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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported) November 15, 1999
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OXIS INTERNATIONAL, INC.
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<S> <C> <C>
Delaware 0-8092 94-1620407
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification
Incorporation) Number)
6040 N. Cutter Circle, Suite 317 Portland, OR 97217-3935
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code. (503) 283-3911
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____________________________________________________________________________________________________
(Former Name or Former Address if Changes Since Last Report)
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Item 2. Acquisition or Disposition of Assets
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On November 15, 1999, OXIS International, Inc. ("OXIS") entered into an
Agreement with Enzon, Inc. ("Enzon") pursuant to which OXIS assigned to Enzon
the rights to its patents relating to polyalkylene glycols. OXIS retained a
non-exclusive perpetual paid-up license under these patents for PEG conjugated
superoxide dismutase. The Agreement is filed herewith as Exhibit 10.1.
In exchange for the assignment, OXIS received an up-front cash payment of
$600,000, and will receive an additional cash amount of $225,000 upon FDA
approval of the first U.S. product covered by these patents. Additionally,
Enzon will pay a royalty based on net sales of High Molecular Weight
polyalkylene glycol products it hereinafter chooses to develop and sell, which
are covered by these OXIS patents. This Agreement supercedes a July 1997 Non-
Exclusive License Agreement between these parties relating to these OXIS
patents.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
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Exhibit 10.1 Agreement dated October 15, 1999, by and between OXIS
International, Inc. and Enzon, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
November 24, 1999 OXIS INTERNATIONAL, INC.
(Registrant)
/s/ Jon S. Pitcher
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Chief Financial Officer and
Vice President
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EXHIBIT INDEX
Page
Exhibit Number
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Exhibit 10.1 Agreement dated October 15, 1999, by and
between OXIS International, Inc. and Enzon, Inc. 6
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EXHIBIT 10.1
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AGREEMENT
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This Agreement, entered into as of October 15, 1999 ("Effective Date"), by
and between OXIS International, Inc., a corporation organized under the laws of
Delaware ("OXIS"), having offices at 6040 N. Cutter Circle, Suite 317, Portland,
OR 97217-3935, and ENZON, Inc. a corporation organized under the laws of
Delaware ("ENZON") having offices at 20 Kingsbridge Road, Piscataway, New Jersey
08854-3998.
0. Background
OXIS is the owner of certain patents described herein ("OXIS Patents"). The
parties entered into a "Non-Exclusive License Agreement" on July 29, 1997 in
connection with the OXIS Patents.
The parties now desire to enter into a new agreement relating to the OXIS
Patents, which will eliminate and concurrently substitute for such Non-Exclusive
License Agreement.
Under this new agreement, which follows herein ("Agreement"), the parties
desire to transfer complete ownership of the OXIS Patents from OXIS to ENZON,
grant OXIS an exclusive license under the OXIS Patents for "High Molecular
Weight Products" under the terms defined herein, and grant OXIS a non-exclusive
license under the OXIS Patents for super-oxide dismutase.
Now, therefore, in consideration of the foregoing and the covenants and
premises contained herein, the parties agree as follows:
1. Definitions
As used herein, capitalized terms will have the meanings set forth below:
1.1 "Affiliate" means any person or entity directly or indirectly
controlling, controlled by or under common control with, either party to this
Agreement. For purposes of the preceding definition, "control" means the direct
or indirect ownership of over fifty percent (50%) of the profits or earnings of
a person or entity, or the ability to control decisions of a person or entity.
1.2 "Net Sales" means the amounts actually received for sales of High
Molecular Weight Products by or on behalf of ENZON and its Affiliates or for
otherwise making High Molecular Weight Products available to others without
sales, whether invoiced or not, less (i) any returns and allowances actually
granted, (ii) packing costs, insurance costs and freight out, (iii) taxes
(excluding income taxes) or excise duties imposed on the transaction (if
separately invoiced), and (iv) wholesaler quantity and cash discounts in amounts
customary in the trade. No deductions shall be made for
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commissions paid to individuals, whether they be with independent sales agencies
or regularly employed, or for the cost of collections. On such sales of High
Molecular Weight Products, other than in an arm's-length transaction, the value
of the Net Sales attributed to such a transaction shall be that which would have
been received in an arm's-length transaction, based on sales of like quantity
and quality products on or about the time of such transaction.
