Cooperation and Shareholders' Agreement - Aventis Research & Technologies GmbH & Co. KG, Nanogen Inc. and Nanogen Recognomics GmbH
COOPERATION AND
SHAREHOLDERS' AGREEMENT
between
Aventis Research & Technologies GmbH & Co KG
Represented by Aventis Research & Technologies Verwaltungs GmbH
Industriepark Hochst, Building G 865 A
65926 Frankfurt am Main
Germany
- hereinafter referred to as "AVENTIS"
and
Nanogen Inc.
10398 Pacific Center Court
San Diego, CA 92121
USA
- hereinafter referred to as "NANOGEN"
and
Nanogen Recognomics GmbH
(former: WT Achtzchnte VerwaltungsgeselIschaft mbH)
Industriepark Hochst, Building G 830
65926 Frankfurt am Main
Germany
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Cooperation and Shareholders' Agreement 2
INDEX:
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<S> <C>
Preamble: .............................................................................5
A. Definitions .......................................................................6
B. Joint Development Agreement ......................................................12
Section 1 Aim of the Cooperation Agreement ......................................12
Section 2 Tasks and Responsibilities of the J.V .................................12
Section 3 Tasks and Responsibilities of Nanogen .................................15
Section 4 (XXX) .................................................................15
Section 5 General Representations and Warranties and Limitations of Liability ...15
Section 6 Funding Obligation of Nanogen .........................................18
Section 7 Funding Obligation of Aventis .........................................19
Section 8 Additional Financial Contributions ....................................19
Section 9 Other Agreements between Aventis and Nanogen ..........................19
Section 10 Management Fees .......................................................21
C. General Provisions with regard to Technology and Improvements as well as
Licenses under Sections D. to F. below ...........................................20
Section 1 Ownership in Technology and Improvements ..............................20
Section 2 Infringement, Validity Challenges and Litigation ......................21
Section 3 Maintenance of Technology and Improvements ............................22
D. Nanogen License ..................................................................22
Section 1 Nanogen Technology and Nanogen Technology Improvements ................22
Section 2 Territory .............................................................23
Section 3 Term and Termination ..................................................23
E. J.V. Nanogen License .............................................................24
Section 1 Aventis Technology and Aventis Technology Improvements, J.V.
Technology and J.V. Technology Improvements ...........................24
Section 2 Sublicenses ...........................................................25
Section 3 Territory .............................................................25
Section 4 Royalties .............................................................25
Section 5 Payments ..............................................................27
Section 6 Records ...............................................................27
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Cooperation and Shareholders' Agreement 3
Section 7 Covenant of Nanogen ...................................................27
Section 8 Term and Termination ..................................................27
F. J.V. Aventis License .............................................................28
Section 1 Aventis Technology and Aventis Technology Improvements ................28
Section 2 Sublicenses ...........................................................28
Section 3 Territory .............................................................29
Section 4 Royalties .............................................................29
Section 5 Payments ..............................................................30
Section 6 Records ...............................................................30
Section 7 Term and Termination ..................................................31
Section 8 J.V. Technology and J.V. Technology Improvements ......................31
G. Term and Termination of the Cooperation Agreement ................................32
Section 1 Term of the Cooperation Agreement .....................................32
Section 2 Termination of the Cooperation Agreement ..............................32
Section 3 Consequences of a Termination of the Cooperation Agreement ............33
H. Shareholders' Agreement for the J.V. .............................................33
Section 1 Term of the J.V. ......................................................33
Section 2 Re-organization of the J.V. ...........................................34
Section 3 Aventis Technology, Aventis Technology Improvements, J.V. Technology
and J.V. Technology Improvements in case of an End of the Operating
Existence and Re-organization of the J.V., i.e. during the existence
of the Holding J.V. ...................................................35
Section 4 Right to Exclusive Negotiation, Right of First Refusal ................35
Section 5 First Warrant by Nanogen ..............................................36
Section 6 Second Warrant by Nanogen .............................................36
Section 7 Rules of Procedure for the Advisory Board and By-Laws .................37
Section 8 Term of the Shareholders' Agreement ...................................37
I. General Provisions ...............................................................38
Section 1 Confidentiality .......................................................38
Section 2 Withholding Tax, VAT ..................................................39
Section 3 Assignment of this Agreement ..........................................40
Section 4 Notices ...............................................................40
Section 5 Dispute Resolution and Arbitration ....................................42
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Cooperation and Shareholders' Agreement 4
Section 6 Severability ..........................................................43
Section 7 Entire Agreement ......................................................43
Section 8 Applicable Law ........................................................44
Section 9 Costs, Fees and Expenses ..............................................44
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Cooperation and Shareholders' Agreement 5
PREAMBLE:
Aventis and Nanogen are the sole shareholders of the J.V. Aventis holds 40%
(i.e.(XXX))of the nominal share capital of the J. V. and Nanogen holds 60%
of (i.e.(XXX)) the nominal share capital of the J.V.
Aventis and Nanogen have contributed certain assets, e.g. IPR, and laboratory
equipment to the J.V. by contribution agreement of June 27, 2001 and Nanogen
grants a certain IPR license.
The primary purpose and aim of the J.V. shall be the further research and
development of the J.V. Business and the J.V. Products which shall then be
commercialized by Nanogen (the "PRIMARY PURPOSE"). The secondary purpose and aim
of the J.V.shall be the exploitation of existing and future IPR of the J.V (the
"SECONDARY PURPOSE"). Should the J.V (for whatever reason) not be able to aim
at the Primary Purpose, then the sole reason for the J.V. shall be the Secondary
Purpose.
The Parties intend to regulate the details and principles on the future joint
research and development envisaged by them and their legal relationship as
shareholders of the J.V. by entering into this Cooperation and Shareholders'
Agreement as of today.
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Cooperation and Shareholders' Agreement 6
A. DEFINITIONS
"AFFILIATE" shall mean any corporation or other business entity controlled by or
in common control of either Aventis or Nanogen, or by which Aventis or Nanogen
are controlled. "CONTROL" or "CONTROLLED" as used herein shall mean the direct
or indirect ownership of fifty (50) % or the maximum interest permitted by local
law of the voting stock of a corporation or other business entity or a fifty
(50) % or greater interest in the income of such corporation or other business
entity.
"AGREEMENT" shall mean this Cooperation and Shareholders' Agreement of today
including all its Parts and Exhibits.
"AVENTIS PRODUCT(S)" shall mean any product sold by Aventis which utilizes
solely one or several of the technologies licensed from the J.V. to Aventis
under the J.V. Aventis License, i.e. Aventis Technology, Aventis Technology
Improvements, if applicable, J.V. Technology (excluding Nanogen Background
Rights) and/ or J.V. Technology Improvements (excluding Nanogen Background
Rights).
"AVENTIS PRODUCT(S) COMBINATION(S)" shall mean one or several Aventis Product(s)
sold by Aventis during a respective Calculation Period in any combination with
any other product of Aventis, or in any combination with another product of
Aventis and other materials, products or product components.
"AVENTIS TECHNOLOGY" shall mean all IPR arising out of or relating exclusively
to (XXX) including but not limited to, specifically the patents and patent
applications listed in Exhibit 1 hereto, existing at Aventis at the Closing Date
and ownership of which is transferred to the J.V. by Aventis.
