-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L84bVP+o3itIuZ7wviL9lQd/9CkPf5zaD3fCggMQk9RYzvyGBjbdzUP397PonzSi D5igbw4l9AQHaEhFAUsrAA== 0000811210-98-000018.txt : 19980810 0000811210-98-000018.hdr.sgml : 19980810 ACCESSION NUMBER: 0000811210-98-000018 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980807 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AGOURON PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000811210 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 330061928 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-12445 FILM NUMBER: 98679669 BUSINESS ADDRESS: STREET 1: 10350 NORTH TORREY PINES ROAD, SUITE 100 CITY: LA JOLLA STATE: CA ZIP: 92037 BUSINESS PHONE: 6196223000 MAIL ADDRESS: STREET 1: 10350 NORTH TORREY PINES ROAD CITY: LA JOLLA STATE: CA ZIP: 92037 10-K/A 1 AMENDMENT NO. 1 TO FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 1 to Form 10-K (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1998 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-15609 Agouron Pharmaceuticals, Inc. (Exact name of registrant as specified in its charter) California 33-0061928 (State or other jurisdiction of (I.R.S. EmployerIdentification No.) incorporation or organization) 10350 North Torrey Pines Road, La Jolla, California 92037-1020 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (619) 622-3000 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, without par value (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] On July 28, 1998, the aggregate market value of the common stock held by nonaffiliates totaled approximately $724,738,000 based on the closing stock price as reported by The Nasdaq Stock Market. On July 28, 1998, there were approximately 31,097,000 shares of common stock, without par value, of the registrant issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE The registrant's definitive proxy statement to be prepared pursuant to Regulation 14A and filed in connection with solicitation of proxies for its Annual Meeting of Stockholders, to be held on October 28, 1998, is incorporated by reference into Part III of this Form 10-K. 1 PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) List of documents filed as part of this report: (1) Financial Statements and Supplementary Data Reference is made to the Index to Financial Statements and Schedules under Item 8 in Part II hereof, where these documents are listed. (2) Exhibits - see (c) below (b) Reports on Form 8-K No reports on Form 8-K were filed during the fourth quarter of fiscal 1998. (c) Exhibits Exhibit Number Exhibit -------- ---------------------------------------------------------- 2.1(a) Agreement and Plan of Reorganization dated as of April 28, 1997, between Agouron Pharmaceuticals, Inc., Agouron Acquisition Corporation and Alanex Corporation. 3.1(b) Restated Articles of Incorporation (December 10, 1992). 3.2(c) Amended and Restated Bylaws (Restated June 17, 1991). 4.1(d) Rights Agreement dated November 7, 1996, as amended on November 27, 1996, between the Company and Chase Mellon Shareholder Services. L.L.C., which includes, as Exhibit A, the Certificate of Determination, Preferences and Rights of Series B Participating Preferred Stock as filed with the California Secretary of State on November 20, 1996. 10.01(h) 1990 Stock Option Plan (Restated November 2, 1995). 10.02(k) Form of 1990 Incentive Stock Option Agreement. 10.03(k) Form of 1990 Non-Statutory Stock Option Agreement for Employees/Officers/Directors. 10.04(k) Form of 1990 Non-Statutory Stock Option Agreement for Consultants. 10.05(c) 1985 Stock Option Plan (Last Amended August 14, 1991). 10.06(e) Agouron Pharmaceuticals, Inc. 401(k) Plan (Amended August 1992). 10.07(b) Agouron Pharmaceuticals, Inc. Employee Stock Purchase Plan (October 15, 1992). 10.08(b) Agouron Pharmaceuticals, Inc. Flexible Benefits Plan (December 10, 1992). 10.09(f) Agreement Two dated February 28, 1994 between Japan Tobacco Inc. and the Company. (Portions of the agreement receive confidential treatment pursuant to an application filed April 25, 1994; File No. 0-15609). 35 Exhibit Number Exhibit -------- ---------------------------------------------------------- 10.10(g) Development and License Agreement dated December 1, 1994 between Japan Tobacco Inc. and the Company (Portions of the agreement receive confidential treatment pursuant to an application dated January 31, 1995). 10.11(h) First Amendment to Development and License Agreement effective December 1, 1994 between Japan Tobacco Inc. and the Company. (Confidential treatment has been requested for portions of this agreement pursuant to an application dated January 31, 1996. The underlying agreement was filed as Exhibit 10.54 on Form 10-Q for the period ended December 31, 1994, and portions thereof receive confidential treatment pursuant to an order of the Securities and Exchange Commission dated June 28, 1995.) 10.12(i) Amendment effective January 1, 1996 to the Agouron Pharmaceuticals, Inc. 401(k) Plan. 10.13(j) 1996 Stock Option Plan. 10.14(j) Form of 1996 Incentive Stock Option Agreement. 10.15(j) Form of 1996 Non-Statutory Stock Option Agreement for Employees/Officers/Directors. 10.16(j) Form of 1996 Stock Option Agreement for Consultants 10.17(l) Second Amendment to Development and License Agreement effective January 17, 1997 between Japan Tobacco Inc. and the Company (Confidential treatment has been requested for portions of this agreement pursuant to an application dated August 21, 1997, as separately filed with the Securities and Exchange Commission. The underlying agreement was filed as Exhibit 10.54 on Form 10-Q for the period ended December 31, 1994, and portions thereof receive confidential treatment pursuant to an orde of the Securities and Exchange Commission dated June 28, 1995.) 10.18(l) Third Amendment to Development and License Agreement effective December 1, 1996 between Japan Tobacco Inc. and the Company. (Confidential treatment has been requested for portions of this agreement pursuant to an application dated August 21, 1997, as separately filed with the Securities and Exchange Commission. The underlying agreement was filed as Exhibit 10.54 on Form 10-Q for the period ended December 31, 1994, and portions thereof receive confidential treatment pursuant to an order of the Securities and Exchange Commission dated June 28, 1995.) 10.19(l) VIRACEPT License Agreement between the Company and Japan Tobacco Inc. and F. Hoffmann-La Roche Ltd dated June 30, 1997. (Confidential treatment has been requested for portions of this agreement pursuant to an application dated August 21, 1997, as separately filed with the Securities and Exchange Commission.) 10.20(m) Form of 1998 Employee Stock Option Plan. 10.21(m) Form of 1998 Employee Non-Statutory Stock Option Agreement. 36 Exhibit Number Exhibit -------- ---------------------------------------------------------- 10.22 License and Supply Agreement between the Company and Japan Energy Corporation effective as of June 30, 1998. (Confidential treatment has been requested for portions of this agreement pursuant to an application dated August 4, 1998, as separately filed with the Securities and Exchange Commission.) 10.23 Common Stock Purchase Agreement between The Immune Response Corporation and the Company dated June 11, 1998. (Confidential treatment has been requested for portions of this agreement pursuant to an application dated August 4, 1998, as separately filed with the Securities and Exchange Commission.) 10.24 Amendment to the VIRACEPT License Agreement between the Company and Japan Tobacco Inc. and F. Hoffmann-La Roche Ltd as of May 1, 1998. (Confidential treatment has been requested for portions of this agreement pursuant to an application dated August 4, 1998, as separately filed with the Securities and Exchange Commission.) 21/#/ Subsidiaries of Agouron Pharmaceuticals, Inc. 23.1/#/ Consent of Independent Accountants. 27/#/ Financial Data Schedule. (Exhibit 27 is submitted as an exhibit only in the electronic format of this Annual Report on Form 10-K submitted to the Securities and Exchange Commission.) 99/#/ Important Factors Regarding Forward-Looking Statements. # Previously filed (a) Incorporated by Reference to Form 8-K filed on May 23, 1997. (b) Incorporated by Reference to Form 10-Q filed for the quarter ended December 31, 1992. (c) Incorporated by Reference to Form 10-K filed for the year ended June 30, 1991. (d) Incorporated by Reference for Form 8-K/A filed on December 20, 1996. (e) Incorporated by Reference to Form 10-K filed for the year ended June 30, 1992. (f) Incorporated by Reference to Form 10-Q/A filed for the quarter ended March 31, 1994. (g) Incorporated by Reference to Form 10-Q filed for the quarter ended December 31, 1994. (h) Incorporated by Reference to Form 10-Q filed for the quarter ended December 31, 1995. (i) Incorporated by Reference to Form 10-Q filed for the quarter ended March 31, 1996. (j) Incorporated by Reference to Form S-8 filed on November 26, 1996. (k) Incorporated by Reference to Form 10-Q for the quarter ended December 31, 1996. (l) Incorporated by Reference to Form 10-K for the year ended June 30, 1997. (m) Incorporated by Reference to Form S-8 filed on February 19, 1998. 37 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AGOURON PHARMACEUTICALS, INC. August 7, 1998 By: /s/ Steven S. Cowell --------------------------------- Steven S. Cowell Corporate Vice President Chief Financial Officer 38 EX-10.22 2 LICENSE AND SUPPLY AGREEMENT PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED (DESIGNATED BY AN ASTERISK (*) AND WHITE SPACE) AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT DATED AUGUST 4, 1998; FILE NO. 0-15609 LICENSE AND SUPPLY AGREEMENT This License and Supply Agreement ("Agreement"), effective as of the 30th day of June 1998, is by and between Japan Energy Corporation, a corporation duly organized and existing under the laws of Japan and having its principal place of business at 10-1, Toranomon 2-chome, Minato-ku, Tokyo 105-8407, Japan (hereinafter referred to as "JE"), and Agouron Pharmaceuticals, Inc., a corporation duly organized and existing under the laws of the State of California, U.S.A., and having its principal place of business at 10350 North Torrey Pines Road, La Jolla, California 92037, U.S.A. (hereinafter referred to as "Agouron"). JE and Agouron are sometimes hereinafter each referred to as a Party (collectively "Parties") to this Agreement. BACKGROUND JE possesses technical information and know-how pertaining to a certain pharmaceutical compound designated JE-2147 and its related compounds that may be useful in the treatment and prevention of Human Immunodeficiency Virus infections and other diseases. The Parties entered into a Confidentiality Agreement effective December 31, 1997 (the "Confidentiality Agreement") and a Material Transfer Agreement effective December 31, 1997 (the "Material Transfer Agreement"), pursuant to which Agouron has undertaken certain evaluations of JE-2147. JE holds patents rights pertaining to JE-2147 and its