1.3 "High Molecular Weight Product" means any product which, in the
course of manufacture, use, or sale would, in the absence of this Agreement,
infringe one or more Valid Claims of one or more OXIS Patents, and which
includes PEG having a molecular weight of at least 30,000, as determined under
U.S. Patent 5,568,478.
1.4 "OXIS Patents" means the U.S. patents listed on Exhibit A hereto, and
any reissues, extension, substitutions, confirmations, re-registrations, re-
examinations, continuations, divisionals or continuations-in-part patent
applications of the foregoing patents, as well as all foreign counterparts or
equivalents, including patents and pending applications of the above, and also
means any other patents and patent applications covered by the warranty stated
in Paragraph 9.2.
1.5 "Valid Claim" means a claim of an OXIS Patent which has not lapsed or
become abandoned or been invalidated by a final judgment of a court of competent
jurisdiction from which no further appeal has or can be taken.
2.0 Assignment and Licenses
2.1 OXIS hereby assigns the entire right, title and interest in the OXIS
Patents to ENZON under the assignment attached hereto as Exhibit B.
2.2 ENZON hereby grants OXIS a royalty-free, non-exclusive, worldwide
license under the OXIS Patents for pegylated super oxide dismutase, with the
right to sublicense.
2.3 If by the first anniversary of the Effective Date ENZON has not paid
OXIS the sum of $100,000, in addition to any other amounts owed under this
Agreement, OXIS shall be automatically granted a royalty-free, exclusive, even
as to ENZON, worldwide license under the OXIS Patents for High Molecular Weight
Products, with the right to sublicense. ENZON shall also pay OXIS $100,000 on
each of the second, third and fourth anniversaries of the Effective Date, to
avoid grant of this license, but thereafter shall have no further obligation to
pay OXIS any amount under this Paragraph 2.3 nor to grant this license to OXIS.
2.4 ENZON shall negotiate in good faith with OXIS any request for a
license under the OXIS Patents that OXIS presents to ENZON, but ENZON shall have
the sole and final discretion to grant the requested license.
3.0 Cash Payments and Royalty for High Molecular Weight Products
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3.1 In exchange for, and as total payment for, the Assignment
described in Paragraph 2.1, ENZON shall pay OXIS the sum of (1) $600,000 on the
signing by both parties of this Agreement, and (2) $225,000 within thirty (30)
days after the first approval to market in the U.S. a drug which would, but for
this Agreement, infringe a Valid Claim of an OXIS Patent.
3.2 If and until OXIS is granted the exclusive license defined in
Paragraph 2.3, but not thereafter, ENZON shall pay OXIS a royalty of 4% of Net
Sales of each High Molecular Weight Product sold by ENZON and its Affiliates
during the existence of a Valid Claim covering such High Molecular Weight
Product. The payments made by ENZON to OXIS under Paragraph 2.3 shall be
creditable by ENZON against any royalties earned hereunder during the calendar
year following such payment.
4.0 Payment Terms
4.1 Accrual; Reporting. Any royalty payments due under this Agreement
shall accrue on a calendar quarter basis and ENZON shall pay to OXIS all such
royalty payments within sixty (60) days of the end of such calendar quarter.
Each payment shall be accompanied by a report summarizing the relevant sales of
High Molecular Weight Products and royalty payment due thereon, including a
description of any offsets or credits deducted, in sufficient detail to permit
confirmation of the accuracy of the payment made. In the event that any payment
due hereunder is not made when due, the payment shall accrue interest beginning
on the first day following the due date at the rate of 1.5% per month or, if
less, the maximum rate permissible under Oregon law.
4.2 Records. During the term of this Agreement, ENZON shall keep full and
accurate books and records for High Molecular Weight Products for which payments
are due detailing gross sales, all deductions allowed in arriving at Net Sales
and any other information necessary in sufficient detail to allow the
calculation of the amounts to be paid hereunder. During the term of this
Agreement and for a period of five (5) years thereafter, ENZON shall permit
OXIS, by independent certified public accountants selected by OXIS, to examine
ENZON's books and records related to High Molecular Weight Products during
business hours for sales that occurred no more than five years prior to such
examination. If it is determined that there was an underpayment of royalties due
to OXIS of five percent (5%) or more, without prejudice to any other rights OXIS
may have, ENZON shall promptly reimburse OXIS for the balance of the royalties
due and shall also reimburse OXIS for the reasonable cost of such examination.