"AVENTIS TECHNOLOGY IMPROVEMENTS" shall mean any IPR which constitutes an
enhancement of, or other improvement to, solely the Aventis Technology andl or
the Aventis Technology Improvements which is conceived (a) during the Operative
Existence of the J.V. and is made by one or more employees, agents or
consultants of any Party, acting either solely or jointly; or (b) during the
existence of the Holding J.V. and is made by a third party under a respective
license.
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Cooperation and Shareholders' Agreement 7
"AVENTIS SHARE" shall mean the share capital held by Aventis in the J.V.
"CALCULATION PERIOD" shall mean a respective calendar quarter of any calendar
year during the term of this Agreement.
"CLOSING DATE" shall mean the effective date of this Agreement after it has been
duly signed and executed by all Parties.
"COMMERCIALIZATION" shall mean the manufacturing, sale andl or distribution of
J.V. Products or J.V. Products Combinations by Nanogen.
"CONFIDENTIAL INFORMATION" shall mean the business and trade secrets and other
proprietary information of any Party disclosed as such orally, in writing or
visually, by any Party to any other Party in the course of the implementation of
this Agreement or relating to the J.V. Business, that (a) derives economic
value, actual or potential, from not being generally known, and (b) is subject
to efforts by the disclosing Party that are reasonable under the circumstances
to maintain its secrecy or confidentiality but excluding such Confidential
Information which was proven to have been independently developed by any
employee or contractor of the receiving Party.
"COOPERATION AGREEMENT" shall mean Parts B., C., D., E., F. and G. of this
Agreement including all its respective provisions and Exhibits and shall always
be read and interpreted together with the definitions in this Part A. as well as
with the general provisions in Part I. of this Agreement.
"COSTS" shall mean full costs within the meaning of Section 255 sub-sec.(2) HGB
(German Commercial Code) including costs described in Section 255 sub-sec.(2)
sent.4 HGB.
"DEDUCTIBLE COSTS" shall mean (XXX)
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Cooperation and Shareholders' Agreement 8
"DATE OF FIRST COMMERCIALIZATION" shall mean the date of the first shipping of a
J.V. Product or a J.V. Products Combination to a third party.
"FIELD" shall mean (XXX)
"HOLDING J.V." shall mean the J.V. after the Re-organization.
"IMPROVEMENT(S)" shall mean either the Aventis Technology Improvements, the J.V.
Technology Improvements or the Nanogen Technology Improvements, as the case may
be.
"IPR" shall mean all trademarks, service marks, trade dress, logos, copyrights,
rights of authorship, all applications, registrations and renewals relating to
the preceding items, database rights, moral rights, inventions, patents, patent
disclosures, patent applications, including all provisionals, continuations (in
whole or in part), divisionals, reissues, extensions, supplementary protection
certificates, reexaminations and foreign counterparts thereof, rights of
inventorship, rights of publicity and privacy, trade secrets, know-how, rights
under unfair competition and unfair trade practices laws, and all other
worldwide intellectual and industrial property rights related thereto.
"J.V. AVENTIS LICENSE" shall mean the non-exclusive license granted to Aventis
by the J.V. under the Aventis Technology, the Aventis Technology Improvements,
the J.V. Technology and J.V. Technology Improvements pursuant to Part F. of this
Agreement.
"J.V. BUSINESS" shall mean the research and development of J.V. Products in the
Field.
"J.V. NANOGEN LICENSE" shall mean the exclusive license granted to Nanogen by
the J.V. under the Aventis Technology, the Aventis Technology Improvements, the
J.V. Technology and the J.V. Technology Improvements pursuant to Part E. of this
Agreement.
"J.V. PRODUCT(S)" shall (XXX)
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Cooperation and Shareholders' Agreement 9
(XXX)
"J.V. PRODUCT(S) COMBINATION(S)" shall mean one or several J.V. Product(s) sold
by Nanogen in any combination with NanoChip-TM- Cartridges and/or in combination
with other assay disposables and/or in combination with other materials,
products or product components.
"J.V. TECHNOLOGY" shall mean those certain patents and patent applications
identified in EXHIBIT 2 hereto, including all IPR arising out of or relating
thereto, already conceived by one or more employees, agents or consultants of
any Party, acting either solely or jointly, at the Closing Date and contributed
to the J.V. by Aventis and Nanogen.
"J.V. TECHNOLOGY IMPROVEMENTS" shall mean (1) any LPR which constitutes an
enhancement of, or improvement to, solely the J.V. Technology and/or the J.V.
Technology Improvements which is conceived (a) during the Operating Existence of
the J.V. and is made by one or more employees, agents or consultants of any
Party, acting either solely o'r jointlyor (b) during the existence of the
Holding J.V. and is made by a third party under a respective license; and (2)
any LPR which is conceived (a) during the Operating Existence of the J.V. and is
made by one or more employees, agents or consultants of any Party, acting solely
or jointly or (b) during the existence of the Holding J.V. and is made by a
third party under a respective license, and which consists of (i) a combination
of, on the one hand, Aventis Technology and/or Aventis Technology Improvements
and, on the other hand, Nanogen Technology and/or Nanogen Technology
Improvements; or (ii) a combination of, on the one hand, Aventis Technology and/
or Aventis Technology Improvements and, on the other hand, J.V. Technology and/
or J.V. Technology Improvements; or (iii) a combination of, on the one hand,
Nanogen Technology and/or Nanogen Technology Improvements and, on the other
hand. J.V. Technology and/or J.V. Technology Improvements; and (3) any other
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Cooperation and Shareholders' Agreement 10
IPR which is conceived (a) during the Operating Existence of the J.V. and is
made by one or more employees, agents or consultants of the J.V. or during (b)
the existence of the Holding J.V. and is made by a third party under a
respective license.
"LICENSOR" shall mean Nanogen in the case of the Nanogen License, and the J.V.
in the case of the J.V. Nanogen License and of the JV. Aventis License.
"LICENSEE" shall mean the J.V. in the case of the Nanogen License, Nanogen Inc.
in the case of the J.V. Nanogen License and Aventis in the case of the J.V.
Aventis License.
"NANOCHIP -TM- WORKSTATIONS" means the integrated Nanogen bioassay system,
consisting of a microchip loader, fluorescence scanner, fluidic handling
subsystem, computer hardware and software and documentation developed by Nanogen
at the Closing Date as well as any and all upgrades, improvement, modification
etc. developed thereof during the Operative Existence of the J.V.
"NANOCHIP -TM- CARTRIDGES" means the Nanogen proprietary electronic microchip
capable of rapid identification and analysis of biological molecules and
consisting of test sites, arranged in an array, which can be individually
manipulated electronically from the NanoChipm' Workstations at the Closing Date
as well as any all upgrades, improvement, modification etc. developed thereof
during Operative Existence of the J.V.
"NANOGEN LICENSE" shall mean the non-exclusive license granted to the J.V. by
Nanogen under the Nanogen Technology and the Nanogen Technology Improvements
pursuant to Part D. of this Agreement.
"NANOGEN BACKGROUND RIGHTS" shall mean the specific claims or parts of claims,
specifications, know-how, or other IPR included in the J.V. Technology or the
J.V. Technology Improvements that consist of Nanogen Technology or Nanogen
Technology Improvements.
"NANOGEN SHARE" shall mean the share capital held by Nanogen in the J.V.
"NANOGEN TECHNOLOGY" shall mean all IPR arising out of or relating to the
NanoChip -TM- Workstation, the NanoChip -TM- Cartridges, or the systems and
technologies incorporated
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Cooperation and Shareholders' Agreement 11
therein, including, but not limited to, specifically the patents and patent
applications listed in Exhibit 3 hereto, existing at Nanogen at the Closing
Date.
