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EXHIBIT 10.25
MANUFACTURING AGREEMENT
This Manufacturing Agreement ("Agreement"), effective as of the 24th day
of June, 1997 (the "Effective Date"), is entered into by and between Argonaut
Technologies, Inc., a Delaware corporation having offices at 000 Xxxxxxxxxx
Xxxx, Xxxxx X, Xxx Xxxxxx, Xxxxxxxxxx 00000, X.X.X. ("Argonaut"), and Merck &
Co, Inc., a New Jersey corporation having offices at Xxx Xxxxx Xxxxx, Xxxxxxxxxx
Xxxxxxx, Xxx Xxxxxx 00000 ("Merck").
BACKGROUND
A. Merck desires to grant to Argonaut the right to manufacture, modify and
distribute certain Instrument Products and Consumable Products (as defined
below) developed by Merck.
B. Merck desires to grant to Argonaut the right to manufacture the
Instrument Products and Consumable Products provided Argonaut sells such
Instrument Products and Consumable Products to Merck in accordance with the
terms of this Agreement.
1. Definitions.
(a) "Consumable Products" means items (including but not limited to
tubes, filters, caps and connectors) consumed or commonly replaced as a result
of routine operation of the Instrument Products, excluding chemical reagents
and polymeric supports.
(b) "Documentation" means the documentation that embodies the Licensed
Technology, as specifically set forth in Exhibit A.
(c) "Instrument Products" shall mean the TCMS product set forth in
Exhibit A hereto, successor products and related instrumentation.
(d) "Intellectual Property Rights" means all current and future
worldwide patents and other patent rights, copyrights, trade secrets and all
other intellectual property rights, including without limitation all
applications and registrations with respect thereto, in and to the Licensed
Technology, which Merck owns or to which Merck has the right to grant licenses
of the scope granted herein as of the Effective Date or during the term of this
Agreement. Merck's current patents and patent applications in the Licensed
Technology are set forth in Exhibit B.
(e) "Licensed Technology" means all technical data, processes,
formulae, inventions, discoveries and technical information, whether or not
patentable, that (i) are necessary for the manufacture or use of the Products
and (ii) are owned by Merck, or to which Merck has the right to grant licenses
of the scope granted herein, as of the Effective Date or during the term of the
Agreement.
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(f) "Year" shall mean each twelve (12) month period following the date of
this Agreement.
2. LICENSE GRANT.
(a) Licensed Technology. Merck hereby grants to Argonaut an exclusive,
sublicensable, worldwide license, under the Intellectual Property Rights, to
develop, manufacture, have manufactured, modify, use, market, service, sell and
otherwise distribute the Instrument Products and Consumable Products, and to
use the Documentation to support such efforts.
(b) Documentation. Argonaut shall have the right to modify, reproduce and
distribute that portion of the Documentation designated "End User
Documentation" in connection with Argonaut's distribution of the Instrument
Products and Consumable Products. Argonaut shall have no other right to modify,
reproduce, distribute or otherwise provide to third parties, the Documentation.
(c) Distributors. Argonaut may exercise its distribution rights granted
pursuant to Sections 2(a) and 2(b) above through the use of third party
distributors, resellers, dealers and sales representatives (collectively,
"Distributors").
3. DELIVERY.
Merck will deliver to Argonaut the Documentation upon the execution of
this Agreement.
4. TECHNICAL ASSISTANCE.
Merck will provide reasonable technical assistance to Argonaut as
necessary in order for Argonaut to understand the Licensed Technology and
Documentation. Any written information provided as part of such technical
assistance shall be considered Documentation hereunder.
5. AGREEMENT TO MANUFACTURE, SELL AND PURCHASE.
Upon Merck's orders therefor, Argonaut agrees to manufacture and sell
Instrument Products and Consumable Products and Merck agrees to purchase such
Products from Argonaut, on the terms and conditions set forth herein. Prices
will be as set forth in Exhibit C.
6. FORECASTS AND ORDERS.
(a) Forecasts. Prior to the beginning of each Year of this Agreement,
Merck shall provide to Argonaut, Merck's written forecast of its Instrument
Product manufacturing requirements hereunder ("Annual Forecast"). This shall be
a non-binding forecast but shall reflect Merck's best good faith estimate of
its requirements.