related compounds. Agouron desires to obtain a license from JE to enable Agouron to develop and commercialize Product (as hereinafter defined) in certain countries of the world, and JE is willing to grant such license on the terms and conditions hereinafter set forth. The Parties wish to cooperate under the terms of this Agreement to optimize the development and commercialization of Product. The Parties also wish to confirm their arrangement regarding the supply of Compound by JE to Agouron and the supply of Product by Agouron to JE (both terms as hereinafter defined). On June 30, 1998, the parties executed and delivered to each other, by telefax, a prior version of this Agreement. The parties now wish to supersede such prior version of this Agreement and to formally enter into this revised version of this Agreement. NOW, THEREFORE, in consideration of the premises, and the mutual covenants, benefits and obligations set forth herein, the Parties agree as follows: ARTICLE I - DEFINITIONS When used in this Agreement, the following terms shall have the meanings set out in this Article I. Except as otherwise explicitly provided, all references to Articles and Sections shall refer to the Articles and Sections of this Agreement, and all references to Attachments, Exhibits and Schedules shall refer to the Attachments, Exhibits and Schedules to this Agreement, all of which are incorporated herein by reference. Section 1.01 "Affiliate" means any person, organization or entity that is, directly or indirectly, controlling, controlled by, or under common control with JE or Agouron, as the case may be. The term "control" (including, with correlative meaning, the terms "controlled by" and "under common control with"), as used with respect to any person, organization or entity, means the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of such person, organization or entity, whether through the ownership of voting securities, or by contract or court order or otherwise. The ownership of voting securities of a person, organization or entity shall not, in and of itself, constitute "control" for purposes of this definition, unless said ownership is of a majority of the outstanding securities entitled to vote of such person, organization or entity. Affiliate shall also mean a limited partnership in which a subsidiary of Agouron and/or JE is a general partner. Section 1.02 "Combination Product" means * Section 1.03 "Compound" means the chemical compound known by the JE code name JE-2147 ("JE-2147"), whose chemical structure is as follows: * (chemical structure) The definition of Compound also means: (i) * Section 1.04 "Compound Supply Plan" means the supply plan under which JE will provide Compound to Agouron in accordance with the provisions of Section 4.04. Section 1.05 "Control," "Controlled" or "Controlling" means * 2 Section 1.06 "Development Program" means * Section 1.07 "Development Program Patent Rights" means * Section 1.08 "Development Program Technology" means * 3 Section 1.09 "Dossier" means the document that is filed with and approved by a government or health authority for purposes of Registration, for example, a Marketing Authorization Application. Section 1.10 "Effective Date" means June 30, 1998. Section 1.11 "EMEA" means the European Agency for the Evaluation of Medicinal Products. Section 1.12 "FDA" means the United States Food and Drug Administration. Section 1.13 "Field" means * Section 1.14 "Initial Commercial Sale" means the first commercial sale of a Product * Section 1.15 "JE Territory" means Japan, Taiwan, South Korea and North Korea. Section 1.16 "JE Patent Rights" means: * Section 1.17 "JE Technology" means * Section 1.18 "Licensed Territory" means all countries of the world, except for Japan, Taiwan, South Korea and North Korea. Section 1.19 "MAA" means Marketing Authorization Application. 4 Section 1.20 "Major Market European Country" means the United Kingdom, France, Germany, Spain or Italy. Section 1.21 "Net Sales" means the gross amount invoiced for Product by Agouron, its Affiliates and sublicensees to non-Affiliated third parties, other than separately itemized transportation costs, and sales taxes and other taxes that are directly linked to and included in the gross amount invoiced, as computed on a product-by-product basis for the countries concerned, less: * Section 1.22 "New Drug Application" or "NDA" means a new drug application, product license application or comparable regulatory submission to the FDA, the EMEA or an equivalent agency of a country in the Territory for permission to commence commercial sale of a Product. Section 1.23 "Patent Rights" means, collectively, * Section 1.24 "Product" means any * Section 1.25 "Registration" means the official approval by the government or health authority in a country (or supra-national organization, such as the European Agency for the Evaluation of Medicinal Products) that is required for a Product to be offered for sale in such country, including such authorizations as may be required for the production, importation, pricing, reimbursement and sale of such Product, and for subsequent regulatory filings for line extensions and/or additional indications of such Product. Section 1.26 "Territory" means * Section 1.27 "Trade Dress" means any materials directly supporting the commercialization of a Product, including, but not limited to, packaging, package inserts, advertising or selling aids, brochures, mailings and/or other marketing or packaging materials. Section 1.28 "Trademark(s)" means any trademark selected and owned by a Party and registered (or applied for) by such Party, its Affiliate(s) and sublicensee(s) in the Territory for use in connection with the marketing of Products. The definition of Trademark(s) shall not refer to trade names or designs such as logos used by a Party to designate the name of such Party. 5 Section 1.29 "United States" or "U.S." means the United States of America, its territories, possessions and protectorates (including Puerto Rico), and the District of Columbia. Section 1.30 "Valid Claim" means a * ARTICLE II - COMMERCIAL RIGHTS Section 2.01 License Grants. To implement the development and commercialization of Compound and/or Products, the Parties, subject to the other applicable provisions of this Agreement, grant and accept the license rights provided below in this Article II. (a) Subject to the provisions of Section 2.01(c), and Article V, JE grants Agouron the exclusive right, even as to JE (with right of sublicense), to use, offer for sale, sell and/or import in or into the Licensed Territory, Compound and Products under applicable JE Patent Rights and Development Program Patent Rights, and using applicable JE Technology and Development Program Technology. (b) * (c) * 6 (d) * (e) Agouron grants JE * (f) Agouron grants JE * (g) Agouron grants JE * 7 (h) Subject to the provisions of Section 4.04, Agouron shall have * Subject to the provisions of Section 4.04, JE shall have a * (i) * (j) * (k) * 8 (l) Agouron agrees to use reasonable efforts to not sell Product in the Licensed Territory to persons who it knows, or has reason to know, will resell and/or transfer such Product outside of the Licensed Territory. Section 2.02 Discontinuance of the Development Program (a) Agouron shall, in a timely manner, use reasonable diligence in the development and Registration of a Product in the Field in the Licensed Territory. Reasonable diligence means a commercially reasonable standard of effort based on the commercial potential for such Product in the Licensed Territory. Development efforts undertaken by Agouron's Affiliates and sublicensees shall be attributed to Agouron. * (b) * 9 Section 2.03 Diligent Efforts to Market * ARTICLE III - SHARING AND PROTECTION OF INTELLECTUAL PROPERTY Section 3.01 Patents. (a) * 10 (b) * (c) * (d) * (e) * 11 (f) * (g) * (h) * (i) * 12 (j) * (k) * (l) * Section 3.02 Infringement of Patents of Third Parties. Each Party, its Affiliates and sublicensees, and their respective employees and agents shall use diligent efforts to avoid known 13 infringement of patents of any third party * Section 3.03 Trademarks. * 14 Section 3.04 Information Exchange. * Section 3.05 Confidentiality. Except as otherwise expressly specified in this Agreement and except for the proper exercise of any license rights granted or rights reserved under this Agreement, JE and Agouron shall each keep in confidence and shall each use its best efforts to cause its respective Affiliates, employees, directors, agents, consultants, clinical research associates, outside contractors, clinical investigators and sublicensees to whom it is permitted to disclose information pursuant to the terms of this Agreement to retain in confidence all confidential and proprietary information of the other Party, including the * Without limiting the foregoing, JE and Agouron shall each exercise the same degree of diligence and care with respect to the above-described information as it exercises with respect to its other proprietary information. Each Party represents to the other Party that it maintains policies and procedures designed to prevent the unauthorized disclosure of its proprietary data and information. * 15 The preceding obligations of confidentiality shall be waived as to information that the Party claiming waiver can demonstrate, based on written records: (i) was in the public domain at the time of disclosure hereunder; (ii) comes into the public domain through no fault of the Party claiming waiver; (iii) was known to the Party claiming waiver prior to its disclosure under this Agreement, unless such information was obtained from the other Party on a confidential basis; (iv) is disclosed on a non-confidential basis to the Party claiming waiver by a third party having a lawful right to make such disclosure on a non-confidential basis; (v) is published with the prior mutual agreement of the Parties, after having given consideration to appropriate commercial factors; (vi) comes into the public domain through governmental publication of a patent application; or (vii) is required to be disclosed to file a patent or other regulatory application or to comply with applicable laws and regulations. * The Parties acknowledge and agree that the Parties' rights and obligations under the Confidentiality Agreement and the Material Transfer Agreement between the Parties which were both originally entered into on December 22, 1997 are hereby superseded by the provisions of this Section 3.05. Section 3.06 Publication. JE and Agouron each acknowledges the interests of the other Party in publishing certain of the results of its development and Registration of a Product to obtain recognition within the scientific community and to advance the state of scientific knowledge. The Parties also recognize their mutual interests in obtaining valid patent protection for their drug products. Consequently, a Party, its employees or consultants wishing to make a publication shall * 16 ARTICLE IV - DEVELOPMENT AND COMMERCIALIZATION STRUCTURE Section 4.01 