"NANOGEN TECHNOLOGY IMPROVEMENTS" shall mean any IPR which constitutes an
enhancement of, or other improvement to, solely the Nanogen Technology and/or
the Nanogen Technology Improvements which is conceived (a) during the Operating
Existence of the J.V. and is made by one or more employees, agents or
consultants of any Party, acting either solely or jointly; or (b) during the
existence of the Holding J.V. and is made by a third party under a respective
license.
"NET SALES" shall mean (XXX)
"NET SALES AVERAGE" shall mean (XXX)
"OPERATIVE EXISTENCE" of the J.V. shall mean the time from the Closing Date
until the Re-organization.
"PARTY" or "PARTIES" shall mean one or more of the parties to this Agreement.
"RE-ORGANIZATION" shall mean (XXX)
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Cooperation and Shareholders' Agreement 12
(XXX)
"SHAREHOLDERS' AGREEMENT" shall mean Part H. of this Agreement including all its
respeetive provisions and Exhibits and shall always be read and interpreted
together with the definitions in this Part A. as well as with the general
provisions in Part I. of this Agreement.
"TECHNOLOGY" shall mean either the Aventis Technology, the J.V. Technology, the
Nanogen Background Rights or the Nanogen Technology, as the case may be.
B. JOINT DEVELOPMENT AGREEMENT
SECTION 1 AIM OF THE COOPERATION AGREEMENT
During the Operative Existence of the J.V. the Parties aim at the research and
development of the J.V. Business by the J.V. and eventually at the
Commercialization of J.V. Products by Nanogen. The respective tasks and
responsibilities of the Parties in the course of the research and development of
the J.V. Business and eventually the Commercialization of J.V. Products are laid
down in this Agreement.
SECTION 2 TASKS AND RESPONSIBILITIES OF THE J.V.
(1) Under This Agreement, the J.V. shall carry out its Primary Purpose and
its Secondary Purpose.
(2) Any activities by the J.V. outside of the J.V. Business must be designed
to create revenues or other value to the J.V. and must meet the following
criteria: (XXX)
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Cooperation and Shareholders' Agreement 13
(3) The J.V. may also enter into specific research contracts with Aventis,
Nanogen. one of their Affiliates or (XXX) as long as the following
criteria are met: (XXX)
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Cooperation and Shareholders' Agreement 14
(XXX)
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Cooperation and Shareholders' Agreement 15
SECTION 3 TASKS AND RESPONSIBILITIES OF NANOGEN
Under this Agreement, Nanogen shall be responsible and solely authorized for the
Commercialization of J.V. Products.
SECTION 4 (XXX)
SECTION 5 GENERAL REPRESENTATIONS AND WARRANTIES AND LIMITATIONS OF LIABILITY
(1) Each Party represents and warrants that:
a) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is
incorporated;
b) it has the corporate power and authority and the legal right to
enter into the Agreement and to perform its obligations hereunder;
c) it has the corporate power and authority and the legal right to
own and operate its assets and to carry on its business as it is
now being conducted;
d) it is in compliance with all requirements of applicable law,
except to the extent that any noncompliance would not have a
material adverse effect on the business, financial or other
condition of such Party and would not
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Cooperation and Shareholders' Agreement 16
materially adversely affect such Party's ability to perform its
obligations under the Agreement;
e) it has taken all necessary corporate action to authorize the
execution and delivery of the Agreement and the performance of its
obligations hereunder;
f) the Agreement has been duly executed and delivered on its behalf
and constitutes a legal, valid and binding obligation, enforceable
against such Party in accordance with its terms;
g) the execution and delivery of the Agreement and the performance of
such Party's obligations hereunder (i) do not conflict with or
violate any requirements of applicable laws or regulations, and
(ii) do not conflict with, or constitute a default under any
contractual obligation of such Party; and
h) there is no outstanding contract, commitment or agreement to which
it is a Party or legal impediment of any kind which conflicts with
this Agreement or might limit, restrict or impair the rights
granted to the other Party hereunder.
(2) In no event shall a Party be liable to the other for costs of procurement
of substitute goods and services, loss of use or profits or any other
special, incidental, indirect or consequential damages, arising out of or
related to this Agreement or the use of any Technology or Improvement
and/or the use or performance of any result or product resulting from
this Agreement, however caused, and on any theory of liability, whether
in an action for contract or tort (including negligence) or otherwise,
and whether or not a Party has been advised of the possibility of such
damages. Each limitation on liability or limited or exclusive remedy set
forth in this Agreement is independent of any other limitation or.remedy
and if any such limitation or remedy fails of its essential purpose or is
otherwise held to be unenforceable, that shall not affect the validity of
any other such limitation or remedy.
(3) Neither Party shall be liable for any delay or nonperformance of any
provision of this Agreement (other than for the payment of amounts due)
due to fire,
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Cooperation and Shareholders' Agreement 17
explosion, flood or other natural catastrophe; governmental legislation,
act, orders or regulations; strikes or labor difficulties; computer,
software, telecommunications, or electrical failure; or any other
event which is outside the control of the respective Party, to the extent
any such event is not occasioned by the negligence of the delayed Party
("FORCE MAJEURE EVENT"), and the time for performance of such provision
shall be deemed to be extended for a period equal to the duration of the
Force Majeure Event preventing performance. The Party affected by a Force
Majeure Event described in the preceding sentence shall use commercially
reasonable best efforts to minimize the delays caused by such Force
Majeuer Events. Each Party shall notify the other as promptly as
practicable of the occurrence of a Force Majeure Event hereunder.
(4) The Parties each hereby disclaim any and all representations and
warranties, express or implied, with respect to their respective research
and development efforts hereunder, including, without limitation
a) whether any product, including but not limited to J.V. Products
and/or J.V. Products Combinations, can be successfully developed
by either of the Parties,
b) whether the products as developed by either of the Parties
hereunder, including but not limited to J.V. Products and/or J.V.
Products Combinations, can be commercially marketed, including but
not limited to the Commercialization of J.V. Products and/or J.V.
Products Combinations,
c) the oaccuracy, performance, utility, reliability, technological or
commercial value, comprehensiveness, merchantability or
suitability for any particular purpose whatsoever of any product,
including but not limited to J.V. Products and/or J.V. Products
Combinations, and
d) whether any products, including but not limited to J.V. Products
and/or J.V. Products Combinations, manufactured will not infringe
any third-party IPR.
(5) The disclaimers stipulated above shall not apply in case of an
intentionally inflicted damage or where a statutory strict liability
applies.
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Cooperation and Shareholders' Agreement 18
SECTION 6 FUNDING OBLIGATION OF NANOGEN
(1) Nanogen hereby commits to spend within Nanogen the amount of US $(XXX)
(in words: (XXX)), at the rate of US $ (XXX) per year, the first year
starting on (XXX) for its own general technology development, benefiting
the Commercialization and development of J.V. Products; the manner in
which the general technology development funding at Nanogen is spent
remains in the exclusive discretion of Nanogen.
Nanogen shall be entitled to deduct from this amount of US $(XXX)(in
words: (XXX)) the US Dollar equivalent of Euro (XXX) (in words: (XXX))
traded at the exchange rate quoted by Dresdner Bank AG at 11 a.m.
Frankfurt (Germany) time on the Closing Date, which Nanogen has already
paid for the acquisition of the sixty (60) % shareholding in the J.V.