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(b) Initial Order. Upon execution of this Agreement, Merck shall provide
to Argonaut, Merck's firm purchase order, for the manufacture by Argonaut of
thirty (30) Instrument Products for sale to Merck hereunder. Argonaut will
commence work on the initial order upon Merck's reasonable acceptance of the
Instrument Product production prototype. Prior to the beginning of each
subsequent quarter during the term hereof, Merck will provide to Argonaut,
Merck's written Instrument Product and Consumable Product purchase order for
the second quarter thereafter, and Merck's Instrument Product purchase forecast
for the third quarter thereafter. Argonaut shall promptly acknowledge, in
writing, all Merck purchase orders hereunder.
(c) Quantities. During each subsequent Year of this Agreement, Argonaut
shall accept and shall use its commercially reasonable efforts to fulfill
Merck's orders for Instrument Products and Consumable Products. During each
subsequent Year of this Agreement, Argonaut shall accept and fulfill all Merck
purchase orders for quantities of Products up to [*] ([*]%) of Merck's aggregate
Product purchases during the prior Year, and shall use its commercially
reasonable efforts to fulfill Merck's orders for additional Products.
(d) Consumable Products. Argonaut shall sell Consumable Products for use
with the Instrument Products to Merck at [*] ([*]%) off Argonaut's North
American List Price, as amended from time to time but no more than one (1) time
per year. Merck shall have the right to purchase Consumable Products from
Argonaut at such price, from any of Merck's world-wide sites, subject to customs
duties, import taxes, freight etc.
(e) Service, Labor and Parts. Merck shall have a [*] ([*]%) discount off
Argonaut's North American List Price, as amended from time to time, for all
service, labor and parts for the Products. Service shall be performed at a
facility specified by Argonaut in accordance with Argonaut's then-current
service terms and conditions. Merck shall pay for shipping for Instrument
Products and Consumable Products requiring service to the specified facility,
and Argonaut shall pay for return shipping fees.
7. TERMS AND CONDITIONS.
All purchases shall be subject to the following terms and conditions:
(a) Ordering. All purchases and sales between Argonaut and Merck shall be
initiated by Merck's issuance of written purchase orders, or by telephone or fax
or telex confirmed by written purchase order. Such orders shall state unit
quantities, unit descriptions, applicable prices, requested delivery dates, and
shipping instructions.
(b) Acceptance. The acceptance by Argonaut of an order shall be indicated
by written acknowledgment thereof by Argonaut.
(c) Controlling Document. The terms and conditions of this Agreement
shall control all sales of Instrument Products and Consumable Products to Merck
hereunder, and any additional or
[*] Confidential Treatment Requested
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different terms or conditions in either party's purchase order, acknowledgment,
or similar document shall be of no effect.
(d) Delivery. Delivery shall be FOB San Xxxxxx. Merck shall have the right
to designate the method of shipment, but if Argonaut has not received such
designation within a reasonable time prior to the scheduled delivery date,
Argonaut may, at its discretion, make arrangements for delivery to Merck's
destination in accordance with its existing shipping practices. Title to and all
risk of loss or damage with respect to the Instrument Products and Consumable
Products shall pass to Merck upon their delivery by Argonaut at the FOB point.
(e) Payment. Unless otherwise agreed in writing, payment to Argonaut for
Instrument Products and Consumable Products shall be due net thirty (30) days
from delivery to Merck.
(f) Warranty. Argonaut warrants for a period of ninety (90) days that the
Instrument Products and Consumable Products sold to Merck will be free from
defects in material and workmanship. Argonaut's sole obligation under the
foregoing warranty, and Merck's sole remedy for breach, shall be for Argonaut to
correct any deficiencies in the product that cause it not to comply with such
warranty, replace the product or refund payment therefor, at Argonaut's
discretion. ARGONAUT AND ITS SUPPLIERS MAKE AND MERCK RECEIVES NO WARRANTIES OR
CONDITIONS, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE
IMPLIED WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
REGARDING THE INSTRUMENT PRODUCTS AND CONSUMABLE PRODUCTS.
8. WARRANTY AND DISCLAIMER.
Merck warrants that the Documentation provided hereunder is a complete set
of the documentation of the Licensed Technology. Merck's sole obligation under
the foregoing warranty, and Argonaut's sole remedy for breach, shall be for
Merck to correct any deficiencies in the Documentation that cause it not to
comply with such warranty. Except as expressly provided above, Merck licenses
the Licensed Technology on an "AS IS" basis. MERCK AND ITS SUPPLIERS MAKE AND
ARGONAUT RECEIVES NO WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE REGARDING THE LICENSED TECHNOLOGY.
9. LIMITATION OF LIABILITY.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT, THE
USE OF THE LICENSED TECHNOLOGY OR DISTRIBUTION OF INSTRUMENT PRODUCTS AND
CONSUMABLE PRODUCTS BY ARGONAUT OR ANY THIRD PARTY, WHETHER UNDER THEORY OF
CONTRACT, TORT (INCLUDING NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR
OTHERWISE.