Coordination. Coordination of the Parties' development and commercialization efforts for Compound and Products in the Licensed Territory shall be carried out as specified in Sections 4.02 and 4.03. Section 4.02 Development and Registration; Responsibility for Development Costs. JE and Agouron acknowledge their mutual intention to cooperate in a commercially reasonable manner in the timely development of Compound and Products in the Territory. The Parties further acknowledge their mutual willingness to discuss ad hoc agreements to establish appropriate mechanisms for such cooperation. Recognizing the importance of timely initiation of development activities, however, JE and Agouron agree to the following basic approach to development of Compound and Products in the Licensed Territory, and to the conduct and funding of their respective development activities. (a) * (b) The Parties acknowledge that it will be necessary to amend and update the Development Program as additional information becomes available concerning the prerequisites necessary for Registration of Product in the Licensed Territory. * 17 (c) As soon as possible after the execution of this Agreement, the Parties shall promptly reach agreement on the basic terms under which JE will manufacture and supply Compound to Agouron, its Affiliates and sublicensees * (d) Agouron shall be responsible * (e) Agouron,* , shall be responsible for submission of Dossiers for a Product to the regulatory authorities in the Licensed Territory in pursuit of approvals to sell such Product and * All Dossiers for Product in the Licensed Territory shall be owned by and be in the name of Agouron. (f) JE shall cooperate with Agouron to * (g) JE will be responsible for * (h) JE shall be responsible * (i) To the extent required to support Registrations of a Product (such as for Investigational New Drug Applications and New Drug Applications), Agouron shall have 18 * (j) Each Party agrees to use its diligent efforts in responding in a timely manner, * (k) Agouron shall keep JE informed of its progress in the development and Registration of Products. This information exchange shall include, * (l) JE and Agouron shall each use qualified persons in the development activities of the Development Program. (m) All work in connection with the development of Compound or Products, to the extent required by applicable laws or regulations, shall be conducted in accordance with Good Laboratory Practices, Good Manufacturing Practices and Good Clinical Practices, as such rules of practice are amended from time to time. Each Party in the conduct of its activities shall comply with all applicable laws, rules and regulations of each jurisdiction within the Territory 19 that are applicable to the development, testing, manufacture, labeling, packaging, storage, marketing, distribution, sale, promotion and import or export of Product.distribution, sale, promotion and import or export of Product. (n) * Section 4.03 Marketing. * JE and Agouron agree to the following basic approach to the marketing of Products in the Licensed Territory, and to the conduct of their marketing activities in their respective marketing territories. (a) Agouron shall be responsible for * (b) * (c) Agouron shall keep JE informed of Agouron's current and planned marketing activities in the Licensed Territory. * JE shall keep Agouron informed of JE's marketing activities in the JE Territory. * (d) Unless prohibited by law or regulation, the labeling for a Product in the countries in the Licensed Territory shall * 20 (e) * (f) Agouron and JE shall each use qualified persons in its marketing activities for a Product in its respective marketing territories. (g) Agouron shall be responsible for responding, in a timely manner, * (h) Each Party, its Affiliates and sublicensees, agrees throughout the duration of this Agreement to notify the other Party immediately in English of * 21 (i) Each Party further agrees to immediately notify the other Party of any information * The information to be provided hereunder shall be provided in English. (j) Without limiting the foregoing, it is also understood that each Party may notify its Affiliates or sublicensees of * Section 4.04 Supply of Compound. It is anticipated that timely development of Compound and/or a Product will require the manufacture of significant amounts of the Compound, and that successful worldwide commercialization of a Product will require annual production of large quantities of the Compound. (a) In accordance with the provisions of Section 4.04, Agouron shall purchase from JE, and JE shall timely deliver Compound for use in the development and Registration activities for Compound and/or Product, including using Compound to make Product to be used in clinical studies and trials and for special license sales. * 22 (b) In accordance with the provisions of Section 4.04, Agouron shall purchase from JE, and JE shall timely deliver Compound for use in making the finished dosage form(s) of Product to be sold in the Licensed Territory, * (c) JE shall maintain books of account and complete and accurate records of all of its FBMCC of procuring and/or producing such Compound * (d) * 23 (e) * (i) (ii) (iii) 24 (iv) Sale and delivery of Compound will be subject to an agreed-upon form of purchase order being issuedby Agouron and accepted by JE. * (v) * (vi) * (vii) * (f) * 25 (i) * (ii) * (g) * Section 4.05 Supply of Product. The details for manufacturing Product will be determined after the execution of this Agreement, according to the following conditions: (a) Agouron shall be responsible for manufacturing Product. (b) * (c) * 26 (d) * (e) * (i) * (ii) * 27 (iii) * (iv) * (v) * (f) * (g) * 28 (h) * ARTICLE V - ADVANCE PAYMENTS AND ROYALTIES Section 5.01 Advanced Payments and Royalties. (a) Subject to the terms and conditions of this Agreement and in consideration for the rights granted to Agouron under this Agreement, Agouron shall make the following one-time-only payments to JE:
PAYMENT MILESTONE EVENT (U.S. Dollars) (i) Within thirty (30)days of execution of this Agreement $6,000,000 (ii) * * (iii)* * (iv) * * (v) * * (vi) * * TOTAL PAYMENTS: $26,000,000 * *
29 * (b) * (c) The Parties agree that the calculation of the amount of royalties due shall be subject to and in accordance with the following provisions: (i) * (ii) * (iii) * 30 (iv) * (v) * (vi) * (vii) * (viii) * 31 Section 5.02 General Licensing Terms. (a) * (b) The Parties agree that the accounting and payment of royalties shall comply with the following terms and conditions: (i) * (ii) * 32 (iii) * (iv) Agouron shall maintain and cause its Affiliates and sublicensees to maintain books of account and complete and accurate records pertaining to the sale or other disposition of Products and of the royalties and other amounts payable under this Agreement in sufficient detail to * 33 (c) * (d) * Section 5.03 Foreign Currency. (a) Net Sales and any milestone and royalty amounts shall be stated in United States dollars. Remittal of milestone payments and royalties shall be made in United States dollars. * (b) * ARTICLE VI - TERM AND TERMINATION Section 6.01 Termination for Breach * 34 Section 6.02 Termination by Agouron. (a) * (b) * 35 (c) * Section 6.03 Termination by Mutual Agreement. The Parties may at any time terminate this Agreement, in part or in its entirety, by mutual written agreement. Section 6.04 Termination Upon Bankruptcy.. In the event that a Party is subject to any proceeding under the bankruptcy laws, including appointment of a receiver, trustee, liquidator or other custodian of its business or substantially all of its assets, and such proceeding, if involuntary, is not dismissed or discharged within one hundred fifty (150) days after such proceeding is instituted, or upon the liquidation, dissolution, or winding up of its business, then this Agreement, at the election of the other Party, shall be terminated in its entirety for cause upon a notice in writing of at least fifteen (15) days from the Party who is not bankrupt or insolvent. Section 6.05 Disposition of Inventory In the event of the cancellation or termination of any license rights with respect to a Product, the inventory of such Product may be sold for up to * after date of cancellation or termination, provided the required payments, if any, are paid thereon. Section 6.06 Effect of Termination. * ARTICLE VII - WARRANTIES AND COVENANTS; INDEMNITIES; INSURANCE; DISPUTE RESOLUTION Section 7.01 Warranties and Covenants. (a) Each Party represents and warrants to the other Party that it has the legal power, authority and right to enter into this Agreement and to perform all of its respective obligations set forth herein, including the attachments hereto. 36 (b) JE acknowledges and represents that the patents and patent applications listed in Schedule 2 are the only patents and patent applications included within the JE Patent Rights that are jointly owned by JE and a third party, and that such patents and patent applications are only subject to the conditions and restrictions noted on Schedule 2 and, except as otherwise noted on Schedule 2, that the license of such JE Patent Rights to Agouron under the terms of this Agreement do not require the consent of such joint owner. * (c) JE represents and warrants that, as of the date this Agreement is executed, it was not aware of the existence of any patent applications or patents owned and Controlled by a third party covering Compound that might materially prevent the Parties from commercializing Compound in the Licensed Territory, except for the patent application listed in Schedule 7.01(c). (d) JE represents and warrants that: (i) it has the right to grant the licenses set forth in Article II; and (ii) there are no suits, claims or proceedings pending in any court or by or before any governmental body or agency with respect to the JE Patent Rights or JE Technology that would materially interfere with the ability of Agouron to fully exercise the licenses granted to it under this Agreement, including the exclusive license rights under Section 2.01(a). Agouron represents that, to the best of its knowledge, it does not have any know-how, trade secret, experimental data, formula, expert opinion, experimental procedure or other confidential and/or proprietary information specifically concerning the Compound, intermediates thereof, or a Product that was developed or acquired by or on behalf of Agouron before the Effective Date of this Agreement that is necessary for either: (i) the formulation (including sustained-release formulations), manufacture, use and/or application of Product; or (ii) obtaining Registration of Product, including, but not limited to, information and data arising out of pre-clinical and clinical trials involving Product and all NDA applications for Product, and which is under the Control of Agouron. (e) Each Party covenants that it shall not commit any act or fail to take any action that, in any significant way, would be in conflict with its material obligations under this Agreement and