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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-2
Mark one
|X| ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended July 31, 1996
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______________ to ____________________
Commission File Number 1-9974
ENZO BIOCHEM, INC.
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(Exact name of registrant as specified in its charter)
New York 13-2866202
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
60 Executive Boulevard,
Farmingdale, New York 11735
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(Address of principal executive offices) (Zip Code)
(5l6) 755-5500
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(Registrant's telephone number,
including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 par value The American Stock Exchange
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(Title of Class) (Name of each Exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
As of October 21, 1996, the Registrant had 21,951,349 shares of Common
Stock outstanding.
The aggregate market value of the Common Stock held by nonaffiliates as of
October 21, 1996 was approximately $316,492,296.
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PART I
Item 1. Business
Introduction
Enzo Biochem, Inc. (the "Company" or "Enzo") employing biotechnology,
develops, manufactures and markets health care products, and also provides
medical diagnostic services to the medical community. Each of the three business
activities of the Company is performed by one of the Company's three
wholly-owned subsidiaries--Enzo Diagnostics, Inc., Enzo Therapeutics, Inc., and
Enzo Clinical Labs, Inc. ("Enzo Diagnostics", "Enzo Therapeutics" and "Enzo
Clinical Labs", respectively). These activities are: (1) diagnostic and research
product development, manufacture and marketing through Enzo Diagnostics, (2)
therapeutic product research and development through Enzo Therapeutics, and (3)
the operation of a clinical reference laboratory through Enzo Clinical Labs. For
information relating to the Company's business segments, see Note 11 of the
Notes to Consolidated Financial Statements.
For the fiscal year ended July 31, 1996 (fiscal 1996), approximately 38% of
the Company's operating revenues was derived from product sales and
approximately 62% was derived from clinical reference laboratory services. For
the fiscal years ended July 31, 1995 and 1994 (fiscal 1995 and fiscal 1994,
respectively), approximately 30% and 23%, respectively, of the Company's
operating revenues were derived from product sales and approximately 70% and
77%, respectively, were derived from clinical reference laboratory services.
Product Development Activities
The Company's product development programs incorporate various scientific
areas of expertise, including recombinant DNA, monoclonal antibody development,
enzymology, microbiology, biochemistry, organic chemistry, and fermentation. The
Company's activities in research and development are performed by the Company's
professional and scientific staff. To a lesser extent, research and development
is pursued in collaboration with outside consultants at research and academic
institutions.
The primary focus of the Company's current research is the development of
products based on gene labeling and gene regulation. The Company is funding its
research programs through its operating cash flows and cash and cash
equivalents, as well as seeking joint ventures and collaborative relationships.
Through Enzo Diagnostics, the Company has devoted a major portion of its
research and development activities to develop simple and reliable test formats
and protocols for the commercialization of nucleic acid-based diagnostics as
well as other diagnostic products. A key system for Enzo is its non-radioactive
BioProbe(R) nucleic acid probe system and the Company continued to introduce new
products based on this technology into the research market during fiscal 1996.
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The product development programs of the Company include developing
BioProbe(R) nucleic acid probe products to detect sexually transmitted diseases,
such as AIDS, herpes, chlamydia, gonorrhea, and other infectious diseases, such
as tuberculosis, cytomegalovirus, hepatitis and Epstein-Barr virus (implicated
in mononucleosis). The Company markets several product lines containing
BioProbe(R) nucleic acid probe products.
The Company, through Enzo Therapeutics, is developing therapeutic
applications of nucleic acids. In May 1987, the Company entered into an
agreement with the Research Foundation of the State University of New York which
grants the Company certain exclusive rights to a genetic engineering technology
for generating antisense RNA repressors. As a result of the technology covered
by such agreement, the Company has obtained three (3) patents. Although the
Company has not derived revenues from any of the foregoing three antisense
patents, the Company believes that this technology will be the basis for the
Company to derive meaningful revenues in the future.
Whenever the Company complements its internal research and development
activities with collaborative research arrangements with academic and private
research institutions or consultants on specific projects, the Company typically
supplies funds to cover salaries, materials, certain laboratory equipment and a
portion of the overhead. In all such collaborative research arrangements, the
Company reserves the commercial rights to any product or process developed,
subject to a royalty payment to the institution or consultant involved over a
period of years. The location of the Company in the greater New York area
affords the Company access to and interaction with a large number of research
institutions and qualified scientists.
In the fiscal years ended July 31, 1996, 1995 and 1994, the Company
incurred costs of approximately $3,083,000, $2,366,000 and $1,764,000,
respectively, for research and development activities.
Clinical Reference Laboratory
The Company, through Enzo Clinical Labs, operates a clinical reference
laboratory which offers full diagnostic services to the greater New York medical
community. The services Enzo Clinical Labs provides include chemistry, blood
tests, cytology studies, tissue pathology, hormone studies, and diagnostic
procedures which seek to detect precancerous conditions, cancers in cervical
specimens and sexually transmitted diseases. Enzo Clinical Labs provides these
services primarily to physicians as well as to clinics, nursing homes and other
clinical laboratories. Enzo Clinical Labs operates a regional clinical reference
laboratory on Long Island and also operates twelve satellite patient service
centers in the greater New York area, including a stat laboratory in Manhattan.
The patient service center collects the specimens as requested by the physician.
The specimens are sent through the Company's in-house courier system to the
Company's laboratory for testing. A "STAT lab" is a laboratory that has the
ability to perform certain routine tests quickly and report results to the
physician immediately.
Patient specimens are delivered to the Company accompanied by a test
request form. These forms, which are completed by the client, indicate the tests
to be performed and provide the necessary billing information. Once this
information is entered into the computer system, the tests are performed and the
results are entered primarily through computer interface or
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manually. Most routine testing is completed by early the next morning, and test
results are printed and prepared for distribution. Some clients have local
printer capability and have reports printed out directly in their offices.
Clients who request that they be called with a result are so notified in the
morning.
The Company currently offers over 2,000 different clinical laboratory tests
or procedures. Several hundred of these are frequently used in general patient
care by physicians to establish or support a diagnosis, to monitor treatment or
medication or to search for an otherwise undiagnosed condition. These routine
procedures are most often used by practicing physicians in their outpatient
office practices.
Approximately 86% and 85% at July 31, 1996 and 1995, respectively, of the
Company's net accounts receivable relate to its clinical reference laboratory
business which operates in the New York Metropolitan area. The Company believes
that the concentration of credit risk with respect to accounts receivable are
limited due to the diversity of the Company's client base. However, the Company
provides services to certain patients covered by various third-party payors,
including the Federal Medicare program. Revenue, net of contractual allowances,
from direct billings under the Federal Medicare program during each of the
fiscal years ended July 31, 1996, 1995 and 1994 approximated 14%, 12% and 17%,
respectively of the Company's total revenue. The Company recorded an additional
provision for uncollectible accounts receivable of $3,500,000 based on trends
that became evident in the fourth quarter of fiscal 1996 that additional
reserves were needed primarily to cover lower collection rates under the Federal
Medicare program and other third-party payors. For the year ended July 31, 1996,
1995 and 1994 no other payor accounted for more than 10% of the Company's
revenues.
In addition, the Company utilizes its clinical reference laboratory to
evaluate and demonstrate the benefits of the Company's diagnostic products (see
Note 11 of the Notes to Consolidated Financial Statements for segment
information and operating revenues and profits).
Business Objectives
The current business objectives of the Company are (1) to develop,
manufacture and market on a worldwide basis diagnostic and therapeutic products
based on the Company's research activities in biotechnology and molecular
biology, and (2) to perform diagnostic tests for the U.S. health care community.
The Company's research and development efforts are directed to both short and
long-term projects. Diagnostic products require less time to commercialize than
therapeutic products because the procedures required for attaining government
clearance are less time consuming. Therapeutic products, once developed, require
extensive clinical testing and compliance. This process can range from three to
five years and, in some instances, longer.
At such time as the Company's initial self-funded research demonstrates
technical feasibility and potential commercial importance, the Company will have
the option to pursue the opportunity on its own or to associate with another
entity for development and ultimate marketing of the product. Unless there is a
business reason to license products or processes developed by the Company, the
Company intends to retain ownership with respect to development and marketing of
a product or process.
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Marketing Strategy
Product Development Activities
Enzo's initial commercialization program for the BioProbe(R) nucleic acid
probe systems included filing major U.S. and foreign patent applications,
clinical evaluation, and Food and Drug Administration (FDA) submissions. The
Company has obtained clearance for a number of FDA approved diagnostics for sale
to clinical reference laboratories and researchers through Enzo Diagnostics.
BioProbe(R) nucleic acid probe products are also sold to the research market,
where FDA clearance is not required. The Company has been successful in
obtaining FDA clearance for four totally Enzo-developed DNA probe products. The
Company believes that significant delays will not be encountered with any future
probe product submissions to the FDA since products based on the BioProbe(R)
nucleic acid probe system have been FDA cleared. However, there can be no
assurance that delays will not be incurred.
Through Enzo Diagnostics, the Company manufactures and markets its
BioProbe(R) nucleic acid probe products for research applications. These
BioProbe(R) research products include products which allow researchers to make
their own non-radioactive DNA probes as well as complete DNA probe kits which
contain all reagents necessary for detecting various disease pathogens in
clinical samples.
Enzo Diagnostics markets a variety of in situ hybridization kits.
PathoGene(R) DNA probe kits detect specific pathogens including human
papillomavirus (HPV), herpes simplex virus, cytomegalovirus, Epstein-Barr virus,
adenovirus, hepatitis B virus and Chlamydia trachomatis. Its BioPap(R) DNA probe
kits detect certain types of HPV in Pap smear samples. An enhanced detection
procedure that will enable the pathologist to identify the presence of fewer
virus particles by increasing the sensitivity of the assay was developed by the
Company. These products compete directly with products labeled with various
radioactive isotopes. In addition to the in situ hybridization kits, Enzo
Diagnostics also markets kits based on its proprietary microplate hybridization
format. Microplate Hybridization Assays have been developed for the detection of
the AIDS-causing virus (HIV-1). Kits are also available to detect HIV-2, another
strain of the AIDS virus, hepatitis virus, the bacteria causing tuberculosis
(TB) and members of the Mycobaterium tuberculosis (MTB) complex.
Enzo's HIV test was one of the first commercial DNA probe tests for this
pathogen in this format. Unlike most AIDS tests which detect antibodies for HIV,
Enzo's HIV Microplate Hybridization Assay detects DNA unique to HIV. Since
individuals can carry the HIV infection for up to 12 months before developing
antibodies to it, a test directed at the virus can provide earlier detection.
Because this product also can measure virus concentrations, it is easier for
researchers to determine HIV levels in patients and look for relationships
between these levels and other disease indicators such as antibody production or
appearance of symptoms. This product is currently marketed to the research
community. An enhanced version of the Microplate Hybridization Assay, has been
developed to detect the hepatitis virus directly in serum and is aimed at the
blood bank market.
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In early stages of infection, the pathogen may be present in very small
amounts and may be difficult to detect. Samples, however, can be treated in a
way that produces copies of targeted DNA, if it is present. This amplification
process is one possible approach to detect very low levels of infection. All of
Enzo's Microplate Assays can be used to detect these pathogens in amplified as
well as unamplified samples. In order to fully integrate its technology, Enzo
has developed a new simplified amplification process for multicopy production of
nucleic acid. A patent application was filed in January 1994 and this
proprietary amplification process was incorporated into the microplate assay
format, thus providing a totally integrated assay system. This approach is being
developed for use with the hepatitis assay system and will form the basis for
all Enzo's microplate assays.
In addition to nucleic acid-based products, the Company also produces and
sells other types of research products, such as monoclonal antibodies. The
products are marketed through direct sales, an extensive product catalog,
advertising in scientific and trade journals and U.S. and foreign distributors.
In fiscal 1993, Enzo Diagnostics began to expand its non-exclusive distribution
arrangements for its proprietary products in both the U.S. and foreign markets
with various companies having worldwide distribution and with companies having
local foreign distribution. In fiscal 1994, the Company continued to expand
these distribution arrangements and began a policy of using joint labels on all
products marketed by its distributors. In April 1994, the Company signed a
multi-year non-exclusive worldwide distribution and supply agreement with
Boehringer Mannheim Biochemicals. Under the terms of this agreement, Boehringer
Mannheim distributes to the global medical research market, a broad range of
biochemical products and reagents manufactured and supplied by Enzo. The
agreement includes products based on nonradioactive DNA probe technology and
includes products that were developed and marketed by Boehringer Mannheim prior
to the agreement, as well as products developed by the Company, all of which are
covered by Enzo patents. The agreement took effect in April 1994 and extends for
the life of the last patent to expire for products involved. In February 1995, a
multi-year non-exclusive distribution agreement was signed with Amersham
International which provides for Amersham to market a broad group of products
developed and marketed by Amersham, as well as products developed by Enzo
Diagnostics. All products are based on nonradioactive DNA labeling technologies
covered by Enzo patents. See Note 1 of Notes to Consolidated Financial
Statements. A multi-year non-exclusive distribution agreement, also covering the
Company's line of proprietary DNA labeling products and reagents was concluded
in May 1995 with Dako A/S, a privately-held international company with
headquarters in Copenhagen, Denmark and subsidiaries worldwide, including the
Dako Corporation based in Carpinteria, California. In September 1995 a similar
multi-year non-exclusive distribution agreement was concluded with VWR
Scientific Products, a leader in the medical research market that was formerly
an operating unit of Baxter Health Care. The Company continues to have
discussions with other potential distributors.
At July 31, 1996 and 1995, 12% and 13% of the Company's net accounts
receivable relate to amounts due from Boehringer Mannheim and Amersham,
collectively. Operating revenues from Boehringer Mannheim represented
approximately 25% and 22% of consolidated operating revenues in fiscal 1996 and
1995, respectively.
The Company had previously entered into distribution agreements with
certain Johnson & Johnson, Inc. (J&J) subsidiaries in Europe, one of which
continues to be in effect. Ortho
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Diagnostics continues to be the Company's distributor for marketing,
distribution and sale in Italy for the Company's BioProbe(R) and other products.
The Company, because of its various proprietary diagnostic technologies,
may enter into joint ventures with other biotechnology companies or other health
care companies with marketing resources and/or complementary technology or
products to more fully take advantage of market opportunities.
Clinical Reference Laboratory
Enzo Clinical Labs is a major regional clinical reference laboratory
offering full service diagnostic testing in the greater New York marketplace.
Its services are marketed by a professional sales force who serve client
physicians, clinics, nursing homes and other clinical laboratories in the area.
A key marketing strategy has been the strategic placement of a network of
patient service centers, where patients can go to have samples taken upon the
request of their physicians. The Company operates a stat laboratory at its
Manhattan patient service center, affording its client physicians rapid test
turnaround. The diagnostic service business provides Enzo Diagnostics with a
practical application of its products, making it possible to more appropriately
tailor diagnostic products to the end-user. The Company's BioProbe(R) nucleic
acid probe products offer Enzo Clinical Labs a marketing tool by establishing it
among the first to offer nucleic acid based tests.
The Company offers its services through direct sales representatives. Sales
representatives market the laboratory services primarily to physicians, clinics,
hospitals and other laboratories. The Company's sales representatives are
compensated through a combination of salaries, commissions and bonuses, at
levels commensurate with each individual's qualifications and responsibilities.
Commissions are primarily based upon the individual's productivity in generating
new business for the Company.
The Company also employs customer service representatives ("CSR's") to
interact with clients on an ongoing basis. CSR's monitor the status of the
services being provided to clients, act as problem solvers, provide information
on new testing developments and serve as the client's regular point of contact
with the Company. CSR's are compensated with a salary commensurate with each
individual's qualifications and responsibilities.
Health care reform, the shift to managed care and increased competition by
hospitals all had an impact on the clinical laboratory testing industry. The
Company expects these trends to continue and plans to respond by shifting
additional sales staff to support the managed care market segment.
Technology and Product Development
The major focus of the Company's product development program has been
toward the commercialization of nucleic acid probe-based in vitro diagnostics
for specific pathogens. Initially, nucleic acid probes were radioactive and
required complex protocols to perform. To develop them into useful commercial
products required making such products easy-to-use, easy
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to interpret, readily automatable and sensitive enough to detect the presence of
low levels of pathogen. As a result of this product development effort, the
Company has developed a broad technology base for the labeling, detection,
sensitivity enhancement, signal amplification and testing formats of nucleic
acid probe products. Patent protection has been aggressively pursued for this
technology base. At the end of fiscal 1996 some 173 patents issued worldwide had
been granted to or licensed by the Company in this area of technology. In fiscal
1995 and continuing during fiscal 1996, the Company began to receive significant
revenues from the distribution agreements related to these patents and believes
that the patents have positioned the Company to derive considerably more
revenues in the future as the markets for these products continue to develop.
These patents cover a variety of BioProbe(R) nucleic acid probe products,
chelation technology for easy radioactive labeling, signal amplification
methods, sensitivity enhancements, and automatable formats.
BioProbe(R) Nucleic Acid Probe Labeling and Signal Generating Systems
Nucleic acid probes used traditionally in biomedical research and
recombinant DNA technology have been radioactively labeled with isotopes of
hydrogen, phosphorous, carbon or iodine. Radioactive materials have historically
provided researchers with the most sensitive and, in many cases, the only means
to perform many important experimental or analytical tests. However, limitations
and drawbacks are associated with the use of radioactive compounds. For example,
radioactive materials are often very unstable and have a limited shelf-life.
Because of the potentially hazardous nature of radioactive materials, their use
must be licensed and elaborate safety precautions must be maintained during the
preparation, utilization and disposal of radioisotopes. In addition, radioactive
nucleotides are extremely expensive and their instability increases usage cost.
To overcome the limitations of radioactively labeled probes, the Company,
starting with basic technology licensed from Yale University ("Yale"), has
developed a proprietary technology which allows DNA probes to be used
effectively without the use of radioactivity. This development permits the
application of genetic analysis in a clinical setting without the shelf-life,
licensing and disposal problems associated with radioactively labeled probes.
In December 1987, a primary patent for the technology that is essential to
the development of nonradioactive DNA probe diagnostics was issued to Yale. In
July 1994 and in September 1995 additional patents, broadening the coverage of
the primary patent were also issued to Yale. The Company has an exclusive
license for both patents from Yale for the life of the patents. Pursuant to such
license agreement, the Company is obligated to pay Yale royalties equal to a
percentage of sales. The Company is obligated to pay Yale an annual minimum
royalty fee of $200,000 which shall continue through the end of the term of the
exclusive license.
The near term application of the BioProbe(R) nucleic acid probe system in
the human health care area is in bacterial and viral diagnostics. Nucleic acid
probe diagnostics can be developed for any organism. Advantages of the nucleic
acid probes for the direct detection of pathogens in human diagnostics are speed
(less than an hour for test results as compared to days), greater specificity,
and the capability of diagnosing a disease in an early or latent stage of
development.
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Radioactive Labeling Systems
The Company has developed a new method for labeling molecules with
radioisotopes that is safer, faster, simpler and more cost effective than
traditional methods of radiolabeling. This method is to be used in those
applications requiring more sensitivity than non-radioactive materials permit.
This method permits radiolabeling of a wide range of molecules for use in a
variety of applications, including in vivo imaging, therapeutics, and clinical
assays.
With this technology stable products are radiolabeled just prior to use,
thereby overcoming inherent limitations of classical radiolabeling technologies.
The Company's method for radiolabeling maximizes the sensitivity while
minimizing radiation exposure and radioactive waste.
In November 1987, the Company received two U.S. patents protecting aspects
of its versatile technology for linking radioactive ions or biotin to various
biologically active molecules for diagnostic and therapeutic uses. Since that
time additional patents covering aspects of this technology have been issued to
the Company.
Automatable Test Formats
In February 1991, the Company was granted a U.S. patent for its nucleic
acid probe testing technology that generates a signal in solution. This
technology allows the development of nucleic acid probe-based tests that can be
readily automated and measured or identified instrumentally. Using this
technology, probes can be detected with either chemiluminescent, fluorescent or
colorimetric methods. The Company is developing test kits employing this
technology and launched two of them to the research market during fiscal 1992.
These included a test for the HIV virus which causes AIDS, and a test for the
bacteria causing tuberculosis. In fiscal 1993 tests for other viruses, including
HIV-2, and hepatitis, were introduced to researchers. In fiscal 1994 a more
sensitive assay that can detect hepatitis B virus directly in serum and geared
to the blood banking market was developed and in fiscal 1995 the Company's
amplification technology was integrated with the enhanced hepatitis assay. The
Company is developing an instrument-based automatable system employing this and
other proprietary Enzo technologies.
Rapid, On-Site Diagnostics
The Company also has developed a diagnostic test technology which makes
possible accurate, rapid and one-step tests. The ease of performing and
interpreting tests using this proprietary gel technology suits them well for
at-home and doctor office use. Using the gel technology, the Company has
developed a fecal occult blood test used to screen for colorectal cancer. The
Company has received FDA clearance to market this occult blood test to physician
offices and plans to develop other tests utilizing the gel technology for aiding
consumer health maintenance.
Monoclonal Antibodies
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The Company markets a panel of monoclonal antibodies that are being used in
pathology laboratories to help identify the original source of a metastatic
cancer and the type of cancer in undifferentiated cancer cells. The ability to
identify the origin and type of cancer aids in the diagnosis of cancer and
assists physicians in prescribing therapy. In order to offer a full line of
state-of-the-art research products, the Company is actively engaged in expanding
its line of monoclonal antibodies.
Therapeutic Technology and Product Development
Through Enzo Therapeutics, the Company is applying its technological
capabilities for manipulating genetic material towards the development of
therapeutic treatments for a variety of cancers and infections. Enzo is
exploring applications of antisense nucleic acids employing various proprietary
technologies. During fiscal 1996, the Company developed a new gene delivery
system that is designed to provide universal and efficient delivery of any gene
to any cell. The GenSert(TM) Universal Delivery System is being combined with
Enzo's antisense technology in its therapeutic development program. Also, the
Company has developed techniques for stably attaching drugs and radioisotopes to
proteins and DNA. The Company is working towards, inter alia, the development of
products relating to HIV, certain cancers and hepatitis, however, no products
have been finalized.
In May 1987, Enzo entered into an agreement with The Research Foundation of
the State of New York (SUNY) granting the Company certain exclusive rights to a
genetic antisense technology. Because this antisense technology offers a way to
control the expression of any gene in any organism, the Company believes it has
broad therapeutic and agricultural applications. For example, this technology
should make possible a new approach to controlling viral diseases and cancers in
humans. It may also be used to control viral diseases in animals and
agriculturally important plants and may lead to a variety of other desirable
traits in agricultural crops and animals. This technology has been proven to be
effective in a variety of organisms, including plants, animals and bacteria. For
example, researchers have developed transgenic mice that are resistant to murine
leukemia virus and tomato plants which produce tomatoes that do not spoil upon
ripening. However, to date the Company has not developed any commercial products
utilizing this technology. Because this technology has such broad application,
the Company is exploring collaborative business relationships of various types
with other companies to develop the applications which Enzo is not interested in
retaining for its own activities. Three U.S. patent applications were
subsequently issued as patents by the U.S. Patent and Trademark Office. The
first patent issued in March 1993; a second patent issued in May 1993; the third
patent issued in December 1993.
