AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 6, 1997
REGISTRATION NO. 333-17991
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
- -----------------------------------------------------------------------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
- -----------------------------------------------------------------------------
KOS PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<TABLE>
<S> <C> <C>
FLORIDA 2834 65-0670898
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DANIEL M. BELL
1001 BRICKELL BAY DRIVE, SUITE 2502, 1001 BRICKELL BAY DRIVE, SUITE 2502,
MIAMI, FL 33131 MIAMI, FL 33131
305-577-3464 305-577-3464
(ADDRESS, INCLUDING ZIP CODE, (ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA CODE, AND TELEPHONE NUMBER, INCLUDING
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) AREA CODE, OF AGENT FOR SERVICE)
- -----------------------------------------------------------------------------
COPIES TO:
STEVEN SONBERG, ESQ. BRUCE K. DALLAS, ESQ.
HOLLAND & KNIGHT DAVIS POLK & WARDWELL
ONE EAST BROWARD BOULEVARD, SUITE 1300 450 LEXINGTON AVENUE
FORT LAUDERDALE, FL 33301 NEW YORK NY 10017
954-525-1000 212-450-4000
TELECOPIER NO. 954-463-2030 TELECOPIER NO. 212-450-4800
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
- ----------------------------------------------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 4 to the Form S-1 Registration Statement is a Part II
filing solely to file exhibits and make related technical changes. Accordingly,
a preliminary prospectus has been omitted.
<PAGE>
PART II
INFORMATION NOT REQUIRED UN PROSPECTUS
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<S> <C>
1.1* Underwriting Agreement among the Company, Cowen & Company,
Dillon, Read & Co. Inc., and Salomon Brothers Inc, as
Representatives of the several Underwriters
3.1* Amended and Restated Articles of Incorporation of the Company
3.2* Amended and Restated Bylaws of the Company
4.1* See Exhibits 3.1 and 3.2 for provisions of the Amended and
Restated Articles of Incorporation and Amended and Restated
Bylaws of the Company defining the rights of holders of Common
Stock of the Company
4.2* Form of Common Stock certificate of the Company (incorporated
herein by reference to the Company's Registration Statement on
Form 8-A filed with the Commission on February 25, 1997)
5* Opinion of Holland & Knight LLP
10.1* Employment Agreement dated as of July 1, 1996, between Daniel
M. Bell and the Company
10.2* Nonqualified Stock Option Agreement by and between the Company
and Daniel M. Bell dated as of June 20, 1996
10.3* Employment Agreement dated as of June 15, 1996, between David
Bova and the Company
10.4* Kos Pharmaceuticals, Inc. 1996 Stock Option Plan
10.5/plus/* Development Agreement by and between the Company and Fuisz
Technologies Ltd.
10.6* Promissory Note in favor of Kos Investments, Inc.
10.7* Registration Rights Agreement dated as of June 30, 1996 by and
between the Company, Kos Holdings, Inc. and Kos Investments,
Inc.
10.8* Oakwood Business Center Lease, dated May 2, 1991, between STS
Buildings Associates, L.P. and the Company
10.9* Oakwood Business Center Lease, dated May 15, 1990, between STS
Buildings Associates, L.P. and the Company
10.10* Oakwood Business Center Lease, dated January 7, 1993, between
STS Buildings Associates, L.P. and the Company
10.11* Modification and Extension Agreement, dated June 6, 1996,
between STS Buildings Associates, L.P. and the Company
10.12* Assignment and Second Modification of Lease Agreement, dated
June 30, 1996, by and between Oakwood Business Center Limited
Partnership and the Company
10.13* Assignment and Second Modification of Loan Agreement, dated
June 30, 1996, by and between Oakwood Business Center Limited
Partnership and the Company
10.14* Assignment and Second Modification of Lease Agreement, dated
June 30, 1996, by and between Oakwood Business Center Limited
Partnership and the Company
10.15* Lease between Center Realty, L.P. and the Company, dated May
1993
10.16* Third Modification of Lease Agreement, dated November 21,
1996, by and between Oakwood Business Center Limited
Partnership and the Company
10.17/plus/* Option/Licensing Agreement by and between the Company and
Fuisz Technologies Ltd.
