Process Development Consortium Membership Agreement between Argonaut Technologies, Inc. and Eli Lilly and Company

Summary

Argonaut Technologies, Inc. and Eli Lilly and Company entered into this agreement for Eli Lilly to join Argonaut's Process Development Consortium. The consortium aims to develop and commercialize automated instrumentation for process chemistry research. Eli Lilly will pay $105,000 for membership, receive prototype and commercial instruments, and participate in quarterly meetings. If the consortium does not reach at least seven members by March 31, 1999, Argonaut will refund most of the payment. The agreement outlines member benefits, purchase priorities, and responsibilities for costs, with limited confidentiality provisions.

EX-10.12 2 ex10-12.txt EX-10.12 1 VIII D EXHIBIT 10.12 PROCESS DEVELOPMENT CONSORTIUM MEMBERSHIP AGREEMENT This Agreement is entered into as of February 28, 1999 (the "Effective Date") by and between Argonaut Technologies, Inc., a Delaware corporation with its principal place of business at 887 Industrial Road, Suite G, San Carlos, California 94070 ("Argonaut"), and Eli Lilly and Company, an Indiana corporation with its principal place of business at Lilly Corporate Center, Indianapolis, Indiana 46285 ("Member"). WHEREAS, Argonaut has expertise in the development of instrumentation utilizing automated organic chemistry for the preparation of small organic molecules of broad chemical diversity; WHEREAS, Argonaut has established a Process Development Consortium ("PDC") to consist of up to ten (10) members which are from the pharmaceutical, biotechnology, and chemical industries, and Argonaut, for the purpose of discussing and identifying desirable features, concepts and designs for instrumentation for automating process development. WHEREAS, the Member wishes to be a member of the PDC, on the terms and conditions herein. NOW THEREFORE, the parties agree as follows: CONCEPT VALIDATION Every company who participates in individual meetings regarding the Process Development Consortium has a high level of interest in the concept and product. The product to be developed is code named "Process". There was approval of the overall concept and validation of the primary specifications and features. SPECIFICATIONS The general specifications for the Process Instrument are listed in Exhibit A. EXPECTED TIME LINE The current expected time line is outlined in Exhibit B. MEMBERSHIP ADVANTAGES Member companies will benefit from early exposure to and hands on experience with prototype instruments, interaction with peers from other companies and most importantly, input into the design and development process to ensure the development and commercialization of system for process chemistry research and development needs. 2 TERMS OF MEMBERSHIP Term. The term of the Agreement is from the effective date of this Agreement to the commercial release date of the Process Instrument. Participation. There will be a minimum of seven (7) and a maximum of ten (10) members in the Consortium. Meetings. The Consortium will meet quarterly during the Term at Argonaut's facilities in San Carlos, California, or another mutually agreed site. In addition, Argonaut may meet with Member individually, as agreed by Argonaut and such Member. Each party shall pay its own costs incurred in connection with such meetings. Argonaut will be responsible for managing the Consortium, including conducting the quarterly meetings, setting agendas and providing the format for the discussion and exchange of ideas. Argonaut will bear the cost of the meeting facilities. Prototypes. Members will have an opportunity to use the prototype instruments and software at Argonaut's San Carlos, CA facility on a scheduled basis during the Term of this Agreement. Fee. In consideration for its participation in the PDC, Member shall pay to Argonaut, One Hundred and Five Thousand U.S. Dollars ($105,000). The payment is due and payable within 30 days after execution of this agreement. Quest 205 Instrument. Upon signing this Agreement, Argonaut shall ship to Member one (1) unit of Quest 205 (part number 900144). The title to the Quest 205 Instrument shall pass to the Member FOB Shipping Point. The Member will be responsible for all applicable taxes, duties, VAT and freight charges. Process Instrument. Argonaut shall ship to Member one (1) unit of the commercial Process Instrument according to Exhibit B. The title to the Process Instrument shall pass to the Member FOB Shipping Point. The Member will be responsible for all applicable taxes, duties, VAT and freight charges. Failure to Complete Consortium. If Argonaut fails to have at least seven (7) members join the Consortium by March 31, 1999, Argonaut shall, by April 30, 1999, refund to Member all amounts paid less the price of the Quest 205 Instrument [*]. Priority. In consideration for its participation in the PDC, and provided that Member timely pays Argonaut the amounts set forth above, Member will be entitled to priority status and discount with regard to the purchase of subsequent commercial "Process" Instruments, not including the original Process Instrument delivered under this Agreement. To implement priority status and take advantage of the related discount, a purchase order must be received by June 30, 1999 to receive a [*] discount from the commercial, non-academic regional list price established by Argonaut (the "List Price"). To implement priority status and take advantage of the related discount, a purchase order must be received by September 30, 1999 to receive a [*] discount from the commercial, non-academic regional list price established by Argonaut (the "List Price"). Shipment priority among Member and other PDC members will be based on the order of receipt of purchase orders from Member or such other PDC members. [*] Confidential Treatment Requested 2 3 Confidential Information. In connection with the performance of this Agreement, Argonaut or Member may not disclose confidential or proprietary technical or business information to the other. There shall be no Confidentiality Agreement in force under this Agreement, except for the financial terms of this Agreement. Publicity. In connection with the performance of this Agreement, Argonaut may use Member names in press release's announcing the formation of the Consortium and Process Instrument related items. Purchase Orders. Lilly shall submit to Argonaut its standard form of purchase order for the equipment to be delivered hereunder, including, but not limited to, the Process Instrument and Quest 205 Instrument delivered as a result of Member joining the Consortium, and, notwithstanding anything in this agreement to the contrary, the terms of such purchase order shall govern Member's acquisition of such equipment hereunder. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers. ELI LILLY AND COMPANY ARGONAUT TECHNOLOGIES, INC. BY: Richard F. Eizenber BY: Mark W. Schwartz, Ph.D TITLE: Executive Director TITLE: Vice President, Marketing and Business Development SIGNATURE: /s/ RICHARD F. EIZENBER SIGNATURE: /s/ MARK W. SCHWARTZ BY: _______________________________ TITLE: ____________________________ SIGNATURE: ________________________ 3 4 EXHIBIT A [*] [*] Confidential Treatment Requested 4 5 [*] [*] Confidential Treatment Requested 5 6 APPENDIX B ARGONAUT TECHNOLOGIES' Process Synthesizer Instrument Consortium Timelines The timeline detailed below is the current timeline Argonaut believes is appropriate for the development of the Process Synthesizer. This timeline is subject to changes based on input from Consortium members, changes to technical, instrument or software specifications, or unforeseen technical problems. This timeline should be taken as an indication of the current expectation and current goals of the Process Development effort, but by no means the unequivocal timeline for the development of the product.