In January 1995, the Company signed a collaborative research agreement with
Cornell University on behalf of its Medical College, aimed at evaluating the
Company's genetic antisense technology for use in managing the treatment of HIV,
the AIDS-causing virus. Early research results indicated, that this technology
could be applied to inhibiting the function of genes necessary for the HIV virus
to grow within the cell. In preclinical studies currently underway, Enzo
scientists and collaborators were able to demonstrate stable resistance to HIV
in human immune cells in culture that were treated with the Company's HIV
product. In May 1996, the Company expanded the HIV development program and
signed a second research agreement with
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St. Luke's-Roosevelt Hospital Center, aimed towards the development of protocols
for its next phase of human clinical studies.
In February 1996, the Company initiated a joint research program with
scientists at the Albert Einstein College of Medicine in New York City, geared
towards the development of a specific therapeutic product for the treatment of
hepatitis B based on the Company's novel gene regulation and delivery
technologies.
Manufacturing
The Company's BioProbe(R) nucleic acid probe products contained in its
PathoGene(R) and BioPap(TM) product lines are manufactured by using recombinant
DNA techniques and traditional chemical synthesis methods. The DNA sequence
which codes for a specific infectious agent or particular trait is isolated by
cloning. The sequence is then introduced into a plasmid, commonly one that grows
in E.coli bacteria, and the bacteria serves as a reproduction vehicle with the
application of standard fermentation procedures. The reproduced quantities of
the specific DNA sequences are purified from the bacteria and then labeled so
they can be detected. The detection system usually employs a non-radioactive
visualization molecule, such as a color-changing enzyme-substrate or a
fluorescent substance. The production of DNA probes does not require large
manufacturing facilities because the yields from the bacteria are high and only
small quantities of nucleic acids are required.
Monoclonal antibodies specific to certain substances are produced by fusing
a type of mouse cancer cell with certain antibody-producing white blood cells
from the spleens of mice that had been immunized with the targeted substance.
The hybrid cells which make antibodies with the desired characteristics are then
cultured to produce large quantities of that one discrete type of antibody.
Monoclonal antibody production does not require extensive facilities.
The Company's manufacturing operation uses exempt quantities of tritium
(3H) in its research and development activities and manufacturing operations.
For the fiscal year ended July 31, 1996 the Company has not had an accumulation
of tritium to be disposed.
Information Systems
The Company believes that with respect to its clinical reference laboratory
business the health care provider's need for data will continue to place high
demands on its information systems staff. The Company believes that the
efficient handling of information involving clients, patients, payors and other
parties will be a critical factor in the Company's future success.
Quality Assurance
The Company considers the quality of its clinical reference laboratory
tests to be of critical importance, and it has established a comprehensive
quality assurance program designed to help assure accurate and timely test
results. In addition to the compulsory external inspections and proficiency
programs demanded by HCFA and other regulatory agencies, Enzo Clinical Labs has
in place systems to emphasize and monitor quality assurance. The Company's
laboratory is subject to on-site evaluation, the College of American Pathologies
("CAP")
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proficiency testing program, New York State survey and the Company's own
internal quality control programs.
External Proficiency/Accreditations
Enzo Clinical Labs participates in numerous externally-administered, blind
quality surveillance programs, including the CAP program. The blind programs
supplement all other quality assurance procedures and give Enzo Clinical Labs'
management the opportunity to review its technical and service performance from
the client's perspective.
The CAP accreditation program involves both on-site inspections of the
laboratory and participation in the CAP's proficiency testing program for all
categories in which the laboratory is accredited by the CAP. The CAP is an
independent non-governmental organization of board certified pathologists which
offers an accreditation program to which laboratories can voluntarily subscribe.
A laboratory's receipt of accreditation by the CAP satisfies the Medicare
requirement for participation in proficiency testing programs administered by an
external source. The Company's laboratory is accredited by the CAP.
Regulation and Reimbursement
Product Development Activities
The Company's present and proposed activities are regulated by the federal
government to a significant extent. This regulation applies not only to research
and development and manufacturing, but also to the marketing of products,
particularly those involving diagnostic or therapeutic applications.
Regulation of Pharmaceutical Products
New drugs are subject to regulation under the Federal Food, Drug, and
Cosmetic Act, and biological products, in addition to being subject to certain
provisions of that Act, are regulated under the Public Health Service Act. The
Company believes that products developed by it or its collaborators will be
regulated either as biological products or as new drugs. Both statutes and the
regulations promulgated thereunder govern, among other things, the testing,
manufacturing, safety, efficacy, labeling, storage, record keeping, advertising
and other promotional practices involving biologics or new drugs, as the case
may be. FDA approval or other clearances must be obtained before clinical
testing, and before manufacturing and marketing, of biologics and drugs. At the
FDA, the Center for Biological Evaluation and Research ("CBER") is responsible
for the regulation of new biologics and the Center for Drug Evaluation and
Research ("CDER") is responsible for the regulation of new drugs.
In addition, any gene therapy products (which is one of the areas in which
the Company may develop products) developed by the Company will require
regulatory clearances prior to clinical trials and additional regulatory
clearances prior to commercialization. New human gene therapy products are
expected to be subject to extensive regulation by the FDA and comparable
agencies in other countries. The precise regulatory requirements with which the
Company will have to comply are uncertain at this time due to the novelty of the
human gene therapies
13
<PAGE>
currently under development. Currently, each protocol is reviewed by the FDA on
a case-by-case basis. The FDA has published a "Points to Consider" guidance
document with respect to the development of gene therapy protocols.
Obtaining FDA approval has historically been a costly and time consuming
process. Generally, in order to gain FDA pre-market approval, a developer first
must conduct pre-clinical studies in the laboratory and in animal model systems
to gain preliminary information on an agent's efficacy and to identify any
safety problems. The results of these studies are submitted as a part of an
investigational new drug ("IND") application, which the FDA must review before
human clinical trials of an investigational drug can start. The IND application
includes a detailed description of the clinical investigations to be undertaken.
In order to commercialize any products, the Company or its collaborator
must sponsor and file an IND and will be responsible for initiating and
overseeing the clinical studies to demonstrate the safety, efficacy and potency
that are necessary to obtain FDA approval of any such products. For Company or
collaboratory-sponsored INDs, the Company or its collaboratory will be required
to select qualified investigators (usually physicians within medical
institutions) to supervise the administration of the products, and ensure that
the investigations are conducted and monitored in accordance with FDA
regulations and the general investigational plan and protocols contained in the
IND. Clinical trials are normally done in three phases, although the phases may
overlap. Phase I trials are concerned primarily with the safety and preliminary
effectiveness of the drug, involve fewer than 100 subjects. Phase II trials
normally involve a few hundred patients and are designed primarily to
demonstrate effectiveness in treating or diagnosing the disease or condition for
which the drug is intended, although short-term side effects and risks in people
whose health is impaired may also be examined. Phase III trials are expanded
clinical trials with larger numbers of patients which are intended to gather the
additional information for proper dosage and labeling of the drug. Clinical
trials generally take two to five years, but the period may vary. Recent
regulations promulgated by the FDA may shorten the time periods and reduce the
number of patients required to be tested in the case of certain life-threatening
diseases which lack available alternative treatments.
The FDA receives reports on the progress of each phase of clinical testing,
and it may require the modification, suspension, or termination of clinical
trials if an unwarranted risk is presented to patients. Human gene therapy
products (which is one of the areas in which the Company may develop products)
are a new category of therapeutics, and there can be no assurance as to the
length of the clinical trial period, the number of patients the FDA will require
to be enrolled in the clinical trials in order to establish the safety, efficacy
and potency of human gene therapy products, or that the clinical data generated
in these studies will be acceptable to the FDA to support marketing approval.
After completion of clinical trials of a new product, FDA marketing
approval must be obtained. If the product is regulated as a new biologic, CBER
will require the submission and approval of both a Product License Application
("PLA") and an Establishment License Application before commercial marketing of
the biologic. If the product is classified as a new drug, the Company must file
a New Drug Application ("NDA") with CDER and receive approval before commercial
marketing of the drug. The NDA or PLA must include results of product
development, pre-clinical studies and clinical trials. The testing and approval
processes
14
<PAGE>
require substantial time and effort and there can be no assurance that any
approval will be granted on a timely basis, if at all. NDAs and PLAs submitted
to the FDA can take, on average, two to five years to receive approval. If
questions arise during the FDA review process, approval can take more than five
years. Notwithstanding the submission of relevant data, the FDA may ultimately
decide that the NDA or PLA does not satisfy its regulatory criteria for approval
and require additional clinical studies. Even if FDA regulatory clearances are
obtained, a marketed product is subject to continual review, and later discovery
of previously unknown problems or failure to comply with the applicable
regulatory requirements may result in restrictions on the marketing of a product
or withdrawal of the product from the market as well as possible civil or
criminal sanctions. In addition, the FDA may condition marketing approval on the
conduct of specific post-marketing studies to further evaluate safety and
effectiveness.
If a developer obtains designations by the FDA of a biologic or drug as an
"orphan" drug for a particular use, the developer may request grants from the
federal government to defray the costs of qualified testing expenses in
connection with the development of such drug. Orphan drug designation is given
to drugs for rare diseases, including many genetic diseases. The first applicant
who has obtained designation of a drug as an orphan drug and who obtains
approval of a marketing application for such drug is entitled to marketing
exclusivity for a period of seven years. This means that no other company can
market a molecularly identical orphan drug for the use approved by the FDA for
seven years after the approval.
Regulation of Diagnostics
Some of the diagnostic products developed by the Company or its
collaborators are likely to be regulated by the FDA as devices rather than
drugs. The nature of the FDA requirements applicable to such diagnostic devices
depends on their classification by the FDA. A diagnostic device developed by the
Company or its collaborators would be automatically classified as a Class III
device, requiring pre-market approval, unless the sponsor could demonstrate to
the FDA, in the required pre-market notification procedure, that the device was
substantially equivalent to an existing device that has been classified in Class
I or Class II or to a pre-1976 device that has not yet been classified. If the
Company or its collaborators were unable to demonstrate such substantial
equivalence, it would be required to undertake the closely and time consuming
process, comparable to that for new drugs, of conducting pre-clinical studies,
obtaining an investigational device exemption to conduct clinical tests, filing
a pre-market approval application, and obtaining FDA approval.
If the Company or its collaborators can demonstrate substantial equivalence
to a Class I product, the "general controls" of the Food, Drug, and Cosmetic Act
- - chiefly adulteration, misbranding, and good manufacturing practice
requirements - will apply. If substantial equivalence to a Class II device can
be shown, the general controls plus "special controls" - such as performance
standards, guidelines for safety and effectiveness, and postmarket surveillance
- - will apply. While demonstrating substantial equivalence to a Class I or Class
II product is not as costly or time-consuming as the pre-market approval process
for Class III devices, it can in some cases also involve conducting clinical
tests to demonstrate that any differences between the new device and devices
already on the market do not affect safety or effectiveness.
15
<PAGE>
Other
In addition to the foregoing, the Company's business is and will be subject
to regulation under various state and federal environmental laws, including the
Occupational Safety and Health Act, the Recourse Conservation and Recovery Act
and the Toxic Substances Control Act. These and other laws govern the Company's
use, handling and disposal of various biological, chemical and radioactive
substances used in and wastes generated by its operations. The Company believes
that it is in material compliance with applicable environmental laws and that
its continual compliance therewith will not have a material adverse effect on
its business. The Company cannot predict, however, whether new regulatory
restrictions on the production, handling and marketing of biotechnology products
will be imposed by state or federal regulators and agencies.
The Company has in-house personnel to expedite the preparation and filing
of documentation necessary for FDA clearances and approvals, patent issuances
and licensing agreements. The Company has received clearance from the FDA to
market five of its diagnostic products. The Company also has several products in
various stages of clinical trial evaluation which, if successful, are expected
to be submitted to the FDA for clearance.
Clinical Laboratory Activities
The clinical laboratory industry is also subject to significant
governmental regulation at the Federal, state and local levels. Under the
Clinical Laboratory Improvement Act of 1967 and the Clinical Laboratory
Improvement Amendments to 1988 (collectively, as amended, "CLIA"), virtually all
clinical laboratories, including the Company's, must be certified by the Federal
government. Many clinical laboratories also must meet governmental standards,
undergo proficiency testing and are subject to inspection. Certificates or
licenses are also required by various state and local laws.
The health care industry is undergoing significant change as third-party
payors, such as Medicare (which principally serves patients 65 and older) and
Medicaid (which principally serves indigent patients) and insurers, increase
their efforts to control the cost, utilization and delivery of health care
services. In an effort to address the problem of increasing health care costs,
legislation has been proposed or enacted at both the Federal and state levels to
regulate health care delivery in general and clinical laboratories in
particular. Some of the proposals include managed competition, global budgeting
and price controls. Although the Clinton Administration's health care reform
proposal, initially advanced in 1994, was not enacted, such proposal or other
proposals may be considered in the future. In particular, the Company believes
that reductions in reimbursement for Medicare services will continue to be
implemented from time to time. Reductions in the reimbursement rates of other
third-party payors are likely to occur as well. The Company cannot predict the
effect health care reform, if enacted, would have on its business, and there can
be no assurance that such reforms, if enacted, would not have a material adverse
effect on the company's business and operations.
In 1992, the U.S. Department of Health and Human Services ("HHS") published
regulations implementing CLIA. The quality standards and enforcement procedure
regulations became effective in 1992, although certain personnel, quality
control and proficiency testing
16
<PAGE>
requirements are currently being phased in by HHS. The quality standards
regulations divide all tests into three categories (waivered, moderate
complexity and high complexity) and establish varying requirements depending
upon the complexity of the test performed. A laboratory that performs high
complexity tests must meet more stringent requirements than a laboratory that
performs only moderate complexity tests, while those that perform only one or
more of either routine "waivered" tests may apply for a waiver from most
requirements of CLIA. The Company's facility is certified by CLIA to perform
high complexity testing. Generally, the HHS regulations require, for
laboratories that perform high complexity or moderate complexity tests, the
implementation of systems that ensure the accurate performance and reporting of
test results, establishment of quality control systems, proficiency testing by
approved agencies and biennial inspections.
The sanction for failure to comply with these regulations may be
suspension, revocation or limitation of a laboratory's CLIA certificate
necessary to conduct business, significant fines and criminal penalties. The
loss of a license, imposition of a fine or future changes in such Federal, state
and local laws and regulations (or in the interpretation of current laws and
regulations) could have a material adverse effect on the Company.
The Company is also subject to state regulation. CLIA provides that a state
may adopt more stringent regulations than Federal law. The State of New York's
clinical laboratory regulations contain provisions that are more stringent than
Federal law.
The Company's laboratory has continuing programs to ensure that their
operations meet all applicable regulatory requirements.
Containment of health care costs, including reimbursement for clinical
laboratory services, has been a focus of ongoing governmental activity. In 1984,
Congress established a Medicare fee schedule for clinical laboratory services
performed for patients covered under Part B of the Medicare program.
Subsequently, Congress imposed a national ceiling on the amount that can be paid
under the fee schedule. Laboratories must accept the scheduled amount as payment
in full for most tests performed on behalf of Medicare beneficiaries and must
bill the program directly. In fiscal 1996, the Company derived approximately 14%
of its net sales from tests performed for beneficiaries of Medicare and Medicaid
programs. In addition, the Company's other business depends significantly on
continued participation on these programs because clients often want a single
laboratory to perform all of their testing services. Since 1984, Congress has
periodically reduced the ceilings on Medicare reimbursement to clinical
laboratories from previously authorized levels. Because a significant portion of
the Company's costs are relatively fixed, these Medicare reimbursement
reductions have a direct adverse effect on the Company's net earnings and cash
flows. The Company cannot predict if additional Medicare reductions will be
implemented.
On January 1, 1993, numerous changes in the Physicians' Current Procedural
Terminology ("CPT") were published. The CPT is a coding system that is published
by the American Medical Association. It lists descriptive terms and identifying
codes for reporting medical and medically related services. The Medicare and
Medicaid programs require suppliers, including laboratories, to use the CPT
codes when they bill the programs for services performed. HCFA implemented these
CPT changes for Medicare and Medicaid on August 1, 1993. The
17
<PAGE>
CPT changes have altered the way the Company bills Medicare and Medicaid for
some of its services, thereby reducing the reimbursement the Company receives
from those programs for some of its services.
In March 1996, the HCFA implemented changes in the policies used to
administer Medicare payments to clinical laboratories for the most frequently
performed automated blood chemistry profiles. Among other things, the changes
established a consistent standard nationwide for the content of the automated
chemistry profiles. Another change incorporated in the HCFA proposal requires
laboratories performing certain automated blood chemistry profiles to obtain and
provide documentation of the medical necessity of tests included in the profiles
for each Medicare beneficiary. Reimbursements have been reduced as a result of
this change.
Future changes in Federal, state and local regulations (or in the
interpretation of current regulations) affecting governmental reimbursement for
clinical laboratory testing could have a material adverse effect on the Company.
The Company is unable to predict, however, whether and what type of legislation
will be enacted into law.
Fraud and Abuse Regulations. The Medicare and Medicaid anti-kickback laws
prohibit intentionally paying anything of value to influence the referral of
Medicare and Medicaid business.
Infectious Wastes and Radioactive Materials. The Company is subject to
licensing and regulation under Federal, state and local laws relating to the
handling and disposal of medical specimens, infectious and hazardous waste and
radioactive materials as well as to the safety and health of laboratory
employees. All Company laboratories are operated in accordance with applicable
Federal and state laws and regulations relating to biohazard disposal of all
laboratory specimens and the Company utilizes outside vendors for disposal of
such specimens. Although the Company believes that it is currently in compliance
in all material respects with such Federal, state and local laws, failure to
comply could subject the Company to denial of the right to conduct business,
fines, criminal penalties and/or other enforcement actions.
Occupational Safety. In addition to its comprehensive regulation of safety
in the workplace, the Federal Occupational Safety and Health Administration
("OSHA") has established extensive requirements relating to workplace safety for
health care employers, including clinical laboratories, whose workers may be
exposed to blood-borne pathogens such as HIV and the hepatitis B virus. These
regulations, among other things, require work practice controls, protective
clothing and equipment, training, medical follow-up, vaccinations and other
measures designed to minimize exposure to, and transmission of, blood-borne
pathogens.
Controlled Substances. The use of controlled substances in testing for
drugs of abuse is regulated by the Federal Drug Enforcement Administration.
Proprietary Technology - Patents
As novel techniques, processes, products or microorganisms are developed
during the course of its research and development activities, the Company will
seek U.S. and, if deemed
18
<PAGE>
necessary, foreign patents. At the end of fiscal 1996 the Company owned or
licensed 34 U.S. and some 151 foreign patents and had filed approximately 165
U.S. and foreign patent applications covering products, methods and procedures
resulting from the Company's research projects. In fiscal 1995 and continuing
this fiscal year, the Company began to receive significant revenues from the
distribution agreements related to these patents and believes that the patents
have positioned the Company to derive considerably more revenues in the future
as the markets for these products continue to develop. Patents relating to the
BioProbe(R) nucleic acid probe system have issued in the U.S. and Europe.
Management believes that additional patents will issue shortly and over the next
several years with respect to the Company's pending applications. There can be
no assurance, however, that patents will be issued on pending applications or
that any issued patents will have commercial benefit. The Company does not
intend to rely on patent protection as the sole basis for protecting its
proprietary technology. It also relies on its trade secrets and continuing
technological innovation. All employees involved in the clinical reference
laboratory division and the manufacturing operations sign a confidentiality
agreement prohibiting the employee from disclosing any confidential information
about the Company, including the Company's technology or trade secrets.
In some instances, the Company may enter into royalty agreements with
collaborating research parties in consideration for the commercial use by the
Company of the developments of their joint research. In other instances a patent
may be obtained by the collaborating party with the Company receiving a license
to use the patented subject matter. In such cases, the Company will seek to
secure exclusive licenses.
In other instances, the Company may have an obligation to pay royalties to,
or reach a royalty arrangement with, a third party in consideration of the
Company's use of developments of such third party. The Company has an exclusive
licensing agreement with Yale for the technology used in the BioProbe(R) nucleic
acid probe products. The agreement covers licensed patents owned by Yale and
licensed to the Company for the life of the patents which expire not earlier
than 2004. See "Business Technology and Product Development - BioProbe(R)
Nucleic Acid Probe Labeling and Signal Generating System."
In fiscal 1987, the Company entered into an agreement with The Research
Foundation of the State University of New York giving the Company exclusive
rights to a genetic engineering technology using antisense nucleic acid control
methodologies. This technology is covered by three U.S. patents applications
subsequently issued as patents by the U.S. Patent and Trademark Office. The
first patent issued in March 1993; a second patent issued in May 1993; the third
patent issued in December 1993. (See "Therapeutic Technology and Product
Development" section). The term of the license agreement extends through the
life of such patents as may issue therefrom. See "Business Technology and Patent
Development - Therapeutic Technology and Product Development." Human
Resources
As of July 31, 1996, the Company employed 176 full-time and 51 part-time
employees. Of the full-time employees, 36 were engaged in research, development,
manufacturing and marketing of research products and 140 at the clinical
reference laboratories. The scientific staff of the Company possesses a wide
range of experience and expertise in the areas of recombinant
19
<PAGE>
DNA, nucleic acid chemistry, molecular biology and immunology. The Company
believes that relations with its employees are good.
Competition
The Company's biotechnology activities compete with pharmaceutical,
chemical, energy, and food companies which are diversifying into biotechnology,
and with specialized biotechnology firms in the United States and elsewhere.
Competition from existing companies and from newly formed private enterprises is
expected to increase.
Most of the Company's competitors in the biotechnology industry are
performing research in many of the same areas as the Company. Many of these
competitors are larger and have greater financial and other resources than the
Company. The primary competitive factors in the biotechnology field are the
ability to create and maintain scientifically advanced technology during a
period of rapid technological development, to attract and retain a breadth and
depth of human resources, to develop proprietary products or processes and to
have available adequate financial resources for bridging the often substantial
time lag between technical concept and commercial implementation.