10.18/plus/ Development Agreement by and between the Company and Fuisz
Technologies Ltd.
10.19/plus/* Option/Licensing Agreement by and between the Company and
Fuisz Technologies Ltd.
10.20/plus/* License Agreement by and between the Company and Upsher-Smith
Laboratories, Inc., dated February 7, 1997
21* Subsidiaries of the Company
23.1* Consent of Holland & Knight LLP (included in Exhibit 5 above)
23.2* Consent of Arthur Andersen LLP
24* Power of Attorney
27* Financial Data Schedule
II-1
<PAGE>
EXHIBIT NUMBER DESCRIPTION
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99.1* Consent of John Brademas
99.2* Consent of Louis C. Lasagna
99.3* Consent of Mark Novitch
99.4* Consent of Frederick B. Whittemore
</TABLE>
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* Previously filed.
** To be filed by amendment.
/plus/ Certain confidential material contained in the document has been
omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Miami, Florida on March 6, 1997.
KOS PHARMACEUTICALS, INC.
By: /s/ DANIEL M. BELL
---------------------------------
Daniel M. Bell
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1993, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------------------------------------------
<S> <C> <C>
/s/ DANIEL M. BELL President, Chief Executive Officer March 6, 1997
- ------------------ and Director
Daniel M. Bell (Principal Executive Officer)
* Chairman of the March 6, 1997
- ------------------ Board of Directors
Michael Jaharis
* Controller March 6, 1997
- ------------------ (Principal Accounting Officer
Juan F. Rodriguez and Principal Financial Officer)
* Vice Chairman of the March 6, 1997
- ------------------ Board of Directors
Robert E. Baldini
* Director March 6, 1997
- ------------------
Steven Jaharis
- -----------------------------------------------------------------------------
*BY: /S/ DANIEL M. BELL March 6, 1997
- ------------------------
Daniel M. Bell
Attorney-in-fact
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- -----------------------------------------------------------------------------
10.18/plus/ Development Agreement by and between the Company and Fuisz
Technologies Ltd.
- -----------------------------------------------------------------------------
/plus/ Certain confidential material contained in the document has been
omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
DEVELOPMENT AGREEMENT
THIS AGREEMENT is made by and between Kos Pharmaceuticals, Inc., a
corporation of the State of Florida, with a place of business at 1001 South
Bayshore Drive, Suite 2502, Miami, FL 33131 (hereinafter referred to as "Kos")
and Fuisz Technologies Ltd., a corporation of the State of Delaware with a place
of business at 3810 Concorde Parkway, Suite 100, Chantilly, VA 22021
(hereinafter referred to as "Fuisz").
WHEREAS, Fuisz has over a period of years conducted research and
development work and developed proprietary technology which is useful to make
controlled-release formulations for pharmaceutical compounds; and
WHEREAS Kos has interests in developing, manufacturing and marketing
once-a-day oral solid dosage forms of IS-5-MN (as hereinafter defined), based on
Fuisz proprietary technology; and
WHEREAS, Fuisz and Kos are each willing to undertake a Development
Program (as hereinafter defined) for development of the foregoing products for
commercial marketing and sale.
Now, therefore, the parties agree as follows:
The definitions as used herein are set forth in Article 1 of the
License Agreement and Appendix A attached hereto and incorporated herein by
reference.
ARTICLE 1 - DEVELOPMENT PROGRAM
1.1 Fuisz and Kos shall jointly undertake using reasonable best efforts
a Development Program to develop one or more Products for Commercial Sale. It is
understood that this Development Program is primarily for the purposes of
developing and producing Products and shall be carried out generally in
accordance with Appendix B.