the attachments hereto. (f) Each Party promises to comply in all material respects with the terms of the licenses granted to it under this Agreement, and with all federal, state, local and foreign laws, rules and regulations applicable to the development, manufacture, distribution, import and export, and sale of pharmaceutical products pursuant to this Agreement. (g) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH OF THE PARTIES MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER INCLUDED WITHIN THE CLAIMS OF THE PATENT RIGHTS, INCLUDING THE COMPOUND. THE PARTIES UNDERSTAND AND AGREE THAT DEVELOPMENT AND COMMERCIALIZATION OF COMPOUND AND/OR PRODUCTS WILL INVOLVE APPROVAL BY REGULATORY AUTHORITIES, AND THAT NO PARTY IS GUARANTEEING THE SAFETY OR EFFICACY OF COMPOUND AND/OR PRODUCTS, 37 OR THAT COMPOUND AND/OR PRODUCTS WILL RECEIVE THE REQUIRED APPROVALS. Section 7.02 Indemnities; Insurance. (a) Agouron shall indemnify and hold harmless JE and its Affiliates, employees, and agents (a "JE Indemnified Party") from and against any and all liabilities, losses, damages, costs, or expenses (including reasonable investigative and attorneys' fees) which the JE Indemnified Party may incur, suffer or be required to pay resulting from or arising in connection with any product liability or other claims (other than claims for patent infringement) arising from the use by any person of any Product, to the extent such product liability or other claim results from the negligent, reckless or intentional misconduct of Agouron, its Affiliates or sublicensees, or their respective employees and agents, or on account of Agouron's failure to fulfill its obligations or undertakings under this Agreement; provided, however, that in no event shall Agouron be liable to a JE Indemnified Party for any indirect, incidental, special or consequential damages, including loss of revenues or profits from sales of Products. (b) JE shall indemnify and hold harmless Agouron and its Affiliates, employees, and agents (an "Agouron Indemnified Party") from and against any and all liabilities, losses, damages, costs, or expenses (including reasonable investigative and attorneys' fees) that the Agouron Indemnified Party may incur, suffer or be required to pay, resulting from or arising in connection with any product liability or other claims (other than claims for patent infringement) arising from the use by any person of any Product, to the extent such product liability or other claim results from the negligent, reckless or intentional misconduct of JE, its Affiliates or sublicensees, or their respective employees and agents, or on account of JE's failure to fulfill its obligations or undertakings under this Agreement; provided, however, that in no event shall JE be liable to an Agouron Indemnified Party for any indirect, incidental, special or consequential damages, including loss of revenues or profits from sales of Products. (c) To the extent that a product liability or other claim (other than a claim for patent infringement) results from the negligent, reckless or intentional misconduct of more than one Party, their Affiliates, sublicensees, or their respective employees and agents, the Parties agree to share in an equitable manner such liabilities, losses, damages, costs, or expenses in proportion to the relative fault of each of the Parties, their Affiliates, sublicensees, or their respective employees and agents. (d) Unless the Parties agree otherwise, all other liabilities, losses, damages, costs, or expenses (including reasonable investigative and attorneys' fees) under this Section 7.02 relating to or involving a Product in a country, except as provided by the terms of Sections 7.02(a), (b) and (c), shall be the responsibility of the Party marketing such Product in such country. The Party marketing a Product in a country shall indemnify the non-marketing Party in such country from and against any and all liabilities, losses, damages, costs, or expenses (including reasonable investigative and attorneys' fees) which such non-marketing Party may incur, suffer or be required to pay resulting from or arising in connection with any product liability or other claims (other than claims for patent infringement) arising from the use by any person of such Product in 38 such country. Section 3.02 sets forth the Parties' liability obligations arising from claims for patent infringement. (e) The aforesaid obligations of the indemnifying Party shall be subject to the indemnified Party fulfilling the following obligations: (i) The indemnified Party shall fully cooperate with the indemnifying Party in the defense of any claims, actions, etc., which defense shall be controlled by the indemnifying Party. (ii) The indemnified Party shall not, except at its own cost, voluntarily make any payment or incur any expense with respect to any claim or suit without the prior written consent of the indemnifying Party, which consent such Party shall not be required to give. (iii) The indemnified Party shall notify the indemnifying Party promptly after receipt of a notice of the commencement of any litigation or threat thereof that may reasonably lead to a claim for indemnification. (f) The Parties agree to maintain appropriate amounts of product liability insurance coverage and to have the other Party included as an additional insured on such policies. Section 7.03 Dispute Resolution. In the event of any controversy or claim arising out of or relating to any provision of this Agreement or any term or condition hereof, or the performance by a Party of its obligations hereunder, the Parties shall try to settle their differences amicably between themselves. If the representatives of the Parties are unable to reach agreement on any such issue, the issue shall be submitted for consideration, in the case of Agouron, to a designee of its Chief Executive Officer and, in the case of JE, to a designee of its Managing Director of Pharmaceuticals and Biobusiness Division. If such designees are unable to agree, then the issue shall be resolved, in the case of Agouron, by its Chief Executive Officer and, in the case of JE, by its Managing Director of Pharmaceuticals and Biobusiness Division. Any unresolved issues arising between the Parties relating to, arising out of, or in any way connected with this Agreement or any term or condition hereof, or the performance by a Party of its obligations hereunder, whether before or after termination of this Agreement, except as otherwise provided in this Agreement, shall be finally resolved by binding arbitration. Whenever a Party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other Party. The Party giving such notice shall refrain from instituting the arbitration proceedings for a period of sixty (60) days following such notice. If JE is the Party initiating the arbitration, the arbitration shall be held in San Diego, California, according to the rules of the American Arbitration Association ("AAA"). If Agouron is the Party initiating the arbitration, the arbitration shall be held in Tokyo, Japan, according to the rules of the Japan Commercial Arbitration Association "JCAA"). The arbitration shall be conducted by a single arbitrator mutually chosen by the Parties. If the Parties cannot agree upon a single arbitrator within fifteen (15) days after the institution of the arbitration proceeding, then the arbitration shall be conducted by a panel of three arbitrators appointed in accordance with applicable AAA or JCAA 39 rules; provided, however, that each Party shall, within thirty (30) days after the institution of the arbitration proceedings, appoint one arbitrator with the third arbitrator being chosen by the other two arbitrators. If only one Party appoints an arbitrator, then such arbitrator shall be entitled to act as the sole arbitrator to resolve the controversy. Any arbitration hereunder shall be conducted in the English language, to the maximum extent possible. All arbitrator(s) eligible to conduct the arbitration must agree to render their opinion(s) within thirty (30) days of the final arbitration hearing. The arbitrator(s) shall have the authority to grant injunctive relief and specific performance and to allocate between the Parties the costs of arbitration in such equitable manner as he/she determines; provided, however, that each Party shall bear its own costs and attorneys' and witness' fees. Notwithstanding the terms of this Section 7.03, a Party shall also have the right to obtain, prior to the arbitrator(s) rendering the arbitration decision, provisional remedies, including injunctive relief or specific performance, from a court having jurisdiction thereof. The arbitrator(s) shall, upon the request of either Party, issue a written opinion of the findings of fact and conclusions of law and shall deliver a copy to each of the Parties. Decisions of the arbitrator(s) shall be final and binding on all of the Parties. Judgment on the award so rendered may be entered in any court having jurisdiction thereof. ARTICLE VIII - DISCLOSURE OF AGREEMENT Section 8.01 Disclosure of Agreement Except as agreed to by the Parties, and as required for the performance of its obligations hereunder, neither JE nor Agouron shall release any information to any third party with respect to any of the terms of this Agreement without the prior written consent of the other Party, which consent shall not unreasonably be withheld. This prohibition includes, but is not limited to, press releases, educational and scientific conferences, promotional materials and discussions with the media. The Parties shall jointly prepare and release a public announcement regarding the existence of this Agreement. If a Party determines that it is required by law, including securities laws and regulations pertaining to publicly traded companies, to release information to any third party regarding the terms of this Agreement, it shall notify the other Party of this fact prior to releasing the information. The notice to the other Party shall include the text of the information proposed for release. The other Party shall have the right to confer with the notifying Party regarding the necessity for the disclosure and the text of the information proposed for release, but the notifying Party shall have the discretion to release the information as it deems necessary to fulfill its requirements under law. Notwithstanding the preceding, JE and Agouron shall each have the right to disclose the terms of this Agreement to persons it proposes to enter into business relationships with, if such persons are subject to confidentiality and use obligations equivalent to those applicable to the disclosing Party hereunder. ARTICLE IX - GENERAL PROVISIONS Section 9.01 No Implied Licenses Only the licenses granted pursuant to the express terms of this Agreement shall be of any legal force and effect. No license rights shall be created by implication or estoppel. 