The Company's clinical reference laboratories activity, which is conducted
in the New York metropolitan area, competes with numerous national and local
entities, some of which are larger and have greater financial resources than the
Company. Enzo Clinical Labs competes primarily on the basis of the quality and
specialized nature of its testing, reporting and information services, its
reputation in the medical community, the pricing of its services, its
reliability and speed in performing diagnostic tests, and its ability to employ
qualified laboratory personnel. The Company also believes that its ability to
compete also depends on its ability to make investments in equipment and
management information systems. CAUTIONARY STATEMENT FOR PURPOSES OF
THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
The Private Securities Litigation Reform Act of 1995 provides a new "safe
harbor" for forward-looking statements to encourage companies to provide
prospective information about their companies without fear of litigation so long
as those statements are identified as forward-looking and are accompanied by
meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those projected in the statement. The
Company desires to take advantage of the new "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995 and is including this section
herein in order to do so. Accordingly, the Company hereby identifies the
following important factors that could cause the Company's actual financial
results to differ materially from those projected, forecast, estimated, or
budgeted by the Company in forward-looking statements.
(a) Heightened competition, including the intensification of price
competition.
(b) Impact of changes in payor mix, including the shift from
traditional, fee-for-service medicine to managed-cost health care.
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<PAGE>
(c) Adverse actions by governmental or other third-party payors,
including unilateral reduction of fee schedules payable to the Company.
(d) The impact upon the Company's collection rates or general or
administrative expenses resulting from compliance with Medicare administrative
policies including specifically the HCFA's recent requirement that laboratories
performing certain automated blood chemistry profiles to obtain and provide
documentation of the medical necessity of tests included in the profiles for
each medicare beneficiary.
(e) Failure to obtain new customers, retain existing customers or
reduction in tests ordered or specimens submitted by existing customers.
(f) Adverse results in significant litigation matters.
(g) Denial of certification or licensure of any of the Company's
clinical laboratories under CLIA, by Medicare and Medicaid programs or other
Federal, state or local agencies.
(h) Adverse publicity and news coverage about the Company or the
clinical laboratory industry.
(i) Inability to carry out marketing and sales plans.
(j) Loss or retirements of key executives.
(k) Impact of potential patent infringement by others or the Company.
(l) Inability to obtain patent protection or secure and maintain
proprietary positions on its technology.
Item 2. Properties
The following are the principal facilities of the Company:
21
<PAGE>
<TABLE>
<CAPTION>
Approximate Approximate Approximate
Floor Annual Expiration
Location Principal Operations Area (sq. ft.) Base Rent Date
- -------- -------------------- -------------- --------- ----------
<S> <C> <C> <C> <C>
60 Executive Blvd. Corporate headquarters, 40,000 $684,000 November 2004
Farmingdale, NY clinical reference laboratory,
and research and development
facilities (See note 6 of Notes
to Consolidated Financial
Statements)
527 Madison Ave. Executive office 6,400 $163,000 December 1998
New York, NY
</TABLE>
Management believes that the current facilities will be adequate for
current and foreseeable future operating needs.
On December 1, 1985, the Company entered into an Agreement with the City of
New York to lease, over a fifty-year term, a six-story building located in New
York City. In the fourth quarter of fiscal 1996, the Company negotiated a
settlement with the City of New York to relieve the Company from any further
obligations related to the lease and to return the building to the City and the
Company agreed to pay the City $2,950,000 in full settlement of all of the
City's claims for unpaid taxes and rent. The Company issued to the City 213,623
shares of the Company's common stock in August 1996 in consideration of the
settlement amount. If the City has not received the net proceeds of $2,950,000
upon the sale of such stock by March 17, 1997, the City shall return the
remaining shares not sold, if any, and the Company shall pay the difference in
cash. As a result of this settlement with the City, the Company incurred a
charge against earnings in the amount of approximately $7.6 million in the
fourth quarter of fiscal 1996.
Item 3. Legal Proceedings
In March 1993, the Company filed suit in the United States District Court
for the District of Delaware charging patent infringement and acts of unfair
competition against Calgene, Inc. and seeking a declaratory judgment of
invalidity concerning Calgene's plant antisense patent. On February 9, 1994, the
Company filed a second suit in the United States District Court for the District
of Delaware charging Calgene with infringement of a second antisense patent
owned by the Company. Calgene has filed a counterclaim in the second Delaware
action seeking a declaration that a third patent belonging to the Company is
invalid. The two Delaware actions have been consolidated and were tried to the
Court in April 1995. In addition, the Company filed suit on March 22, 1994 in
the United States District Court for the Western District of Washington against
Calgene and the Fred Hutchinson Cancer Research Center, alleging that the
defendants had conspired to issue a false and misleading press release regarding
a supposed "patent license" from Hutchinson to Calgene, and conspired to damage
the Company's antisense patents by improperly using confidential information to
challenge them in the Patent Office. The
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Complaint further charges that Hutchinson is infringing and inducing Calgene to
infringe the Company's antisense patents. On February 2, 1996, the Delaware
Court issued an opinion ruling against Enzo and in favor of Calgene, finding
certain Enzo claims infringed, but the patent, as a whole not infringed, and
finding the claims at issue invalid for lack of enablement. Calgene's patent was
found valid (non-obvious) over the prior art. On February 29, 1996, the Delaware
Court issued an Order withdrawing its February 2, 1996 Opinion. Enzo intends to
appeal from any adverse judgment. There can be no assurance that the Company
will be successful in any of the foregoing matters or that Calgene and/or
Hutchinson will not be successful. However, even if the Company is not
successful management does not believe there will be a significant monetary
impact.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were brought to a vote of the Company's stockholders in the
fiscal quarter ended July 31, 1996.
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<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The common stock of the Company is traded on the American Stock Exchange
(Symbol:ENZ). The following table sets forth the high and low price of the
Company's Common Stock for the periods indicated as reported on the American
Stock Exchange.
High Low
---- ---
1995 Fiscal Year (August 1, 1994
to July 31, 1995):
1st Quarter $ 15 3/8 $ 9 1/8
2nd Quarter $ 13 7/8 $ 10
3rd Quarter $ 11 3/8 $ 9 1/2
4th Quarter $ 17 1/8 $ 9 1/2
1996 Fiscal Year (August 1, 1995
to July 31, 1996):
1st Quarter $ 23 $ 14 5/8
2nd Quarter $ 24 1/2 $ 15 3/8
3rd Quarter $ 20 3/8 $ 15 1/8
4th Quarter $ 21 $ 13 1/2
On October 21, 1996, the last sale price of the Common Stock of the Company
as reported on the American Stock Exchange was $18 1/8.
On October 25, 1996, the Company had approximately 1,433 shareholders of
record.
The Company has not paid a cash dividend on its Common Stock and intends to
continue to follow a policy of retaining future earnings to finance its
operations. Accordingly, the Company does not anticipate the payment of cash
dividends to holders of Common Stock in the foreseeable future.
On June 5, 1995, the Company declared a 5% stock dividend paid July 31,
1995 to shareholders of record as of July 3, 1995. On September 13, 1996, the
Company declared another 5% stock dividend payable on October 29, 1996 to
shareholders of record on October 8, 1996.
24
<PAGE>
Item 6.
Selected Financial Data
(In thousands, except per share data)
For the Years Ended July 31,
---------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating revenues $ 34,490 $31,700 $ 22,799 $ 20,025 $ 20,535
Litigation settlement, net of legal
fees -- 21,860 -- -- --
Writedown of leasehold interest
and related costs 7,613 11,400 600 3,000 401
Interest income (expense) net 1,640 941 87 (230) (1,420)
Income (loss) before provision
(benefit) for taxes on income
and extraordinary items (7,508) 9,749 2,156 (6,324) (1,103)
Provision (benefit) for taxes on
income 199 4,131 (2,945) 52 115
Income (loss) before extraordinary
items (7,707) 5,618 5,101 (6,376) (1,218)
Extraordinary items:
Gain on extinguishment of debt -- -- 150 -- --
(Gain) loss on debt conversion -- -- -- (466) 572
-------- ------- -------- -------- --------
Net income (loss) $ (7,707) $ 5,618 $ 5,251 $ (6,842) $ (646)
======== ======= ======== ======== ========
Per common and common equivalent share(1):
Income (loss) before extraordinary
items $ (.34) $ .24 $ .22 $ (.33) $ (.08)
Extraordinary items -- -- .01 (.02) --
-------- ------- -------- -------- --------
Net income (loss) $ (.34) $ .24 $ .23 $ (.35) $ (.04)
======== ======= ======== ======== ========
Average common and dilutive
common equivalent (1) 22,593 23,075 22,628 19,407 15,767
</TABLE>
25
<PAGE>
Selected Financial Data
(in thousands, except per share data and ratios)
As at July 31,
------------------------------------------------------
1996 1995 1994 1993 1992
---- ----- ----- ---- ----
Working capital (deficit) $29,451 $24,449 $17,153 $ (2,411) $ (2,642)
Total assets 62,838 72,458 65,043 47,569 49,793
Long-term debt and
obligation
under capital lease 114 4,698 4,379 4,168 4,186
Stockholders' equity 55,253 61,113 51,245 32,396 32,993
- ----------
(1) In fiscal years 1996, 1993 and 1992, common stock equivalents have not been
included because the effect of their inclusion would have been anti-dilutive.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Company, at July 31, 1996, had cash and cash equivalents of $17.8
million, an increase of $6.7 million from July 31, 1995. The Company had net
working capital of $29.5 million at July 31, 1996 compared to $24.4 million at
July 31, 1995.
The Company's income before taxes and before the writedown of leasehold
interest and related costs was $105,000 which includes depreciation and
amortization aggregating approximately $1.8 million. The Company's positive cash
flow from operations was sufficient to meet its current cash needs for the
research and development programs and other investing activities. The Company
believes that its current cash position is sufficient for its foreseeable
liquidity and capital resource needs, although there can be no assurance that
future events will not alter such view.
Net cash provided by operating activities for the 1996 fiscal year was
approximately $6.1 million and includes $5 million of cash received in
connection with the litigation settlement as compared to net cash provided by
operating activities of $9.1 million for the 1995 fiscal year. The decrease in
net cash provided by operating activities from fiscal 1995 to fiscal 1996 was
primarily due to the Company's net loss for 1996, which was partially offset by
an increased provision for uncollectible accounts receivable of $2.9 million
(resulting primarily from a reduction in collection rates under Medicare), a
decrease in writedown of leasehold interest and related costs of $3.8 million
and by a decrease in the note receivable litigation settlement of $5 million in
fiscal 1996 compared to an increase of $17.6 million in fiscal 1995.
26
<PAGE>
Net cash used by investing activities in fiscal 1996 amounted to
approximately $1 million as a result of capital expenditures and deferred patent
costs as compared to net cash used by investing activities of $1.4 million in
fiscal 1995. The decrease relates primarily from reduced capital expenditures in
fiscal 1996 compared to fiscal 1995.
Net cash provided by financing activities of approximately $1.6 million
primarily results from the proceeds from the exercise of stock options and
warrants which represents an increase of $2.4 million compared to fiscal 1995
primarily due to payments of loans payable and long term debt in fiscal 1995.
The Company's net accounts receivable of $10.5 million and $10.9 million
represent 111 average days and 126 average days of operating revenues at July
31, 1996 and 1995 respectively. The average age of the Company's receivables at
July 31, 1996 was 113 average days as compared with 116 average days as of July
31, 1995. The change in net accounts receivable is due to a decrease in accounts
receivable at the clinical reference laboratory of approximately $180,000 and a
decrease of research products accounts receivable of approximately $220,000. The
Company does not believe that the reduction in net receivables and the age of
such receivables has had a material effect on the Company's liquidity or capital
position.
On October 19, 1994 the Company executed a settlement agreement with
Johnson & Johnson, Inc. (J&J) pursuant to which the Company received $15.0
million and a promissory note requiring J&J and its subsidiary, Ortho
Diagnostics, Inc., to pay $5.0 million a year for each of the four successive
anniversaries of said date. These future payments are recorded at net present
value discounted using an interest rate of 5.25%. The litigation settlement
amounted to approximately $21.9 million, net of legal fees. Pursuant to the
terms of the settlement, all of the Company's grants, licenses and intellectual
property have been returned to the Company in totality.
In December 1985, the Company entered into an agreement with the City of
New York to lease, over a fifty year term, a building located in New York City.
In the fourth quarter of fiscal 1996, the Company negotiated a settlement with
the City of New York to relieve the Company from any further obligations related
to the lease and to return the building to the City and the Company agreed to
pay the City $2,950,000 in full settlement of all of the City's claims for
unpaid taxes and rent. The Company issued to the City 203,450 shares of the
Company's common stock in August 1996 (213,623 shares after giving effect to the
5% stock dividend paid in October, 1996) in consideration of the settlement
amount. These shares were issued at the fair market value at the date of the
settlement for unpaid rent and payments in-lieu-of taxes of $2.95 million. If
the City has not received the net proceeds of $2.95 million upon the sale of
such stock by March 17, 1997, the City shall return the remaining shares not
sold, if any, and the Company shall pay the difference in cash. As a result of
this settlement with the City, the Company incurred a charge against earnings in
the amount of approximately $7.6 million in the fourth quarter of fiscal 1996.
The components of the $7.6 million charge included a writedown of the leasehold
interest of $6.2 million and for unpaid payments-in-lieu of taxes and rent on
the leasehold of $1.4 million. Of the settlement of $2.95 million payments
in-lieu-of taxes and unpaid rent, $1.55 million was recorded prior to fiscal
1996 and the balance of $1.4 million was recorded in fiscal 1996. Management is
not aware of any material claims, disputes or settled matters concerning
third-party reimbursements which would have a material effect on the Company's
financial statements.
Results of Operations
Fiscal 1996 Compared to Fiscal 1995
Revenues from operations for the fiscal year ended July 31, 1996 ("fiscal
1996") increased by $2,790,000 over revenues from operations for the fiscal year
ended July 31, 1995
27
<PAGE>
("fiscal 1995"). This increase was due to an increase of $3,398,000 in revenues
from research product sales over revenue for the similar activity in fiscal 1995
offset by a $608,000 decrease in revenues for the clinical reference laboratory
operations. The increase in research product sales resulted primarily from the
Company's non-exclusive distribution agreements for the Company's products and
generally was the result of significantly higher volume of sales of product. The
decrease in revenues from the clinical laboratory operations resulted primarily
from a decrease in volume of unprofitable diagnostic screening tests.
Cost of sales increased by approximately $1,563,000 as a result of the
increase of $2,644,000 in the cost of sales of research products from the
Company's distribution agreements activities offset by a decrease in the cost of
clinical laboratory services of $1,081,000. This decrease is primarily due from
the improved efficiencies of performing certain diagnostic screening tests and
the increase in the number of esoteric tests performed actually at the
laboratory.
Research and development expenses increased by approximately $717,000 as a
result of an increase in research programs and the increased amortization of
patent costs.
The provision for uncollectible accounts receivable increased by $2,857,000
primarily due to an additional provision recorded by the Company in the fourth
quarter of fiscal 1996 primarily to cover lower collection rates under the
Federal Medicare programs and other third-party insurance carriers. Effective
March 1, 1996, the Medicare policy of allowing payment for all tests contained
in an automated profile when at least one of the tests in the profile was
covered was eliminated. When one or more of the tests on the newly standardized
list are reported on a claim, carriers are to pay only for medically necessary
tests in a profile. The former standard was to allow payment for the entire
profile if at least one of the tests was medically necessary. The amount paid
for a profile is limited to what would have been paid had only the medically
necessary tests been ordered. Based on collection rate data in the fourth
quarter of fiscal 1996, which was the first period evidence was available to
show the effects of the change in Medicare policy, it became evident that
additional reserves were needed to cover these lower collection rates, including
reduced reimbursement by Medicare for periods prior to March 1, 1996, the
effective date of the policy change. Accordingly, the Company recorded an
additional provision of $3.5 million in the fourth quarter of fiscal 1996 to
reflect the reduced reimbursements received by the Company from Medicare and
other third party insurers who generally follow the reimbursement policies of
Medicare.
The Company's net accounts receivable from the clinical laboratory
operations of $9.0 million and $9.2 million represent an average of 150 days of
operating revenue at July 31, 1996 and 1995, respectively. The $3.5 million
additional provision relates to the increase in the mix of Medicare invoicing in
the fourth quarter and the change in reimbursement policy rates on this
invoicing. The Company expects that in the future, as a result of the revised
Medicare reimbursement policies, the Company will receive reimbursements and
cash flows. at the clinical reference laboratory at the lower rates realized in
fiscal 1996. The Company will continue its efforts at attempting to control
costs associated with the performance of the tests, however, there can be no
assurance that such efforts will be successful.
Selling and general and administrative expenses decreased by $2,463,000
primarily due to a decrease in legal fees in fiscal 1996 and the overall
improved efficiencies at the clinical reference laboratory.
28
<PAGE>
In the fourth quarter of fiscal 1995, management decided that it was not in
the best interests of the Company to continue further renovations on the
leasehold interest since the continuing expenses associated with such
renovations were not deemed justifiable in light of the uncertainty of
recoupment of such expenses and because the likelihood of occupancy of the
leasehold interest was in question. A decision was made to dispose of the
leasehold interest as is, and an independent appraisal of the leasehold interest
on a current condition basis indicated that a writedown of the leasehold
interest was required in the amount of $11,400,000 which was recorded in the
fourth quarter of fiscal 1995. During fiscal 1996, the Company made extensive
efforts to find a developer for the leasehold interest. In addition, the Company
commenced negotiations with the City to also assist the Company in identifying
and approving a buyer or developer for the leasehold interest. Simultaneously,
the Company commenced negotiations with the City for a full surrender of the
leasehold interest back to the City. Based on the limited interest in the
leasehold by any developer, the Company determined that it was in the best
interest of the Company to negotiate a complete and full settlement with the
City. On July 31, 1996, the Company negotiated a settlement with the City of New
York (the "City") to relieve the Company from any further obligations related to
the lease and to return the building to the City and the Company agreed to pay
the City $2,950,000 in full settlement of all of the City's claims for unpaid
taxes and rent. The Company issued to the City 213,623 shares (after giving
effect to the 5% stock dividend paid in October 1996) of the Company's common
stock in August 1996 in consideration of the settlement amount. If the City has
not received the net proceeds of $2.95 million upon the sale of such stock by
March 17, 1997, the City shall return the remaining shares not sold, if any, and
the Company shall pay the difference in cash. As a result of this settlement
with the City of New York, the Company incurred a charge against earnings in the
amount of approximately $7.6 million in the fourth quarter of fiscal 1996.
The operating profit from research and development activities and related
costs amounts to $449,000 in fiscal 1996, as compared to an operating profit of
$479,000 in fiscal 1995. The decrease in the profit is principally related to
the increase in research and development expenses from the diagnostic division.
The operating profit from the clinical reference laboratories activities
amounted to $124,000 (.6% of operating revenues) as compared to an operating
profit of $2,146,000 (10% of operating revenues) in fiscal 1995. This decrease
resulted principally from the increase in the provision for uncollectible
accounts receivable due to the lower collection rates under Medicare programs
and other third-party insurance carriers and offsetting deduction in overall
operating expenses in fiscal 1996. Results of Operations
Fiscal 1995 Compared to Fiscal 1994
Revenues from operations for the fiscal year ended July 31, 1995 ("fiscal
1995") increased by $8,901,000 over revenues from operations for the fiscal year
ended July 31, 1994 ("fiscal 1994"). This increase was due to increases of
$4,365,000 in revenues from research product sales over revenue for the similar
activity in fiscal 1994 and by a $4,536,000 increase in revenues for the
clinical reference laboratory operations. The increase of revenues from the
clinical laboratory operations resulted primarily from an increase in volume of
screening tests. The increase in the volume of research product sales resulted
primarily from the Company's
29
<PAGE>
non-exclusive distribution agreements entered into in April 1994 and February
1995 to distribute the Company's products.
Research and development expenses increased by approximately $602,000 as a
result of an increase in research programs and the amortization of patent costs.
Cost of sales increased by approximately $3,099,000 as a result of increased
revenue from the sale of research products and from the clinical reference
laboratory. This increase resulted primarily from the Company's non-exclusive
distribution agreements to distribute products. Included in the general and
administrative expenses are legal fees of $2,977,000 and $1,663,000 for fiscal
years 1995 and 1994, respectively.
The provision for uncollectible accounts receivable increased by $341,000
primarily from an increase in operating revenues at the clinical reference
laboratory operations. Selling expenses increased by approximately $701,000 due
to an increase in marketing programs and personnel costs for the clinical
reference laboratory operations.
On October 19, 1994, the Company executed a settlement agreement with J&J
pursuant to which the Company received $15.0 million in cash and a promissory
note requiring J&J to pay a total of $5.0 million a year for each of the four
successive anniversaries of said date. These future payments are recorded at net
present value discounted using an interest rate of 5.25%. The litigation
settlement amounted to approximately $21,860,000, net of legal fees.
The operating profit from the research and development activities and
related costs amounted to $479,000 in fiscal 1995 as compared to an operating
loss of $493,000 in fiscal 1994. The increase in this profit is principally
related to the Company's nonexclusive distribution agreements to distribute
products. The operating profit from the clinical reference laboratories
activities amounted to a profit of $2,146,000 as compared to an operating loss
of $659,000 in fiscal 1994. This increase resulted principally from an increase
in the volume of screening tests.
The provision for income taxes of $4,131,000 results from current income
taxes due and utilization of net operating loss carryforwards related to taxable
income recognized in connection with the J&J lawsuit.
Net income for the fiscal year ended July 31, 1995 increased to
approximately $5,618,000 compared with approximately $5,251,000 for the fiscal
year ended July 31, 1994.
Item 8. Financial Statements and Supplementary Data
The response to this item is submitted in a separate section of this
report.
30
<PAGE>
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
(a) Directors - The following sets forth certain information regarding
directors of the Company who are not executive officers of the Company.
Information with respect to directors of the Company who are also executive
officers of the Company appears below under the subcaption "Executive Officers."
The Company has a classified Board of Directors consisting of three classes.
JOHN B. SIAS (age 69) has been Director of the Company since January 1982.
Mr. Sias has been President and Chief Executive Officer of Chronicle Publishing
Company since April 1993. From January 1986 until April 1993, Mr. Sias was
President of ABC Network Division, Capital Cities/ABC, Inc. From 1977 until
January 1986 he was the Executive Vice President, President of the Publishing
Division (which includes Fairchild Publications) of Capital Cities
Communications, Inc.
JOHN J. DELUCCA (age 53) has been a Director of the Company since January
1982. Since October 1993, Mr. Delucca has been Senior Vice President and
Treasurer of RJR Nabisco, Inc. From January 1992 until October 1993, he was
managing director and Chief Financial Officer of Hascoe Associates, Inc. From
October 1, 1990 to January 1992 he was President of The Lexington Group. From
September 1989 until September 1990 he was Senior Vice President-Finance of the
Trump Group. From May 1986 until August 1989, he was senior Vice
President-Finance at International Controls Corp. From February 1985 until May
1986, he was a Vice President and Treasurer of Textron, Inc. Prior to that he
was a Vice President and Treasurer of the Avco Corporation, which was acquired
by Textron.