1.2 Each party shall appoint a Program Manager for overall management of
the Development Program and such Program Managers shall by mutual agreement
provide the direction of the program and the scope of work to be undertaken
under the Development Program; provided, however, that Kos shall determine the
focus of work which the Program Managers mutually agree can be carried out under
the
<PAGE>
Development Program, within the guidelines set forth in Appendix B. The initial
Program Manager for Kos shall be designated within thirty (30) days and the
initial Program Manager for Fuisz shall be Martynn Sheehan. Each party may
change the designated Program Manager upon written notice to the other party of
such change.
1.3 During the term of the Development Program Fuisz shall periodically
provide to Kos samples of materials for evaluation by Kos. Kos shall promptly
evaluate such samples and provide guidance to Fuisz for further work based on
the results of such evaluations. During the Development Program term, Program
Managers or representatives of the parties shall meet from time to time to
discuss planning and progress of the Development Program to carry out efficient
and effective activities. Fuisz shall provide project updates to Kos verbally
and/or in written form every four (4) weeks during the Development Program, and
shall provide a written report upon completion of the Development Program. All
such discussions and activities shall be considered as carried out under the
Development Program.
1.4 Kos shall supply to Fuisz, at Kos's cost and expense, materials
including IS-5-MN which Kos believes are essential for carrying out the
Development Program. All such materials supplied by Kos shall be materials
approved for human uses unless otherwise specifically designated and Kos shall
supply MSDS sheets where necessary for the processing of such materials. Fuisz
shall advise Kos from time to time of its requirements for such materials for
the Development Program.
1.5 Upon termination of each Phase of the Development Program, Fuisz
shall provide to Kos quantities of prototype Products processed using Technology
which demonstrate the best results obtained under the Development Program. Kos
shall provide to Fuisz all data, information and conclusions generated during
the Development Program relating to the Development Program and/or Technology
including without limitation ******************** and any other mutually agreed
pre-defined data, and Fuisz shall have the ****************** to use all such
data, information and conclusions; provided, however, that Fuisz shall not
utilize such data, information and conclusions to the detriment of the
competitive position of Kos or inappropriately identify Kos in any publicity
concerning same.
1.6 In the event special processing or manufacturing equipment
specifically modified or adapted for use with Technology is requested by Kos to
be used under the Development Program, Kos shall provide such equipment to Fuisz
for the duration of the Development Program.
1.7 All activities in connection with the Development Program shall be
carried out by each party in strict compliance with any applicable federal,
state or local laws, regulations or guidelines governing such activities.
2
<PAGE>
1.8 In addition to the funding under Article 3, Kos shall pay for the
cost of all materials including IS-5-MN used in the Development Program and
approved by Kos (to the extent such materials are not provided and fully paid by
Kos), and Kos shall pay for the costs of all shipping, packing, customs, duties
and customs clearances associated with shipment of materials and/or equipment to
or from Fuisz or for, or resulting from work under, the Development Program. In
addition, Kos shall pay for the reasonable costs of travel of Fuisz personnel at
the prior request and approval of Kos in connection with meetings, activities or
reviews of activities under the Development Program.
1.9 All equipment, supplies and other items purchased by either party
for the conduct of the Development Program, shall be the sole and exclusive
property of the purchasing party. For purposes hereof, all such items purchased
by Fuisz with funds provided by Kos shall be deemed to be items purchased and
owned by *****.
ARTICLE 2 - TERM AND TERMINATION OF THE DEVELOPMENT PROGRAM
2.1 The initial term of Phase I of the Development Program shall be
***************** from the Effective Date. The parties shall use reasonable
efforts to carry out the Development Program during such initial term. However,
if due to unforseen circumstances unavoidable delays attributable solely to
Fuisz are encountered, or force majeure events are encountered in carrying out
activities, the initial term of the Development Program shall be extended for a
time equal to the delay at no additional cost to Kos. The Development Program
shall be automatically extended on a week by week basis after the initial term
provided that Kos may terminate the Development Program anytime after the
initial term or at the end of each successive weekly extension of the
Development Program, and Fuisz may terminate the Development Program at the end
of the twelfth (12th) weekly extension thereof or at the end of each successive
weekly extension thereafter, respectively upon seven (7) calendar days advance
notice in writing to the other party.
