker entering into (or completing) a term sheet agreement (or other agreement) with investors or an underwriter by the Maturity Date, which provides for: (1) a scheduled closing by February 1, 1998, (2) a public or private sale of equity securities of Maker, the gross proceeds from which equity sale is to aggregate to at least $10 million, (3) the proceeds of the sale are not designated by the investor for specified limited purposes, (4) the price per share for the sale is set by mutual agreement between Maker and new investors who invest at least $1 million, and (5) the sale of equity securities actually is consummated by February 1, 1998; or
(ii) Maker entering into (or completing) a term sheet agreement (or other agreement) by the Maturity Date for the merger or sale of Maker at a value of at least $85 million, with (a) a scheduled closing for the merger or sale to be by February 1, 1998, and (b) the merger or sale actually is consummated by February 1, 1998; or
(iii) Maker's Board of Directors adopting an Operational Plan for Maker to continue its operations in the ordinary course of business through December 31, 1998, funded by Maker's own cash flow and other resources, without requiring outside equity or debt investment in Maker. In the event the "Qualifying Financing" is such "Operational Plan", then the equity securities into which the principal and interest owing on this Promissory Note shall be converted pursuant to Section 6bi above shall be a new series of Maker's preferred stock
(Series G) having rights, preferences and privileges comparable to those of Maker's Series E preferred stock, but with a conversion price and liquidation preference being equal to 90% of the then current fair market value of Maker's then most recently issued preferred stock sold to cash investors (excluding stock sold to RPR), and with a liquidation preference senior to all other preferred stock. Said fair market value of said preferred stock shall be determined by mutual agreement between Maker and Lender, but if no mutual agreement is reached, then said fair market value shall be determined by a nationally recognized investment banking firm which is mutually selected by Maker and Lender, with the fees for obtaining said valuation determination to be borne equally by Maker and Lender. Said Series G preferred stock will include a customary weighted average anti-dilution protection provision applicable to Maker's next following sale of preferred stock of at least $1 million to new investors.
a. Default in the payment of principal or interest due hereunder, and such default continues for a period of thirty (30) days after the due date thereof.
b. The making of an assignment for the benefit of creditors by Maker, or the appointment of a receiver for all or substantially all of Maker's property, or the filing by Maker of a petition in bankruptcy or other similar proceeding under law for the relief of debtors; or
c. The filing against Maker of a petition in bankruptcy or other similar proceeding under law for relief of debtors, and such petition is not vacated or discharged within sixty (60) days after the filing thereof
Michigan. In any action brought under or arising out of this Promissory Note, Maker hereby consents to the jurisdiction of any competent court within the State of Michigan and consents to service of process by any means authorized by Michigan law.
MAKER:
AASTROM Biosciences, Inc.
EXHIBIT B
Stock Warrant
STOCK WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED, UNLESS AN EXEMPTION FROM THE REQUIREMENT OF SUCH REGISTRATION IS AVAILABLE UNDER THE CIRCUMSTANCES AT THE TIME OBTAINING AND DEMONSTRATED BY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY.
Void after 5:00 p.m., Michigan Time, on October 15, 2000
Warrant to Purchase up to _______ Shares of Common Stock
The State Treasurer of the State of Michigan, Custodian of the Michigan Public School Employees' Retirement System, State Employees' Retirement System, Michigan State Police Retirement System, and Michigan Judges Retirement System
or assigns (the "Holder"), is entitled, subject to the provisions of this Warrant, to purchase from Aastrom Biosciences, Inc., a Michigan corporation (the "Company"), at any time within the Exercise Period (hereinafter defined), up to _______ fully paid and non-assessable shares (the "Shares") of Common Stock of the Company ("Stock"), at a purchase price per share (the "Exercise Price") as defined below. The Shares deliverable upon exercise of this Warrant, as adjusted from time to time, are hereinafter sometimes referred to as "Warrant Stock" and the exercise price to purchase a share of Warrant Stock is hereinafter sometimes referred to as the "Exercise Price."
The "Exercise Period" shall commence on the earlier of (a) 90 days after the Company completing its IPO (as defined below), (b) the Company completing a Qualifying Financing, or (c) October 15, 1999 (provided that this date is not within 90 days after the IPO is completed, in which event the option shall be exercisable at the end of said 90 days); and the Exercise Period shall end on October 15, 2000.