During the fiscal year ended July 31, 1996, there were three (3) formal
meetings of the Board of Directors, several actions by unanimous consent and
several informal meetings. The Board of Directors has an Audit Committee and
Stock Option Committee. The Audit Committee had one (1) formal meeting and the
Stock Option Committee had three (3) formal meetings in fiscal 1996.
The Audit Committee is authorized to review proposals of the Company's
auditors regarding annual audits, recommend the engagement or discharge of the
auditors, review recommendations of such auditors concerning accounting
principles and the adequacy of internal controls and accounting procedures and
practices, to review the scope of the annual audit, to approve or disapprove
each professional service or type of service other than standard auditing
services to be provided by the auditors, and to review and discuss the audited
financial
31
<PAGE>
statements with the auditors. Its members are Shahram K. Rabbani and Messrs.
Sias and Delucca.
The Stock Option Committee has the plenary authority in its discretion to
determine the purchase price of the Common Stock issuable upon the exercise of
each option, to determine the employees to whom, and the time or times at which,
options shall be granted and the number of shares to be issuable upon the
exercise of each option, to interpret the plans, to prescribe, amend and rescind
rules and regulations relating to them, to determine the term and provisions of
the respective option agreements and to make all other determinations deemed
necessary or advisable for the administration of the plans. Its members are
Messrs. Sias and Delucca.
The Company does not have a formal Executive Committee or Nominating
Committee of the Board of Directors.
(b) Executive Officers - The following table sets forth the names and
positions of all of the current executive officers of the Company:
Name Position
---- --------
Elazar Rabbani, Ph.D. President, Chairman of the Board of Directors
and Chief Executive Officer
Shahram K. Rabbani Executive Vice President, Treasurer, Director
Barry W. Weiner Executive Vice President, Secretary and Director
Norman E. Kelker, Ph.D. Senior Vice President
Dean Engelhardt, Ph.D. Senior Vice President
Herbert B. Bass Vice President of Finance
Barbara E. Thalenfeld, Ph.D. Vice President, Corporate Development
David C. Goldberg Vice President, Business Development
DR. ELAZAR RABBANI (age 52) has served as President and a Director of the
Company since its organization in 1976. Dr. Rabbani received his B.A. degree
from New York University in Chemistry and his Ph.D. degree in Biochemistry from
Columbia University. He is a member of the American Society for Microbiology.
SHAHRAM K. RABBANI (age 44) has been an Executive Vice President of the
Company since September 1981 and a Vice President, Treasurer and a Director of
the Company since its organization. Mr. Rabbani received a B.A. degree in
chemistry from Adelphi University.
BARRY W. WEINER (age 46) has been an Executive Vice President since
September 1981, a Vice President and Director of the Company since its
organization and Secretary since March 1980. He was employed by
Colgate-Palmolive Company, New York, New York from August 1974 until March 1980,
when he joined the Company on a full-time basis. Mr. Weiner received his B.S.
degree in Economics from New York University and a M.B.A. from Boston
University.
32
<PAGE>
DR. NORMAN E. KELKER (age 57) has been a Vice President of the Company
since September 1981. Effective January 1, 1989, he was promoted to Senior Vice
President. From 1975 until he joined the Company, Dr. Kelker was an Associate
Professor in the Department of Microbiology of the New York University School of
Medicine. He holds a Ph.D. from Michigan State University.
DR. DEAN ENGELHARDT (age 56) has been Vice President since September 1981.
Effective January 1, 1989, he was promoted to Senior Vice President. Prior to
joining the Company he was Associate Professor of Microbiology at Columbia
University College of Physicians and Surgeons. He obtained his Ph.D. from
Rockefeller University.
HERBERT B. BASS (age 48) is Vice President of Finance of the Company. Prior
to his promotion, Mr. Bass was the Corporate Controller of Enzo. Before joining
Enzo in 1986, Mr. Bass held various positions at Danziger & Friedman, Certified
Public Accountants, from 1979 to 1986, the most recent of which was audit
manager. For the preceding seven years he held various positions at Berenson &
Berenson, C.P.A.'s. Mr. Bass holds a Bachelor degree in Business Administration
from Baruch College.
DR. BARBARA E. THALENFELD (age 56) is Vice President of Corporate
Development and has been with Enzo since 1982. Prior to joining the Company she
held an NIH research fellowship at Columbia University. She received a Ph.D.
from Hebrew University- Hadassah Medical Center and an MS from Yale University.
DAVID C. GOLDBERG (age 39) is Vice President of Business Development. Prior
to joining Enzo in 1985, he was employed at DuPont NEN Products. He received an
MS from Rutgers University and an MBA from New York University.
Dr. Elazar Rabbani and Shahram K. Rabbani are brothers and Barry W. Weiner
is their brother-in-law.
Item 11. Executive Compensation
The information required under this item will be set forth in the Company's
proxy statement to be filed with the Securities and Exchange Commission on or
before November 28, 1996 and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required under this item will be set forth in the Company's
proxy statement to filed with the Securities and Exchange Commission on or
before November 28, 1996 and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
33
<PAGE>
The information required under this item will be set forth in the Company's
proxy statement to be filed with the Securities and Exchange Commission on or
before November 28, 1996 and is incorporated herein by reference.
34
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K
---------------------------------------------
(a) (1) Consolidated Financial Statements
Consolidated Balance Sheet - July 31, 1996 and 1995
Consolidated Statement of Operations-
Years ended July 31, 1996, 1995 and 1994
Consolidated Statement of Stockholders' Equity-
Years ended July 31, 1996, 1995 and 1994
Consolidated Statement of Cash Flows-
Years ended July 31, 1996, 1995 and 1994 Notes to Consolidated
Financial Statements.
(2) Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts
All other schedules have been omitted because the required information is
included in the consolidated financial statements or the notes thereto or
because they are not required.
(3) Exhibits
The following documents are filed as Exhibits to this Annual Report on Form
10-K:
Exhibit
No Description
------- -----------
3(a) Certificate of Incorporation, as amended March 17, 1980. (1)
3(b) June 16, 1981 Certificate of Amendment of the Certificate of
Incorporation. (2)
3(c) Certificate of Amendment to the Certificate of Incorporation. (11)
3(d) Bylaws. (1)
4(d) Form of Note Indenture. (3)
10(a) 1980 Stock Option Plan. (1)
10(b) Investment Agreement between the registrant and Johnson & Johnson
Development Corp. dated June 25, 1982. (4)
35
<PAGE>
10(c) Agreement between the registrant and Ortho Diagnostic System, Inc.
dated June 25, 1982. (5)
10(d) 1983 Incentive Stock Option Plan.(6)
10(e) Letter Agreement between the Company and Ortho Diagnostic Systems,
Inc. dated as of January 1, 1985. (7)
10(f) Lease Agreement dated as of December 1, 1985. (8)
10(g) Indenture of Mortgage and Trust dated as of December 1, 1985. (8)
10(h) Letter of Credit Agreement dated as of December 1, 1985.(8)
10(i) Leasehold Mortgage and Security Agreement dated as of February 5,
1986. (8)
10(j) Loan Agreement dated as of December 31, 1985. (8)
10(k) Restricted Stock Plan. (8)
10(p) Agreement with First New York Bank for Business. (14)
10(q) Agreement with BioHealth Laboratories, Inc. shareholders filed
herewith. (15)
10(r) Agreement with Johnson & Johnson, Inc. filed herewith. (16)
10(s) 1993 Incentive Stock Option Plan. (16)
10(t) Employment Agreement with Elazar Rabbani. (16)
10(u) Employment Agreement with Shahram Rabbani. (16)
10(v) Employment Agreement with Barry Weiner. (16)
10(w) 1994 Stock Option Plan (17).
10(x) Stipulation of Settlement with the City of New York (18).
10(y) Agreement with Corange International Limited (Boehringer Mannheim)
effective April 1994. (19)
10(z) Agreement with Amersham International effective February 1995.
(19)
10(aa) Agreement with Dako A/S effective May 1995. (19)
10(bb) Agreement with Baxter Healthcare Corporation (VWR Scientific
Products) effective September 1995. (19)
36
<PAGE>
10(cc) Agreement with Yale University and amendments thereto. (19)
10(dd) Agreement with The Research Foundation of the State of New York
effective May 1987. (19)
11 Computation of per-share earnings (18).
21 Subsidiaries of the registrant:
23 Consent of Independent Auditors filed herewith.
Notes to (a)(3)
- ----------
(1) The exhibits were filed as exhibits to the Company's Registration Statement
on Form S-18 (File No. 2-67359) and are incorporated herein by reference.
(2) This exhibit was filed as an exhibit to the Company's Form 10-K for the
year ended July 31, 1981 and is incorporated herein by reference.
(3) These exhibits were filed as exhibits to the Company's Current Report on
Form 8-K dated April 4, 1986 and are incorporated herein by reference.
(4) This exhibit was filed as an exhibit to the Company's Current Report on
Form 8-K dated June 29, 1982 and is incorporated herein by reference.
(5) This exhibit was filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended July 31, 1983 and is incorporated herein by
reference.
(6) This exhibit was filed with the Company's definitive proxy statement dated
February 4, 1983 and is incorporated herein by reference.
(7) This exhibit was filed with the Company's Annual Report on Form 10-K for
the year ended July 31, 1985 and is incorporated herein by reference.
(8) These exhibits were filed as exhibits to the Company's Quarterly Report on
Form 10- Q for the quarter ended January 31, 1986 and are incorporated
herein by reference.
(9) This exhibit was filed as an exhibit to the Company's Registration
Statement on Form S-2(33-7657) and is incorporated herein by reference.
(10) This exhibit was filed as an exhibit to the Company's Current Report on
Form 8-K dated July 12, 1990 and is incorporated herein by reference.
37
<PAGE>
(11) This exhibit was filed with the Company's Annual Report on Form 10-K for
the year ended July 31, 1989 and is incorporated herein by reference.
(12) This exhibit was filed with the Company's Annual Report on Form 10-K for
the year ended July 31, 1990 and is incorporated herein by reference.
(13) This exhibit was filed with the Company's Annual Report on Form 10-K for
the year ended July 31, 1991 and is incorporated herein by reference.
(14) This exhibit was filed with the Company's Annual Report on Form 10-K for
the year ended July 31, 1992 and is incorporated herein by reference.
(15) This exhibit was filed as an exhibit to the Company's Registration
Statement on Form S-3 (33-72170) and is incorporated herein by reference.
(16) This exhibit was filed with the Company's Annual Report on Form 10-K for
the year ended July 31, 1994 and is incorporated herein by reference.
(17) This exhibit was filed with the Company's Annual Report on Form 10-K for
the year ended July 31, 1995 and is incorporated herein by reference.
(18) This exhibit was filed with the Company's Annual Report on Form 10-K for
the year ended July 31, 1995 and is incorporated by reference.
(19) These exhibits are subject to a confidential treatment request pursuant to
Securities Exchange Act Rule 24b-2
- ----------
(b) The Company's Current Reports on Form 8-K filed during the quarter ended
July 31, 1996 -- none.
(c) See Item 14(a)(3), above.
(d) See Item 14(a)(2), above.
*************
38
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ENZO BIOCHEM, INC.
Date: January 17, 1997 By: /s/ Elazar Rabbani
---------------------
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Elazar Rabbani January 17, 1997
- ------------------------------------
Elazar Rabbani, President
and Chairman of Board of Directors
(Principal Executive Officer)
/s/ Shahram K. Rabbani January 17, 1997
- ------------------------------------
Shahram K. Rabbani, Executive
Vice President, Treasurer and
Director (Principal Financial and
Accounting Officer)
/s/ Barry W. Weiner January 17, 1997
- ------------------------------------
Barry W. Weiner, Executive
Vice President, Secretary
and Director
- ------------------------------------
John B. Sias, Director
- ------------------------------------
John J. Delucca, Director
39
<PAGE>
FORM 10-K, ITEM 14(a) (1) AND (2) ENZO BIOCHEM, INC.
LIST OF CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements and financial statement
schedules of Enzo Biochem, Inc. are included in Item 14(a):
Report of Independent Auditors F-2
Consolidated Balance Sheet -- July 31, 1996 and 1995 F-3
Consolidated Statement of Operations --
Years ended July 31, 1996, 1995 and 1994 F-4
Consolidated Statement of Stockholders' Equity --
Years ended July 31, 1996, 1995 and 1994 F-5
Consolidated Statement of Cash Flows --
Years ended July 31, 1996, 1995 and 1994 F-6
Notes to Consolidated Financial Statements F-8
Schedule II - Valuation and Qualifying
Accounts --Years ended July 31, 1996, 1995 and 1994 F-27
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.
F-1
<PAGE>
Report of Independent Auditors
Board of Directors and Stockholders
Enzo Biochem, Inc.
We have audited the accompanying consolidated balance sheets of Enzo Biochem,
Inc. (the "Company") as of July 31, 1996 and 1995, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended July 31,1996. Our audits also included the
financial statement schedule listed in the Index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Enzo
Biochem, Inc. at July 31, 1996 and 1995 and the consolidated results of their
operations and their cash flows for each of the three years in the period ended
July 31, 1996, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth herein.
/s/ Ernst & Young LLP
Melville, New York
October 15, 1996
F-2
<PAGE>
ENZO BIOCHEM, INC.
CONSOLIDATED BALANCE SHEET
July 31, 1996 and 1995
<TABLE>
<CAPTION>
LIABILITIES AND
ASSETS 1996 1995 STOCKHOLDERS' EQUITY 1996 1995
------ ---- ---- --------------------- ---- ----
<S> <C> <C> <C> <C> <C>
Current assets: Current liabilities:
Cash and cash equivalents $17,792,700 $11,067,900 Trade accounts payable $1,281,700 $1,579,900
Accounts receivable, less Accrued legal fees 1,392,000 921,900
allowance for doubtful accounts
of $5,398,000 in 1996 and
$2,127,000 in 1995 10,488,200 10,915,200 Income taxes payable -- 1,074,000
Accrued leasehold costs 2,950,000 1,531,800
Current portion of note
receivable --
litigation settlement 5,000,000 5,000,000 Other accrued expenses 776,400 615,400
Inventories 1,810,500 2,197,500 Current portion of long-term
debt 34,600 31,700
Current portion of obligations
under capital leases 28,700 53,000
--------- ---------
Other 822,900 1,076,500
---------- -----------
Total current assets 35,914,300 30,257,100 Total current liabilities 6,463,400 5,807,700
Property and equipment, at cost less Long-term debt 46,600 81,200
accumulated depreciation and
amortization 3,106,800 13,892,200
Obligations under capital leases 67,100 4,617,000
Long-term portion of note receivable--
litigation settlement 9,113,600 13,121,000 Other deferred liabilities 1,008,000 839,800
Cost in excess of fair value of net Commitments and contingencies
tangible assets acquired, less (Notes 6, 7 and 10)
accumulated amortization of
$3,128,000 in 1996 and
$2,758,000 in 1995 9,675,100 10,045,700 Stockholders' equity:
Preferred Stock, $.01 par value;
Deferred patent costs, less authorized 25,000,000 shares;
accumulated amortization of no shares issued or
$2,176,000 in 1996 and outstanding
$1,628,000 in 1995 4,878,600 4,971,000 Common Stock, $.01 par value;
authorized 75,000,000 shares;
shares issued and outstanding:
Other 149,700 171,300 21,624,900 in 1996 and
----------- ----------- 21,334,600 in 1995 216,400 213,500
Additional paid-in capital 83,450,000 81,605,000
Accumulated deficit (28,413,400) (20,705,900)
----------- -----------
$62,838,100 $72,458,300
----------- ----------- Total stockholders' equity 55,253,000 61,112,600
----------- ----------- ----------- -----------
$62,838,100 $72,458,300
----------- -----------
----------- -----------
</TABLE>
See accompanying notes F-3
<PAGE>
<TABLE>
<CAPTION>
ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Years ended July 31, 1996, 1995 and 1994
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues:
Research product revenues $12,946,300 $ 9,548,400 $ 5,183,200
Clinical laboratory services 21,544,000 22,152,500 17,615,400
------------ ------------ -----------
34,490,300 31,700,900 21,798,600
Costs and expenses:
Cost of research product revenues 8,351,000 5,706,400 3,035,700
Cost of laboratory services 7,088,700 8,170,100 7,742,300
Research and development expense 3,083,000 2,366,400 1,764,000
Selling expense 2,714,800 2,754,200 2,053,200
Provision for uncollectable accounts receivable 6,702,900 3,845,600 3,504,300
General and administrative expense 8,085,100 10,508,300 8,530,100
Recovery of research contract receivable -- -- (6,500,000)
Litigation settlement, net of legal fees -- (21,859,700) --
Writedown of leasehold interest and related costs 7,613,400 11,400,000 600,000
------------ ------------ -----------
43,638,900 22,891,300 20,729,600
------------ ------------- -----------
Income (loss) before interest income, net, provision
(benefit) for taxes on income and extraordinary item (9,148,600) 8,808,600 2,069,000
Interest income, net 1,640,200 940,700 87,200
------------ ------------- ------------
Income (loss) before provision (benefit) for taxes on
Income and extraordinary item (7,508,400) 9,749,300 2,156,200
Provision (benefit) for taxes on income 199,100 4,131,200 (2,945,000)
------------ ------------- ------------
Income (loss) before extraordinary item (7,707,500) 5,618,100 5,101,200
Extraordinary item:
Gain on extinguishment of debt -- -- 150,000
------------ --------- ---------
Net income (loss) ($7,707,500) $5,618,100 $5,251,200
========== ========= =========
Per common and common equivalent share:
Income (loss) before extraordinary item $(.34) $.24 $.22
Extraordinary item -- -- .01
---------- --------- --------
Net income (loss) $(.34) $.24 $.23
========== ========= ========
Weighted average common shares 22,593,000 23,075,100 22,627,600
========== ========== ==========
</TABLE>
See accompanying notes
F-4
<PAGE>
ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Years ended July 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
Common Stock Additional Total
paid-in Accumulated Shareholders'
Shares Amount Capital deficit equity
---------- -------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at July 31, 1993 18,287,100 $182,900 $58,169,700 $(25,957,100) $32,395,500
Net income for the year ended July 31, 1994 -- -- -- 5,251,200 5,251,200
Increase in common stock and paid-in capital due to
debenture conversion 50,000 500 261,800 -- 262,300
Increase in common stock and paid-in capital due to
exercise of stock options 150,500 1,500 449,600 -- 451,100
Increase in common stock due to investment from
investor, net of expenses of approximately $17,000 940,000 9,400 7,493,500 7,502,900
Increase in common stock and paid-in capital
due to exchange of stock for debt, net of
expenses of approximately $205,000 394,600 3,900 5,378,000 -- 5,381,900
---------- -------- ----------- ---------- -----------
Balance at July 31, 1994 19,822,200 $198,200 $71,752,600 $(20,705,900) $51,244,900
Net income for the year ended July 31, 1995 5,618,100 5,618,100
Increase in common stock and paid-in capital due to
exercise of stock options and warrants 210,800 2,200 1,393,400 -- 1,395,600
Increase in common stock and paid-in capital due to
exchange of stock for debt 285,600 2,900 2,851,100 -- 2,854,000
Increase in common stock and paid-in capital due to
5% stock dividend 1,016,000 10,200 5,607,900 (5,618,100) --
---------- -------- ----------- ----------- -----------
Balance at July 31, 1995 21,334,600 $213,500 $81,605,000 $(20,705,900) $61,112,600
Issuance of stock for employee 401(k) plan 10,200 100 145,700 -- 145,800
Net loss for the year ended July 31, 1996 -- -- -- (7,707,500) (7,707,500)
Increase in common stock and paid-in capital due to
exercise of stock options and warrants 280,100 2,800 1,699,300 -- 1,702,100
---------- -------- ----------- ------------ -----------
Balance at July 31, 1996 21,624,900 $216,400 $83,450,000 $(28,413,400) $55,253,000
---------- -------- ----------- ------------ -----------
---------- -------- ----------- ------------ -----------
</TABLE>
See accompanying notes F-5
<PAGE>
<TABLE>
<CAPTION>
ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Years ended July 31, 1996, 1995 and 1994
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $(7,707,500) $5,618,100 $5,251,200
Adjustments to reconcile net income (loss) to net cash provided (used)
by operating activities:
Depreciation and amortization of property and equipment 894,400 862,600 736,400
Amortization of costs in excess of fair value of net tangible assets
acquired 370,600 369,600 368,800
Amortization of deferred patent costs 547,200 484,300 439,700
Provision for uncollectible accounts receivable and reimbursable costs
on research contracts 6,702,900 3,845,600 3,504,300
Writedown of leasehold interest and related costs 7,613,400 11,400,000 600,000
Deferred income tax (benefit) provision -- 2,849,300 (3,049,300)
Legal expenses converted into stock -- 1,455,700 246,000
Recovery of research contract receivable -- -- (6,500,000)
Accretion of interest on note receivable (992,600) (494,000) --
Issuance of stock for employee 401K plan 145,800 -- --
Gain on extinguishment of debt -- -- (150,000)
Deferred rent and other assets 168,200 167,300 178,100
Changes in operating assets and liabilities:
Note receivable - litigation settlement 5,000,000 (17,627,000) --
Accounts receivable before provision for uncollectable amounts (6,275,900) (5,488,900) (7,812,100)
Research contract receivable -- 6,500,000 --
Inventories 387,000 (94,800) (447,800)
Other assets 161,900 (184,900) (105,800)
Trade accounts payable, accrued leasehold costs and other
accrued expenses 143,900 (3,449,400) 2,759,800
Income taxes payable (1,074,000) 1,074,000 --
Accrued legal fees 64,200 1,834,300 785,400
Accrued interest payable -- (30,000) (51,300)
-------- -------- --------
Total adjustments 13,857,000 3,473,700 (8,497,800)
---------- --------- -----------
Net cash provided (used) by operating activities 6,149,500 9,091,800 (3,246,600)
(Continued on following page)
F-6
</TABLE>
<PAGE>
ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Years ended July 31, 1996, 1995, and 1994
<TABLE>
<CAPTION>
1996 1995 1994
--------- ----------- -----------
<C> <C> <C> <C>
Cash flows from investing activities:
Capital expenditures $(651,100) $(1,033,300) $(1,174,700)
Patent costs deferred (363,000) (392,600) (286,800)
(Increase) decrease in security deposits (28,400) 52,400 (48,500)
----------- ----------- -----------
Net cash used by investing activities (1,042,500) (1,373,500) (1,510,000)
Cash flows from financing activities:
Payments of obligations under capital leases (52,600) (78,400) (240,700)
Proceeds from long and short term borrowings -- -- 2,162,800
Proceeds from the exercise of stock options and warrants 1,702,100 1,395,600 451,100
Payment of loans payable to bank and long term debt (31,700) (2,118,500) (1,416,700)
Proceeds from issuance of stock -- -- 7,520,000
Payment for registration filing fees -- -- (222,800)
----------- ---------- -----------
Net cash provided (used) by financing activities 1,617,800 (801,300) 8,253,700
----------- ---------- -----------
Net increase in cash and cash equivalents 6,724,800 6,917,000 3,497,100
Cash and cash equivalents at the beginning of the year 11,067,900 4,150,900 653,800
----------- ----------- -----------
Cash and cash equivalents at the end of the year $17,792,700 $11,067,900 $4,150,900
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See accompanying notes
F-7
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
Enzo Biochem, Inc. (the "Company") is engaged in research, development,
manufacturing and marketing of diagnostic and research products based on genetic
engineering, biotechnology and molecular biology. These diagnostic products will
allow for the diagnosis of and/or screening for infectious diseases, cancers,
genetic defects and other medically pertinent diagnostic information. The
Company operates a clinical reference laboratory which offers and provides
diagnostic medical testing services to the health care community. The Company
also is conducting research and development activities in the development of
therapeutic products.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All intercompany transactions and
balances have been eliminated.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with
maturities of three months or less to be cash equivalents.