5.0 Patent Matters
5.1 Patent Prosecution and Maintenance. ENZON shall be solely responsible
for the prosecution and maintenance of the OXIS Patents at ENZON's expense. OXIS
shall provide the aid to ENZON described in Exhibit B for such purposes and for
the purpose of transfer of ownership of the OXIS Patents to ENZON.
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5.2 Patent Infringement. If OXIS becomes aware of any actual or
threatened infringement of any OXIS Patent, OXIS will notify ENZON in writing
promptly after learning of such infringement. ENZON shall have the sole right
(but not the obligation) to bring and control, at its own expense, any
infringement action against any person or entity infringing the OXIS Patents.
OXIS will reasonably assist ENZON and cooperate in any litigation at ENZON's
request and expense.
6.0 Term and Termination
6.1 Term. This Agreement will commence on the Effective Date and, unless
sooner terminated as provided hereunder, will expire on a country-by-country
basis, upon the expiration of the last to expire of the OXIS Patents.
6.2 Termination.
(a) The expiration or any termination of this Agreement shall
have no effect on the Assignment granted under Paragraph 2.1, which shall
survive such expiration or termination; provided ENZON has not breached its
requirements to make the payments called for in Paragraph 3.1.
(b) Subject to Paragraph 6.2 (a), this Agreement may be
terminated by OXIS upon sixty (60) days written notice upon the bankruptcy,
insolvency, dissolution or winding up of ENZON (other than dissolution or
winding up for the purposes of reconstruction or amalgamation); or by
either party upon or after the breach of any material provision of this
Agreement by the other party if such breach has not been cured within the
sixty (60) day period following written notice of termination.
(c) Upon expiration or termination of this Agreement, all
rights granted by ENZON to OXIS hereunder shall terminate and revert to
ENZON. Without limiting any remedies otherwise available to the terminating
party, termination of this Agreement pursuant to this Paragraph 6.0 will
not relieve ENZON from any amounts owing to OXIS at the time of termination
and will not terminate any rights or obligations arising and existing prior
to termination of this Agreement.
7.0 Indemnification
7.1 Indemnification. Each party agrees to indemnify, hold harmless and
defend the other party, its officers, directors, employees and agents, from and
against any and all claims, suits, losses, damages, costs, fees and expenses
resulting from or arising out of the development, manufacture, storage, sale or
other distribution or use of its products covered by the OXIS Patents, the
exercise of rights granted hereunder, or the negligence or willful misconduct of
each party in its performance of its obligations under this Agreement.
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8.0 Limitation of Liability
8.1 Waiver of Consequential Damages. IN NO EVENT WILL EITHER PARTY
BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES OR ITS SUBLICENSEES FOR ANY LOST
PROFITS, LOST SAVINGS, OR OTHER INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES
BASED ON ANY CLAIM BY THE OTHER PARTY, EXCEPT UNDER PARAGRAPH 7.0.
8.2 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, AND
HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND OR NATURE, WHETHER
EXPRESS OR IMPLIED, RELATING TO THE OXIS PATENTS, INCLUDING ANY EXPRESS OR
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR
THAT THE PRACTICE OF THE OXIS PATENTS, OR THE MANUFACTURE, USE OR SALE OF A
PRODUCT DISCOVERED OR IDENTIFIED THROUGH THE USE OF THE OXIS PATENTS, WILL NOT
INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OF THIRD PARTIES.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY EXPRESSLY DOES NOT
WARRANT THE ACCURACY, SAFETY, OR USEFULNESS FOR ANY PURPOSE, OF THE TECHNOLOGY
COVERED UNDER THE OXIS PATENTS. NOTHING CONTAINED IN THIS AGREEMENT SHALL BE
CONSTRUED AS EITHER A WARRANTY OR REPRESENTATION BY EITHER PARTY AS TO THE
VALIDITY OR SCOPE OF ANY OXIS PATENT. NEITHER PARTY ASSUMES ANY LIABILITY IN
RESPECT OF ANY INFRINGEMENT OF ANY OXIS PATENT OR OTHER RIGHT OF THIRD PARTIES
DUE TO THE ACTIVITIES OF EITHER PARTY UNDER THIS AGREEMENT.