(2) Nanogen shall inform the advisory board of the J.V. at least (XXX) prior
to the beginning of each year of the amounts referred to in sub-sec.(1)
Nanogen will spend and for what such amounts referred to in sub-sec. (1)
shall be spent.
(3) Nanogen shall report to the J.V. at least every (XXX) on the status of
spending of the amounts referred to in sub-sec. (1) and on the specific
expenditures ~to be deducted from said amount.
(4) Aventis through its certified public accountants who are subject to a
professional duty of secrecy, shall be entitled to inspect at reasonable
times and to such extent that this will not interfere with the business
operations of Nanogen Inc. the relevant books, records and accounts of
Nanogen to monitor the fulfillment of the funding obligation of Nanogen
under this Agreement.
(5) The costs for such inspection shall be borne by Aventis unless
inaccuracies to the detriment of the J.V. of more than (XXX) % between
the amount actually spent by Nanogen and the amount to be spent by
Nanogen pursuant to sub-sec.
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Cooperation and Shareholders' Agreement 19
(1) herein above are discovered, in which case Nanogen shall bear such
costs. In any case, Nanogen shall pay any such amounts resulting from
such inspection which Nanogen owes to the J.V. plus a default interest at
a rate of (XXX) % per annum to the J.V. within (XXX) days after
the end of any such inspection.
SECTION 7 FUNDING OBLIGATION OF AVENTIS
Aventls in the contribution agreement dated June 27, 2001 has contributed to the
capital reserves of the J.V. the amount of US $(XXX) (in words: (XXX)) less the
monthly expenses which have been paid by Aventis for the funding and/or costs
of the research department of Aventis which up to the Closing Date has been
employed in the research and development of the J.V. Business and/or the J.V.
Products since (XXX) plus monthly interest on the then resulting amount at an
interest rate of (XXX) % per annum, beginning on (XXX); and less the US Dollar
equivalent of (XXX) (in words: (XXX)) traded at the exchange rate quoted by
Dresdner Bank AG at 11 a.m. Frankfurt (Germany) time on the Closing Date, which
Aventis has already paid for the acquisition of the (XXX) shareholding in the
J.V. In addition to this contribution, no additional or further funding
obligation of Aventis with regard to the J.V. exists.
The amount contributed from Aventis to the J.V. pursuant to the contribution
agreement dated (XXX) is intended to fund the initial US $(XXX) (in
words: (XXX)) of expenses of the J.V.
SECTION 8 ADDITIONAL FINANCIAL CONTRIBUTIONS
(XXX)
SECTION 9 OTHER AGREEMENTS BETWEEN AVENTIS AND NANOGEN
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Cooperation and Shareholders' Agreement 20
For purposes of clarification, nothing in this Agreement is intended to
alter, modify, or in any way affect either (a) the separate Collaborative
Research and Development Agreement by and between Aventis Research &
Technologies GmbH & Co. KG and Nanogen, Inc., dated 27 September 1999 (the
"SEPTEMBER 1999 AGREEMENT"), or (b) the separate Collaborative Research and
Development Agreement by and between Aventis Research & Technologies GmbH &
Co. KG and Nanogen, Inc., dated 3 December 1998 (the "DECEMBER 1998
AGREEMENT") or (c) (XXX). In case of any conflict between, on the one hand,
this Agreement, and on the other hand, either the September 1999 Agreement or
the December 1998 Agreement or the Beta Site Agreement, the provisions of the
September 1999 Agreement or the December 1998 Agreement or the Beta Site
Agreement shall prevail.
SECTION 10 MANAGEMENT FEES
Unless otherwise agreed upon, neither Aventis nor Nanogen shall charge
management fees to the J.V.
C. GENERAL PROVISIONS WITH REGARD TO TECHNOLOGY AND IMPROVEMENTS AS WELL AS
LICENSES UNDER SECTIONS D. TO F. BELOW
SECTION 1 OWNERSHIP IN TECHNOLOGY AND IMPROVEMENTS
(1) The Parties already now agree to the following ownership rights with
regard to the Technology and the Improvements:
a) the Aventis Technology as well as the J.V. Technology shall be
owned solely by the J.V.
b) the Aventis Technology Improvements shall be owned solely by the
J.V.
c) the Nanogen Technology as well as the Nanogen Technology
Improvements shall at all times be solely owned by Nanogen.
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Cooperation and Shareholders' Agreement 21
d) J.V. Technology Improvements shall all be owned solely by the J.V.
(2) The Parties agree that where an employee/ employees of a Party makes an
Improvement such Party shall claim any and all Improvements so made by
its employee(s) for unlimited use by the Party whose employee(s) made the
Improvement. The Party whose employee(s) made the respective Improvement
shall then transfer the ownership in such Improvement to the Party
becoming the owner of the respective Improvement pursuant to the
provisions contained in sub-sec. (1) above. The respective Party becoming
the owner of an Improvement shall bear any inventor compensation payments
due to the employee(s) of the Party who made the Improvement.
SECTION 2 INFRINGEMENT, VALIDITY CHALLENGES AND LITIGATION
(1) The respective Licensor and the respective Licensee shall inform each
other without undue delay of any infringement of the respective
Technology and/or the respective Improvements with regard to the
respective license granted under this Agreement.
(2) Upon the request of the respective Licensee, the respective Licensor
shall defend the respective Technology and/or the respective Improvement
against validity challenges of third parties and shall enforce them
against third parties infringing the respective Technology and/or the
respective Improvement. The respective Licensor shall be entitled to deny
such request of the respective Licensee in cases where such action would
materially prejudice the business interests of the respective Licensor.
(3) All costs incurred in connection with any defense or enforcement by the
respective Licensor of the respective Technology and/or the respective
Improvement against validity challenges by third parties shall be borne
by the respective Licensor.
(4) In case the J.V. as Licensor pursuant to sub-sec. (2) above declines to
defend or enforce the Technology and/or the Improvements licensed by the
J.V. as Licensor under this Agreement, the J.V. shall deliver written
notice thereof to
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Cooperation and Shareholders' Agreement 22
Nanogen and Aventis. Nanogen shall then have the first option to defend
or enforce such Technology and/ or Improvements at Nanogen's expense, and
Aventis, after a respective declination by Nanogen to defend or enforce,
shall have the second option to defend or enforce such rights at Aventis'
expense. The shareholders hereby resolve that any recovery and/or
damages shall be distributed to the shareholders according to their
respective shareholding pursuant to applicable German laws. Out of any
recovery and/or damages resulting from or being paid by a third party in
the course of any such defense or enforcement, Nanogen or Aventis, as the
case may be, shall be entitled to fully recover its reasonable attorneys'
fees and expenses related to bringing the action to defend or enforce
such Technology and/ or Improvements. The Party who ultimately defends or
enforces such rights to conclusion of the matter will be entitled to
recover its reasonable attorney's fees and expenses out of any recovery
and/or damages before the other Party's expenses, if any, are recovered
out of such recovery and/ or damages.
(5) In case that the respective Licensee should, directly or indirectly,
contest any of the Technology and/ or the Improvements licensed under the
respective license granted under this Agreement, the respective Licensor
shall be entitled to terminate the respective license granted under this
Agreement for cause and with immediate effect.
SECTION 3 MAINTENANCE OF TECHNOLOGY AND IMPROVEMENTS
The respective "Licensor shall maintain (,,AUFRECHFERHALTEN") the respective
Technology and/or Improvements licensed by it under this Agreement during the
term of such license and shall pay all costs required for such maintenance.