The "Exercise Price" shall be the lesser of:
(1) $6.00 share, increasing by $2.00 per share on each anniversary of the date the Company completes its IPO; or
(2) 85% of the fair market value of the Company's stock, which value shall be determined as follows:
(a) if the Company's common stock is traded in the public stock market at the time the stock warrant is exercised, then said fair market value shall be the public trading price, calculated using the average of the last trading price of the day for the 20 trading days preceding the date of exercise.
(b) if the exercise of the stock warrant is made prior to the Company completing an IPO, then said fair market value shall be the fair market value of the Company's then most recently issued preferred stock sold to cash investors (excluding stock sold to RPR), determined by mutual agreement between the Company and the State. If no such mutual agreement is reached, then the fair market value of said preferred stock shall be determined by a nationally recognized investment banking firm which is mutually selected by the Company and the State, with the fees for such determination to be borne equally between the Company and the State.
The term "IPO" means an initial public offering of the Company's Common Stock which is registered with the United States Securities and Exchange Commission.
The term "Qualifying Financing" means any one of the following:
a. the Company entering into (or completing) a term sheet
agreement (or other agreement) with investors or an underwriter by the Maturity
Date, which provides for: (1) a scheduled closing by February 1, 1998, (2) a
public or private sale of equity securities of the Company, the gross proceeds
from which equity sale is to aggregate to at least $10 million, (3) the proceeds
of the sale are not designated by the investor for specified limited purposes,
(4) the price per share for the sale is set by mutual agreement between the
Company and new investors who invest at least $1 million, and (5) the sale of
equity securities actually is consummated by February 1, 1998; or
b. the Company entering into (or completing) a term sheet agreement (or other agreement) by the Maturity Date for the merger or sale of the Company at a value of at least $85 million, with (1) a scheduled closing for the merger or sale to be by February 1, 1998, and (2) the merger or sale actually is consummated by February 1, 1998; or
c. the Company's Board of Directors adopting an Operational Plan for the Company to continue its operations in the ordinary course of business through December 31, 1998, funded by the Company's own cash flow and other resources, without requiring outside equity or debt investment in the Company.
the Company or at the office of its stock transfer agent, if any, accompanied by
the cash payment of the Exercise Price for the number of Shares specified in
such Exercise Agreement. Upon payment of the Exercise Price as provided in this
Section 4, the Holder shall thereupon be entitled to receive the number of
Shares of Warrant Stock determined as provided hereunder. If this Warrant should
be exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the right of the
Holder to purchase the balance of the Shares purchasable hereunder. Upon receipt
by the Company of this Warrant in proper form for exercise and accompanied by
payment, the Holder shall be deemed to be the holder of record of the Shares of
Warrant Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such shares of Warrant Stock shall not then be actually delivered
to the Holder.
limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.
Warrant been exercised immediately prior to such event. Any such provision shall include provision for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Warrant. The foregoing provisions of this Section 12 shall similarly apply to successive reclassifications, capital reorganizations and changes of shares of Stock. In the event of a merger (where the Company is not the surviving entity), consolidation or other sale or conveyance (in all such cases where the consideration to be received by the holders of the Stock of the Company consists solely of cash or securities registered under the Securities Act of 1933, as amended, the "Act") and if requested by the Company, the Holder shall agree to exercise this Warrant immediately prior to such event, or otherwise the expiration date shall be accelerated to the day preceding the effective date of the merger, consolidation or other sale or conveyance.
lose the exemption from registration under applicable federal and state securities laws used for the original issuance of this Warrant.
The securities represented by this certificate may not be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement made under the Securities Act of 1933 (the "Act"), or pursuant to an exemption from registration under the Act.
Date: _________________, 199__ AASTROM Biosciences, Inc.
By:____________________________
ACCEPTANCE OF WARRANT AGREEMENT
The undersigned hereby accepts this Warrant and agrees to abide by all the terms and conditions hereof. The undersigned further represents and agrees that it is an "accredited investor" as defined by Rule 501 promulgated by the Securities and Exchange Commission and that it is accepting this Warrant for its own account for investment purposes and not with a view to or for sale in connection with a distribution of the Warrant or the Warrant Stock.