2.2 If either party shall default, fail to perform, or otherwise commit
a breach of a material obligation or any covenant contained herein with respect
to the Development Program, and shall fail to remedy such default, failure to
perform or breach within sixty (60) days after its receipt of written notice
thereof from the other party, such other party may terminate the Development
Program and incur no further obligation hereunder, it being understood, however,
that if within such sixty (60) days after receipt of such notice, the party in
default shall have rectified its default, then the Development Program and the
terms hereof relating to the Development Program shall be restored as if no
termination of the Development Program had occurred. The term of this Agreement
(or any extension thereof) shall be tolled by the time required by the
defaulting party to cure the default.
3
<PAGE>
2.3 This Agreement shall commence upon the Effective Date and terminate
at the end of the term of the Development Program, including any extensions
thereof.
2.4 Except for Kos and Fuisz jointly owned technology and patents and
Fuisz solely owned technology and patents, Fuisz hereby acknowledges that it
shall not have the right, following expiration of the Development Agreement
term, to use technology to the extent obtained from Kos, patents based thereon
or any materials to the extent obtained from Kos, for any purpose without
obtaining a license from Kos, which license Kos, in its sole discretion, may
grant or deny.
2.5 Except as set forth in the License Agreement and except for Kos and
Fuisz jointly owned technology and patents and Kos solely owned technology and
patents, Kos hereby acknowledges that it shall not have the right, following
expiration of the Development Agreement term, to use Technology to the extent
obtained from Fuisz, patents based thereon or any materials to the extent
obtained from Fuisz, for any purpose without obtaining a license from Fuisz,
which license Fuisz, in its sole discretion, may grant or deny.
ARTICLE 3 - FUNDING OF THE DEVELOPMENT PROGRAM
3.1 Kos shall provide total funding for Phase 1 of the Development
Program as set forth in Appendix B, in the amount of
****************************
******************************************************************************
******************* of which shall be paid to Fuisz within *********** days of
the Effective Date, and ******************************** of which shall be paid
within ************************ following the end of Phase 1 and
****************************************** of which shall be paid within
**************** following completion of the Phase 1 ******************* of
Appendix B. This amount of funding may be increased by mutual agreement. This
funding shall not include the cost of the ******************* which shall be
funded and paid for ************. In the event Kos chooses to proceed to Phase 2
and/or Phase 3 as set forth in Appendix B, unless Fuisz determines further
development is not feasible, Kos shall pay to Fuisz additional amounts
commensurate with the activity involved and as mutually agreed, consistent with
the cost of Phase 1 and with the level of activity, for Phase 2 and for Phase 3
payable within **************** of commencement of the phases.
3.2 In the event the Development Program is extended by mutual written
agreement of the parties, each successive one (1) week extension after the
initial term shall be funded and paid to Fuisz in advance at a rate of
************************************ per week with respect to extension of Phase
I, and with respect to Phases 2 and 3, such weekly amounts as are consistent
with the additional funding set forth in Section 3.1; provided, however, that if
the man-day charges for
4
<PAGE>
work carried out at Fuisz during the initial term are less than the funding
actually paid under the initial term (exclusive of charges under Section 1.8)
then additional funding for such extensions under this Section 3.2 shall not be
invoiced or due until such time as the man-day charges equal such funding
provided for the initial term. Other costs as set forth in Section 1.8
associated with successive weekly extensions incurred under the Development
Program, shall be invoiced once each month and will be due net thirty (30) days
from date of mailing of the invoice.
3.3 All work done at Fuisz shall be at ************** rates of Fuisz for
pharmaceutical development work. Verification of the man-days charges for work
under the Development Program and the schedule of applicable existing charge
rates shall be made available to Kos at reasonable intervals upon written
request. In the event Kos requests work be done in excess of the current funding
during the initial term of the Development Agreement or any extensions thereof,
Fuisz shall invoice Kos for such excess work on a monthly basis. In the event
either party terminates the Development Program, Kos shall be obligated to pay
Fuisz for all work done by Fuisz under the Development Program up to the date of
termination, and if terminated by Kos for breach by Fuisz, Fuisz shall refund
any advanced funding payments made by Kos in excess of payments for work done.