Cash equivalents consist of short-term debt securities of the U.S. government
that the Company intends to hold to maturity which range from August 7, 1996 to
September 30, 1996. The market values of these securities, as determined by
quoted sources, approximated cost at July 31, 1996 and 1995.
CONCENTRATION OF CREDIT RISK
Approximately 86% and 85% at July 31, 1996 and 1995, respectively, of the
Company's net accounts receivable relate to its clinical reference laboratory
business which operates in the New York Metropolitan area. Concentration of
credit risk with respect to accounts receivable are limited due to the diversity
of the Company's client base. However, the
F-8
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
CONCENTRATION OF CREDIT RISK (CONT'D)
Company provides services to certain patients covered by various third-party
payors, including the Federal Medicare program. Revenue, net of contractual
allowances, from direct billings under the Federal Medicare program during each
of the fiscal years ended July 31, 1996, 1995 and 1994 approximated 14%, 12% and
17%, respectively of revenue. The Company recorded an additional provision for
uncollectable accounts receivable of $3,500,000 based on trends that became
evident in the fourth quarter, that additional reserves were needed primarily to
cover lower collection rates under the Federal Medicare program and other
third-party payors. Management is not aware of any material claims, disputes or
settled matters concerning third-party reimbursement which would have a material
effect on the Company's financial statements.
In April, 1994, the Company signed a non-exclusive worldwide distribution and
supply agreement with Boehringer Mannheim Biochemicals. Under the terms of this
agreement, Boehringer Mannheim distributes to the global medical research
market, a broad range of biochemical products and reagents manufactures and
supplied by Enzo. The agreement includes products based on nonradioactive. DNA
probe technology and includes products that were developed and marketed by
Boehringer Mannheim prior to agreement, as well as products developed by the
Company, all of which are convered by Enzo patents. The agreement took effect in
April 1994 and entends of the life of the last patent to expire for products
involved. In February 1995, a distribution agreement was signed with Amersham
International and includes a broad group of products developed and marketed by
Amersham, as well as products developed by Enzo Diagnostics. All products are
based on nonradioactive DNA labeling technoligies covered by Enzo patents.
At July 31, 1996 and 1995, 12% and 13% of the Company's net accounts receivable
relate to amounts due from Boehringer Mannheim and Amersham collectively.
Operating revenues from Boehringer Mannheim represented approximately 25% and
22% of consolidated operating revenues in fiscal 1996 and 1995, respectively.
INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or
market.
PROPERTY AND EQUIPMENT
Equipment is being depreciated on the straight-line and accelerated methods over
the estimated useful lives of the assets. Leasehold improvements are amortized
over the term of the related leases or estimated useful lives of the assets,
whichever is shorter.
AMORTIZATION OF INTANGIBLE ASSETS
The cost in excess of fair value of net tangible assets acquired is being
amortized on the straight-line method over periods of twenty or forty years.
PATENT COSTS
The Company has filed applications for United States and foreign patents
covering certain aspects of its technology. The costs incurred in filing such
applications have been deferred and are amortized over the estimated useful
lives of the patents beginning upon issue. Costs related to unsuccessful patent
applications are expensed.
F-9
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
REVENUE RECOGNITION
Revenues from services from the clinical reference laboratory are recognized
when services are provided. The Company's revenue is based on amounts billed or
billable for services rendered, net of contractual adjustments and other
arrangements made with third-party payors to provide services at less than
established billing rates. Revenues from research product sales are recognized
when the products are shipped.
NET INCOME (LOSS) PER SHARE
Net income (loss) per share has been computed based upon the weighted average
number of common shares and dilutive common stock equivalents outstanding during
the year. In fiscal 1996, common stock equivalents have not been included
because the effect of their inclusion would have been anti-dilutive. The net
income (loss) per share amounts for fiscal 1996, 1995 and 1994 have been
retroactively adjusted to reflect the 5% stock dividend declared in fiscal 1995
and for the 5% stock dividend declared in September 1996. For 1994, shares
issuable upon conversion of the 9% convertible subordinated debentures are not
common stock equivalents, are antidilutive and, therefore, are also excluded
from the computation of net income (loss) per share.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
amounts of income and expenses during the reporting period. Actual results could
differ from those estimates.
RECENTLY ISSUED ACCOUNTING STANDARDS
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of". This standard is effective for the Company's financial statements beginning
in the first quarter of fiscal 1997. SFAS No. 121 establishes the accounting for
the impairment of long-lived assets, certain identifiable intangibles and the
excess of cost over net assets acquired, related to those assets to be held and
used in operations, whereby impairment losses are required to be recorded when
indicators of impairment are present and the undiscounted cash flows estimated
to be
F-10
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
RECENTLY ISSUED ACCOUNTING STANDARDS (CONT'D)
generated by those assets are less than the assets carrying amount. SFAS No. 121
also addresses the accounting for long-lived assets and certain identifiable
intangibles that are expected to be disposed of. In the opinion of the Company's
management, it is anticipated that the adoption of SFAS No. 121 will not have a
material effect on the consolidated results of operations or financial condition
of the Company.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which requires adoption of the disclosure provisions in fiscal
1997. The new standard defines a fair value method of accounting for the
issuance of stock options and other equity instruments. Under the fair value
method, compensation cost is measured at the grant date based on the fair value
of the award and is recognized over the service period, which is usually the
vesting period. Pursuant to SFAS No. 123, companies are encouraged, but are not
required, to adopt the fair value method of accounting for employee stock- based
transactions. Companies are also permitted to continue to account for such
transactions under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," but would be required to disclose in a note to the
1997 consolidated financial statements proforma net income and per share amounts
as if the Company had applied the new method of accounting. SFAS No. 123 also
requires increased disclosures for stock-based compensation arrangements. The
Company has not yet determined if it will elect to change to the fair value
method or provide the necessary proforma information, nor has it determined the
effect the new standard will have on its operating and per share results should
it elect to make such change.
F-11
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 2 - SUPPLEMENTAL DISCLOSURE FOR STATEMENT OF CASH FLOWS
Cash paid for interest reconciled to interest expense for the years ended July
31, 1996, 1995 and 1994 is as follows:
1996 1995 1994
---- ---- ----
Cash paid for interest $27,100 $166,400 $165,700
Plus non cash items:
Increase (decrease) in accrued interest
payable. -- (30,000) (51,300)
------- -------- --------
Interest expense $27,100 $136,400 $114,400
======= ======== ========
In the years ended July 31, 1996, 1995 and 1994, the Company paid cash for
income taxes of approximately $1,323,000, $232,000 and $94,000 respectively, and
received refunds of income taxes previously paid of approximately $35,000 in
fiscal 1996 and $27,000 in fiscal 1994.
OTHER NONCASH ITEMS:
During fiscal 1996, 1995 and 1994, the Company acquired property and equipment
in the amount of $ 0, $129,300 and $76,400, respectively, which was financed
through capital lease obligations.
During fiscal 1996, 1995 and 1994, approximately $1,418,000, $1,082,000 and
$282,000, respectively, has been accrued for construction costs, rent and legal
fees related to the New York City leasehold. Interest accretion on the capital
lease obligation for the New York City leasehold was approximately $ 0, $318,000
and $331,000, for fiscal 1996, 1995 and 1994, respectively.
F-12
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 2 - SUPPLEMENTAL DISCLOSURE FOR STATEMENT OF CASH FLOWS (CONT'D)
OTHER NONCASH ITEMS (CONT'D):
During fiscal 1994, Debentures of $262,000 were converted into 50,000 shares of
the Company's Common Stock. On January 13, 1995, the Company paid in full the
outstanding balance of the Debentures.
In fiscal 1994, the Company exchanged approximately $2,600,000 of accrued legal
fees, construction costs and patent costs for approximately 205,000 shares of
the Company's Common Stock. The Company also settled a lawsuit against the
former owners of its subsidiary, Enzo Clinical Labs, Inc., by issuing
approximately 190,000 shares with a market value of approximately $3,000,000
which was recorded against amounts due to former owners of $3,450,000 and the
difference of $450,000 was recorded as a reduction of cost in excess of fair
value of net tangible assets acquired. In fiscal 1995, the Company issued
approximately 286,000 shares of common stock in exchange for approximately
$2,900,000 in legal fees of which approximately $1,456,000 related to legal fees
incurred in fiscal 1995.
NOTE 3 - INVENTORIES
At July 31, 1996 and 1995 inventories consist of:
1996 1995
---- ----
Raw materials $74,000 $ 60,800
Work in process 1,232,000 1,508,200
Finished products 504,500 628,500
------- -------
$1,810,500 $2,197,500
========== ==========
F-13
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 4 - PROPERTY AND EQUIPMENT
At July 31, 1996 and 1995 property and equipment consist of:
1996 1995
---- ----
Laboratory machinery and equipment $1,964,100 $ 1,941,500
Leasehold improvements 2,194,300 2,146,200
Office furniture and equipment 3,639,000 3,422,400
--------- ---------
7,797,400 7,510,100
Accumulated depreciation and amortization 4,690,600 3,893,800
--------- ---------
3,106,800 3,616,300
Building under capital lease and related construction costs, including
capitalized interest of $4,364,700 in 1995 and net of cumulative
writedown to estimated fair market value of
$19,901,000 in 1995 -- 10,275,900
--------- ----------
$3,106,800 $13,892,200
========== ===========
In the fourth quarter of fiscal 1995, management decided that it was not in the
best interests of the Company to continue further renovations on the leasehold
interest since the continuing expenses associated with such renovations were not
deemed justifiable in light of the uncertainty of recoupment of such expenses
and the likelihood of occupany was in question. A decision was made to dispose
of the leasehold interest as is, and an independent appraisal of the leasehold
interest on a liquidation basis indicated that a writedown of the leasehold
interest was required in the amount of $11,400,000 which was recorded in the
fourth quarter of fiscal 1995.
During fiscal 1996, the Company made extensive efforts to find a developer for
the leasehold interest and the Company commenced negotiations with the City of
New York to also assist the Company in identifying a buyer or developer for the
leasehold interest. Simultaneously, the Company commenced negotations with the
City for a full surrender of the leasehold interest back to the City. Based on
the limited interest in the leasehold by any developer, the Company determined
during the fourth quarter of fiscal 1996 that it was in the best interests of
the Company to negotiate a complete and full settlement with the City and
F-14
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
On July 31, 1996, the Company negotiated a settlement with the City of New York
to relieve the Company from any further obligations related to the lease and to
return the building to the City and the Company agreed to pay the City
$2,950,000 in full settlement of all of the City's claims for unpaid taxes and
rent. The Company issued to the City 203,450 shares (213,623 shares after giving
effect to the 5% stock dividend paid in October 1996) of the Company's common
stock in August 1996 in consideration of the settlement amount. These shares
were issued at the fair market value at the date of the Settlement for unpaid
rent and payments in-leau of taxes of $2.95 million. If the City has not
received the net proceeds of $2,950,000 upon the sale of such stock by March 17,
1997, the City shall return the remaining shares not sold, if any, and the
Company shall pay the difference in cash. The Company would receive the net
proceeds in excess of $2,950,000. The excess or deficiency of the net proceeds
received by the Company or paid to the City shall be recorded to additional
paid-in capital. As a result of this settlement with the City, the Company
incurred a charge against earnings in the amount of approximately $7.6 million
in the fourth quarter of fiscal 1996. The components of the $7.6 million charge
included a writedown of the leasehold interest of $6.2 million and for unpaid
payments in-lieu-of taxes and rent on the leasehold of $1.4 million. Of the
settlement of $2.95 million payments in-lieu-of taxes and unpaid rent, $1.55
million was recorded prior to fiscal 1996 and the balance of $1.4 million was
recorded in fiscal 1996.
NOTE 5 - LOAN PAYABLE AND LONG-TERM DEBT
At July 31, 1996 and 1995, long-term debt consists of the following:
1996 1995
---- ----
8.75% loan payable to bank at $3,360
per month through 1998 $81,200 112,900
Less current portion 34,600 31,700
------ ------
Total long-term debt $46,600 $81,200
======= =======
NOTE 6 - LEASE OBLIGATIONS
CAPITAL LEASES
In December 1985, the Company entered into an agreement with the City of New
York to lease, over a fifty-year term, a building located in New York City. In
the fourth quarter of fiscal 1996, the Company negotiated a settlement with the
City of New York to relieve the Company from any further obligations related to
the lease and to return the building to the City (see Note 4).
The Company also leases certain office equipment and computers under capital
leases. The cost and accumulated amortization of assets acquired under
capitalized leases is approximately $259,000 and $144,000 at July 31, 1996 and
$3,529,000 and $94,000 at July 31, 1995, respectively.
F-15
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 6 - LEASE OBLIGATIONS (CONT'D)
OPERATING LEASES (CONT'D)
Minimum annual rentals under capital lease obligations for fiscal years ending
July 31 are as follows:
EQUIPMENT LEASES
1997 $ 37,700
1998 33,900
1999 33,900
2000 8,400
-----
Total of future annual
minimum lease payments 113,900
Less amount representing
interest 18,100
------
Present value of minimum
lease payments $ 95,800
========
OPERATING LEASES
Enzo Clinical Labs, Inc., ("Enzo Clinical Labs"), a wholly-owned subsidiary of
the Company, leases its office and laboratory space under several leases which
expire between September 1, 1994 and November 30, 2004. Certain officers of the
Company own the building which Enzo Clinical Labs uses as its main facility. In
addition to the minimum annual rentals of space, this lease is subject to an
escalation clause. Rent expense under this lease approximated $751,000, $684,000
and $683,000 in fiscal 1996, 1995 and 1994, respectively.
Total consolidated rent expense incurred by the Company during fiscal 1996, 1995
and 1994 was approximately $1,227,000, $1,132,000 and $1,108,000, respectively.
Minimum annual rentals under operating lease commitments for fiscal years ending
July 31 are as follows:
1997 1,053,000
1998 1,129,000
1999 1,092,000
2000 1,094,000
2001 1,071,000
Thereafter 1,406,000
---------
$6,845,000
=========
F-16
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 7 - LITIGATION
ORTHO DIAGNOSTIC SYSTEMS, INC.
On January 1, 1985, the Company entered into a follow-on agreement with Ortho
Diagnostic Systems, Inc. ("Ortho"), a subsidiary of Johnson and Johnson, Inc.
("J&J") pursuant to the 1982 agreement, whereby Ortho agreed to pay the Company
$11,000,000 over a four and one-half year period on a cost recovery basis in
support of research and development projects. Ortho paid $4,500,000 to the
Company under this agreement up to January 1987 at which time Ortho indicated
its intention to suspend future scheduled payments under the agreements pending
resolution of certain matters. At July 31, 1994, the Company had a receivable
from Ortho of approximately $6,500,000. Even though the Company continued to
perform its obligations under the agreements, it provided a total of $6,500,000
in prior years for the potentially uncollectable receivable from Ortho pending
resolution of the disputed items and the outcome of the civil suit filed by the
Company against Ortho and J&J. This allowance for uncollectable receivable of
$6,500,000 was reversed in the fourth quarter of fiscal 1994 due to the
resolution of this matter, as discussed below.
The outside legal counsel was compensated on a contingency basis. During fiscal
1995, the Company issued approximately 110,000 shares in exchange for $1.1
million in accrued legal fees.
On October 19, 1994, the Company executed a settlement agreement with J&J
pursuant to which the Company received $15.0 million in cash, of which $6.5
million related to amounts due under the agreements referred to above, and a
promissory note requiring J&J Ortho to pay a total of $5.0 million a year for
each of the four successive anniversaries of said date. Pursuant to the terms of
the settlement, all of the Company's grants, licenses and intellectual property
have been returned to the Company in totality. These future payments are
recorded at their net present value of $14.1 million at July 31, 1996 in the
accompanying consolidated balance sheet, using a discount rate of 5.25%.
CALGENE, INC.
In March 1993, the Company filed suit in the United States District Court for
the District of Delaware charging patent infringement and acts of unfair
competition against Calgene, Inc. and seeking a declaratory judgment of
invalidity concerning Calgene, Inc.'s plant antisense patent. On February 9,
1994, the Company filed a second suit in the United States District Court for
the District of Delaware charging Calgene with infringement of a second
antisense patent owned by the Company. Calgene filed a counterclaim in the
second
F-17
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 7 - LITIGATION (CONT'D)
CALGENE, INC. (CONT'D)
Delaware action seeking a declaration that a third patent belonging to the
Company is invalid. The two Delaware actions were consolidated and were tried to
the Court in April 1995. In addition, the Company filed suit on March 22, 1994
in the United States District Court for the Western District of Washington
against Calgene and the Fred Hutchinson Cancer Research Center, alleging that
the defendants had conspired to issue a false and misleading press release
regarding a supposed "patent license" from Hutchinson to Calgene, and conspired
to damage the Company's antisense patents by improperly using confidential
information to challenge them in the Patent Office. The Complaint further
charges that Hutchinson is infringing and inducing Calgene to infringe the
Company's antisense patents.
On February 2, 1996, the Delaware Court issued an opinion ruling against Enzo
and in favor of Calgene, finding certain Enzo claims infringed, but the patent,
as a whole not infringed, and finding the claims at issue for lack of
enablement. Calgene's patent was found valid (non-obvious) over the prior art.
On February 29, 1996, the Delaware Court issued an Order withdrawing its
February 2, 1996 Opinion. Enzo intends to appeal from any adverse judgment.
There can be no assurance that the Company will be successful in any of the
foregoing matters or that Calgene, Inc. and/or Hutchinson will not be
successful. However, even if the Company is not successful management does not
believe there will be a significant monetary impact.
NOTE 8 - INCOME TAXES
The tax provision (benefit) is calculated under the provisions in Statement of
Financial Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes".
1996 1995 1994
---- ---- ----
Current
Federal -- $400,000 --
State and local 199,100 881,900 $104,300
Deferred
Federal -- 5,650,000 --
State and local -- 1,799,300 (49,300)
Change in deferred tax asset
valuation reserve related
to net operating losses -- (4,600,000) (3,000,000)
-------- ----------- -----------
Provision (benefit) for income taxes $199,100 $4,131,200 $(2,945,000)
======== ========== ============
F-18
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 8 - INCOME TAXES (CONT'D)
Current income taxes provided for in fiscal 1996 relate primarily to state and
local taxes computed based upon capital.
Current income taxes of approximately $1,300,000 provided for in the fourth
quarter of fiscal 1995 are primarily calculated on the alternative minimum tax
method.
Deferred income taxes arise from temporary differences between the tax basis of
assets and liabilities and their reported amounts in the financial statements.
The components of deferred income taxes are as follows:
1996 1995 1994
---- ---- ----
Deferred tax liability:
Deferred patent costs $(2,037,000) $(2,076,000) $(2,110,000)
Other -- (310,000) (310,000)
----------- --------- ---------
Total deferred tax liabilities (2,037,000) (2,386,000) (2,420,000)
Deferred tax assets:
Writedown of leasehold interest -- 7,573,000 3,390,000
Provision for uncollectable
accounts receivable and
research contract 1,240,000 574,000 490,000
Net operating loss carryforwards 9,543,000 36,000 8,199,000
Alternative minimum tax credits 403,000 600,000 --
Other 422,000 352,000 282,000
------- ------- -------
11,608,000 9,135,000 12,361,000
Valuation allowance for deferred
tax assets (9,571,000) (6,749,000) (7,092,000)
----------- ----------- -----------
Net deferred tax asset (liability) $ 0 $ 0 $2,849,000
=========== =========== ==========
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
asset will be realized. The ultimate realization of the deferred tax asset is
dependent upon the generation of future taxable income. Management considers
scheduled reversals of deferred tax liabilities, projected future taxable income
and tax planning strategies which can be implemented by the Company in making
this assessment. The Company has provided a full valuation allowance for the net
deferred tax asset at July 31, 1996 and 1995. The
F-19
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 8 - INCOME TAXES (CONT'D)
decrease in the valuation allowance for deferred tax assets of $4,084,000 in
fiscal 1994 relates primarily to the expected utilization of net operating loss
carryforwards and deferred tax assets related to the Johnson & Johnson, Inc.
settlement (see Note 7).
The Company has net operating loss carryforwards of approximately $22.8 million
which are due to expire in 2011. The Company also has alternative minimum tax
credits which are due to expire in 2001.
The provision (benefit) for income taxes were at rates different from U.S.
federal statutory rates for the following reasons:
1996 1995 1994
---- ---- ----
Federal statutory rate 34% 34% 34%
Expenses not deductible for income
tax return purposes (2%) 2% 7%
State income taxes, net of federal (2%) 10% 2%
No benefit for operating losses (33%) 44% (41%)
Change in valuation reserve related
to benefits from operating losses -- (48%) (139%)
---- ----- ------
(3%) 42% (137%)
==== === ======
NOTE 9 - STOCK OPTIONS AND WARRANTS
The Company has a nonqualified stock option plan, an incentive stock option plan
and a restricted stock incentive plan and has issued other options and warrants,
as described below. All share information has been adjusted to reflect the 5%
stock dividends declared on September 13, 1996 and June 5, 1995.
NONQUALIFIED STOCK OPTION PLAN
The Company has a nonqualified stock option plan (the "Plan") under which
options for up to 793,800 shares of Common Stock may be issued. No additional
options may be granted under such plan. The exercise price of options granted
under the terms of the Plan will be determined by the Board of Directors.