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10. PATENT NOTICES.
Argonaut shall place appropriate patent markings on Instrument Products
used, sold or otherwise distributed hereunder during the term of this Agreement.
11. CONFIDENTIALITY.
(a) Confidential Information. As used herein, Confidential Information
means information that one party discloses to the other party.
(b) Use and Disclosure. The receiving party agrees not to use, disclose,
distribute or disseminate the Confidential Information of the disclosing party
except as expressly permitted under this Agreement. The receiving party agrees
to restrict access to such Confidential Information to only those employees who
need such Confidential Information in order for the receiving party to exercise
its rights hereunder. The receiving party will not use such materials at a
location other than its address listed above without the disclosing party's
consent. The receiving party agrees to protect the confidentiality of the
disclosing party's Confidential Information using the same degree of care that
it uses to protect its own most confidential information, but in no event less
than reasonable care.
(c) Remedies. The receiving party acknowledges that breach of the
foregoing confidentiality obligation may cause irreparable harm to the
disclosing party, the extent of which would be difficult to ascertain.
Accordingly, the receiving party agrees that the disclosing party may seek
immediate injunctive relief in the event of a breach by the receiving party or
any of its employees of the provisions of this Section 11. In the event of such
a breach, the disclosing party shall have the right to terminate this Agreement
immediately upon notice without opportunity to cure.
(d) Exceptions. The foregoing restrictions will not apply to information
that the receiving party can demonstrate: (i) was known to the receiving party
at the time of disclosure to the receiving party by the disclosing party as
shown by the files of the receiving party in existence at the time of
disclosure; (ii) has become publicly known through no wrongful act of the
receiving party; (iii) has been rightfully received from a third party
authorized by the disclosing party to make such disclosure without restriction;
(iv) has been approved for release by written authorization of the disclosing
party; or (v) has been independently developed by the receiving party without
any use of Confidential Information of the disclosing party and by employees or
other agents of the receiving party who have not been exposed to the
Confidential Information of the disclosing party.
(e) Confidentiality of Agreement. Each party agrees that the terms and
conditions of this Agreement shall be treated as Confidential Information;
provided that each party may disclose the terms and conditions of this
Agreement: (i) as required by any court or other governmental body or as
otherwise required by law; (ii) to legal counsel; (iii) in confidence, to
accountants, banks, and financing sources and their advisors; (iv) in
confidence, in connection with the enforcement of this Agreement or rights
under this Agreement. Argonaut agrees not to disclose that it has entered into
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an Agreement with Merck concerning the Instrument Products or the Consumable
Products and Argonaut will not mention Merck in connection with the Instrument
Products or the Consumable Products.
12. INDEMNIFICATION AND INTELLECTUAL PROPERTY.
(a) Merck Intellectual Property. Merck will exercise reasonable efforts in
processing patents covering the Instrument Products. Merck shall at Argonaut's
request, notify Argonaut of all countries in which it is seeking patents
covering the Instrument Products. Argonaut shall have the right, but not the
obligation, to apply for such patents in any countries in which Merck is not
seeking such patent protection in Merck's name and at Argonaut's expense. Merck
shall provide cooperation to Argonaut including the execution of documents, so
that Argonaut may prosecute such patents, as Argonaut may reasonably request.
Merck shall promptly after discovery notify Argonaut of any material
infringement of which it becomes aware related to any patents covering the
Instrument Products. Merck shall have the right to bring, defend and maintain
any appropriate suit, action or proceeding involving any such infringement at
Merck's expense. In the event that Merck fails to take any such action, Merck
shall give Argonaut all authority, information and assistance necessary to
pursue, defend or settle any such suit, action or proceeding and Argonaut shall
pay the expenses (including attorneys' fees) incurred in connection with any
such suit, action or proceeding. Should Argonaut lack standing to bring any such
suit, action or proceeding, then Merck will, at the request of Argonaut, do so
upon Argonaut's undertaking to promptly to reimburse Merck monthly, or make
advances to Merck, for all Merck's reasonable expenses (including attorneys'
fees) resulting therefrom. Any amounts recovered in any suit, action or
proceeding under this Section 12(b), whether by judgment or settlement
(including, but not limited to, any royalties or other consideration received
pursuant to any sublicenses or other arrangements entered into as part of
settlement), shall be retained by Argonaut.