D. NANOGEN LICENSE
SECTION 1 NANOGEN TECHNOLOGY AND NANOGEN TECHNOLOGY IMPROVEMENTS
(1) Nanogen hereby grants to the J.V. a (XXX) license (XXX) under the
Nanogen Technology and the Nanogen
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 23
Technology Improvements for the use in the research and development of
the J.V. Business.
(2) Notwithstanding the license granted herein above, (XXX)
(3) Nanogen shall make available to the J.V. without undue delay all records,
documents, files, results, plans and other materials relating to the
Nanogen Technology and the Nanogen Technology Improvements which the J.V.
requires to understand, assess and exploit the Nanogen Technology and the
Nanogen Technology Improvements under the license granted herein.
SECTION 2 TERRITORY
The Nanogen License is granted for (XXX)
SECTION 3 TERM AND TERMINATION
(1) The Nanogen License shall become effective on the Closing Date.
(2) The Nanogen License shall remain in force during the Operative Existence
of the J.V. The Re-organization of the J.V. or any termination of this
Cooperation Agreement shall automatically be deemed to be an expiration
or a termination of the Nanogen License effective at the same time as the
Re-organization of the J.V. or the termination of this Cooperation
Agreement.
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 24
E. J.V. NANOGEN LICENSE
SECTION 1 AVENTIS TECHNOLOGY AND AVENTIS TECHNOLOGY TECHNOLOGY AND J.V.
TECHNOLOGY IMPROVEMENTS
(1) The J.V. hereby grants to Nanogen an (XXX) license under the Aventis
Technology, the Aventis Technology Improvements, the J.V. Technology and
the J.V. Technology Improvements for the use in the Commercialization of
J.V. Products.
(2) The J.V. shall make available to Nanogen in the English language without
undue delay all records, documents, files, results, plans and other
materials relating to the Aventis Technology, the Aventis Technology
Improvements, the J.V. Technology and the J.V. Technology Improvements
which Nanogen requires to understand, assess and exploit the Aventis
Technology, the Aventis Technology Improvements, the J.V. Technology and
the J.V. Technology Improvements under the license granted herein. The
J.V. shall free of charge provide to Nanogen technical information
regarding the J.V. Products in English language and shall further
provide, free of charge, a reasonable amount of technical training and
support in the form of documentation and/or consultation to enable
Nanogen to commercialize the J.V. Products.
(3) Notwithstanding the license granted herein above, (XXX).
The J.V. may also grant further licenses, (XXX) under the Aventis
Technology, the Aventis Technology Improvements, the J.V. Technology and
the J.V. Technology Improvements to third parties as long as the
following criteria are met:
(XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 25
(XXX)
SECTION 2 (XXX)
SECTION 3 TERRITORY
The J.V. Nanogen License is granted for (XXX).
SECTION 4 ROYALTIES
(1) In consideration for the J.V. Nanogen License granted herein above,
Nanogen shall pay to the J.V. royalties amounting to (XXX). The Parties
agree that
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 26
the Sales of J.V. Products Combinations shall be calculated as follows:
(XXX)
(2) (XXX)
(3) Within (XXX) days of the end of each Calculation Period, Nanogen shall
calculate in writing the amount of royalties payable from Nanogen to the
J.V. and Nanogen shall make available such calculation to the J.V. in
writing and, upon request, the underlying data. The respective royalty
payments by Nanogen to the J.V. shall become due and payable within (XXX)
days after the date of such calculation by Nanogen.
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 27
SECTION 5 PAYMENTS
In case of late payments by Nanogen, Nanogen shall pay to the J.V. default
interest at a rate of (XXX) % per annum. All payments to the J.V. provided for
herein above shall be made to a bank account to be nominated by the J.V.
SECTION 6 RECORDS
(1) The J.V. through its certified public accountant who is subject to a
professional duty of secrecy shall be entitled to inspect at
reasonable times and to such extent this will not interfere with the
business operations of Nanogen the relevant books, records and
accounts of Nanogen to determine the accuracy of the royalty
payments made by Nanogen to the J.V. under the provisions of this
J.V. Nanogen License.
(2) The costs for such auditor shall be borne by the J.V. unless
inaccuracies to the detriment of the J.V. of more than (XXX) % of
the royalties due to the J.V. under this J.V. Nanogen License are
discovered, in which case Nanogen shall bear such costs. In any
case, Nanogen shall pay any such amounts resulting from such
inspection which Nanogen owes to the J.V. plus a default interest at
a rate of (XXX) % per annum to the J.V. within (XXX) days after the
end of any such inspection.
SECTION 7 COVENANT OF NANOGEN
Nanogen shall use its best efforts for the Commercialization of J.V. Products,
taking into account the market, the scientific and research situation and the
competition in the J.V. Business.
SECTION 8 TERM AND TERMINATION
(1) The J.V. Nanogen License shall become effective on the Closing Date.
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 28
(2) The J.V. Nanogen License shall remain in force as long as and in so far
as any J.V. Product is patent-protected, or during the Operative
Existence of the J.V. and for (XXX) years thereafter, whichever is
shorter.
F. J.V. AVENTIS LICENSE
SECTION 1 AVENTIS TECHNOLOGY AND AVENTIS TECHNOLOGY IMPROVEMENTS
(1) The J.V. hereby grants to Aventis a (XXX) under the Aventis Technology
and the Aventis Technology Improvements for any use outside of the Field
and (XXX).
(2) The J.V. shall make available to Aventis without undue delay all records,
documents, files, results, plans and other materials relating to the
Aventis Technology and Aventis Technology Improvements which Aventis
requires to understand, assess and exploit the Aventis Technology and
Aventis Technology Improvements under the license granted herein.
(3) Notwithstanding the license granted herein above,(XXX).
SECTION 2 (XXX)
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Cooperation and Shareholders' Agreement 29
(a) (XXX)
(b) (XXX)
(c) (XXX)
(d) (XXX)
SECTION 3 TERRITORY
The J.V. Aventis License is granted for (XXX).
SECTION 4 ROYALTIES
(1) In consideration for the J.V. Aventis License granted herein above,
Aventis shall pay to' the J.V. royalties amounting to (XXX). The Parties
agree that the Sales of Aventis Products Combinations shall be calculated
as follows: (XXX).
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 30
(XXX)
(2) (XXX)
(3) Within (XXX) days of the end of each Calculation Period, Aventis shall
calculate in writing the amount of royalties payable from Aventis to the
J.V. and Aventis shall make available such calculation to the J.V. in
writing and, upon request, the underlying data. The respective payments
by Aventis to the J.V. shall become due and payable within (XXX) days
after the date of such calculation by Aventis.
SECTION 5 PAYMENTS
In case of late'payments by Aventis, Aventis shall pay to the J.V. default
interest at a rate of (XXX) % per annum. All payments to the J.V. provided for
herein above shall be made to a bank account to be nominated by the J.V.
SECTION 6 RECORDS
(1) The J.V. through its certified public accountant who is subject to a
professional duty of secrecy shall be entitled to inspect at reasonable
times and to such extent this will not interfere with the business
operations of Aventis the relevant books, records and accounts of Aventis
to determine the accuracy of the royalty
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 31
payments made by Aventis to the J.V. under the provisions of this J.V.
Aventis License.