Dated: __________________________, 199__
WARRANT HOLDER:
The State Treasurer of the State of Michigan,
Custodian of the Michigan Public School
Employees' Retirement System, State Employees'
Retirement System, Michigan State Police
Retirement System, and Michigan Judges
Retirement System
By: ______________________________________
EXHIBIT A
To: ______________________________
Dated: _________________
The undersigned, pursuant to the provisions set forth in the within Warrant, hereby agrees to subscribe for and purchase ______ shares of the Warrant Stock covered by such Warrant and makes payment herewith in the sum of $__________ as full payment for such Warrant Stock, at the price per share of $__________, as provided by such Warrant.
EXHIBIT B
TRANSFER NOTICE
(To transfer or assign the foregoing Warrant, execute this form and supply the information and materials required by Section 14 of the Warrant. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby transferred and assigned to
NOTE: The signature to this Transfer Notice must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.
EXHIBIT 11.1
AASTROM BIOSCIENCES, INC.
STATEMENT RE COMPUTATION OF PRO FORMA NET LOSS PER SHARE
Year ended June 30. Three months ended September 30, ---------------------------------------- -------------------------------- 1994 1995 1996 1995 1996 ------------ ------------- ------------ --------------- ------------- Weighted average number of common shares outstanding 1,294,000 1,724,000 1,749,000 1,740,000 1,752,000 Issuance of Common Stock(1) 135,000 135,000 135,000 135,000 136,000 Assumed exercise of stock options to purchase Common Stock(1) 121,000 121,000 121,000 121,000 121,000 Series E Preferred Stock issued in January 1996 1,078,000 1,078,000 1,078,000 1,078,000 1,078,000 Weighted average number of common shares representing assumed conversion of Series A, Series B, Series C and Series D Convertible Preferred Stock from the date of issuance 4,833,000 5,586,000 7,020,000 7,020,000 7,020,000 ------------ ------------ ------------ ------------- ------------- Pro forma weighted average number of common and common equivalent shares outstanding 7,461,000 8,644,000 10,103,000 10,094,000 10,107,000 ============ ============ ============ ============= ============= Net loss $ (6,140,000) $ (5,717,000) $ (9,917,000) $ (1,299,000) $ (3,273,000) ============ ============ ============ ============= ============= Pro forma net loss per share $ (.82) $ (.66) $ (.98) $ (.13) $ (.32) ============ ============ ============ ============= ============= |
(1) Represents shares of common stock or common stock equivalents issued subsequent to October 1995 at a price per share less than the offering price of $8.00. Such shares are considered to be cheap stock and, accordingly, reflected as outstanding since inception.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-1 of our report dated October 31, 1996, on our audits of the financial statements of Aastrom Biosciences, Inc. We also consent to the reference to our firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P. Detroit, Michigan October 31, 1996 |