ARTICLE 4 - MERCHANTABILITY, FITNESS FOR PURPOSE AND
LIMITATIONS OF LIABILITY
4.1 The parties recognize that this is an agreement for services and not
for the sale of goods. Therefore, except as provided in this Article 4, Fuisz
makes no warranties, express or implied, regarding the quality or quantity of
any Product produced under this Agreement or materials purchased to support work
performed under this Agreement which are not specifically identified in writing
as to source or quality by Kos prior to purchase, provided that Fuisz represents
and warrants that as of the time of delivery, all Products supplied to Kos which
are labeled cGMP Sample shall conform to the specifications mutually agreed to
in writing by the parties, shall be manufactured using Current Good
Manufacturing Practices as defined in regulations promulgated by the FDA under
the Federal Food, Drug and Cosmetic Act (the "Act"), shall contain only
materials that are GRAS, and shall not be adulterated or misbranded within the
meaning of the Act. FUISZ EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
4.2 In the performance of the duties contemplated hereunder, the status
of the parties including employees and agents of each, shall be that of
independent contractors and not as employees, agents or fiduciaries of the other
party, and neither party shall have the right to make commitments for or on
behalf of the other party.
5
<PAGE>
4.3 Each party shall be responsible for the safety of its employees and
agents with respect to activities relating to the Development Program under this
Agreement and for liability for damages or personal injuries, including death,
resulting from such activities without any warranty, liability or
indemnification on the part of the other party.
ARTICLE 5 - FORCE MAJEURE
5.1 Neither Fuisz nor Kos shall be liable for delay or failure in the
performance of the obligations contained in this Agreement arising solely from
any one or more of the following matters: (a) acts of God, or public enemy or
war (declared or undeclared); (b) acts of governmental authorities, of
quasi-governmental authorities, or the United States, or any political
subdivision thereof, or of any department or agency thereof, or regulations or
restrictions imposed by law or by court action, except as they may result from
the unreasonable failure of Fuisz or Kos to perform as required hereunder; (c)
acts of persons, other than employees or agents of the parties, engaged in
subversive activities or sabotage; (d) fires, floods, explosions or other
catastrophes; (e) epidemics or quarantine restrictions; (f) strikes, or similar
labor disruptions; (g) freight embargoes, or interruption of transportation; (h)
unusually severe weather; (i) delays of a supplier of Fuisz or Kos due to any of
the above causes or events; or (j) any other extraordinary causes, similar or
dissimilar, beyond the control of the party concerned; and provided that due
diligence is exercised to cure such cause and resume performance, and the time
for performance by such party shall be extended by a period of any such delay.
ARTICLE 6 - CONFIDENTIALITY
6.1 CONFIDENTIALITY; EXCEPTIONS - Except to the extent expressly
authorized by this Agreement, and except as provided in Section 6.2, or
otherwise agreed in writing, the parties shall, for the term of this Agreement
and for five (5) years thereafter, keep confidential and shall not publish or
otherwise disclose, or use for any purpose, any Confidential Information
furnished to one party by the other party pursuant to this Agreement, except to
the extent that it can be established by competent evidence that such
Confidential Information:
(a) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure by the other party;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
6
<PAGE>
(c) became generally available to the public or became
otherwise part of the public domain after its disclosure and other than through
any act or omission of the receiving party in breach of this Agreement;
(d) was disclosed to the receiving party, other than under an
obligation of confidentiality, by a third party who had no obligation to the
disclosing party not to disclose such Confidential Information to others; or
(e) is independently developed by or on behalf of the
receiving party by individuals not having access to such Confidential
Information.