40 Section 9.02 No Waiver Any failure by a Party to enforce any right which it may have hereunder in any instance shall not be deemed to waive any right which it or the other Party may have in any other instance with respect to any provision of this Agreement, including the provision which such Party has failed to enforce. Section 9.03 Severability; Government Acts. In the event that any provision of this Agreement is judicially, or by a competent authority, determined to be unenforceable, in part or in whole, with regard to any or all of the countries in the Territory, the remaining provisions or portions of this Agreement shall be valid and binding to the fullest extent possible, and the Parties shall endeavor to negotiate additional terms, as feasible, in a timely manner so as to fully effectuate the original intent of the Parties, to the extent possible, in the applicable countries. In the event that any act, regulation, directive, or law of a country, including its departments, agencies or courts should make impossible or prohibit, restrain, modify or limit any material act or obligation of a Party under this Agreement, and if any Party to this Agreement is materially adversely affected thereby, the Parties shall attempt in good faith to negotiate a lawful and enforceable modification to this Agreement that substantially eliminates the material adverse effect; provided that, failing any agreement in that regard, the Party who is materially adversely affected shall have the right, at its option, to suspend or terminate this Agreement as to such country. Section 9.04 Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision. Section 9.05 Notification and Governmental Approvals. After execution of this Agreement, to the extent required by law, Agouron, after consultation with JE, shall notify the appropriate authorities in the Licensed Territory about the terms of this Agreement; JE, after consultation with Agouron, shall notify the appropriate authorities in the JE Territory about the terms of this Agreement. JE and Agouron shall obtain any government approval(s) required to enable this Agreement to become effective, or to enable any payment hereunder to be made, or any other obligation hereunder to be observed or performed. Third-party costs and expenses incurred in notifying governmental authorities or obtaining governmental approval shall be shared equally between the Parties. Each Party shall keep the other Party informed of its progress in notifying such governmental authorities and obtaining such government approval, and shall cooperate with the other Party in any such efforts. Section 9.06 U.S. Export Controls The Parties agree to comply with the United States laws and regulations governing exports and re-exports of the Compound, intermediates thereof, Products, Development Program Technology, JE Technology or any other technology or software developed or disclosed as a result of this Agreement. The Parties acknowledge that any performance under this Agreement is subject to any restrictions which may be imposed by the United States laws and regulations governing exports and re-exports. Each Party agrees to provide the other Party with any reasonable assistance, including written assurances which may be required by a competent governmental authority and by applicable laws and regulations as a precondition for any disclosure of technology or software by the other Party under the terms of 41 this Agreement. The obligations of this Section 9.06 shall survive termination or expiration of this Agreement. Section 9.07 No Agency. JE and Agouron shall have the status of independent contractors under this Agreement and, except as otherwise explicitly provided in this Agreement, nothing in this Agreement shall be construed as an authorization of a Party to act as an agent of the other Party. Section 9.08 Captions; Number; Official Language. The captions of the articles and sections of this Agreement are for general information and reference only, and this Agreement shall not be construed by reference to such captions. Where applicable in this Agreement, the singular includes the plural and vice versa. To the extent appropriate, the meaning of terms whose first letters are capitalized, but which are variations of terms that are defined elsewhere in this Agreement, shall each have the same meaning as the defined term. English shall be the official language of this Agreement and any license agreement provided for hereunder, and all communications between the Parties hereto shall be conducted in that language. Section 9.09 Force Majeure. A Party shall not be responsible to the other Party for any failure, delay or interruption in the performance of any of its obligations under this Agreement if such failure, delay or interruption is caused by any act of God, earthquake, fire, casualty, flood, war, epidemic, riot, insurrection, or any act, exercise, assertion or requirement of a governmental authority, or other cause beyond the reasonable control of the Party affected if the Party affected shall have used its best efforts to avoid such occurrence. If a Party believes that the performance of any of its obligations under this Agreement shall be delayed or interrupted as a result of any of the reasons stated in this Section 9.09, and provided such Party is able to do so, such Party shall promptly notify the other Party of such delay or interruption and the cause therefor, and shall provide such other Party with its estimate of when the performance of its obligations shall recommence. When the Party affected is able to recommence the performance of obligations delayed or interrupted as a result of any of the reasons stated in this Section 9.09, it shall so notify the other Party and, except as otherwise provided in this Agreement, it shall promptly resume the performance of such obligations. Section 9.10 Amendment. This Agreement, including the Attachments, Exhibits and Schedules, constitutes the full agreement of the Parties with respect to the subject matter of this Agreement, and incorporates any prior discussions between them with respect to such subject matter. This Agreement supersedes the rights and obligations of JE and Agouron under the Confidential Disclosure Agreement and the Material Transfer Agreement between the Parties which were both originally entered into on December 22, 1997. This Agreement, including the attachments hereto, shall not be amended, supplemented or otherwise modified, except by an instrument in writing signed by duly authorized officers of the Parties. Section 9.11 Applicable Law. This Agreement shall be construed and the rights of the Parties shall be determined in accordance with the laws of Japan; provided, however, that with regard to issues concerning the validity and construction of patents, trademarks and other 42 intellectual property, the rights of the Parties shall be determined in accordance with the laws of the country under which such intellectual property rights were granted.under which such intellectual property rights were granted. Section 9.12 Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be given in person, delivered by recognized overnight delivery service, sent by mail (certified or registered, or air mail for addresses outside of the continental U.S.), or by telefax (or other similar means of electronic communication), whose receipt is confirmed by confirming telefax, and addressed, in the case of JE, to its Managing Director of Pharmaceuticals and Biobusiness Division and, in the case of Agouron, to the Senior Vice President, Commercial Affairs (with a copy to the Legal Department), at the addresses shown at the beginning of this Agreement, or such other person and/or address as may have been furnished in writing to the notifying Party in accordance with the provisions of this Section 9.12. Except as otherwise provided herein, any notice shall be deemed delivered upon the earliest of: (i) actual receipt; (ii) four (4) business days after delivery to such recognized overnight delivery service; (iii) eight (8) business days after deposit in the mail; or (iv) the date of receipt of the confirming telefax. Section 9.13 Assignment. This Agreement shall be assignable by a Party to its Affiliates; if this Agreement is assigned by a Party to an Affiliate, the Party shall still be responsible for all of its obligations as specified in this Agreement. This Agreement shall only be assignable by a Party to a non-Affiliated third party with the prior written consent of the other Party, which consent may be withheld at the sole discretion of such other Party. Any such assignment without the prior written consent of the other Party shall be void. Notwithstanding the preceding, in the event of: (i) a sale or transfer of all or substantially all of a Party's assets; or (ii) the merger or consolidation of a Party with another company, this Agreement shall be assignable to the transferee or successor company. Section 9.14 Succession. This Agreement shall be binding upon all successors in interest, assigns, trustees and other legal representatives of the Parties. 43 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement at a formal signing ceremony on July 28, 1998, in duplicate originals, by their respective officers thereunto duly authorized. JAPAN ENERGY CORPORATION AGOURON PHARMACEUTICALS, INC. By: /s/ Akihiko Nimoyama By: /s/ Peter Johnson Name: Akihiko Nimoyama Name: Peter Johnson Title: Representative Director and Title: Chief Executive Officer President and President By: /s/ Ken Irino By: /s/ Gary Friedman Name: Ken Irino Name: Gary E. Friedman, Esq. Title: Senior Management Director Title: Corporate V.P. and General Counsel WITNESSED BY: By: /s/ Toshinobu Miyake By: /s/ R. Kent Snyder Name: Toshinobu Miyake Name: R. Kent Snyder Title: Assoc. Dir., General Mgr. of Title: Senior Vice President Coordination Business Development Pharmaceuticals & Biobusines Division 44 S1-1 SCHEDULE 1 JE PATENTS AND PATENT APPLICATIONS * S1-1 S2-1 SCHEDULE 2 * S2-1 * SCHEDULE 7.01(c) * S7.01(c)-1 * EXHIBIT 1 DEVELOPMENT PROGRAM * E1-1 ATTACHMENT 1 TRADEMARK LICENSE * A1-1 EX-10.23 3 COMMON STOCK PURCHASE AGREEMENT PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED (DESIGNATED BY AN ASTERISK (*) AND WHITE SPACE) AND FILED SEPARATELY WITH THE SECURITIES AND ECHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT DATED AUGUST 4, 1998; FILE NO. 0-15609 COMMON STOCK PURCHASE AGREEMENT This Common Stock Purchase Agreement ("Agreement") is made and entered into as of June 11, 1998 by and between THE IMMUNE RESPONSE CORPORATION., a Delaware corporation (hereinafter referred to as the Company) and AGOURON PHARMACEUTICALS, INC., a California corporation ("Agouron"), which parties hereby agree as follows: 1. Authorization; Commitment; Closing 1.01 Authorization. The Company proposes to authorize, issue and sell to Agouron on or before January 15, 2000, certain amounts of its common stock, $.0025 par value ("Common Stock"), as described and determined below. 1.02 Commitment. Subject to Paragraph 5.06 and the terms and conditions hereof and on the basis of the representations and warranties hereinafter set forth, the Company agrees to issue and sell to Agouron, and Agouron agree to purchase from the Company as of the dates and for the consideration set forth below, the number of shares of the Company's Common Stock as determined below. The Common Stock which Agouron is acquiring pursuant to the terms of this Agreement is hereinafter referred to as "Restricted Common Stock". Agouron is hereinafter sometimes referred to as the "Purchaser." The purchases of the Common Stock shall occur on the seven purchase dates set forth below. On each purchase date, Agouron shall be entitled to acquire such number of shares of Restricted Common Stock (rounded up to the nearest whole share) as may be purchased for $2,000,000, at a purchase price equal to the stated premium set forth opposite the applicable purchase date, over the then fair market value ("FMV") of the Common Stock on The NASDAQ Stock Market. FMV shall be defined as the average closing price of the Common Stock on The NASDAQ Stock Market for the five (5) trading days immediately preceding the referenced purchase date. In the event the FMV is * on any purchase date, the premium applicable to such purchase date shall be adjusted to *