ARTICLE 5 |
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
PERIOD TYPE | YEAR |
FISCAL YEAR END | JUN 30 1996 |
PERIOD START | JUL 01 1995 |
PERIOD END | JUN 30 1996 |
CASH | 10,967,000 |
SECURITIES | 0 |
RECEIVABLES | 0 |
ALLOWANCES | 0 |
INVENTORY | 0 |
CURRENT ASSETS | 11,485,000 |
PP&E | 2,339,000 |
DEPRECIATION | 1,151,000 |
TOTAL ASSETS | 12,673,000 |
CURRENT LIABILITIES | 1,634,000 |
BONDS | 0 |
PREFERRED MANDATORY | 0 |
PREFERRED | 34,218,000 |
COMMON | 324,000 |
OTHER SE | (23,692,000) |
TOTAL LIABILITY AND EQUITY | 12,673,000 |
SALES | 0 |
TOTAL REVENUES | 1,609,000 |
CGS | 0 |
TOTAL COSTS | 12,142,000 |
OTHER EXPENSES | 0 |
LOSS PROVISION | 0 |
INTEREST EXPENSE | 62,000 |
INCOME PRETAX | (9,917,000) |
INCOME TAX | 0 |
INCOME CONTINUING | (9,917,000) |
DISCONTINUED | 0 |
EXTRAORDINARY | 0 |
CHANGES | 0 |
NET INCOME | (9,917,000) |
EPS PRIMARY | (.98) |
EPS DILUTED | 0 |
ARTICLE 5 |
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
PERIOD TYPE | YEAR |
FISCAL YEAR END | JUN 30 1995 |
PERIOD START | JUL 01 1994 |
PERIOD END | JUN 30 1995 |
CASH | 2,680,000 |
SECURITIES | 8,388,000 |
RECEIVABLES | 0 |
ALLOWANCES | 0 |
INVENTORY | 0 |
CURRENT ASSETS | 11,272,000 |
PP&E | 1,925,000 |
DEPRECIATION | 646,000 |
TOTAL ASSETS | 12,551,000 |
CURRENT LIABILITIES | 953,000 |
BONDS | 0 |
PREFERRED MANDATORY | 0 |
PREFERRED | 28,253,000 |
COMMON | 241,000 |
OTHER SE | (17,308,000) |
TOTAL LIABILITY AND EQUITY | 12,551,000 |
SALES | 0 |
TOTAL REVENUES | 517,000 |
CGS | 0 |
TOTAL COSTS | 6,447,000 |
OTHER EXPENSES | 0 |
LOSS PROVISION | 0 |
INTEREST EXPENSE | 66,000 |
INCOME PRETAX | (5,717,000) |
INCOME TAX | 0 |
INCOME CONTINUING | (5,717,000) |
DISCONTINUED | 0 |
EXTRAORDINARY | 0 |
CHANGES | 0 |
NET INCOME | (5,717,000) |
EPS PRIMARY | (.66) |
EPS DILUTED | 0 |
ARTICLE 5 |
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
PERIOD TYPE | YEAR |
FISCAL YEAR END | JUN 30 1994 |
PERIOD START | JUL 01 1993 |
PERIOD END | JUN 30 1994 |
CASH | 0 |
SECURITIES | 0 |
RECEIVABLES | 0 |
ALLOWANCES | 0 |
INVENTORY | 0 |
CURRENT ASSETS | 0 |
PP&E | 0 |
DEPRECIATION | 0 |
TOTAL ASSETS | 0 |
CURRENT LIABILITIES | 0 |
BONDS | 0 |
PREFERRED MANDATORY | 0 |
PREFERRED | 0 |
COMMON | 0 |
OTHER SE | 0 |
TOTAL LIABILITY AND EQUITY | 0 |
SALES | 0 |
TOTAL REVENUES | 872,000 |
CGS | 0 |
TOTAL COSTS | 7,192,000 |
OTHER EXPENSES | 0 |
LOSS PROVISION | 0 |
INTEREST EXPENSE | 65,000 |
INCOME PRETAX | (6,140,000) |
INCOME TAX | 0 |
INCOME CONTINUING | (6,140,000) |
DISCONTINUED | 0 |
EXTRAORDINARY | 0 |
CHANGES | 0 |
NET INCOME | (6,140,000) |
EPS PRIMARY | (.82) |
EPS DILUTED | 0 |
ARTICLE 5 |
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
PERIOD TYPE | 3 MOS |
FISCAL YEAR END | SEP 30 1996 |
PERIOD START | JUL 01 1996 |
PERIOD END | SEP 30 1996 |
CASH | 5,908,000 |
SECURITIES | 1,200,000 |
RECEIVABLES | 0 |
ALLOWANCES | 0 |
INVENTORY | 0 |
CURRENT ASSETS | 7,706,000 |
PP&E | 2,512,000 |