Each party may disclose the other's Confidential Information to the
extent such disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, or is necessary to be
disclosed in connection with the marketing or sale of a Product or is necessary
to be disclosed to comply with applicable governmental regulations; provided,
however, that if a party is required to make any such disclosure of the other
party's Confidential Information it shall, except where impracticable for
necessary disclosures, for example to health authorities, give reasonable
advance notice to the other party of such disclosure requirement and, except to
the extent inappropriate in the case of patent applications, shall use
reasonable efforts to secure confidential treatment of such Confidential
Information required to be disclosed.
6.2 All trade secrets provided to a party under this Agreement by the
other party, as defined under the Uniform Trade Secrets Act of the United
States, or the trade secret laws of applicable national countries, which are
provided by one party to the other party hereunder and identified in writing as
trade secrets, shall be maintained in confidence, without limitation of time,
and will be used only for purposes of work under this Agreement or
commercialization of Products under the provisions of this Agreement.
6.3 Each party may also disclose the other's Confidential Information
and trade secrets to an Affiliate, agent or consultant on a need-to-know basis,
who is under an obligation of confidentiality and non-use at least substantially
equivalent to the obligations of this Article 6, a party disclosing the other
party's Confidential Information or trade secrets to such Affiliate, agent or
consultant shall notify the other party of the identity of such Affiliate, agent
or consultant.
ARTICLE 7 - INVENTIONS AND PATENTS
7.1 Inventions and any patent applications and patents based on
Inventions made under or as a result of work done under the Development Program
or as a result
7
<PAGE>
of evaluations or analysis of samples under the Development Program shall be
owned as follows:
(a) if invented solely by the staff of Fuisz or their
consultants or jointly by employees of Fuisz and their consultants, ownership
shall rest in Fuisz;
(b) if invented solely by the staff of Kos or their
consultants or jointly by employees of Kos and their consultants and such
Inventions are based upon or directly related to Technology, ownership shall
rest in Fuisz; otherwise, ownership shall rest in Kos and Fuisz shall have
irrevocable, paid up, non-exclusive rights thereunder;
(c) if invented jointly by employees of Kos and/or Kos
consultants and employees of Fuisz and/or Fuisz' consultants ("Joint
Invention"), ownership shall rest jointly in Fuisz and Kos.
7.2 Patent and copyright procurement activity in regard to Inventions
shall be pursued at the discretion and expense of the owner or designee set
forth in Section 7.1 except that procurement activities with respect to Joint
Inventions shall be pursued at the discretion and equally shared expense of
Fuisz and Kos. Each party, however, shall notify the other upon the preparation
of any written invention report and/or the filing of any patent or copyright
application based on an Invention, provide the other with a copy of any such
Invention report, or patent or copyright application based on an Invention, and
any issued patent or statutory copyright granted thereon, and on request update
the other as to the status of any such patent or copyright application. Neither
party shall be liable with respect to any claims or damages arising from any
act, or failure to act, in regard to the preparation, prosecution or maintenance
of any such patent applications or patents. Each party shall sign documents to
vest or maintain title to patents and/or copyrights in the owner designated in
Section 7.1, and provide all reasonable assistance to the other with respect to
preparation and prosecution of such patents and copyrights as may be necessary.
7.3 As to Inventions owned by Kos and/or Fuisz in accordance with
Section 7.1, each party shall furnish to the other all information and data in
its possession reasonably necessary to obtain patents and copyrights on such
Inventions and, upon request, shall review applications for such patents and
copyrights. In the event the Program Manager or the owner or designee decides
that additional examples are necessary to obtain patents on Inventions, the
other party shall cooperate by providing any such examples relating to use of
the Invention as may reasonably be requested by the owner or designee, provided
that the owner or designee shall reimburse the other party for the reasonable
costs of generating such examples for individually owned Inventions where the
Program Managers do not agree to fund generation of such additional examples.