(b) By Argonaut. Argonaut shall indemnify, hold harmless and, at Merck's
request, defend Merck from and against any and all claims, liabilities and
expenses (including reasonable fees of attorneys and other professionals)
arising out of or in connection with Argonaut's use, manufacture or distribution
of the Instrument Products and Consumable Products, provided Merck promptly
notifies Argonaut of any such claim and permits Argonaut to control the defense
and settlement thereof.
13. TERM AND CONDITION.
(a) Term. This Agreement shall continue in full force and effect for a
period of five (5) years unless earlier terminated as provided in Section 13(b)
below.
(b) Termination.
(i) If either party defaults in the performance of any provision of
this Agreement, then the non-defaulting party may give written notice to the
defaulting party that if the default is not
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cured within thirty (30) days the Agreement will be terminated. If the
non-defaulting party gives such notice and the default is not cured during the
thirty (30) day period, then the Agreement will terminate immediately upon
notice by the non-defaulting party.
(ii) This Agreement will terminate automatically without notice,
(i) upon the institution by or against Argonaut of insolvency, receivership or
bankruptcy proceedings or any other proceedings for the settlement of Argonaut's
debts, (ii) upon Argonaut's making an assignment for the benefit of creditors,
or (iii) in the event of Argonaut's dissolution or insolvency.
(c) Survival. The parties' rights and obligations under Sections 1, 2,
7(g), 10, 11, 9, 10, 11, 12 and 13 shall survive any termination of this
Agreement.
(d) No Waiver. The failure of either party to enforce any provision of
this Agreement shall not be deemed a waiver of such provision.
14. MISCELLANEOUS PROVISIONS.
(a) Independent Contractors. The relationship of Argonaut and Merck
established by this Agreement is that of independent contractors, and neither
party is an employee, agent, partner or joint venturer of the other. All
financial obligations associated with Merck business are the sole responsibility
of Merck. All sales and other agreements between Merck and its customers are
Merck's exclusive responsibility and will have no effect on Merck's obligations
under this Agreement.
(b) Assignment. Merck may not transfer or assign its rights or
obligations under this Agreement without prior written consent of Argonaut.
Subject to the foregoing sentence, this Agreement will be binding upon and
inure to the benefit of the parties hereto, their successors and assigns.
Successors of Argonaut shall include any party which acquires Argonaut or into
which Argonaut merges.
(c) No Implied Waivers. The failure of either party at any time to
require performance by the other of any provision hereof shall not affect the
right of such party to require performance at any time thereafter, nor shall
the waiver of either party of a breach of any provision hereof be taken or held
to be a waiver of a provision itself.
(d) Severability. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions
will nevertheless remain in full force and effect. The parties agree to
renegotiate in good faith those provisions so held to be invalid to be valid,
enforceable provisions which provisions shall reflect as closely as possible
the original intent of the parties, and further agree to be bound by the
mutually agreed substitute provision.
(e) Force Majeure. Except for payment of monies, neither party shall
be liable for failure to fulfill its obligations under this Agreement or any
purchase order issued hereunder or for delays in delivery due to causes beyond
its reasonable control, including, but not limited to, acts of God, man-
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made or natural disasters, earthquakes, fire, riots, flood, material shortages,
strikes, delays in transportation or inability to obtain labor or materials
through its regular sources. The time for performance of any such obligation
shall be extended for the time period lost by reason of the delay.
(f) Conflicting Terms. The parties agree that the terms and conditions of
this Agreement shall prevail, notwithstanding contrary or additional terms, in
any purchase order, sales acknowledgment, confirmation or any other document
issued by either party effecting the purchase and/or sale of Products, unless
the parties agree otherwise in writing.
(g) Headings. Headings of paragraphs herein are inserted for convenience
of reference only and shall not affect the construction or interpretation of
this Agreement.
(h) Notice. Any notice required or permitted to be given under this
Agreement shall be delivered (i) by hand, (ii) by registered or certified mail,
postage prepaid, return receipt requested, to the address of the other party
first set forth above, or to such other address as a party may designate by
written notice in accordance with this Section 14(h), (iii) by overnight
courier, or (iv) by fax with confirming letter mailed under the conditions
described in (ii) above. Notice so given shall be deemed effective when
received, or if not received by reason of fault of addressee, when delivered.
(i) Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements relating thereto, written or oral, between the parties. Amendments
to this Agreement must be in writing, signed by the duly authorized officers of
the parties. The terms of any purchase order are expressly excluded.
(j) Governing Law. This Agreement shall be governed by and construed
under the law of the State of California, without regard to conflict of laws
principles or the U.N. Convention on Contracts for the International Sale of
Goods.