F-20
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 9 - STOCK OPTIONS AND WARRANTS (CONT'D)
A summary of nonqualified stock option transactions for the three years ended
July 31, 1996 is as follows:
NUMBER
OF SHARES EXERCISE PRICE
--------- --------------
Outstanding - July 31, 1993 168,384 $3.07
Exercised (13,892) $3.07
--------
Outstanding - July 31, 1994 and 1995 154,492 $3.07
Exercised (21,525) $3.07
--------
Outstanding - July 31, 1996 132,967 $3.07
=======
The options granted are generally exercisable at 25% per year after one year and
expire ten years after the date of grant and, at July 31, 1996 all nonqualified
options were exercisable.
INCENTIVE STOCK OPTION PLAN
The Company has an incentive stock option plan ("1983 plan") under which the
Company may grant options for up to 992,250 shares of common stock. No
additional options may be granted under the 1983 plan. The exercise price of
options granted under such plan is equal to or greater than fair market value of
the common stock on the date of grant. The Company has stock option plans ("1993
plan" and "1994 plan") under which the Company may grant options for up to
1,653,750 shares (1993 plan) and for up to 1,047,375 shares (1994 plan) of
common stock. The options granted pursuant to the plans may be either incentive
stock options or nonstatutory options. To date, the Company has only granted
incentive stock
F-21
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 9 - STOCK OPTIONS AND WARRANTS (CONT'D)
options under these plans. A summary of incentive stock option transactions for
the three years ended July 31, 1996 is as follows:
NUMBER
OF SHARES EXERCISE PRICE
--------- --------------
Outstanding - July 31, 1993 1,118,055 $1.36 - 7.03
Exercised (42,557) $1.36 - 4.09
Canceled (140,079) $1.36 - 7.03
Issued 758,582 $8.96 - 14.52
-------
Outstanding - July 31, 1994 1,694,001 $1.36 - 14.52
Exercised (115,938) $1.36 - 7.03
Canceled (2,756) $3.07
Issued 298,778 $8.73 - 10.31
-------
Outstanding - July 31, 1995 1,874,085 $1.36 - 14.52
Exercised (117,210) $1.36 - 9.07
Canceled (67,961) $1.36 - 9.07
Issued 357,525 $13.57 - 18.81
-------
Outstanding - July 31, 1996 2,046,439 $1.36 - 18.81
=========
Incentive stock options generally become exercisable at 25% per year after one
year and expire ten years after the date of grant. At July 31, 1996, under the
incentive stock option plans 1,049,837 options were exercisable.
RESTRICTED STOCK INCENTIVE PLAN
The Company has a restricted stock incentive plan whereby the Company may award
up to 220,500 shares of its common stock. Under the terms of the plan, any
shares issued are restricted in regard to sales and transfers for a period of
five years after award. Such restrictions begin to expire at 25% per year after
the second year of ownership. As of July 31, 1996, the Company has not awarded
any shares of common stock under this plan.
F-22
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 9 - STOCK OPTIONS AND WARRANTS (CONT'D)
OTHER OPTIONS AND WARRANTS
In fiscal 1982, the Company issued 33,736 warrants in connection with the sale
of stock. These warrants were exercisable at $8.31 per share through June 1996
of which 16,868 warrants were exercised in fiscal 1994 and in fiscal 1996. As
part of the restructuring of the Debenture in November 1991, the Company issued
additional warrants to purchase 283,343 shares of common stock with an exercise
price of $1.81 per share expiring ten years after the date of issue. In fiscal
1996, 1995 and 1994, 7,140, 4410 and 92,059 of these warrants were exercised,
respectively. In connection with the issuance of newly issued shares of the
Company's Common Stock to a private investor in fiscal 1994, the Company issued
warrants to purchase 275,625 shares of common stock with exercise prices ranging
from $7.26 to $10.89 per share. In fiscal 1996, 1995 and 1994, 121,275, 110,250
and 44,100 of these warrants were exercised, respectively. In fiscal 1996, the
Company issued warrants to purchase 85,575 shares of common stock with an
exercise price ranging from $9.51 to $16.67 per share which expire five years
after the date of issue. In fiscal 1996, 9,975 of these warrants were exercised
and 12,075 were cancelled.
* * * * *
As of July 31, 1996, the Company has reserved 4,334,058 shares under the
arrangements described above.
F-23
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 10 - COMMITMENTS
The Company has an exclusive licensing agreement to an invention covered by
licensed patents. Under this agreement, the Company is required to make certain
minimum royalty payments of $200,000 per year through the life of the patents.
F-24
<PAGE>
<TABLE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
Note 11 - Lines of business
The Company operates two lines of business: (i) conducting research and
development activity and selling products derived from such research and (ii)
operating clinical reference laboratories which provide diagnostic services to
the health care community. The following financial information (in thousands)
with respect to such lines of business (industry segments) is based on the
guidelines contained in Statement of Financial Accounting Standards No. 14.
AT JULY 31, 1996 AND FOR AT JULY 31, 1995 AND FOR
THE YEAR THEN ENDED THE YEAR THEN ENDED
------------------- -------------------
RESEARCH CLINICAL RESEARCH CLINICAL
AND REFERENCE AND REFERENCE
DEVELOPMENT LABORITORIES TOTAL DEVELOPMENT LABORITORIES TOTAL
----------- ------------ ----- ----------- ------------ -----
<C> <C> <C> <C> <C> <C> <C>
Operating revenues:
Sales and diagnostic services $12,946 $21,544 $34,490 $9,548 $22,152 $31,700
======= ======= ======= ====== ======= =======
Operating profit (loss) $449 $124 $573 $479 $2,146 $2,625
==== ==== ==== ======
Investment income 1,667 1,077
Corporate expenses (2,135) (4,413)
Writedown of leasehold interest
and related costs (7,613) (11,400)
Recovery of research contract
receivable -- --
Litigation settlement, net of
legal fees -- 21,860
------ ------
Income (loss) before provision
(benefit) for taxes on income
and extraordinary items $(7,508) $9,749
======= ======
Identifiable assets $22,309 $22,731 $45,040 $27,196 $23,867 (a) $51,063
======= ======= ======= =======
Corporate assets, principally cash and cash equivalents, short-term investments,
deferred financing costs, building under capital leases
and funds held in escrow 17,798 21,395
------ ------
$62,838 $72,458
======= =======
Depreciation and amortization $576 $1,236 $1,812 $514 $1,202 $1,716
==== ====== ====== ==== ====== ======
Property and equipment
expenditures $45 $388 $433 $41 $989 $1,030
=== ==== === ====
Corporate property and
equipment expenditures 266 132
--- ---
$699 $1,162
==== ======
F-25
<PAGE>
AT JULY 31, 1994 AND FOR
THE YEAR THEN ENDED
-------------------
RESEARCH CLINICAL
AND REFERENCE
DEVELOPMENT LABORITORIES TOTAL
----------- ------------ -----
<S> <C> <C> <C>
Operating revenues:
Sales and diagnostic services $5,183 $17,616 $22,799
====== ======= =======
Operating profit (loss) ($493) ($659) ($1,152)
====== =======
Investment income 202
Corporate expenses (2,794)
Writedown of leasehold interest
and related costs (600)
Recovery of research contract
receivable 6,500
Litigation settlement, net of
legal fees --
------
Income (loss) before provision
(benefit) for taxes on income
and extraordinary items $2,156
======
Identifiable assets $17,261 $20,393 (a) $37,654
======= =======
Corporate assets, principally cash and cash equivalents, short-term investments,
deferred financing costs, building under capital leases
and funds held in escrow 27,389
------
$65,043
=======
Depreciation and amortization $484 $1,061 $1,545
==== ====== ======
Property and equipment
expenditures $16 $839 $855
=== ====
Corporate property and
equipment expenditures 930
----
$1,785
======
</TABLE>
(a) Includes cost in excess of fair value of net tangible assets acquired of
$9,675 in 1996, $10,046 in 1995, and $10,391 in 1994.
F-25 (cont.)
<PAGE>
ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996, 1995 and 1994
NOTE 12 - EMPLOYEE BENEFIT PLAN
The Company has a qualified Salary Reduction Profit Sharing Plan (the "Plan")
for eligible employees under Section 401(k) of the Internal Revenue Code. The
Plan provides for voluntary employee contributions through salary reduction and
voluntary employer contributions at the discretion of the Company. For the years
ended July 31, 1996, 1995 and 1994, the Company has authorized employer
contributions of 25% of the employees' contribution up to 6% of the employees'
compensation in Enzo Biochem, Inc. common stock. The 401(k) employer
contributions expense converted into the Company's common stock was $145,800 in
fiscal year 1996. The 401(k) employer contribution expense in 1995 and 1994 was
not material.
NOTE 13 - SUPPLEMENTARY EARNINGS PER SHARE
The Company converted $262,000 in principal of the Company's outstanding
Debentures into 52,500 shares of Common Stock in 1994. Pro forma earnings per
share information as if the conversion had occurred at the beginning of the
period would be as follows:
1994
----
Income before extraordinary items $.22
Extraordinary items .01
-----
Net income $.23
====
Weighted average common shares 22,632,800
==========
NOTE 14 - STOCK DIVIDEND
On June 5, 1995, the Company declared a 5% stock dividend paid July 31, 1995 to
shareholders of record as of July 3, 1995. The stock price on the date of
declaration was $10.125. The dividend has been charged against accumulated
deficit to the extent of net income in fiscal 1995. On September 13, 1996, the
Company declared another 5% stock dividend payable on October 29, 1996 to
shareholders of record as of October 8, 1996.
F-26
<PAGE>
ENZO BIOCHEM, INC.
SCHEDULE II - VALUATION
AND QUALIFYING ACCOUNTS
YEARS ENDED JULY 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
ADDITIONS
---------
BALANCE AT CHARGED CHARGED
BEGINNING TO COSTS TO OTHER (ADDITIONS) BALANCE AT
DESCRIPTION OF PERIOD AND EXPENSES ACCOUNTS DEDUCTIONS END OF PERIOD
- ----------- ---------- ------------ -------- ----------- -------------
<S> <C> <C> <C> <C> <C>
1996
Allowance for doubtful accounts
receivable $2,127,000 $6,702,900 - $3,431,900(1) $5,398,000
Allowance for deferred tax
valuation $6,749,000 - - $(2,822,000) $9,571,000
1995
Allowance for doubtful accounts
receivable $1,956,000 $3,845,600 - $3,674,600(1) $2,127,000
Allowance for deferred tax valuation $7,092,000 - - $343,000(1) $6,749,000
1994
Allowance for doubtful accounts
receivables $2,016,000 $3,504,300 - $3,564,300(1) $1,956,000
Allowance for deferred tax valuation $11,176,000 - - $4,084,000 $7,092,000
Allowance for doubtful research
contract receivable $6,500,000 - - $6,500,000(2) $ -
</TABLE>
(1) Write-off of uncollectable accounts receivable.
(2) Recovery of research contract receivable.
F-27
<PAGE>
EXHIBIT INDEX
Exhibit
No Description
------- -----------
10(y) Agreement with Corange International Limited (Boehringer Mannheim)
effective April 1994. (1)
10(z) Agreement with Amersham International effective February 1995. (1)
10(aa) Agreement with Dako A/S effective May 1995. (1)
10(bb) Agreement with Baxter Healthcare Corporation (VWR Scientific
Products) effective September 1995. (1)
10(cc) Agreement with Yale University and amendments thereto. (1)
10(dd) Agreement with The Research Foundation of the State of New York
effective May 1987. (1)
23 Consent of Independent Auditors filed herewith.
- ----------
(1) These exhibits are subject to a confidential treatment request pursuant to
Securities Exchange Act Rule 24b-2
<PAGE>
EXHIBIT 10(y)
DISTRIBUTION AND SUPPLY AGREEMENT
BETWEEN ENZO BIOCHEM, INC. AND CORANGE INTERNATIONAL LIMITED
April 25, 1994
This agreement is entered into effective this 25th day of April, 1994, by
and among Enzo Biochem, Inc. and Enzo Diagnostics, Inc., a wholly-owned
subsidiary of Enzo Biochem, Inc. (collectively referred to hereafter as "ENZO"),
New York corporations having their principal places of business at 60 Executive
Boulevard, Farmingdale, NY 11735, U.S.A., and Corange International Limited, a
Bermuda corporation having its principal place of business at 22 Church Street,
Hamilton, Bermuda HM HX ("CIL").
WHEREAS, ENZO owns or has rights to certain PATENTS listed in APPENDIX A
("PATENTS");
WHEREAS, CIL wishes to market and sell certain PRODUCTS ("PRODUCT(S)"),
covered by claims of PATENTS, into the research products market worldwide;
WHEREAS, ENZO wishes CIL to market and sell certain PRODUCTS, covered by
claims of PATENTS, into the research products market worldwide;
WHEREAS, ENZO manufactures or will manufacture certain PRODUCTS;
WHEREAS, ENZO desires to have CIL manufacture for ENZO certain PRODUCTS
within the scope of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, the parties hereto agree as follows:
I. Definitions
AFFILIATE means an entity controlled by or under common control with
another entity within the Corange Limited group of companies. For purposes of
this Agreement, control shall mean the ownership of a majority of the common
stock or the majority of the voting equity interest. Unless the context
otherwise requires, "CIL" shall be deemed to refer to Corange International
Limited and its AFFILIATES.
<PAGE>
GROUP A PRODUCT means a product that is a nucleotide, oligonucleotide or
polynucleotide with a signal generating moiety, the manufacture, use or sale of
which is covered by claims of a PATENT and that is not a group A1 product. The
current GROUP A PRODUCTS are listed on EXHIBIT A to this Agreement.
GROUP A1 PRODUCT means a product that is a nucleotide, oligonucleotide or
polynucleotide with a signal generating moiety, the manufacture, use or sale of
which is covered by claims of a PATENT and that requires additional complex
proprietary manufacturing know-how CIL. The current GROUP A1 PRODUCTS are listed
on EXHIBIT A1 to this Agreement.
GROUP C PRODUCT means a product (i) is not a GROUP A PRODUCT or a GROUP A1
PRODUCT, the use of which is covered by claims of a PATENT. The current GROUP C
PRODUCTS are listed on EXHIBIT C to this Agreement.
GROUP D PRODUCT means a product that may or may not infringe claims of a
patent which the parties have agreed that CIL shall manufacture, or have
manufactured, and sell.
GROUP E1 PRODUCT means a KIT manufactured by ENZO. The current GROUP E1
PRODUCTS are listed on EXHIBIT E1 to this Agreement.
GROUP E2 PRODUCT means a product currently manufactured by ENZO that is not
part of a KIT. The current GROUP E2 PRODUCTS are listed on EXHIBIT E2 to this
Agreement.
GROUP K PRODUCT means a KIT sold by CIL that contains RAW MATERIALS. The
current GROUP K PRODUCTS are listed on EXHIBIT K to this Agreement.
GROUP K1 PRODUCT means (i) a KIT sold by CIL that does not contain RAW
MATERIALS but contains a component that, if sold individually, would be a GROUP
K1 PRODUCT, or (ii) a component requiring manufacturing processes in addition to
labeling on the base, sugar or phosphate. The current GROUP K1 PRODUCTS are
listed on EXHIBIT K1 to this Agreement.
2
<PAGE>
ENZ-1 DIV 3 CLAIMS means the claims contained in the U.S. patent
application USSN 07/130,170, filed December 7, 1987, as allowed by the United
States Patent and Trademark Office in the notice of allowance dated November,
1993, or the equivalent claims (or equivalent composition claims) in a foreign
patent.
ENZ-7 COMPOSITION CLAIMS means composition or apparatus claims contained in
U.S. Patent No. 4,994,373 (USSN 385986 filed July 20, 1989) or any patent
issuing from any parent, continuation, reissue or division of such patent, or
any foreign counterpart thereto or comparable claims in any PATENT, that, in
mutual agreement between CIL and ENZO or through the final judgment of a court
of law, are infringed by a product sold by CIL.
ENZO SELLING PRICE means the higher of (i) the actual selling price of a
GROUP A1, C, K OR K1 product less the usual trade discounts actually allowed,
and credits actually given for returns allowances or trades; or *.
PATENTS means patents throughout the world owned or licensed by ENZO.
Issued PATENTS are listed in APPENDIX A to this Agreement, which APPENDIX is
subject to periodic supplementation upon the issuance of PATENTS.
PRODUCTS means collectively all GROUP A PRODUCTS, GROUP A1 PRODUCTS, GROUP
C PRODUCTS, GROUP D PRODUCTS, GROUP E1 PRODUCTS, GROUP E2 PRODUCTS, GROUP K
PRODUCTS, and GROUP K1 PRODUCTS.
FORCE MAJEURE means a cause beyond the control of a party, including but
not limited to acts of God, acts, laws or regulations of any government, civil
disorder, strikes, destruction of production facilities or material by fire,
water, earthquake or storm, epidemics and failures of public utilities or common
carriers.
KIT means a PRODUCT containing two or more vials of reagents or other
components that are optimized to allow the user to perform a function.
RAW MATERIALS means a GROUP A PRODUCT or a material that is included as a
component of a KIT for which ENZO has PATENTS.
MANUFACTURING TRANSITION PERIOD is defined in Section VII.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
3
<PAGE>
SELLING PRICE means the actual selling price of a PRODUCT to a CIL customer
that is the end user of the PRODUCT, less the usual trade discounts actually
allowed, and credits actually given for returns, allowances or trades.
II. Sale Of PRODUCTS.
ENZO hereby appoints, and CIL accepts appointment, subject to the
conditions set forth herein, as a nonexclusive distributor for the distribution
and sale of PRODUCTS to the research market subject to the conditions of this
Agreement.
A. GROUP A PRODUCTS.
1. Manufacture and Sale. ENZO or its designee shall manufacture, sell
and deliver to CIL and CIL shall purchase exclusively from ENZO (after the
MANUFACTURING TRANSITION PERIOD with respect to each GROUP A PRODUCT) such
quantities of the GROUP A PRODUCTS as CIL may order in accordance with this
Agreement. CIL shall have the right to sell GROUP A PRODUCTS worldwide within
the scope of this Agreement.
2. Packaging. Each of the GROUP A PRODUCTS shall be packaged in
CIL-designated packaging and labeling; provided, however, that such packaging
shall acknowledge ENZO as provided in this Agreement and that such packaging
shall not be changed by CIL to become unduly burdensome to ENZO.
3. Specifications. Each GROUP A PRODUCT shall conform to the
specifications for it agreed to by ENZO and by CIL.
4. Changes to Exhibit A. CIL may request that ENZO add to EXHIBIT A
and manufacture and sell to CIL additional products that are nucleotides,
oligonucleotides or polynucleotides with a signal generating moiety, which CIL
believes to be GROUP A PRODUCTS, the manufacture, use or sale of which are
covered by PATENTS, provided that CIL may not add any additional product for any
period during which ENZO has a prior exclusive commitment to a third party. If
ENZO desires to manufacture such additional products, then such additional
products shall be added to EXHIBIT A and the parties shall immediately enter
into good faith negotiations on specifications and price. If ENZO does not
desire to manufacture such additional products, such additional products shall
be added to EXHIBIT A1 for manufacture by or for CIL under the terms of this
Agreement.
4
<PAGE>
ENZO shall have the right at any time, upon its representation to CIL that
it desires to commence manufacture and supply of such additional products, to
transfer such additional products from the status of GROUP A1 PRODUCTS to GROUP
A PRODUCTS.
B. GROUP A1 PRODUCTS.
1. Manufacture and Sale. ENZO shall engage CIL to manufacture GROUP A1
PRODUCTS in accordance with ENZO's specifications. CIL shall have the right to
sell GROUP A1 PRODUCTS worldwide within the scope of this Agreement.
2. Changes to Exhibit A1. CIL may add to EXHIBIT A1 additional products
that fall within the definition of GROUP A1 PRODUCTS by giving ENZO notice to
that effect. In the event CIL gives notice to ENZO of an additional product to
be included as a GROUP A1 PRODUCT, and ENZO proves by its laboratory and other
documentary evidence, that it has been working on a project within the last six
(6) months to develop commercially the same PRODUCT and added to EXHIBIT A.
C. GROUP C PRODUCTS.
1. Manufacture and Sale. ENZO shall engage CIL to manufacture GROUP C
PRODUCTS. CIL shall have the right to sell GROUP C PRODUCTS worldwide within the
scope of this Agreement.
2. Changes to Exhibit C. CIL may add additional products to EXHIBIT C
by giving ENZO notice to that effect.
D. GROUP D PRODUCTS.
1. Manufacture and Sale. CIL shall have the right to manufacture, have
manufactured, and sell GROUP D PRODUCTS worldwide.
2. Changes to Exhibit D. The parties may mutually consent to include
additional products as GROUP D PRODUCTS, which consent shall not be unreasonably
withheld.
3. No Acknowledgement. The foregoing does not constitute an
acknowledgement by CIL that any agreement or license from ENZO is necessary in
order for CIL to sell or CIL's customers to use GROUP D PRODUCTS.
5
<PAGE>
E. GROUP K PRODUCTS.
1. Manufacture and Sale of KITS. ENZO shall engage CIL to manufacture
(except for RAW MATERIALS, which shall be manufactured by ENZO subject to the
terms of this Agreement) GROUP K PRODUCTS in accordance with ENZO's
specifications. CIL shall have the right to sell GROUP K PRODUCTS worldwide
within the scope of this Agreement.
2. Supply of RAW MATERIALS. ENZO shall supply to CIL and CIL shall
purchase exclusively from ENZO (after the MANUFACTURING TRANSITION PERIOD) such
quantities of the RAW MATERIALS as CIL may order in accordance with this
Agreement.
3. RAW MATERIAL Specifications. RAW MATERIALS shall conform to the
specifications agreed to by ENZO and by CIL.
4. Changes Exhibit K. CIL may add additional products to EXHIBIT K by
giving ENZO notice to that effect, provided that CIL may not add any additional
product for any period during which ENZO has a prior exclusive commitment to a
third party. ENZO shall use its best efforts to manufacture and sell RAW
MATERIALS for such additional GROUP K products to CIL. Until such time as ENZO
elects to scale up manufacture of such RAW MATERIAL, ENZO shall request that CIL
manufacture the RAW MATERIALS for such additional GROUP K PRODUCTS.
F. GROUP K1 PRODUCTS.
1. Manufacture and Sale of KITS. ENZO shall engage CIL to manufacture,
or have manufactured, GROUP K1 PRODUCTS worldwide within the scope of this
Agreement. CIL shall have the right to sell GROUP K1 PRODUCTS worldwide within
the scope of this Agreement.
2. Changes to Exhibit K1. CIL may add to EXHIBIT K1 additional
products that fall within the definition of GROUP K1 PRODUCTS by giving ENZO
notice to that effect.