Purchase Date Purchase Price * ------------- -------------- June 11, 1998 $2,000,000 * October 15, 1998 $2,000,000 * January 15, 1999 $2,000,000 * April 15, 1999 $2,000,000 * July 15, 1999 $2,000,000 * October 15, 1999 $2,000,000 * January 15, 2000 $2,000,000 *
1.03 Closing. Separate closings of the purchase and sale of the Restricted Common Stock ("Closings") shall occur on each of the purchase dates set forth above and shall take place at such time and place as the Company and Purchaser shall agree. At each Closing the Company shall deliver to Purchaser the number of shares of Restricted Common Stock required by Paragraph 1.02, above, upon delivery to the Company by Purchaser of a certified check or wire transfer of funds in the amount of $2,000,000. The Restricted Common Stock to be delivered to Agouron hereunder at each Closing will be evidenced by a single certificate registered in Agouron's name or in the name of such nominee as Agouron may specify and, when issued in accordance with the terms of this Agreement for the consideration expressed herein, will be duly authorized, validly issued, fully paid, nonassessable and free and clear of any liens or encumbrances caused or created by the Company (except that such Restricted Common Stock of the Company will be subject to restrictions on transfer under federal and applicable state securities laws). 2. Representations 2.01 Representations of the Company. The Company represents and warrants as follows: (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority which are necessary to own and operate its business and properties and to carry on its business as it is being conducted. The Company is duly licensed and qualified and in good standing in the State of California and in such other jurisdictions in which the ownership or lease of property or the conduct of its business makes such licensing or qualification necessary. (b) There are no proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company in any court or before any governmental authority or agency or arbitration board or tribunal which involve the possibility of materially and adversely affecting the properties, business, prospects or condition (financial or otherwise) of the Company. (c) The issuance and sale of the Restricted Common Stock and compliance by the Company with all of the provisions of this Agreement are within the corporate powers of the Company and have been duly authorized by all proper corporate action on the part of the Company and will not (i) conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under the Articles of Incorporation of the Company or the Bylaws of the Company, (ii) conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under or give any party the right to terminate or accelerate performance under any other agreement or instrument to which the Company is a party (iii) require consent under any other contract to which the Company is a party, (iv) result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any other contract to which the Company is a party or (v) conflict with any provision of any applicable judgment, decree, order, statute, rule, or regulation of any court or any public, governmental or regulatory agency or body having jurisdiction over the Company. (d) This Agreement is a valid and binding agreement of the Company and is enforceable against the Company in accordance with the terms hereof, except as such enforceability may be affected by applicable bankruptcy laws and equitable remedies. 2 (e) The authorized capital stock of the Company consists of 5,000,000 shares of preferred stock (preferred stock) and 40,000,000 shares of common stock. As of the date hereof, 200 shares of its Series F Convertible Preferred Stock are outstanding. This preferred stock is convertible into common stock initially at a conversion price equivalent to $14.07 per share of common stock. If the Company's common stock does not trade at prices higher than $14.07 per share over a period of time, the conversion price will be adjusted downward on April 24, 1999 (or sooner if the Company issues common stock at less than $14.07 per share) and quarterly thereafter. As of June 9, 1998, 22,900,350 shares of voting common stock are outstanding. As of the date hereof, 4,497,749 stock options issued pursuant to the Company's stock option plans and two (2) warrants to purchase a total of 2,051,281 shares of voting stock are outstanding. Up to 6,180,000 shares of common stock may be issued under the Company's stock option plans. Except as set forth above, there are no other options, warrants, conversion privileges, preemptive rights, or rights of first refusal granted by the Company in favor of any other person presently outstanding or in existence to purchase or acquire any of the authorized but unissued Common Stock of the Company, other than any of such items granted pursuant to this Agreement. The Company has provided to Purchaser copies of its currently in effect Articles of Incorporation and Bylaws, its Form 10-K for the year ended December 31, 1997, its 1997 Annual Report, its Proxy statement dated April 27, 1998 and its Form 10-Q for the quarter ended March 31, 1998. The Company warrants that the information contained in such documents as updated and supplemented prior to the date of the Closing is true and correct and when taken as a whole does not omit a fact necessary to make the information contained therein in light of the circumstance under which the documents were made (taking into account, without limitation, the type of transaction contemplated by this Agreement and the sophistication and nature of the Purchaser), not misleading. The Company acknowledges that the Purchaser is relying on the written documentation provided by the Company to Purchaser as described above in making its decision to purchase the Restricted Common Stock. (f) Since March 31, 1998, except for the sale of 200 shares of Series F Convertible Preferred Stock for $10 million, there has not been any change in the assets, liabilities, financial condition or operations of the Company other than changes in the ordinary course of business, none of which individually or in the aggregate have had a material adverse affect on such assets, liabilities, financial condition or operations of the Company. 2.02 Representations of the Purchaser. The Purchaser represents and warrants as follows: (a) It is the intent of the Purchaser that its purchase of the Restricted Common Stock contemplated by this Agreement shall constitute a transaction exempt from registration under the Securities Act of 1933, as amended (the "Securities Act") and any applicable state securities laws. 3 (b) Purchaser will not offer or sell any Restricted Common Stock except pursuant to an effective registration statement under the Securities Act or in transactions which do not require registration under the Securities Act. (c) Purchaser is a corporation duly organized and validly existing under the laws of the State of California is in good standing under such laws and has all requisite corporate powers and authority to enter into this Agreement. (d) On or prior to the date of the initial Closing, Purchaser will have taken all action necessary for the authorization, execution, delivery and performance of this Agreement. (e) Purchaser has (i) reviewed this Agreement, and the written statements, and documents, delivered to Purchaser as described in Section 2.01(e); and, (ii) received satisfactory response from the Company as to matters about which Purchaser has inquired relating to this Agreement, and other documents described in Section 2.01(e) and relating to the Company's business condition, prospects and plans as necessary to evaluate the merits and risks of acquiring the Restricted Common Stock. Purchaser has informed the Company that Purchaser is relying on all such information and documents in making its decision to purchase the Restricted Common Stock. (f) Purchaser (i) has had the risks involved in the investment represented by this Agreement explained; (ii) has knowledge and experience in financial and business matters to evaluate the merits and risks of the investment represented by this Agreement; (iii) is able to bear the economic risk of the investment represented by this Agreement (including a complete loss of this investment); and (iv) has determined that this investment is suitable for Purchaser in light of Purchaser's financial circumstances and available investment opportunities. (g) Purchaser is acquiring the Restricted Common Stock for its own account and with its general assets for the purpose of investment and not with a view to the resale, transfer or distribution thereof, and has no present intention of selling, transferring, negotiating or otherwise disposing of any Restricted Common Stock. Notwithstanding anything in this Agreement to the contrary, it is agreed that the Purchaser shall have the right to assign or transfer the Restricted Common Stock to its Affiliates at any time without the consent of the Company. 3. Non-Disclosure. Except as agreed to by the parties neither the Company nor the Purchaser shall release any information to any third party with respect to any of the terms of this Agreement without the prior written consent of the other, which consent shall not unreasonably be withheld. This prohibition includes, but is not limited to, press releases, promotional materials and discussions with the media. If the Company determines that it is required by law to release information to any third party regarding the terms of this Agreement, it shall notify the Purchaser of this fact prior to releasing the information. The notice to the Purchaser shall include the text of the information proposed for release. The Purchaser shall 4 have the right to confer with the Company regarding the necessity for the disclosure and the text of the information proposed for release. 