8
<PAGE>
ARTICLE 8 - GENERAL PROVISIONS
8.1 INDEPENDENT CONTRACTORS. Nothing in this Agreement shall be deemed
to create an agency, employer-employee, partnership or joint venture
relationship between the parties. The status of the parties shall be, for all
purposes, independent contractors. Neither party shall have the right to control
the work of the other's employees and/or agents.
8.2 NO OTHER IMPLIED LICENSES. Except as provided in the License
Agreement each party understands that this Agreement does not include any
assurance that the other party has granted or will grant any license, option or
right to it, and the other party reserves the right to enter into exclusive
licenses or business arrangements with other parties for any or all of its
technology.
8.3 AMENDMENTS. No addition to, deletion from or modification of any of
the provisions of this Agreement shall be binding upon the parties unless made
in writing and signed by a duly authorized representative of each party. Any
such additions, deletions or modifications shall refer specifically to this
Agreement.
8.4 ASSIGNMENT. This Agreement is unassignable by either Kos or Fuisz
except with the prior written consent of the other; provided, however, that it
may be assigned without consent to a corporate successor of Kos or Fuisz or to a
person or corporation acquiring all or substantially all of the business and
assets of Kos or Fuisz to which this Agreement relates. All or any portion of
Technology shall be assignable by Fuisz; provided, however, that in the event of
any such assignment, any such assignee shall accept and agree in writing to be
bound by all of the terms and conditions of this Agreement relating to such
assigned rights.
8.5 APPLICABLE LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware, United States of
America, without reference to its conflict of laws provisions.
8.6 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed duly given when personally delivered or sent by
registered or certified mail, return receipt requested, postage prepaid, or by
cable confirmed by letter as aforesaid, as follows:
Notice to Fuisz: Notice to Kos:
Fuisz Technologies Ltd. Kos Pharmaceuticals, Inc.
3810 Concorde Parkway 1001 South Bayshore Drive
Suite 100 Suite 2502
Chantilly, VA 22021 Miami, FL 33131
ATTN: Richard C. Fuisz ATTN: President
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President and CEO
With a copy to:
James L. Wilcox
Vice President & General Counsel
or to such other address as either party may hereafter designate in writing by
like notice.
8.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties with regard to the subject matter hereof and
supersedes all prior discussions, representations and understandings with
respect thereto, whether written or oral.
8.8 SURVIVAL. The rights and obligations of either party under Articles
6 and 7 shall survive the termination of this Agreement.
8.9 PUBLIC ANNOUNCEMENTS. Except as required by law or in connection
with private or public offerings to raise capital or as required for documents
to be filed with the Securities and Exchange Commission (a "Permitted Public
Announcement"), neither party shall make any public announcement concerning this
Agreement or the subject matter hereof without the prior written consent of the
other; provided, however, that in any event, each party shall have the right to
refer, in such announcement required by law or in any private or public offering
documents, to the status of this Agreement or of the Development Agreement and
to state that the license hereunder has been granted, together with a
generalized description of the nature and extent of such license. All such
announcements shall be made available by the announcing party to the other party
at least five (5) business days in advance of the announcement for review and
comment by the other party
8.10 This Agreement shall be executed in one or more counterparts, each
of which shall for all purposes be deemed to be an original and all of which
shall constitute the same instrument subject to the time limitations imposed in
those sections.
8.11 ALTERNATIVE DISPUTE RESOLUTION.
(a) In the event of any dispute, controversy or claim arising
out of or relating to this Agreement (unless such dispute, controversy or claim
involves an issue of patent validity), Kos or Fuisz shall employ alternative
dispute resolution procedures in an effort to avoid litigation over any such
dispute, controversy or claim. Any such dispute, controversy or claim hereunder
shall, prior to submission to such alternative dispute resolution proceedings,
be referred to representatives of management (hereinafter "Management
Representatives") of the respective parties for resolution.