9.0 Representations and Warranties
9.1 Mutual Representations and Warranties. Each party hereby represents
and warrants:
(a) Corporate Power. Such party is duly organized and validly
existing in good standing under the laws of the state of its incorporation
and has all requisite corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
(b) Due Authorization. Such party is duly authorized to execute
and deliver this Agreement and to perform its obligations hereunder.
(c) Binding Agreement. This Agreement is a legal and valid
obligation binding upon it and enforceable in accordance with its terms.
The execution, delivery and performance of this Agreement by such party
does not
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conflict with any agreement, instrument or understanding, oral or written,
to which it is a party or by which it may be bound, not violate any law or
regulation of any court, governmental body or administrative or other
agency having jurisdiction over it.
9.2 OXIS Patents. OXIS represents and warrants that the OXIS Patents
listed in Exhibit A are all the patents OXIS owns or has rights to that, but for
this Agreement, would be infringed by the making, using or selling of a
polyalkylene glycol product or such product combined with a protein, drug or
therapeutic entity. OXIS further represents and warrants that it will update
Exhibit A to include any reissues, extensions, substitutions, confirmation, re-
registrations, re-examinations, continuations, divisionals or continuations-in-
part patent applications of the foregoing patents or any other new OXIS Patent
covered by this warranty, which issue during the term of this Agreement after
the Effective Date.
10. General Provisions
10.1 Relationship of the Parties. Neither party is, nor will be deemed to
be, an agent or legal representative of the other party for any purpose. Neither
party will be entitled to enter into any contracts, incur any debts or make any
commitments in the name of or on behalf of the other party, and neither party
will be entitled to pledge the credit of the other party in any way or hold
itself out as having authority to do so.
10.2 Compliance with Laws. Each party shall use its best efforts to
comply with all applicable laws, rules and regulations pertaining to the
development, testing, manufacture, marketing and import or export of the
products covered by the OXIS Patents.
10.3 Non-Assignment. As in licensee under the OXIS Patents, OXIS shall
not assign this Agreement, in whole or in part, without the prior written
consent of ENZON, except such consent shall not be required in connection with
OXIS' sale of its entire business to which this Agreement pertains.
10.4 Divisibility. If any provision of this Agreement is found to be
prohibited by law and invalid, or for any other reason if any provision is held
to be unenforceable, in whole or in part, such provision shall be ineffective to
the extent of the prohibition or unenforceability without invalidating or having
any other adverse effect upon any other provision of this Agreement.
10.5 Entire Agreement. This Agreement, including the documents and the
instruments referred to herein, constitutes the entire agreement between the
parties relating to its subject matter and supersedes all prior to
contemporaneous negotiations or agreements, whether oral or written, relating to
the subject matter hereof. No extension, modification or amendment of this
Agreement shall be binding upon a party unless such extension, modification or
amendment is set forth in a written instrument, which is executed and delivered
on behalf of such party.
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10.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive law of the State of Delaware, without giving
effect to any conflicts or choice of laws principles which otherwise might be
applicable.
10.7 Publicity. Neither party shall make any public statement using the
name of the other party, or referring to this Agreement, or disclosing any of
its terms, without the prior written approval of the other party.
10.8 Survival. Paragraphs 2.1 and 2.3 shall survive the expiration or any
termination of this Agreement, provided, with respect to Paragraph 2.1, the
payments called for in Paragraph 3.1 are made to OXIS, and with respect to
Paragraph 2.3, the payments called for have not been made to OXIS. Paragraphs
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4.0, 5.1, 6.3, 7.1 and 10.7 shall also survive the expiration or any termination
of this Agreement.
In Witness Whereof, the parties hereto have duly executed this Agreement,
including the Exhibits attached hereto and incorporated herein by reference, as
of the date first written above.
ENZON, INC. OXIS INTERNATIONAL, INC.