4. Compliance with Securities Act 4.01 Certain Definitions. As used herein, the following terms shall have the following respective meanings: (a) Commission. Shall mean the Securities and Exchange Commission, or any other Federal agency at the time administering the Securities Act or the Trust Indenture Act, as the case may be. (b) Securities Act. Shall mean the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the relevant time. (c) Exchange Act. Shall mean the Securities Exchange Act of 1934, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the relevant time. (d) Restricted Common Stock. Shall mean the Common Stock of the Company issued and sold pursuant to this Agreement which by the terms hereof is required to bear the legend specified in Section 4.02 hereof. 4.02 Restriction of Transferability; Legend. Shares of Restricted Common Stock shall not be resold or transferred unless registered under the Securities Act or unless an exemption from registration is available for such sale or transfer. The conditions specified below are intended to ensure compliance with the provisions of the Securities Act in respect of any transfer of stock. Each certificate for shares of Restricted Common Stock shall be stamped or otherwise imprinted with a legend in substantially the following form: The shares evidenced by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold or transferred in the absence of such registration or an exemption therefrom under said Securities Act and the transfer of such shares is subject to terms and conditions specified in the Common Stock Purchase Agreement dated as of June 11, 1998, between the Company and Agouron Pharmaceuticals, Inc. If shares of Restricted Common Stock evidenced by certificates bearing a legend required by this Section 4.02 are sold in accordance with a registration statement which has become effective under the Securities Act, or if the Company shall receive an opinion of its counsel to the effect that any legend required under this Section 4.02 is not, or is no longer, necessary or required with respect to such shares (including, without limitation, because of the availability of the exemption afforded by Rule 144 of the General Rules and Regulations of the Commission), the Company shall, or shall instruct its transfer agent and registrar to, remove such legend or issue new certificates without such legend in lieu thereof. 5 4.03 Information Requirements. The Company agrees to: (a) Make and keep public information available, as such term is understood and defined in Commission Rule 144 and Rule 144A, under the Securities Act; (b) Use its best efforts to 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; and (c) Furnish to any holder of Restricted Common Stock a copy of the most recent annual or quarterly report of the Company, and such other publicly available reports and documents of the Company, so that such holder may avail itself of any rule or regulation of the Commission allowing it to sell any such securities without registration. 4.04 Piggy-Back Registration Rights. If the Company before January 15, 2001 contemplates a public offering of shares of its Common Stock to be registered under the Securities Act, the Company shall so notify the Purchaser in writing of its intention to do so, at least twenty (20) days prior to the filing of a registration statement for such offering. If Purchaser gives written notice to the Company, within ten (10) days of receipt of the notice from the Company, of Purchaser's desire to have its Restricted Common Stock included in such registration statement, Purchaser may, subject to the provisions of this Section 4.04, have its Restricted Common Stock included in such registration statement. The Company shall bear all expenses in connection with the registration and sale of any such Restricted Common Stock, other than the fees or disbursements of any special counsel which the Purchaser may retain in connection with the registration of its Restricted Common Stock or any portion of the underwriter's commission, discounts and expenses attributable to the Restricted Common Stock being offered and sold by the Purchaser. Notwithstanding the foregoing, if the managing underwriter of any such offering determines that the number of shares proposed to be sold by the Company, by other shareholders having piggy-back rights, and/or by the Purchaser is greater than the number of shares which the underwriter believes feasible to sell at the time, at the price and upon the terms approved by the Company, then the number of shares which the underwriter believes may be sold shall be allocated for inclusion in the registration statement in the following order of priority: (i) shares being offered by the Company; and (ii) pro rata among the other shareholders and the Purchaser, based on the number of shares of Common Stock each shareholder requested to be registered. The Company shall have the right to designate the managing underwriter in respect of a public offering pursuant to this Section 4.04. 4.05 Additional Covenants Concerning Sale of Shares. (a) The Company will notify the Purchaser of the effectiveness of any registration statement in which Purchaser has exercised registration rights granted pursuant to the terms of Section 4.04, together with a list of the jurisdictions where the Company has qualified or is exempt from registration under applicable state securities laws. 6 (b) The Company will prepare and file with the Commission such amendments and supplements to any registration statement filed pursuant to the terms of Section 4.04 (and any prospectus used in connection with such registration statement) as may be necessary to comply with the provisions of the Securities Act with respect to the sale of Restricted Common Stock by the Purchaser. (c) The Company will furnish to the Purchaser a reasonable number of copies of the prospectus used in connection with a registration statement filed pursuant to the terms of Section 4.04, including a preliminary prospectus, which prospectus conforms to the requirements of the Securities Act, and such other documents as the Purchaser may reasonably request, in order to facilitate the disposition of the Purchaser's Restricted Common Stock. (d) In connection with any registration statement referred to in Section 4.04 of this Agreement, Purchaser will furnish to the Company such information as the Company may reasonably require from Purchaser for inclusion in the registration statement (and the prospectus included therein). (e) The Company's obligations under Section 4.04 shall be conditioned upon Purchaser executing and delivering to the Company its agreement, in a form satisfactory to counsel for the Company, that it will comply with all applicable provisions of the Securities Act, the Exchange Act, the securities acts of applicable states and any rules and regulations promulgated under such acts and will furnish to the Company information about sales made in such public offering. 4.06 Indemnification In the event any of the Restricted Common Stock of Purchaser is included in a registration statement under Section 4.04 of this Agreement: (a) To the extent permitted by law, the Company will indemnify and hold harmless the Purchaser and its Affiliates and their respective officers, directors and employees, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (hereinafter sometimes collectively referred to as a "Violation(s)"): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; and the Company will 7 reimburse each such indemnified party for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 4.06 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon, and in conformity with, written information furnished expressly for use in connection with such registration, by any such indemnified party. (b) To the extent permitted by law, the Purchaser will indemnify and hold harmless the Company and its Affiliates and their respective officers, directors and employees against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any Violations, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon, and in conformity with, written information furnished by the Purchaser and its Affiliates and their respective officers, directors and employees to the Company expressly for use in connection with such registration; and the Purchaser will reimburse each such indemnified party for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 4.06 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Purchaser, which consent shall not be unreasonably withheld or delayed. (c) Promptly after receipt by an indemnified party under this Section 4.06 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 4.06, notify the indemnifying party in writing of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, to assume the defense thereof with counsel mutually satisfactory to the parties. 5. Miscellaneous 5.01 Expenses; Finders Fees. Neither party shall pay expenses and finder fees for or to the other in connection with this transaction. Each party agrees to indemnify and hold the other party harmless from any liability for any commission or compensation in the nature of a finder's fee to any broker or other person (and the costs and expenses of defending against such liability or asserted liability) claiming to have been hired or engaged by the party. 5.02 Replacement of Certificates for Restricted Common Stock. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of 8 any certificate evidencing any Restricted Common Stock, the Company will execute, register and deliver, in lieu thereof, a new certificate for an equal number of shares of Restricted Common Stock. In the case of loss, theft or destruction of a certificate, at the election of the Company, the Purchaser may be required to provide an indemnity reasonably satisfactory to the Company or to post a surety bond in an amount equal to the value of the shares represented by the new certificate. 5.03 Notice. Any notice required to be given under the terms of this Agreement shall be in writing, and shall be given in person, transmitted by telecopier, e-mail or similar electronic communication, delivered by a recognized overnight delivery service such as Federal Express or sent by mail (certified or registered or air mail for addresses outside of the country of origin), return receipt requested, postage prepaid and addressed to the Company at 5935 Darwin Court, Carlsbad, California 92008, or such other address as the Company may designate to Purchaser in writing and to the Purchaser, at the address appearing at the beginning of this Agreement or such other address as Purchaser may designate to the Company in writing. Except as otherwise provided herein, any notice so given shall be deemed delivered upon the earlier of (i) actual receipt; (ii) receipt by sender of confirmation if telecopied or sent by e-mail or similar electronic communication; (iii) two business days after delivery to such overnight delivery service; or (iv) five business days after deposit in the mail. 5.04 Successors and Assigns. This Agreement shall be binding upon the parties and their respective successors and assigns. 