(2) The costs for such auditor shall be borne by the J.V. unless inaccuracies
to the detriment of the J.V. of more than (XXX) % of the royalties due to
the J.V. under this J.V. Aventis License are discovered, in which case
Aventis shall bear such costs. In any case, Aventis shall pay any such
amounts resulting from such inspection which Aventis owes to the J.V.
plus a default interest at a rate of (XXX) % per annum to the J.V. within
(XXX) days after the end of any such inspection.
SECTION 7 TERM AND TERMINATION
(1) The J.V. Aventis License shall become effective on the Closing Date.
(2) The J.V. Aventis License shall remain in force (XXX).
SECTION 8 J.V. TECHNOLOGY AND J.V. TECHNOLOGY IMPROVEMENTS
(1) The J.V. shall grant to Aventis a (XXX) license under the J.V. Technology
and the J.V. Technology Improvements (however excluding any J.V.
Technology and/or J.V. Technology Improvements which contain any Nanogen
Background Rights) as long as the following criteria are met:
a) (XXX)
b) (XXX)
c) (XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 32
d) (XXX)
e) (XXX)
f) (XXX)
(2) Aventis shall be entitled to grant sublicenses under this license
according to the provisions in Section 2 of this Part F.
G. TERM AND TERMINATION OF THE COOPERATION AGREEMENT
SECTION 1 TERM OF THE COOPERATION AGREEMENT
The term of the Cooperation Agreement shall begin at the Closing Date, shall be
(XXX) and shall at all times be the same as the Operative Existence of the
J.V. Therefore, the Re-organization of the J.V. shall automatically be deemed to
be a termination of this Cooperation Agreement effective at the completion of
such Reorganization. However, the J.V. Nanogen License (Part E.) and the J.V.
Aventis License (Part F.) shall remain in force as provided for in Part E. and
Part F. of this Agreement, respectively.
SECTION 2 TERMINATION OF THE COOPERATION AGREEMENT
(1) The right to ordinary termination of this Cooperation Agreement shall be
excluded for (XXX) years after the Closing Date.
(2) After the period mentioned in sub-sec. (1) above, the Cooperation
Agreement may be terminated by giving (XXX) months prior written notice.
(3) A Party shall be entitled to terminate this Cooperation Agreement for
cause ("AUS WICHTIGEN GRUND") with a termination period of (XXX) months
as of the
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 33
notice of termination, provided the terminating Party is not responsible
for this cause. Such cause shall be deemed to exist a) in case of a
material non-achievement of milestones as established by the unanimous
decision of the advisory board of the J.V. from time to time (XXX) shall
be attached to this Agreement as Exhibit 4, b) in case of a breach of any
material obligation of a Party provided in this Cooperation Agreement,
particularly, without limitation in case that Aventis or Nanogen should
cease payments provided for in this Cooperation Agreement, or c) in case
that either Party becomes insolvent or applies to the court for the
opening of bankruptcy or similar proceedings, or d) in case that the J.V.
should run out of the necessary operating funds in order to aim at the
Primary Purpose. The transfer of a shareholding in the J.V. shall not be
deemed to be a cause entitling any Party to a termination for cause.
SECTION 3 CONSEQUENCES OF A TERMINATION OF THE COOPERATION AGREEMENT
(1) In case that any Party terminates the Cooperation Agreement pursuant to
the provisions contained in Section 2 of this Part G., such termination
shall also be deemed to be a demand for Re-organization according to
Section 2 of Part H. The J.V. shall be informed of any such declaration
of termination. Within (XXX) any such declaration of termination being
made, Aventis and Nanogen shall hold a shareholders' meeting of the
shareholders' of the J.V. and resolve upon the issues provided for in
Part H. Section 3 sub-sec.(3) to effect the Re-organization.
(2) In case of any termination of the Cooperation Agreement, Aventis and/
or Nanogen shall be freed from any and all funding obligations included
in this Agreement with the exception of the respective obligations to pay
royalties to the J.V. as provided for under the J.V. Nanogen License and
the J.V. Aventis License, respectively.
H. SHAREHOLDERS' AGREEMENT FOR THE J.V.
SECTION 1 TERM OF THE J.V.
The term of the J.V. shall be indefinite.
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 34
SECTION 2 RE-ORGANIZATION OF THE J.V.
(1) If, at any time during the Operative Existence of the J.V., Aventis or
Nanogen is entitled to demand from the other Party the re-organization of
the J.V. as set out below in sub-sec. (2), then either Aventis or Nanogen
shall be entitled to terminate the Cooperation Agreement pursuant to Part
H. Section 2 sub-sec.(2) or (3).
(2) As a result of the Re-organization of the J.V., the J.V. shall become the
Holding J.V. without employees whose exclusive purpose is to hold and
further exploit the Aventis Technology, the Aventis Technology
Improvements, the J.V. Technology and/or the J.V. Technology
Improvements, i.e. to aim at the Secondary Purpose, and to receive the
royalty payments as described in Part E. and F. of this Agreement, and to
make dividend payments to the shareholders according to their
shareholdings, and to complete the functions described below.
(3) The Re-organization shall be put into effect by a shareholders'
resolution of the J.V. resolving on the following issues:
a) change of the purpose of the J.V. (from the Primary Purpose to the
Secondary Purpose);
b) disposal of all employees while taking into account Part H.
Section 2 sub-sec. (4), if applicable;
c) instruction of the J.V.'s management to do everything necessary
and helpful so that the Holding J.V. aims at the Secondary Purpose
only.
Aventis and Nanogen hereby commit to resolve upon a respective
shareholders' resolution within (XXX) as of the demand for
Re-organization.
(4) The Parties agree that the costs of Re-organization shall under all
circumstances be borne exclusively by Nanogen. This shall also include
the taking over the employment agreements of the (XXX) former
Aventis' employees named in Exhibit 5 to this Agreement.
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 35
(5) For purposes of this Agreement, the Re-organization is completed and
simultaneously the Operative Existence of the J.V. ends at the date of
the aforementioned shareholders' resolution.
SECTION 3 AVENTIS TECHNOLOGY, AVENTIS TECHNOLOGY IMPROVEMENTS, J.V. TECHNOLOGY
AND J.V. TECHNOLOGY IMPROVEMENTS IN CASE OF AN END OF THE OPERATING
EXISTENCE AND RE-ORGANIZATION OF THE J.V., I. E. DURING THE
EXISTENCE OF THE HOLDING J.V.
(1) Upon a Re-organization of the J.V., all Aventis Technology, Aventis
Technology Improvements, J.V. Technology, and J.V. Technology
Improvements shall remain within the Holding J.V. and shall continue to
be owned by the Holding J.V., and be subject to the same licensing
provisions and restrictions described in Parts C., E. and F. above.
(2) All Nanogen Technology Improvements and all Nanogen Technology shall be
owned by Nanogen and shall stay in the sole ownership of Nanogen.
(3) The J.V. Nanogen License shall remain in force as long as and in so far
as any J.V. Product is patent-protected, or during the Operative
Existence of the J.V. and for (XXX) years thereafter.
(4) The J.V. Aventis License shall remain in force as long as and in so far
as any J.V. Product is patent-protected, or during the Operative
Existence of the J.V. and for (XXX) years thereafter.
(5) The J.V. shall, after paying its (minimal) operating costs, continue to
pay its income under the provisions of the German corporate and tax law
to its respective shareholders according to their respective
shareholdings.