By: /s/ John A. Caruso By: /s/ Ray R. Rogers
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Name: John A. Caruso Name: Ray R. Rogers
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Title: V.P. Admin & General Counsel Title: Chairman
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EXHIBIT A
OXIS PATENTS
. U.S. patent No. 5,468,478, entitled "Conjugates of Superoxide Dismutase
Coupled to High Molecular Weight Polyalkylene Glycols, issued November 21,
1995.
. U.S. Patent No. 5,283,317, entitled "Intermediates for Conjugation of
Polypeptides With High Molecular Weight Polyalkylene Glycols, issued February
1, 1994.
. U.S. patent No. 5,080,891, entitled "Conjugates of Superoxide Dismutase
Coupled to High Molecular Weight Polyalkylene Glycols, issued January 14,
1992.
. U.S. Patent No. 5,006,333, entitled "Conjugates of Superoxide Dismutase
Coupled to High Molecular Weight Polyalkylene Glycols, issued April 9, 1991.
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EXHIBIT B
ASSIGNMENT
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WHEREAS, OXIS INTERNATIONAL, INC., a Delaware corporation ("OXIS") having a
principal place of business at 6040 N. Cutter Circle, Suite 317, Portland, OR
97217-3935 is the owner of the following patents:
. U.S. Patent No. 5,468,478, entitled "Conjugates of Superoxide Dismutase
Coupled to High Molecular Weight Polyalkylene Glycols, issued November 21,
1995;
. U.S. Patent No. 5,283,317, entitled "Intermediates for Conjugation of
Polypeptides With High Molecular Weight Polyalkylene Glycols, issued February
1, 1994;
. U.S. Patent No. 5,080,891, entitled "Conjugates of Superoxide Dismutase
Coupled to High Molecular Weight Polyalkylene Glycols, issued January 14,
1992;
. U.S. Patent No. 5,006,333, entitled "Conjugates of Superoxide Dismutase
Coupled to High Molecular Weight Polyalkylene Glycols, issued April 9, 1991.
WHEREAS, Enzon, Inc., a corporation of the State of Delaware
("Company"), having a place of business at 20 Kingsbridge Road, Piscataway,
New Jersey 08854, is desirous of acquiring the entire right, title and
interest in and to said patents;
NOW, THEREFORE, in consideration of one dollar ($1.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, OXIS does hereby sell, transfer and assign to Company, its
successors, assigns and legal representatives, the entire right, title and
interest in and to said patents any and all improvements in said patents, and
any and all legal equivalents thereof in a foreign country including all rights
to claim priority, in all countries of the world, and in and to all applications
for Letters Patents that may be made therefor, in all countries of the world,
including all patents that may be granted thereon and all divisions, reissues,
substitutions, continuations, reexaminations thereof and extensions thereof and
all rights arising under the International Convention for the Protection of
Industrial Property by filing any such applications for Letters Patents. OXIS
hereby acknowledges that this assignment, being of the entire right, title and
interest in and to said patents, carries with it the right in Company to apply
for and obtain from competent authorities in all countries of the world any and
all Letters Patent by attorneys and agents of Company's selection and the right
to procure and maintain the grant of all such Letters Patent to Company in its
own name as assignee of the entire right, title and interest therein.
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OXIS will, at Company's expense, perform all lawful acts which Company, its
successors, assigns, nominees and legal representatives may deem advisable to
carry out the true purposes and intent hereof will assist Company, its
successors, assigns, nominees and legal representatives, in every lawful way to
obtain, sustain and enforce such patents, in all countries of the world, as and
when requested by Company, including specifically, but without limitation,
execute all lawful papers which Company may deem advisable for carrying out the
true purposes and intent hereof, including all lawful oaths and affidavits, one
or more written confirmations of this agreement, all applications for Letters
Patent in foreign countries and all divisional, continuation, reissue and
substitute applications for Letters Patent for said patents.
OXIS acknowledges and agrees that the obligations recited herein are
binding on OXIS and its successors and assigns forever.
IN WITNESS WHEREOF, OXIS by its authorized representative, hereby sign this
document below.
OXIS INTERNATIONAL, INC.
By: /s/ Ray R. Rogers
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Title: Chairman
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Date: November 11, 1999
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