DEPRECIATION | 1,287,000 |
TOTAL ASSETS | 8,931,000 |
CURRENT LIABILITIES | 1,166,000 |
BONDS | 0 |
PREFERRED MANDATORY | 0 |
PREFERRED | 37,718,000 |
COMMON | 365,000 |
OTHER SE | (30,465,000) |
TOTAL LIABILITY AND EQUITY | 8,931,000 |
SALES | 0 |
TOTAL REVENUES | 224,000 |
CGS | 0 |
TOTAL COSTS | 3,612,000 |
OTHER EXPENSES | 0 |
LOSS PROVISION | 0 |
INTEREST EXPENSE | 11,000 |
INCOME PRETAX | (3,273,000) |
INCOME TAX | 0 |
INCOME CONTINUING | (3,273,000) |
DISCONTINUED | 0 |
EXTRAORDINARY | 0 |
CHANGES | 0 |
NET INCOME | (3,273,000) |
EPS PRIMARY | (.32) |
EPS DILUTED | 0 |
ARTICLE 5 |
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
PERIOD TYPE | 3 MOS |
FISCAL YEAR END | SEP 30 1995 |
PERIOD START | JUL 01 1995 |
PERIOD END | SEP 30 1995 |
CASH | 0 |
SECURITIES | 0 |
RECEIVABLES | 0 |
ALLOWANCES | 0 |
INVENTORY | 0 |
CURRENT ASSETS | 0 |
PP&E | 0 |
DEPRECIATION | 0 |
TOTAL ASSETS | 0 |
CURRENT LIABILITIES | 0 |
BONDS | 0 |
PREFERRED MANDATORY | 0 |
PREFERRED | 0 |
COMMON | 0 |
OTHER SE | 0 |
TOTAL LIABILITY AND EQUITY | 0 |
SALES | 0 |
TOTAL REVENUES | 211,000 |
CGS | 0 |
TOTAL COSTS | 1,641,000 |
OTHER EXPENSES | 0 |
LOSS PROVISION | 0 |
INTEREST EXPENSE | 18,000 |
INCOME PRETAX | (1,299,000) |
INCOME TAX | 0 |
INCOME CONTINUING | (1,299,000) |
DISCONTINUED | 0 |
EXTRAORDINARY | 0 |
CHANGES | 0 |
NET INCOME | (1,299,000) |
EPS PRIMARY | (.13) |
EPS DILUTED | 0 |
ARTICLE 5 |
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
PERIOD TYPE | OTHER 1 |
FISCAL YEAR END | JUN 30 1996 |
PERIOD END | JUN 30 1996 |
CASH | 0 |
SECURITIES | 0 |
RECEIVABLES | 0 |
ALLOWANCES | 0 |
INVENTORY | 0 |
CURRENT ASSETS | 0 |
PP&E | 0 |
DEPRECIATION | 0 |
TOTAL ASSETS | 0 |
CURRENT LIABILITIES | 0 |
BONDS | 0 |
PREFERRED MANDATORY | 0 |
PREFERRED | 0 |
COMMON | 0 |
OTHER SE | 0 |
TOTAL LIABILITY AND EQUITY | 0 |
SALES | 0 |
TOTAL REVENUES | 3,782,000 |
CGS | 0 |
TOTAL COSTS | 32,164,000 |
OTHER EXPENSES | 0 |
LOSS PROVISION | 0 |
INTEREST EXPENSE | 219,000 |
INCOME PRETAX | (27,025,000) |
INCOME TAX | 0 |
INCOME CONTINUING | (27,025,000) |
DISCONTINUED | 0 |
EXTRAORDINARY | 0 |
CHANGES | 0 |
NET INCOME | (27,025,000) |
EPS PRIMARY | 0 |
EPS DILUTED | 0 |
1 | INCEPTION TO DATE |
ARTICLE 5 |
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
PERIOD TYPE | OTHER 1 |
FISCAL YEAR END | JUN 30 1997 |
PERIOD END | SEP 30 1996 |
CASH | 0 |
SECURITIES | 0 |
RECEIVABLES | 0 |
ALLOWANCES | 0 |
INVENTORY | 0 |
CURRENT ASSETS | 0 |
PP&E | 0 |
DEPRECIATION | 0 |
TOTAL ASSETS | 0 |
CURRENT LIABILITIES | 0 |
BONDS | 0 |
PREFERRED MANDATORY | 0 |
PREFERRED | 0 |
COMMON | 0 |
OTHER SE | 0 |
TOTAL LIABILITY AND EQUITY | 0 |
SALES | 0 |
TOTAL REVENUES | 4,006,000 |
CGS | 0 |
TOTAL COSTS | 35,776,000 |
OTHER EXPENSES | 0 |
LOSS PROVISION | 0 |
INTEREST EXPENSE | 230,000 |
INCOME PRETAX | (30,298,000) |
INCOME TAX | 0 |
INCOME CONTINUING | (30,298,000) |
DISCONTINUED | 0 |
EXTRAORDINARY | 0 |
CHANGES | 0 |
NET INCOME | (30,298,000) |
EPS PRIMARY | 0 |
EPS DILUTED | 0 |
1 | INCEPTION TO DATE |