SECTION 4 RIGHT TO EXCLUSIVE NEGOTIATION, RIGHT OF FIRST REFUSAL
(1) At any time during the Operative Existence of the J.V. and during the
existence of the Holding J.V., Nanogen and Aventis shall each be entitled
to demand from the other, and shall each be obligated to enter into,
exclusive and good faith
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 36
negotiations on the acquisition of the Aventis Share or the Nanogen
Share, as the case may be. However, in such case neither Aventis nor
Nanogen shall be under any obligation to sell the Aventis Share or the
Nanogen Share, as the case may be, to the respective other Party.
(2) Furthermore, at any time during the Operative Existence of the J.V. and
during the existence of the Holding J.V., Nanogen and Aventis each are
entitled to a right of first refusal ("VORKAUFSRECHT") to purchase the
Aventis Share or the Nanogen Share, as the case may be. Once the
respective other Party, i.e. Aventis or Nanogen, as the case may be, has
declined to purchase the Aventis Share or the Nanogen Share, as the case
may be, of the respective other Party wishing to sell, the respective
Party wishing to sell may sell its Aventis Share or its Nanogen Share, as
the case may be, to a third party. If a third party purchases either the
Aventis Share or the Nanogen Share, as the case may be, the third party
shall assume all obligations, and obtain all rights, held by the
respective selling Party under the provisions of this Agreement relating
to the shareholding of the respective Party in the J.V.
(3) All provisions relating to granting of licenses under this Agreement
shall remain unaffected by the sale and transfer of the shareholding or
part of it of Aventis or Nanogen.
SECTION 5 FIRST WARRANT BY NANOGEN
Nanogen hereby grants the following first warrant to Aventis:
Effective as of the Closing Date, (XXX).
SECTION 6 SECOND WARRANT BY NANOGEN
Nanogen hereby grants the following second warrant to Aventis:
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 37
(XXX)
SECTION 7 RULES OF PROCEDURE FOR THE ADVISORY BOARD AND BY-LAWS
Aventis and Nanogen commit to pass (i) for the advisory board of the J.V. the
"Rules of Procedure for the Advisory Board of Nanogen Recognomics GmbH" as
attached to this Agreement as Exhibit 6 and (ii) for the management of the J.V.
the "By-Laws for the Management of Nanogen Recognomics GmbH" as attached to this
Agreement as Exhibit 7.
SECTION 8 TERM OF THE SHAREHOLDERS' AGREEMENT
(1) The term of the Shareholders' Agreement shall begin at the Closing Date
and shall be indefinite. This Shareholders' Agreement shall, except only
as provided in this Section 8 sub-sec. (3) and (4) below, survive and
stay in force in case of any termination of the Cooperation Agreement or
in case of any Re-organization of the J.V.
(2) The right of Aventis and Nanogen to ordinary termination of this
Shareholders' Agreement shall be excluded for (XXX) years after the
Closing Date.
(3) After the period mentioned in sub-sec. (2) above, the Shareholders'
Agreement may be terminated by Aventis and/or by Nanogen by giving (XXX)
months prior written notice.
(4) Nanogen and/or Aventis shall only be entitled to terminate this
Shareholders' Agreement for cause ("AUS WICHTIGEM GRUND") with immediate
effect, provided the terminating Party is not responsible for this cause
and this cause is directly related to this Shareholders' Agreement,
taking into account that the Shareholders' Agreement shall survive the
termination of the Cooperation
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 38
Agreement even if the Cooperation Agreement was terminated for cause.
Such cause entitling a Party to terminate the Shareholders' Agreement
shall be deemed to exist a) in case of a breach of any material
obligation of Aventis or Nanogen provided for in this Shareholders'
Agreement, or b) in case of a breach of Section 1 of Part I. of this
Agreement, or c) in case that Aventis or Nanogen should become insolvent
or apply to the court for the opening of bankruptcy or similar
proceedings.
(5) Any fact which will be deemed to be a cause pursuant to the
aforementioned sub-sec. (4) of this Section 8 shall also be deemed to be
a cause in accordance with Section 17 of the J.V.'s Articles of
Association ("GESELLSCHAFTSVERTRAG") and shall therefore entitle the
other Party to redeem ("EINZIEHEN") the respective shares of the Party
which was responsible for the cause.
(6) The provisions of Part E., of Part F. and, Section 1 of Part I. shall in
any event survive the termination of this Agreement or Parts of this
Agreement.
I. GENERAL PROVISIONS
SECTION 1 CONFIDENTIALITY
(1) During the term of this Agreement or any Part of this Agreement as well
as thereafter, the Parties shall keep secret and shall not communicate to
third parties any and all Confidential Information.
(2) The Parties shall oblige their employees to also keep secret the
Confidential Information.
(3) The Parties may hand over Confidential Information to third parties only
after the express written consent of the disclosing Party has been
obtained, except as otherwise required by law.
(4) The obligations under this Section 1 of this Part I. to this Agreement
shall not apply to Confidential Information which
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Cooperation and Shareholders' Agreement 39
a) was known to the receiving Party at the time of disclosure by the
other Party and was not disclosed to it by a third party who
received it, directly or indirectly, from such other Party or
b) is generally available to the public through no fault of the Party
receiving the Confidential Information or
c) was received by the Party under no obligation of secrecy from
someone who did not receive it, directly or indirectly, from the
other Party or
d) was proven to have been independently developed by any employee or
contractor of the receiving Party,
e) is required to be disclosed in compliance with applicable laws or
regulations, or by order of a court or other regulatory body
having competent jurisdiction; provided, however, that the Party
required to make the disclosure gives reasonable advance written
notice to the other Party of the disclosure requirement, and
further provided that the Party required to make the disclosure
uses commercially reasonable best efforts to secure confidential
treatment of such Confidential Information required to be
disclosed.
(5) Upon termination of this Agreement, the Parties shall return to each
other or destroy all documents, files or other evidence and copies
thereof containing Confidential Information. In case of destruction of
documents, a written notification shall be given to the other Party. -
SECTION 2 WITHHOLDING TAX, VAT
(1) All sums due under this Agreement shall be paid in full without the
deduction of withholding tax that may be imposed except as provided by
strict statutory provisions. The Parties to this Agreement shall
cooperate in all respects necessary to take advantage of reduced rates of
withholding taxes under double taxation agreements and otherwise.
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Cooperation and Shareholders' Agreement 40
(2) All royalty payments agreed upon between the parties in this Agreement
are stated net of VAT. VAT at the respectively legally applicable rate
shall have to be paid in addition wherever applicable.
SECTION 3 ASSIGNMENT OF THIS AGREEMENT
This Agreement (at all times excluding this Part H. of this Agreement which
shall always and only be transferred together with the Aventis Share and/or the
Nanogen Share or parts thereof, as the case may be) or parts of this Agreement,
e.g. the J.V. Nanogen License or the J.V. Aventis License, (at all times
excluding this Part H. of this Agreement which shall always and only be
transferred together with the Aventis Share and/or the Nanogen Share or parts
thereof, as the case may be) shall not be transferred or assigned by Aventis or
Nanogen to or for the benefit of a third party without the other respective
Party's prior written consent, which consent will not be unreasonably withheld.
Notwithstanding the foregoing, Aventis and/or Nanogen have the right to assign
this Agreement to (i) any entity that acquires a majority of that respective
Party's stock, assets, or business, or acquires that portion of that respective
Party's business to which this Agreement and the license rights granted herein
relate, or (ii) any Affiliate of Aventis or Nanogen, or (iii) (XXX).