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(b) Any such dispute that shall not have been resolved
pursuant to paragraph 8.11(a) ninety (90) days after reference to such
Management Representatives, or otherwise by agreement between the parties, shall
be referred to arbitration in accordance with the rules of the American
Arbitration Association. The arbitration tribunal shall consist of three (3)
arbitrators. The party initiating arbitration shall nominate one (1) arbitrator
(who shall not be affiliated with such party) in the request for arbitration and
the other party shall nominate a second arbitrator (who shall not be affiliated
with such party) in the answer thereto. The two (2) arbitrators so named will
then jointly appoint the third (3rd) arbitrator as chairman of the arbitration
tribunal. If a party fails to nominate its arbitrator as chairman of the
arbitration tribunal or if the arbitrators named by the parties fail to agree on
the person to be named as chairman within sixty (60) days, the Office of the
American Arbitration Association in Washington, DC, USA shall make the necessary
appointments of an arbitrator or the chairman of the tribunal. The award of the
arbitration tribunal shall be final and judgment upon such an award may be
entered in any competent court or application may be made to any competent court
for judicial acceptance of such an award and an order of enforcement. In the
event of any procedural matter not covered by the aforesaid Rules, the
procedural law of the State of Delaware, United States of America, shall govern.
8.12 For so long as he is employed by Fuisz, Fuisz shall provide the
services of Dr. Michael Myers, or an appropriate substitute designated by Fuisz
and acceptable to Kos, who shall be primarily responsible for carrying out the
responsibilities of Fuisz under the Development Program.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized officer as of the Effective Date.
KOS PHARMACEUTICALS, INC. FUISZ TECHNOLOGIES LTD.
/S/ DANIEL M. BELL /S/ RICHARD C. FUISZ
- -------------------------------- ---------------------------------
Daniel M. Bell Richard C. Fuisz, M.D.
President President and CEO
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APPENDIX A
"CONFIDENTIAL INFORMATION" shall mean all business or technical information,
including, without limitation, all photographs, records, methods, processes,
techniques, equipment, and all know how and trade secrets, provided by one party
to the other party under the provisions of this Agreement.
"EFFECTIVE DATE" shall mean the Effective Date of the License Agreement.
"INVENTION" shall mean any discovery or invention conceived, made or reduced to
practice in the performance of work under the Development Program or resulting
from the IN VITRO evaluation or analysis of samples produced under the
Development Program.
"LICENSE AGREEMENT" shall mean the Option and License Agreement between Kos and
Fuisz relating to IS-5-MN and having the same Effective Date as this Agreement.
<PAGE>
APPENDIX B
DEVELOPMENT PROGRAM SCHEDULE
PHASE 1 - **********
(a) Preformulation - *******
- Drug Physicochemical Characterization
- Excipient compatibility Studies
- Qualitative Formulation Selection
(b) Formulation Assessment - *******
- Quantitative Formulation Development
- *********************
- *******************
- Finished Product
- Manufacture and Testing of a Range of Batches at each stage
- Informal Stability Assessment
- Analytical Methodology Validation
(c) Process Initiation - *******
- Initial Processing Parameter Characterization Studies
- Formulation Reproducibility Studies
(d) Product Characterization - *******
- Manufacture under GMP condition of Product(s) for pilot
pharmacokinetic study
- Release of Product(s) for the pilot pharmacokinetic study
- Pilot stability evaluation
PHASE 2 - **********
(a) Formulation Optimization - ********
- Optimization of Formulations Through Batch Reproducibility
Studies at Initial Scale-up Level for:
- *********************
- *******************
- Finished Product
(b) Process Development - ********
- Evaluation of Pilot Scale-up Manufacturing Process and
Definition of Operating Parameters
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APPENDIX B (CONT.)
(c) Product Characterization - *******
- Manufacture of Pilot Scale Product(s) for Confirmatory
Pharmacokinetic Study and Clinical Studies
- Formal Stability Testing
PHASE 3
(a) Commercialization -
- Scale-up to Commercial Scale Manufacturing
- Process Validation
- Manufacture of Pivotal Pharmacokinetic and Clinical batches
(as Appropriate)
- Pivotal Stability in Finish Packaging Configuration
Status: Duration and Costing to be defined.
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