(k) Arbitration. Any dispute or claim arising out of or in relation to
this Agreement, or the interpretation, making, performance, breach or
termination thereof, shall be finally settled by binding arbitration under the
Rules of Conciliation and Arbitration of the International Chamber of Commerce
as presently in force ("Rules") and by three (3) arbitrators appointed in
accordance with said Rules. Judgment on the award rendered may be entered in
any court having jurisdiction thereof. The place of arbitration shall be San
Francisco, California, U.S.A. The parties may apply to any court of competent
jurisdiction for temporary or permanent injunctive relief, without breach of
this Section 14(k) and without any abridgment of the powers of the arbitrators.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the Effective Date.
MERCK & CO., INC. ARGONAUT TECHNOLOGIES, INC.
By: /s/ XXXXXX X. XXXXXXXX By: /s/ XXX XXXXXX
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Name: Xxxxxx X. Xxxxxxxx Name: Xxx Xxxxxx
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(Typed or Printed) (Type or Printed)
Title: V.P. MRL Title: VP PRODUCT DEVELOPMENT
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EXHIBIT A
Documentation and Products
Documentation: All Product documentation provided to Argonaut on March __,
1997, including drawings and schematics.
Products:
A. INSTRUMENT PRODUCTS
1) TCMS
Manual Parallel Solid Phase Synthesis Device
Approximate Footprint: 2 ft X 2 ft
Reaction Vessel Capacity: 20
Variable Reaction Vessel Volume: 2 to 10 ml Inert Reaction
Environment
Inert Materials: Teflon and Glass
Agitation: Vertical Oscillation
Group Temperature Range: 40 to 150 C with Preset temperature set
time (A recirculating bath chiller is required to meet the low
temperature requirements of this temperature range. The bath
chiller will not be supplied by Argonaut)
Pressurized Solvent Delivery
Parallel/Individual Pressurized Solvent Filtering Discrete Reagent
Addition
Compound Collection Capability
2) ACCESSORY: AUTOMATED SOLVENT WASH MODULE FOR TCMS
Automated, Timed Delivery of Solvents Preset Control of Solvent
Filtering
Preset Control of Repeats
B. CONSUMABLE PRODUCTS
1) REACTION VESSELS (MULTIPLE FIXED VOLUMES)
2) FRITS: TEFLON POROUS SINTERED FRITS
3) COLLECTION TUBES AND CAPS: SAMPLE COLLECTION VIALS
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EXHIBIT B
Patents and Patent Applications
U.S. Patent Application USSN [*]
[*] Confidential Treatment Requested
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EXHIBIT C
Product Prices
A. INSTRUMENT PRODUCTS
1) TCMS $[*]
2) ACCESSORY: AUTOMATED SOLVENT WASH MODULE FOR TCMS [*]%
Discount off of Argonaut's North American List Price.
B. CONSUMABLE PRODUCTS
1) REACTION VESSELS (MULTIPLE FIXED VOLUMES) As per 6(d)
2) FRITS: TEFLON POROUS SINTERED FRITS As per 6(d)
3) COLLECTION TUBES: SAMPLE COLLECTION VIALS As per 6(d)
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AMENDMENT
Effective June 15, 1998, the following products may be purchased under the
terms of the agreement dated June 24, 1997 between Argonaut Technologies, Inc.
and Merck & Co., Inc. This Amendment replaces the prior Exhibit A and Exhibit C.
EXHIBIT A & C
PRODUCT & NET PRICE LISTING
Instrumentation Products
- Quest(TM) 210 Manual Synthesizer (Part Number 900093) $[*]
Originally referred to as TCMS by Merck.
- Quest(TM) 210 Synthesizer
with Automated Solvent Wash Module (Part Number 900090) $[*]
- Quest(TM) Automated Solvent Wash upgrade (See notes below.) $[*]
Quest 210 units manufactured prior to June 1, 1998 will order this part
number (Part Number 900089)
Quest 210 units manufactured after June 1, 1998 will order this part
number (Part Number 900094)
Consumable Products
- Quest(TM) 210 accessories and consumable parts
Per the original agreement, section 6.d, the prices remain [*]
percent ([*]) off Argonaut's North America. A price list is attached
that reflect the terms of the Agreement for each part.
The parties have executed this Amendment by their duly authorized
representatives, effective as of the day and year written above.
ARGONAUT TECHNOLOGIES, INC. MERCK & CO., INC.
By: /s/ XXX XXXXXX By:
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Xxx Xxxxxx Xxxxx Xxxxxxx
V.P. Product Development Director of Combinatorial Chemistry
[*] Confidential Treatment Requested