5.05 Survival of Representations, Etc. All covenants, representations and warranties made by the parties herein shall survive the Closings and the delivery of this Agreement and the shares of Restricted Common Stock purchased hereunder. 5.06 Termination. Purchaser's obligation to purchase Restricted Common Stock under this Agreement shall terminate with respect to any purchase obligations whose purchase dates under Paragraph 1.02 occur after Purchaser has elected to terminate, in its entirety, all of Purchaser's rights and obligations under the Letter of Intent ("LOI") dated June 11, 1998 and the Definitive Agreement (as defined in the LOI) between the parties. 5.07 Severability. Should any part of this Agreement for any reason be declared invalid, such decision shall not affect the validity of any remaining portion, which remaining portion shall remain in force and effect as if this Agreement had been executed with the invalid portion thereof eliminated and it is hereby declared the intention of the parties hereto that they would have executed the remaining portion of this Agreement without including therein any such part, parts, or portion which may, for any reason, be hereafter declared invalid. 5.08 Governing Law. This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of California without regard to its conflict of law provisions. 5.09 Captions, Form of Pronouns. The descriptive headings of the various sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof. All pronouns used in this Agreement shall be deemed to include masculine, feminine and neuter forms. 9 5.10 Agreement is Entire Contract. This Agreement constitutes the entire contract between the parties hereto related to the purchase and sale of Restricted Common Stock and no party shall be liable or bound to the other in any manner by any warranties, representations or covenants except as specifically set forth herein. 5.11 Third Parties. Nothing in this Agreement is intended to confer upon any party, other than the parties hereto, and their respective permitted successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein. 5.12 Amendment and Waiver. Any provision of this Agreement may be amended and the observance of any term hereof may be waived (either prospectively or retroactively and either generally or in a particular instance) only with the written consent of the Company and the Purchaser. 5.13 Affiliates. References to Purchaser in this Agreement shall be deemed to include direct or indirect subsidiaries of Purchaser. The term "Affiliate" shall have the meaning defined in the LOI. 5.14 Dispute Resolution. In the event of any controversy or claim arising out of or relating to any provision of this Agreement, the parties shall try to settle their differences amicably between themselves. Any unresolved disputes arising between the parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by either party of its obligations hereunder, whether before or after termination of this Agreement, shall be finally resolved by binding arbitration. Whenever a party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other party. The party giving such notice shall refrain from instituting the arbitration proceedings for a period of sixty (60) days following such notice The arbitration shall be held in San Diego, California according to the rules of the American Arbitration Association ("AAA") applicable to commercial securities matters of this nature. The arbitration shall be conducted by a panel of three arbitrators appointed in accordance with AAA rules; provided, however, that each party shall within thirty (30) days after the institution of the arbitration proceedings appoint one arbitrator with the third arbitrator being chosen by the other two arbitrators. If only one party appoints an arbitrator, then such arbitrator shall be entitled to act as the sole arbitrator to resolve the controversy. Any arbitration hereunder shall be conducted in the English language and the arbitrator(s) shall apply the law set forth in SectionE5.08. All arbitrator(s) eligible to conduct the arbitration must agree to render their opinion(s) within thirty (30) days of the final arbitration hearing. The arbitrator(s) shall have the authority to grant injunctive relief and specific performance, and to allocate between the parties the costs of arbitration in such equitable manner as he determines; provided, however, that each party shall bear its own costs and attorney's and witness' fees. Notwithstanding the terms of this Section 5.14, a party shall also have the right to obtain prior to the arbitrator(s) rendering the arbitration decision, provisional remedies including injunctive relief or specific performance from a court having jurisdiction thereof. The arbitrator(s) will, upon the request of either party, issue a written opinion of the findings of fact and conclusions of law and shall deliver a copy to each of the parties. Decisions of the arbitrator(s) shall be final and binding on all of the parties. Judgment on the award so rendered may be entered in any court having jurisdiction thereof. 10 The execution hereof by Purchaser shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement. THE IMMUNE RESPONSE CORPORATION By /s/ Dennis J. Carlo By /s/ Charles J. Cashion ACCEPTED AND AGREED TO AS OF THE DAY AND YEAR AFORESAID. PURCHASER: AGOURON PHARMACEUTICALS, INC By /s/ Peter Johnson Peter Johnson President and Chief Executive Officer By /s/ Gary Friedman Gary Friedman Secretary 11 EX-10.24 4 AMENDMENT TO THE VIRACEPT LICENSE AGREEMENT PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED (DESIGNATED BY AN ASTERISK (*) AND WHITE SPACE) AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT DATED AUGUST 4, 1998; FILE NO. 0-15609 AMENDMENT TO THE VIRACEPT (Nelfinavir Mesylate) LICENSE AGREEMENT This Amendment ("Amendment") to the VIRACEPT (Nelfinavir Mesylate) License Agreement ("the Agreement"), effective as of this 1st day of May, 1998 ("Effective Date"), is between Agouron Pharmaceuticals, Inc., a corporation duly organized and existing under the laws of the state of California, having a principal place of business at 10350 North Torrey Pines Road, La Jolla, California, United States of America (hereinafter referred to as "Agouron"), Japan Tobacco Inc., a corporation duly organized and existing under the laws of Japan, having its principal place of business at JT Building, 2-1, Toranomon 2-chome, Minato-ku, Tokyo, Japan (hereinafter referred to as "JT"), and F. Hoffmann-La Roche Ltd, a corporation duly organized and existing under the laws of Switzerland, having its principal place of business at CH-4002-Basel, Switzerland (hereinafter referred to as "Roche"). Agouron, JT and Roche are each sometimes hereinafter referred to as a party (collectively "parties"). The parties for good and valuable consideration hereby agree as follows: RECITALS 1. Background 1.01 All capitalized terms, except as expressly otherwise defined herein, shall have the meanings set forth in the Agreement. 1.02 Agouron, JT and Roche entered into a Letter of Intent on January 17, 1997 and the VIRACEPT (nelfinavir mesylate) License Agreement dated for reference purposes only June 30, 1997, under which Agouron and JT granted, and Roche received, a license in the Licensed Territory to use, offer for sale, sell and/or import Products in the Field under applicable Agouron/JT Patent Rights and Development Program Patent Rights and using applicable Agouron/JT Technology, Roche Technology and Development Program Technology. 1.03 Roche has certain capacities to manufacture Compound as well as formulate Product. Roche has informed Agouron and JT of its desire to manufacture Compound and formulate Product to be sold and/or distributed in the Licensed Territory with such Roche manufacturing and formulating responsibilities to be phased-in over an agreed-to period of time. 1.04 The parties, in accordance with the provisions of Section 4.04(f) of the Agreement, have discussed in good faith an arrangement under which Roche could be the manufacturer of Compound and the formulator of Product to be sold and/or distributed in the Licensed Territory. 1.05 Agouron and JT under certain conditions are willing to grant Roche certain rights to manufacture Compound and formulate Product to be sold and/or distributed in the Licensed Territory. 1.06 * 1.07 * 1.08 To effect the preceding and clarify the parties' rights and obligations under the Agreement, the parties wish to amend the Agreement as provided below. AMENDMENT 2. Grant of Rights to Roche 2.01 * 2.02 * 2.03 * 2 2.04 Except as otherwise specifically provided in the Agreement, * 2.05 All licenses granted Roche in this Amendment in a country shall become * 2.06 Roche shall not have the right to use * 3. Limitations 3.01 Roche's rights to manufacture Compound and formulate Product shall * 3.02 * 3 (a) * (b) * (c) * (d) * 4 3.03 * 5 4. Markup 4.01 For the rights granted pursuant to the provisions of Paragraphs 2.01-2.04, * 5. License grant to Agouron and JT 5.01 Roche grants Agouron and JT * 5.02 For the rights granted pursuant to the provisions of Paragraph 5.01, * 5.03 * 6 6. Exchange of Information 6.01 Immediately after execution of this Amendment by the parties, and on an ongoing basis thereafter, * 7. Supply obligations 7.01 * 7.02 * 7.03 * (a) * (b) * 7 (c) * (d) * (e) * (f) * 7.04 * 8 7.05 * 8. Schedule 2 of Agreement 8.01 * 9. Trademark/Labeling 9.01 The labeling for any Product to be sold and/or distributed by Roche, * 9 10. Remaining Agreement Terms 10.01 Except as expressly amended by the terms contained in this Amendment, the provisions of the Agreement, as previously amended, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to enter into this Amendment to the VIRACEPT(TM)(Nelfinavir Mesylate) License Agreement, effective as of the Effective Date. AGOURON PHARMACEUTICALS, INC. JAPAN TOBACCO INC. By: /s/ Gary Friedman By: /s/ Masakazu Kakei Name: Gary Friedman Name: Masakazu Kakei Title: Corp. Vice President Title: Executive Director By:/s/ R. Kent Snyder By: /s/ Tatsuya Yoneyama Name: R. Kent Snyder Name: Tatsuya Yoneyama Title: Sr. Vice President Title: Vice President, Business Devel., Pharmaceuticals Division F. HOFFMANN-LA ROCHE LTD By /s/ St. Arnold Name: St. Arnold Title: Vice Director By: /s/ B. Scholl Name: B. Scholl Title: Vice Director 10 SCHEDULE 1 * S1-1 SCHEDULE 2 ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT * S2-1 SCHEDULE 2 ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT * S2-2 SCHEDULE 2 ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT * S2-3 SCHEDULE 2 ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT * SCHEDULE 2 ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT * S2-4 SCHEDULE 2 ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT * S2-5 ATTACHMENT 1 1. * 2. * 3. * 4. * 5. * 6. * -----END PRIVACY-ENHANCED MESSAGE-----