G. GROUP E1 PRODUCTS.
1. Manufacture and Sale. ENZO shall manufacture, sell and deliver to
CIL, and CIL shall purchase exclusively from ENZO such quantities of the GROUP
E1 PRODUCTS as CIL may order in accordance with this Agreement. CIL shall have
the right to sell GROUP E1 PRODUCTS worldwide within the scope of this
Agreement.
2. Packaging. Each of the GROUP E1 PRODUCTS shall be packaged in
CIL-designated packaging and labeling; provided, however, that such packaging
shall acknowledge ENZO as provided in this Agreement and that such packaging
shall not be unduly burdensome to ENZO.
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<PAGE>
3. Specifications. Each GROUP E1 PRODUCT shall conform to the
specifications for it agreed to by ENZO and by CIL.
4. Changes to EXHIBIT E1. CIL may request from time to time that ENZO
add to EXHIBIT E1. Upon acceptance, ENZO shall use its best efforts to
manufacture and sell such products to CIL. ENZO shall inform CIL, under the
terms of this Agreement, of any changes in its product offering that may be
added to EXHIBIT E1.
H. GROUP E2 PRODUCTS.
1. Manufacture and Sale of KITS. ENZO shall manufacture, sell and
deliver to CIL, and CIL shall purchase exclusively from ENZO such quantities of
the GROUP E2 PRODUCTS as CIL may order in accordance with this Agreement. CIL
shall have the right to sell GROUP E2 PRODUCTS worldwide within the scope of
this Agreement.
2. Packaging. Each of the GROUP E2 PRODUCTS shall be packaged in
CIL-designated packaging and labeling; provided, however, that such packaging
shall acknowledge ENZO as provided in this Agreement and that such packaging
shall not be unduly burdensome to ENZO.
3. Specifications. Each GROUP E2 PRODUCT shall conform to the product
specifications agreed upon by ENZO and CIL.
4. Changes to EXHIBIT E2. CIL may request from time to time that ENZO
add to EXHIBIT E2. Upon acceptance, ENZO shall use its best efforts to
manufacture and sell such products to CIL. ENZO shall inform CIL, under the
terms of this Agreement, of any changes in its product offering that may be
added to EXHIBIT E2.
III. Sale of GROUP A1, C, K and K1 PRODUCTS BY ENZO.
CIL appoints, and ENZO accepts appointment, subject to the conditions set
forth herein, as a non-exclusive distributor for the worldwide distribution and
sale of GROUP A1, C, K, and K1 PRODUCTS, subject to the following conditions:
A. SUPPLY ARRANGEMENT.
ENZO shall purchase its requirements for GROUP A1, C, K and K1
PRODUCTS from CIL. Such supply arrangement shall
7
<PAGE>
be on an exclusive basis worldwide. If, at any time after the first anniversary
of the issuance of a United States patent to CIL covering digoxigenen labeled
nucleotides, oligonucleotides or polynucleotides (a "dig patent"), and during
the term of this Agreement, such dig patent is or appears to be infringed by a
third party in connection with the sale of a product in competition with the
PRODUCTS described herein, the party having knowledge thereof shall notify the
other and the parties shall consult to consider what, if any, action should be
taken. The decision regarding institution of proceedings to abate the
infringement shall be at CIL's discretion, and in the event CIL elects to
initiate legal proceedings, ENZO shall give CIL all reasonable assistance in
such proceedings. In the event CIL shall elect not to institute infringement
proceedings, and if ENZO can show, by market research performed by a researcher
mutually acceptable to both parties, that infringing sales exceed 20% of the
market for a particular PRODUCT, the payment to CIL for such PRODUCT pursuant to
this Agreement shall be reduced by 25% until CIL commences legal action against
such infringer of settlement has been reached between such infringer and CIL.
The foregoing sentence does not constitute a validation, endorsement or belief
(express or implied) on the part of ENZO in the validity of any CIL patent
claims. PRODUCT specifications, etc. shall be identical in all respects to
PRODUCT distributed by CIL. Labeling of any such PRODUCTS shall not include any
reference to CIL except as may be required by law.
B. SALE TO END USERS.
ENZO shall sell PRODUCT exclusively to end users, and not for
distribution or resale.
C. PAYMENT TO CIL.
In consideration of the right to distribute GROUP A1, C, K AND K1
PRODUCTS, ENZO will pay CIL:
1. For all GROUP A1 PRODUCTS sold by ENZO to end users, ENZO will pay
CIL an amount equal to * of the ENZO SELLING PRICE of such GROUP A1 PRODUCTS.
Notwithstanding the foregoing, ENZO will pay CIL an amount equal to * of the
ENZO SELLING PRICE of any such GROUP A1 PRODUCTS sold in any country where a dig
patent has not issued
2. For all GROUP C PRODUCTS sold by ENZO to end users, ENZO will pay
CIL an amount equal to * of the ENZO SELLING PRICE of such GROUP C PRODUCTS.
Notwithstanding the foregoing, ENZO will pay CIL an amount equal to *% of the
ENZO SELLING PRICE of any such GROUP C PRODUCTS sold in any country where a dig
patent has not issued
3. For all GROUP K PRODUCTS sold by ENZO to end users, ENZO will pay
CIL an amount equal to * of the ENZO SELLING PRICE of such GROUP K PRODUCTS.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
8
<PAGE>
4. For all GROUP K1 PRODUCTS sold by ENZO to end users, ENZO will pay
CIL an amount equal to * of the ENZO SELLING PRICE of such GROUP K1 PRODUCTS.
Notwithstanding the foregoing, ENZO will pay CIL an amount equal to *% of the
ENZO SELLING PRICE of any such GROUP K1 PRODUCTS sold in any country where a dig
patent has not issued.
D. Shipping Terms. All PRODUCTS ordered by ENZO for sale on its own
account shall be shipped by CIL pursuant to ENZO's written instructions. FOP
Penzberg, Germany.
E. Warranty. CIL warrants that the PRODUCTS sold to ENZO for sale on its
own account shall meet the specifications agreed upon by the parties. CIL's sole
obligation under this warranty is to promptly replace the PRODUCTS without cost
or expense therefor to ENZO. THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER
WARRANTIES OR LIABILITIES, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
F. Miscellaneous Terms. The provisions of Section V, Paragraphs A through
D, shall be applied to ENZO's purchase of PRODUCTS from CIL in the same fashion
as such provisions apply to CIL's purchases from ENZO.
IV. Price to CIL
A. GROUP A PRODUCTS:
1. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Not Issued. For all GROUP A PRODUCTS manufactured by ENZO and sold
by CIL in any country where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have
Not Issued, ENZO's price to CIL shall be an amount equal to * of the SELLING
PRICE of such GROUP, A PRODUCTS.
2. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. For all GROUP A PRODUCTS manufactured by ENZO and sold by
CIL in any country where the ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have
Issued, ENZO's supply price to CIL shall be an amount equal to * of the SELLING
PRICE of such GROUP A PRODUCTS.
3. GROUP A PRODUCTS Manufactured By CIL. For all GROUP A PRODUCTS
manufactured for ENZO by CIL during the MANUFACTURING TRANSITION PERIOD pursuant
to Section VII B, C, and D of this Agreement, ENZO's supply price to CIL for
such GROUP A PRODUCTS shall be an amount equal to (i) *% of the SELLING PRICE of
GROUP A PRODUCTS sold by CIL in any country where the ENZ 1 DIV 3 CLAIMS or ENZ
7 COMPOSITION CLAIMS have not issued, plus CIL's contract supply price for such
PRODUCTS to ENZO (ii) *% of the SELLING PRICE of GROUP A PRODUCTS which are
manufactured or sold by CIL in any country where the ENZ 1 DIV 3 CLAIMS or ENZ 7
COMPOSITION CLAIMS have issued, plus CIL's contract supply price for such
PRODUCTS to ENZO and (iii) *% of the SELLING PRICE of GROUP A PRODUCTS
worldwide, plus CIL's contract supply price for such PRODUCTS to ENZO, at such
time as the ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS have issued in both
Europe and the United States.
*.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
9
<PAGE>
B. GROUP A1 PRODUCTS:
1. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Not Issued. For all GROUP A1 PRODUCTS sold by CIL in any country
Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have Not Issued in such
country, ENZO's supply price to CIL shall be an amount equal to * of the SELLING
PRICE of such GROUP A1 PRODUCTS, plus CIL's contract supply price for such
PRODUCT TO ENZO.
2. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. For all GROUP A1 PRODUCTS sold by CIL in any country ENZ 1
DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have Issued, ENZO's supply price to CIL
shall be an amount equal to * of the SELLING PRICE of such GROUP A1 PRODUCTS,
plus CIL's contract supply price for such PRODUCTS TO ENZO.
3. Sale In Countries When ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. At such time as ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS are issued both in the United States and Europe, ENZO's supply price for
all GROUP A1 PRODUCTS sold by CIL shall be an amount equal to * of the SELLING
PRICE of such GROUP A1 PRODUCTS, worldwide.
C. GROUP C PRODUCTS:
1. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Not Issued. For all GROUP C PRODUCTS sold by CIL in any country
where the ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have Not Issued, ENZO's
supply price of such GROUP C PRODUCTS, shall be an amount equal to *% of the
SELLING PRICE of such GROUP C PRODUCTS, plus CIL'S contract supply price for
such PRODUCTS to ENZO, provided, however, that ENZO shall rebate to CIL as a
discount * paid pursuant to Section IV, C, 1 .
2. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. For all GROUP C PRODUCTS sold by CIL in any country where
the ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have Issued, ENZO's supply
price to CIL shall be an amount equal to * of the SELLING PRICE of such GROUP C
PRODUCTS, plus CIL's contract supply price for such PRODUCT TO ENZO.
3. Sale In Countries When ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. At such time as ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS are issued both in the United States and Europe, ENZO's supply price for
all GROUP C PRODUCTS sold by CIL shall be an amount equal to * of the SELLING
PRICE of such GROUP C PRODUCTS worldwide, plus CIL's contract supply price for
such PRODUCT TO ENZO.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
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<PAGE>
D. GROUP D PRODUCTS:
1. CIL shall not owe ENZO any amounts on sales of GROUP D PRODUCTS.
2. Nothing contained in this Section IV D, shall be construed as a
waiver of any rights that ENZO may have against any third party with regard to
its PATENTS. In the event ENZO enters into any agreement with any supplier of a
GROUP D PRODUCT, ENZO will rebate to CIL any monies or value received from that
supplier resulting from such sales of GROUP D PRODUCT to CIL.
E. GROUP K PRODUCTS:
1. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Not Issued. For all GROUP K PRODUCTS which are sold by CIL in any
country where the ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have Not
Issued, ENZO's supply price to CIL for such GROUP K PRODUCTS shall be an amount
equal to * of the SELLING PRICE of such GROUP K PRODUCTS, plus CIL's contract
supply prices for such products to ENZO.
2. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. For all GROUP K PRODUCTS, which are sold by CIL in any
country where the ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have Issued,
ENZO's supply price to CIL shall be an amount equal to * of the SELLING PRICE of
such GROUP K PRODUCTS, plus CIL's contract supply prices for such products to
ENZO
3. Sale In Countries When ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. At such time as ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS are issued both in the United States and Europe, ENZO's supply price for
all GROUP K PRODUCTS sold by CIL shall be an amount equal to * of the SELLING
PRICE of such GROUP K PRODUCTS worldwide, plus CIL's contract supply prices for
such products to ENZO.
F. GROUP K1 PRODUCTS:
1. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Not Issued. For all GROUP K1 PRODUCTS which are sold by CIL in any
country where the ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have Not
Issued, ENZO's supply price to CIL for such GROUP K1 PRODUCTS shall be an amount
equal to * of the SELLING PRICE of such GROUP K1 PRODUCTS, plus CIL's contract
supply prices for such products to ENZO.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
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2. Sale In Countries Where ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. For all GROUP K1 PRODUCTS, which are sold by CIL in any
country where the ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION CLAIMS Have Issued,
ENZO's supply price to CIL shall be an amount equal to * of the SELLING PRICE of
such GROUP K1 PRODUCTS, plus CIL's contract supply price for such products to
ENZO.
3. Sale In Countries When ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS Have Issued. At such time as ENZ 1 DIV 3 CLAIMS or ENZ 7 COMPOSITION
CLAIMS are issued both in the United States and Europe, ENZO's supply price for
all GROUP K1 PRODUCTS sold by CIL shall be an amount equal to * of the SELLING
PRICE of such GROUP K1 PRODUCTS worldwide, plus CIL's contract supply price for
such products to ENZO.
G. GROUP E1 PRODUCTS.
1. For GROUP E1 PRODUCTS, ENZO's supply price to CIL shall be an
amount equal to * of the SELLING PRICE of such products.
H. GROUP * PRODUCTS.
For GROUP E2 PRODUCTS, ENZO's supply price to CIL shall be an amount equal
to * of the SELLING PRICE of such products.
I. Manufacturing, Use and Sale of Products Prior to This Agreement.
CIL shall pay to ENZO the amount of * (U.S. dollars) for manufacture, use
and sale, by CIL and CIL customers, of all PRODUCTS that have claims that would
be infringed by any PATENTS, wherein the manufacture, use or sale occurred prior
to this Agreement. This payment of * made by CIL to ENZO shall constitute full
payment for manufacture, use and sale of all PRODUCTS manufactured, used or sold
by CIL or CIL customers prior to this Agreement. This payment of * shall also
release CIL and customers of CIL of any liability for the manufacture, use, and
sale of any PRODUCTS manufactured, used or sold prior to this Agreement.
J. Method for Determining and Making Payment.
CIL shall pay ENZO according to the method set forth on Appendix B to
this Agreement. Appendix B describes the method for estimating Worldwide Average
Unit Prices based upon Worldwide Mannheim. CIL agrees to permit its books and
records to be examined by ENZO from time to time to the extent necessary, but
not more often than twice per year to verify receipts. Such examination is to
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
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<PAGE>
be made by ENZO, at ENZO's expense, except in the event that the results of the
audit reveal a discrepancy in ENZO's favor of five (5%) or more, then the audit
fees shall be paid by CIL.
K. *.
V. Forecasts and Purchase Orders
A. Forecasts. During the mid-month of each calendar quarter after the
effective date of this Agreement, CIL shall provide to ENZO a non-binding
forecast covering its estimated requirements for GROUP A PRODUCTS, RAW
MATERIALS, GROUP E1 PRODUCTS, GROUP E2 PRODUCTS and other material manufactured
by ENZO under this Agreement for the succeeding two (2) calendar quarters. Such
forecast shall be made for planning purposes only and is not a purchase
commitment.
B. Purchase Orders. Purchase orders will be issued to ENZO by CIL at least
sixty (60) days in advance of the requested delivery of such products. Each
purchase order will indicate specific delivery and/or shipping requirements.
ENZO shall meet such requirements provided that the quantities of products
ordered are within 130% of the forecast for such quarter. If a purchase order is
for a quantity in excess of 130% of the forecast amount for such quarter, the
parties agree to negotiate in good faith to agree upon delivery and/or shipping
requirements that are reasonable under the circumstances.
C. Cancellation of Purchase Orders. Purchase orders may be cancelled by CIL
no later than fifteen (15) after issuance. If CIL desires to cancel an order
later than fifteen (15) after the issuance of such purchase order, the parties
agree to negotiate in good faith to determine a reasonable resolution of such
order. In the event CIL cancels a purchase order to ENZO under this paragraph,
CIL will reimburse ENZO for materials specifically purchased to fill such order,
as well as manufacturing costs directly attributable to such fulfillment,
incurred prior to the receipt of notice of cancellation.
D. Conflicting Purchase Order or Order Acceptance. Each purchase order
shall be governed by the relevant provisions of this agreement (unless otherwise
expressly provided in the individual purchase order and confirmed in writing by
ENZO), and no conflicting term or condition which may appear in the preprinted
matter in CIL's purchase order form or ENZO's confirmation or acceptance form
shall be binding on either party
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
13
<PAGE>
or apply to any transaction under this agreement unless agreed to by both
parties in writing.
E. Shipping Terms. All PRODUCTS, ordered by CIL shall be shipped by ENZO
pursuant to CIL's written instructions, FOB Farmingdale, New York 11735.
VI. Quality Control and Product Acceptance
A. GROUP E1 PRODUCTS and GROUP E2 PRODUCTS. ENZO shall provide CIL with
GROUP E1 PRODUCT and GROUP E2 PRODUCT specifications and package inserts within
thirty (30) days of the execution of this Agreement and promptly after the
introduction of any new GROUP E1 PRODUCT or GROUP E2 PRODUCT. Such
specifications and package inserts shall be subject to CIL's approval, which
shall not be unreasonably withheld.
B. All Other Products. Before manufacturing any PRODUCTS or RAW MATERIALS
other than GROUP E1 PRODUCTS or GROUP E2 PRODUCTS for CIL, ENZO shall provide to
CIL (under an appropriate confidentiality and non-use agreement, if ENZO so
requests) a detailed description of the manufacturing process ENZO will use in
such manufacture. CIL shall have the right to approve such manufacturing
process: CIL's approval shall not be unreasonably withheld. Once ENZO begins
manufacturing any GROUP A PRODUCT or RAW MATERIALS for CIL, ENZO shall provide
documentation to CIL showing that ENZO has manufactured the products in
accordance with the manufacturing process that has been approved by CIL. CIL
shall have the right to periodically audit ENZO's documentation and
manufacturing process to ensure such compliance. Within one (1) year of the time
CIL becomes ISO 9000 certified for PRODUCTS, ENZO shall become ISO 9000
certified for such PRODUCTS. CIL shall provide consultative assistance to ENZO
to facilitate such certification.
C. Quality Testing. CIL shall have the right to test PRODUCTS and RAW
MATERIALS for the conformance with the specifications upon receipt of such
PRODUCTS, and agrees to notify ENZO of acceptance or non-acceptance based on
such conformity with the specifications within thirty (30) days in the case of
RAW MATERIALS and ten (10) days in case of all other PRODUCTS. Acceptance shall
not be unreasonably withheld.
D. Disagreement on Quality. If the parties disagree as to whether a RAW
MATERIAL PRODUCT shipment meets specifications, the parties shall use their best
efforts to resolve such disagreement expeditiously. If the parties are unable to
resolve the disagreement, ENZO and CIL shall jointly evaluate the disputed
product at CIL's facility in Penzberg, Germany or such other site as CIL deems
appropriate. In such event, CIL shall pay the reasonable travel expenses of ENZO
personnel to Penzberg or such other site.
E. Storage and Stock Rotation.
1. ENZO and CIL agree to share all necessary storage and stock
rotation practices which apply to the PRODUCTS.
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2. CIL further agrees to take diligent care not to ship PRODUCTS which
have expired, been damaged in storage and handling, or improperly stored. CIL
will be responsible for damage or liability arising from its shipment of
expired, damaged or improperly stored PRODUCTS.
F. Product Complaint File. CIL agrees to allow ENZO, at ENZO's expense,
access to its Product Complaint File on a periodic basis, not to exceed once
every six months (under an appropriate confidentiality and non-use agreement, if
CIL so requests). If, in ENZO's opinion, an undue number of complaints exist
concerning the quality of an individual product, then ENZO and CIL shall meet
and discuss the means of ensuring improved quality.
VII. Manufacturing By CIL
A. Manufacturing Transition Period. At the time of the commencement of this
Agreement for GROUP A PRODUCTS or RAW MATERIALS, ENZO may request that CIL
manufacture such materials for a limited amount of time until ENZO can initiate
manufacturing activities. This manufacturing transition period cannot be a time
greater than 6 months.
B. Quality/Capacity Issues. If, after the MANUFACTURING TRANSITION PERIOD
with respect to any GROUP A PRODUCTS or RAW MATERIALS, ENZO becomes unable to
supply CIL's supply needs, either because of capacity or quality issues
(including, with limitation, a failure to comply with the terms of Section VI
B. CIL may manufacture the affected PRODUCT(S) or RAW MATERIALS for ENZO, and
purchase such products at the prices set forth in Section IV with respect to
such products, until ENZO certifies to CIL that it has corrected the capacity or
quality problem and will be able to meet CIL's requirements.
C. FORCE MAJEURE. If ENZO becomes unable to supply CIL's product needs as a
result of FORCE MAJEURE, CIL may manufacture the affected PRODUCTS for ENZO, and
the purchase of such products at the prices set forth in Section IV with respect
to such products, until ENZO is able to resume supplying CIL.
VIII. Sales Promotions and Technical Service
CIL shall exert on its own account, its best efforts in sales promotions
and advertisement of PRODUCTS such as direct mailings, catalog listings and
promotions, except in the case where CIL determines that it no longer wishes to
sell PRODUCTS. ENZO agrees to provide CIL with such technical support for the
PRODUCTS and RAW MATERIALS as CIL may reasonably request. ENZO will provide CIL
with one copy of any literature, technical data, specifications and the like
describing the PRODUCTS and RAW MATERIALS
15
<PAGE>
as they are currently produced for the assistance of CIL in the preparation of
advertising material and catalogs for existing and new products. CIL will list
GROUP E1 PRODUCTS and GROUP E2 PRODUCTS in its next available or published
product catalog(s) or in a supplemental catalog in which these PRODUCTS can be
listed after the effective date of this agreement. CIL will modify the listings
of PRODUCTS in its product catalog(s) as soon as reasonably possible to conform
with the list of such PRODUCTS. CIL will modify the listings of GROUP E1
PRODUCTS and GROUP E2 PRODUCTS in its product catalog(s), or a supplemental
catalog, at CIL's discretion, as soon as reasonably possible after any
corresponding modification of the PRODUCTS in the EXHIBITS of this Agreement.
IX. Product Labels
Labels on the outside of PRODUCTS (excluding GROUP D PRODUCTS) including
vials and boxes and package inserts shall contain the following wording:
"Sold through an arrangement with Enzo Diagnostics, Inc."
X. Warranty
A. GROUP E1 PRODUCTS and GROUP E2 PRODUCTS. ENZO warrants that the GROUP E1
PRODUCTS and GROUP E2 PRODUCTS sold by ENZO to CIL shall met the specifications
agreed to by CIL and described in ENZO's PRODUCT or package inserts. ENZO's sole
obligation under this warranty is to promptly replace the GROUP E1 PRODUCTS and
GROUP E2 PRODUCTS without cost or expense therefor to CIL. THIS WARRANTY IS
EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
B. ALL OTHER PRODUCTS and RAW MATERIALS. ENZO warrants that the PRODUCTS
and RAW MATERIALS sold by ENZO to CIL shall meet the specifications agreed to by
CIL. ENZO's sole obligation under this warranty is to promptly replace the
PRODUCTS and RAW MATERIALS without cost or expense therefor to CIL. THIS
WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES OR LIABILITIES, EXPRESS OR
IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
1. PRODUCT REPLACEMENT. Notwithstanding the foregoing warranties, ENZO
agrees to replace, at no cost to CIL,
16
<PAGE>
any PRODUCTS and RAW MATERIALS manufactured by ENZO upon the request of any CIL
customer so long as it remains CIL's policy to do the same with respect to its
own products. Notwithstanding the foregoing, ENZO shall not be required to
replace PRODUCTS and RAW MATERIALS replaced as a result of shipping or handling
errors by CIL.