In any case of a transfer of this Agreement pursuant to this Section 3 of this
Part H., the third party must accede to the rights and obligations under this
Agreement except for the rights and obligations contained in this Part H. of
this Agreement.
SECTION 4 NOTICES
(1) All notices or other communications hereunder shall be in writing, unless
a stricter form is required by applicable law.
(2) All notices or communications shall be sent to the following addresses,
or to such other addresses of which a Party may have informed the other
Parties to this Agreement from time to time, which change of address
shall be effective only when received by the other Parties:
a) If to Aventis:
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Cooperation and Shareholders' Agreement 41
Aventis Research & Technologies GmbH & Co KG
Industriepark Hochst, Building G 865 A
65926 Frankfurt am Main
Germany
Attention: Geschaftsleitung
With a copy to:
CMS Hasche Sigle Eschenlohr Peltzer Schafer
Friedrich-Ebert-Anlage 44
60325 Frankfurt am Main
Germany
Telephone: +49 (0) 69 71 70 10
Facsimile: + 49 (0) 69 71 70 11 20 Attention: Dr. Harald Jung
b) If to Nanogen:
Nanogen Inc.
10398 Pacific Center Court
San Diego, CA 92121
USA
Attention: Management
With a copy to:
Lovells Boesebeck Droste
Darmstadter Landstral3e 125
60598 Frankfurt am Main
Germany
Telephone: ++/-49 (0)69 962 360
Facsimile: ++49 (0) 69 962 36 100
Attention: Dr. Jorg Siegels
c) If to the J.V.:
Nanogen Recognomics GmbH
Industriepark Hochst, Building G 830
65926 Frankfurt am Main
Germany
Attention: Geschaftsleitung
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Cooperation and Shareholders' Agreement 42
With a copy to:
CMS Hasche Sigle Eschenlohr Peltzer Schafer
Friedrich-Ebert-Anlage 44
60325 Frankfurt am Main
Germany
Telephone: +49(0)69717010
Facsimile: +49(0)6971701120
Attention: Dr. Harald Jung
SECTION 5 DISPUTE RESOLUTION AND ARBITRATION
The Parties commit to use their best efforts to resolve any disagreements or
disputes internally and - only if such internal dispute resolution should not
succeed - to proceed to arbitration by the International Chamber of Commerce in
accordance with the Rules of Arbitration of the International Chamber of
Commerce. Therefore, in the event of any dispute arising out of or relating to
this Agreement, or its breach, termination or invalidity, any Party (the
"INITIATING PARTY") shall adhere to the following procedure in making any claim
against any other Party (the "RESPONDING PARTY"):
(1) Any disagreement or dispute shall first be referred to the next session
of the advisory board of the J.V. for resolution.
(2) The Initiating Party shall immediately after notifying the Responding
Party of the basis for the dispute, prepare and provide the Responding
Party and the advisory board with a written, detailed summary of the
basis for the dispute, together with all facts, documents, and other
information supporting the dispute.
(3) Should the dispute not be resolved by an unanimous decision of the
advisory board on that next session, the Initiating Party and the
Responding Party, together with their representatives, employees or other
parties having knowledge of or interest in the claim, shall meet at
mutually agreed upon times and places in a good faith effort to
compromise and settle the dispute.
(4) If a dispute resolution should not be possible between the
representatives, employees or other parties having knowledge of or
interest in the dispute, any
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Cooperation and Shareholders' Agreement 43
such dispute shall immediately be submitted to the CEO of Aventis and the
CEO of Nanogen for resolution.
(5) All disputes arising in connection with or out of this Agreement which
are not settled in accordance with the provisions of this section shall
be finally settled under the Rules of Arbitration of the International
Chamber of Commerce by three arbitrators appointed in accordance with the
said Rules.
(6) Such arbitration shall take place in Frankfurt am Main, Germany. The
arbitrators shall apply the substantive laws of the Federal Republic of
Germany (excluding the German principles on conflicts of law).
SECTION 6 SEVERABILITY
(1) Should any provision of this Agreement be or become invalid, ineffective,
or unenforceable, the remaining provisions of this Agreement shall be
valid.
(2) The Parties agree to replace the invalid, ineffective, or unenforceable
provision by a valid, effective, and enforceable provision which
economically best meets the intention of the Parties had they foreseen
the invalidity, ineffectiveness, or unenforceability at that time. The
same shall apply in the case of an omission or if this Agreement is
silent.
(3) If a provision of this Agreement should be valid by a competent court or
arbitration tribunal because of the scope of its coverage (such as
territory, subject matter, time period or amount), said provision shall
not be deemed to be completely invalid but shall be deemed to be valid
with the permissible scope that is nearest to the originally agreed-upon
scope.
SECTION 7 ENTIRE AGREEMENT
(1) This Agreement including all Exhibits hereto contains the entire
agreement and understanding of the Parties in respect of the transaction
contemplated by this Agreement. This Agreement shall supersede all other
prior agreements and understandings, both written and oral, among the
Parties to this Agreement or
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Cooperation and Shareholders' Agreement 44
among and between any of them with respect to such transactions - except
the December 1998 Agreement, the September 1999 Agreement and the Beta
Site Agreement - provided, however, that such prior agreements and
understanding may to the extent necessary and appropriate be used in the
interpretation of this Agreement. In the event of any conflicts between
this Agreement and prior agreements regarding the interpretation, this
Agreement shall prevail.
(2) There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or
referred to herein.
(3) Any changes of this Agreement have to be made in writing. This shall also
apply to a waiver of the provision of this requirement of written form.
(4) This Agreement has been made and shall be binding in the English
language. However, in case that one or several of the Exhibits to this
Agreement should be in the German language, they shall nevertheless be
considered binding as part of this Agreement.
SECTION 8 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the laws of
the Federal Republic of Germany (excluding the German principles on conflicts of
law) as to all matters, including but not limited to, matters of validity,
construction, effect, performance and remedies.
SECTION 9 COSTS, FEES AND EXPENSES
Each Party shall bear the costs of its advisors and its own internal costs.
Of the costs of notarization of this Agreement, Nanogen shall bear (XXX)% and
Aventis shall bear (XXX)%.
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(XXX) Confidential material redacted and filed separately with the Commission
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Cooperation and Shareholders' Agreement 29
Zug Switzerland, June 29, 2001
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Place, Date Aventis Research & Technologies GmbH &
Co KG
Represented by Aventis Research &
TechnologiesVerwaltungs GmbH
by: /s/ Brigitte Scharr
---------------------------------
Brigitte Scharr
Zug Switzerland, June 29, 2001
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Place, Date Nanogen Inc.
by: /s/ Dorin Schultheiss
---------------------------------
Dorin Schultheiss
Zug Switzerland, June 29, 2001
------------------------------ --------------------------------------
Place, Date Nanogen Recognmics GmbH
by: /s/ Stefan Koller
---------------------------------
Stefan Koller
[SEAL OF PETER B. ARNOLD]
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(XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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TABLE (XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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TABLE (XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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Exhibit 2, Definition of JV-Technology
PENDING PATENT APPLICATIONS CO-OWNED BY AVENTIS AND NANOGEN
(XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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(XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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Exhibit 3, Definition of Nanogen-Technology
PATENTS AND PENDING PATENT APPLICATIONS TO BE LICENSED BY NANOGEN
TO THE NANOGEN-AVENTIS JOINT VENTURE
(XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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Exhibit 3
(XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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Exhibit 3
(XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
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(XXX)
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(XXX) Confidential material redacted and filed separately with the Commission
4/4