XI. Relationship Between ENZO and CIL
Nothing herein creates or constitutes a partnership or an agreement of
agency between the parties with respect to any activities whatsoever. The
relationship between ENZO and CIL shall be that of seller and buyer, and neither
party shall conclude any contract or agreement or make any commitment,
representation or warranty which binds the other party or otherwise act in the
name of or on behalf of the other party. Furthermore, this agreement is not a
license or an implied license of ENZO's PATENTS. ENZO maintains full rights
under its PATENTS. The foregoing statements are paramount to this Agreement.
XII. FORCE MAJEURE
Subject to Section VII D, each of the parties shall be excused from the
performance of its obligations under this Agreement in the event performance is
prevented by FORCE MAJEURE. The party incurring a FORCE MAJEURE condition shall
notify the other that such condition exists within five (5) days of the time
such party learns of such condition. Should such FORCE MAJEURE condition
continue for forty-five (45) days after such notice, the non-affected party may,
at its option, terminate this Agreement. At such termination all designations
that are the subject of this Agreement are revoked with the exception of the
Confidentiality and Non Use Agreement.
If ENZO's capacity to manufacture and deliver PRODUCTS and RAW MATERIALS
under this agreement is diminished by circumstances beyond its control, then
ENZO shall employ its existing capacity to supply CIL in accordance with this
agreement in a manner fair and equitable to all its customers.
XIII. Confidentiality and Non-Disclosure
ENZO and CIL agree that any confidential information relating to ENZO's
PATENTS and/or ENZO's or CIL's proprietary technical information and/or ENZO's
or CIL's business development in the area of the PRODUCTS will not be disclosed
while this Agreement is in effect to third parties except with the prior written
consent of the non requesting party or if the confidential information can be
shown by documentary evidence that it was:
17
<PAGE>
(i) in the possession of the receiving party prior to disclosure thereof
by the other party;
(ii) is or through no fault of the receiving party becomes part of the
public knowledge or literature;
(iii) lawfully becomes available without limitation by its disclosure from
an outside source; or
(iv) the receiving party can prove it was developed independently.
XIV. Term and Termination
A. Term. This Agreement shall become effective as of the date first above
written and shall continue until the expiration of the last PATENT to expire.
B. Termination for Breach. In the event either party breaches a material
provision of this Agreement, the non- breaching party may, after giving the
breaching party written notice of such breach and ninety (90) days in which to
cure such breach, terminate this Agreement upon written notice to the non-
breaching party. Either party may terminate this Agreement forthwith by giving
written notice to the other party in the event the other party shall:
(i) Become insolvent, admit its inability to pay its debts as they mature,
or has a petition in bankruptcy filed by or against it or a receiver
appointed for all or substantially all of its business or assets; or
(ii) Make a general assignment of all or substantially all of its business
or assets for the benefit of its creditors; or
(iii) Cease to carry on its business in the ordinary course.
C. Termination. If CIL ceases to offer, or has not sold GROUP A, A1, C, K
and K1 PRODUCTS, for a period of *, CIL shall have the right to terminate this
Agreement upon thirty (30) days' written notice to ENZO. Upon termination of
this Agreement, the distribution relationship between ENZO and CIL shall no
longer exist.
D. Assignment. This Agreement may not be assigned or otherwise transferred
by either party (except to an affiliate of such party) without the written
consent of the non-assigning party. Any attempted assignment or transfer without
such consent shall be void.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
18
<PAGE>
XV. Use of Products
Unless otherwise specified in writing and agreed to by both parties, all
PRODUCTS are for research use only and are not intended for or to be used for
diagnostic or therapeutic use.
XVI. Indemnification and Insurance
A. Indemnification.
ENZO agrees to and shall defend, indemnify and hold CIL, its employees,
agents and officers harmless, including attorneys' fees, from and against any
suit or proceeding alleging death or injury to persons or property and any
liability, damages or penalties awarded therein and resulting from or arising
from ENZO's negligence in the manufacture, storage or transport of PRODUCTS and
RAW MATERIALS prior to their receipt by CIL. CIL agrees to and shall defend,
indemnify and hold ENZO, its employees, agents and officers harmless, including
attorneys fees, from and against any suit or proceeding alleging death or injury
to persons or property and any liability, damages or penalties awarded therein
and resulting from or arising from CIL's negligence in handling, storage or
transport of PRODUCTS and RAW MATERIALS after receipt thereof from ENZO.
B. Insurance Each party shall at all times during the term of this
Agreement purchase and maintain comprehensive general liability insurance
including products liability, contractual liability and broad form property
damage with combined single limits for bodily injury and/or death and property
damage of $5,000,000 for any one occurrence. Such insurance shall also require
thirty (30) days' prior written notice of cancellation or material change in
coverage.
XVII. Third Party Patents.
ENZO agrees to and shall defend, indemnify and hold CIL and its customers
harmless, including attorneys fees, from and against any suit, proceeding, claim
or loss and any damages or penalties awarded therein so far as such suit or
proceeding is based upon an assertion that the use or sale of PRODUCTS and RAW
MATERIALS are, in such suit or proceeding, held to infringe and their further
use or sale is enjoined. ENZO shall, at its sole cost and expense, either (i)
procure for CIL and its customers the right to continue using and selling such
PRODUCTS and RAW MATERIALS, (ii) replace such PRODUCTS and RAW MATERIALS with
non-infringing equivalents, (iii) modify such PRODUCTS and RAW MATERIALS so
that they become non-infringing, or (iv) discontinue the use or sale of such
PRODUCTS and RAW MATERIALS if no alternative recourse is possible.
19
<PAGE>
XVIII. Patent Infringement.
Infringement Proceedings. If, at any time after the first anniversary of
the issuance of * and during the term of this Agreement, one or more of the
PATENTS is or appears to be infringed by a third party in connection with the
sale of a product in competition with the PRODUCTS described herein, the party
having knowledge thereof shall notify the other and the parties shall consult to
consider what, if any, action should be taken. The decision regarding
institution of proceedings to abate the infringement shall be at ENZO's
discretion, and in the event ENZO elects to initiate legal proceedings, CIL
shall give ENZO all reasonable assistance in such proceedings. In the event ENZO
shall elect not to institute infringement proceedings, and if CIL can show, by
market research performed by a researcher mutually acceptable to both parties,
that infringing sales exceed 20% of the market for a particular PRODUCT, the
payment to ENZO for such PRODUCT pursuant to this Agreement shall be reduced by
25% until ENZO commences legal action against such infringer or settlement has
been reached between such infringer and ENZO.
XIX. Invoicing and Payment. Invoices by each party to the other for work
performed and product supplied hereunder shall be issued at the end of each
calendar quarter. The net amount due shall be paid within thirty (30) days of
the end of each quarter.
XX. Miscellaneous
A. Waiver.
A waiver of any provision of this Agreement must be in writing. Waiver by
ENZO or CIL of any provision of this agreement shall not be deemed a waiver of
future compliance therewith and such provision as well as all other provisions
hereunder shall remain in full force and effect.
B. Governing Law. This Agreement is made under and shall be governed by the
laws of the State of New York.
C. Severability. In the event that any clause of this Agreement shall be
found to be void or unenforceable, such finding shall not be construed to render
any other clause of this Agreement either void or unenforceable, and all other
clauses shall remain in full force and effect.
D. Headings. All headings of the sections and paragraphs of this Agreement
are inserted for convenience only and shall not affect any construction or
interpretation of this Agreement.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
20
<PAGE>
E. Notices. All notices to be given with respect to this Agreement shall be
in writing and shall be deemed effectively given:
(a) when delivered personally;
(b) seven calendar days after being deposited in the mail, registered or
certified mail, return receipt requested
addressed as set forth below, or to such other address that either party
designates by written notice to the other party:
ENZO: Enzo Diagnostics, Inc.
60 Executive Boulevard
Farmingdale, NY 11735
Attention: Mr. Shahram K. Rabbani
Executive Vice President
and Chief Operating Officer
Fax No.: 1 (516) 755-5509
Phone No.: 1 (516) 755-5500
CIL: Boehringer Mannheim Corporation
9115 Hague Road
Indianapolis, IN 46220
Attn.: General Manager-Biochemicals
North America
Fax No.: 1 (317) 576-7317
Phone No.: 1 (317) 845-2000
F. Entirety. This Agreement together with the Appendix and Exhibits
attached hereto embodies the entire understanding between CIL and ENZO, and
there are no contracts or prior drafts of the agreement, understandings,
conditions, warranties or representations, oral or written, express or implied,
with reference to the subject matter hereof which are not merged herein. No
modification hereto shall be of any force or effect unless (1) reduced to
writing and signed by both parties hereto, and (2) expressly referred to as
being modifications of this agreement.
G. Mutuality. This Agreement has been drafted after considerable
negotiation by the parties and on the basis of mutual understanding; neither
party shall be prejudiced as being the drafter thereof.
H. Public Announcements. Any press release or other public announcement
relating to this Agreement shall be approved by both parties prior to its
release.
21
<PAGE>
IN WITNESS WHEREOF, the parties have cause this Agreement to be executed by
their duly authorized representatives.
ENZO BIOCHEM, INC. CORANGE INTERNATIONAL LIMITED
By: /s/ Dean Lee Engelhardt By: /s/ William Petrovic
----------------------------- ----------------------------------
Dean Lee Engelhardt, Ph.D William Petrovic
Senior Vice President Treasurer
April 25, 1994 April 25, 1994
----------------------------- ----------------------------------
DATE DATE
22
<PAGE>
PRODUCT CLASSIFICATION
EXHIBIT A
Seq # BM Group Name
396 A Biotin-16dUTP, sale
669 A DNA mol wt mk VI, padigxgn
1671 A DNA MWM II BIOTIN LABELED
1673 A DNA MWM III BIOTIN LABELED
1675 A DNA MWM VI BIOTIN LABELED
1717 A RNA Marker III-DIG label
1721 A Fluorescein-12-eeUTP
1778 A Biotin 16-ddUTP
1779 A Fluorescein-12-ddUTP
1780 A Fluorescein-12-UTP
1782 A Hydroxy-cuomarin-6-dUTP
1784 A Biotin-11-UTP
1809 A Dig DNA MWM VIII
1903 A DNA Mol Wt XI, dig-labeled
1904 A DNA Mol Wt XII, dig label
1975 A Rhod-6-dUTP
5002 A RNA MWM I DIGOXIGENIN LABEL **
5003 A RNA MWM I DIG-LABEL **
5004 A Dig-16-dATP
EXHIBIT A1
589 A1 DIGOXIGENIN 11-DUTP **(HAZ)
590 A1 Digoxigenin-11-UTP
1662 A1 DIG RNA LABELING _____________
1663 A1 DIG-11-ddUTP
1974 A1 AMCA-8-dUTP
5005 A1 Dig-11-dUTP
5012 A1 Dig-11-dUTP, alk label
5013 A1 Dig-11-dUTP, alk label
EXHIBIT C
115 C Anti-digoxigenin-(Fab)-AP
114 C Anti-digoxigenin-(Fab)-POD
113 C Anti-digoxigenin-(Fab)-flu
116 C Anti-digoxigenin-(Fab)- ___
1652 C ANTI-DIG (MONO)
1765 C Anti-Fluor-AP, Fab
1
<PAGE>
EXHIBIT D
BM Group
Seq # Name
112 D Anti-digoxigenin (Fab)
410 D Blocking Reagent, hybrid
672 D DNA polymerase I
673 D DNA pol I, enconuc-free
674 D DNA pol I, klenow frag
1131 D Nick translation Kit
1178 D Nylon membranes, positive
1356 D Primer, Random pd(N)G
1397 D Random Primed Labeling Kit
1521 D RNA polymerase, E. coli
1522 D SPG RNA polymerase
1523 D RNA polymerase, 13
1524 D RNA polymerase, 17
1548 D Streptavicin-AP, NA det
1574 D Terminal transferase
1592 D Transcription Kit, SP6/T7
1653 D _________________________________________
1672 D DNA MWM II DIG LABELED **
1674 D DNA MWM III DIG LABELED **
1883 D HEXANUCLEOTIDE MIXTURE IOX
1886 D Lumi-Phos 530
1766 D Anti-FluorPOD,Fab
1785 D Lumigen PPD
1799 D [Fluorescein]-unconj(Mab)
1915 D anti-dig gold conj.
1978 D [dig]-AMCA, Feb Frag
5019 D SPG primer, dig
5020 D T3 primer, dig
5021 D T7 primer, dig
5022 D lambda ___________ rev.primer, dig
5023 D lambda ___________ primer, dig
5024 D DIG Wash and Block buffer set
EXHIBIT K
658 K DNA 3-End Labeling Kit
660 K Genius 2 DNA Labeling Kit
661 K Genius 1 DNA Label/Det Kit
1168 K Genius 3 NA Det. Kit
1661 K DIG DNA LABELING MIXTURE
16__ K GENIUS 5 OLIGO LABEL KIT
1755 K Genius 6 Oligo ___________ Kit
1768 K Genius 7 Lumin. Det. Kit
2
<PAGE>
Seq # BM Group Name
1803 K DIG DNA Sequencing Kit
1890 K Genius 4 RNA Labeling Kit
1976 K Genius 5 End Labeling Set
5000 K MULTI-COLOR DNA DETECTION SET
5001 K ET-Assay Kit
K ____________________________________________
5028 K Biotin High Prime
5027 K Fluor High Prime
EXHIBIT K1
1951 K1 Actin RNA probe-DIG labeled
5006 K1 HUMAN CHROMOSOME,ALL,PROB,DIG **
5007 K1 Human Chr. Y, dig
5008 K1 Human Chr Y, flu
5009 K1 Human chr. 1, dig
5010 K1 Human chr. 1, flu
5011 K1 Human chr. ______, flu
5014 K1 PCR DIG labelling mix
5015 K1 DIG labeled control DNA
5016 K1 DIG labeled control RNA
5017 K1 DIG labeled control oligo
5018 K1 S. cerevisiae chr. probe, dig
3
<PAGE>
EXHIBIT E-1
CATEGORY E1
Enzo
Category Cat. No. Product
- -------- -------- -------
E1 42803 Nick Translation System (containing Bio-11-dUTP
E1 42804 Nick Translation System (to be used with nucleotide of choice)
E1 42809 Terminal Labeling Kit
E1 42810 Random Priming Kit
E1 42813 BioBridge(R) Labeling System
E1 42807 RNA Labeling System - T3/T7
E1 42808 RNA Labeling System - SP6
E1 43818 DETEK(R)I-f (double antibody fluorescence)
E1 43820 DETEK(R)-hrp Kit
E1 43822 DETEK(R)-alk Kit
E1 43823 DETEK(R)-Enhancer Kit (double antibody alk phos)
E1 43825 Peroxidase Substrate Kit (AEC)
E1 43826 Peroxidase Substrate Kit (DAB)
E1 43827 Alkaline Phosphate Substrate Kit (NBT/BCIP)
E1 43900 ImmunoDETEK(R) Kit (Peroxidase)
E1 43910 ImmunoDETEK(R) Kit (Alkaline Phosphatase)
<PAGE>
EXHIBIT E-2
CATEGORY E1
Enzo
Category Cat. No. Product
- -------- -------- -------
E2 42814 BioBridge(R) Labeling Molucule
E2 42806 Bio-11-dUTP (0.3mM)
E2 42806-50 Bio-11-dUTP (1.0mM)
E2 42811 Bio-16-dUTP (0.3mM)
E2 42811-50 Bio-16-dUTP (1.0mM)
E2 42816 Bio-11-dCTP (0.3mM)
E2 42816-50 Bio-11-dCTP (1.0mM)
E2 42819 Bio-7-dATP (0.3mM)
E2 42819-50 Bio-7-dATP (1.0mM)
E2 42812 Bio-AP3-dCTP (0.3mM)
E2 42815 Bio-11-UTP (20mM)
E2 42801 Bio-11-CTP (20mM)
E2 42817 Allylamine UTP (20mM)
E2 43861 IgG fraction rabbit anti biotin
E2 43805 DETEK(R)-fav (fluoresceinated avidin)
E2 43406 ENZOTIN(R) Biotinylating Reagent
2
<PAGE>
ENZO DIAGNOSTICS, INC.-BOEHRINGER MANNHEIM GMBH
DISTRIBUTORSHIP AGREEMENT
EXHIBIT A - AMENDMENT A DATED
AUGUST 19, 1994
ENZO BIOCHEM, INC.
UNITED STATES ISSUED PATENTS
================================================================================
Grant of
Patent
Patent Number Title/Inventor Published
- --------------------------------------------------------------------------------
4,687,732 Visualization Polymers and Their Aug. 18. 1987
Application to Diagnostic Medicine
David C. Ward et al.
- --------------------------------------------------------------------------------
4,707,352 Method of Radioactively Labeling Nov. 17. 1987
Diagnostic and Therapeutic Agents
Containing a Chelating Group
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,707,440 Nucleic Acid Hybridization Assay and Nov. 17, 1987
Detectable Molecules Useful in Such
Assay
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,711,955 Modified Nucleotides and Methods of Dec. 8. 1987
Preparing and Using Same
David C. Ward et al.
- --------------------------------------------------------------------------------
4,746,604 Specific Binding Assays Utilizing A May 24, 1988
Viable Cell as a Label
Solomon Mowshowitz
- --------------------------------------------------------------------------------
4,755,458 Composition and Method for the Jul. 5, 1988
Detection of the Presence of a Polynucleotide Sequence of
Interest Elazar Rabbani et al.
- --------------------------------------------------------------------------------
5,328,824 Methods of Using Labeled Jul. 12, 1994
Nucleotides
David C. Ward
- --------------------------------------------------------------------------------
5,241,060 Base Moiety-Labeled Detectable Aug. 31, 1993
Nucleotide
Dean Englehardt et al.
- --------------------------------------------------------------------------------
5,260,433 Saccharide Specific Binding System Nov. 9, 1993
Labeled Nucleotides
Dean Englehardt et al.
- --------------------------------------------------------------------------------
1
<PAGE>
================================================================================
Grant of
Patent
Patent Number Title/Inventor Published
- --------------------------------------------------------------------------------
4,767,609 Therapeutic and Diagnostic Processes Aug. 30, 1988
Using Isotope Transfer to Chelator-
Target Recognition Molecule Conjugate
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,772,548 Radiosotopicassay Using Isotope Sept. 20, 1988
Transfer to Chelator-Target
Recognition Molecule Conjugate
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,843,122 Detectable Molecules, Method of June 27, 1989
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,849,208 Detectable Molecules, Method of Jul. 18, 1989
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,849,505 Detectable Molecules, Method of Jul. 18, 1989
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,868,103 Analyte Detection by Means of Energy Sep. 19, 1989
Transfer
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,889,798 Hetarologous System for the Detection Dec. 26, 1989
of Chemically Labeled DNA and other
Biological Materials Providing a
Receptor or Target Moiety Therson
Elazar Rabbani
- --------------------------------------------------------------------------------
4,894,325 Hybridization Method for the Detection Jan. 16, 1990
of Genetic material
Dean Englehardt et al.
- --------------------------------------------------------------------------------
4,900,669 Necleotide Sequence Composition and Feb. 13, 1990
Method for Detection for Neissera
Gonorrhoeae and Method for Screening
for a Nucleotide Sequence that is
Specific for a Genetically Distinct
Group
Andrew Lo et al.
- --------------------------------------------------------------------------------
4,943,523 Detectable Molecules, Method of Jul. 24, 1980
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
2
<PAGE>
================================================================================
Grant of
Patent
Patent Number Title/Inventor Published
- --------------------------------------------------------------------------------
4,952,665 Detectable Molecules, Method of Aug. 28, 1990
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,987,065 In Vivo Labelling of Polynucleotide
Sequences
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,994,373 Method and Structures Employing Feb. 19, 1991
Chemically-Labelled Polynucleotide
Probes
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
5,002,885 Detectable Molecules, Method of Mar. 26, 1991
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
5,013,831 Detectable Molecules, Method of May 7, 1991
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
5,024,933 Method and Kit for Sample Adherence to June 18, 1991
Test Substrate
Huey-Lang Yang et al.
- --------------------------------------------------------------------------------
5,061,076 Time-Resolved Fluorometer Oct. 29, 1991
Ian Hurley
- --------------------------------------------------------------------------------
5,082,830 End Labeled Nucleotide Probe Jan. 21, 1992
Christine L. Brakel et al.
- --------------------------------------------------------------------------------
5,175,269 Compound and Detectable Molecules Dec. 29, 1992
Having An Oligo-or Polynucleotide with
Modifiable Reactive Group
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
5,288,609 Capture Sandwich Hybridization Method Feb. 22, 1994
and Composition
Dean Engelhardt et al.
- --------------------------------------------------------------------------------
5,328,824 Methods of using Labeled Neucleotides Jul. 12, 1994
================================================================================
3
<PAGE>
APPENDIX B
WORLD-WIDE LOCAL NET SALES FOR DIG PRODUCTS ARE CALCULATED FOR 1994 BY APPLYING
A FACTOR OF 1.85 ON EX MANNHEIM NET SALES.
THE FACTOR OF 1.85 REFLECTS THE RATIO BETWEEN LOCAL WORLD-WIDE NET SALES AND EX
MANNHEIM SALES.
IT SHALL BE REVISED AND AGREED UPON MUTUALLY ON A YEARLY BASIS ACCORDING TO THE
ACTUAL SITUATION OF THE CURRENT YEAR AND BE APPLIED FOR THE FOLLOWING YEAR.
AVERAGE LOCAL UNIT PRICE SHALL BE CALCULATED BY APPLYING THE NUMBER OF UNITS
SOLD EX MANNHEIM.
- 1 -
<PAGE>
EXHIBIT 10(z)
ENZO DIAGNOSTICS, INC. - AMERSHAM INTERNATIONAL PLC
DISTRIBUTORSHIP AGREEMENT
THIS AGREEMENT, effective upon acceptance by both parties below by and between
ENZO DIAGNOSTICS, INC. ("ENZO"), a New York corporation having its principal
place of business at 60 Executive Boulevard, Farmingdale, New York 11735,
U.S.A., and AMERSHAM INTERNATIONAL public limited company ("AMERSHAM") a company
incorporated in England and Wales, having its principal place of business at
Amersham Place, Little Chalfont, Buckinghamshire HP7 9NA, England.
WHEREAS, ENZO owns rights to certain PATENTS listed in EXHIBIT A
("PATENTS");
WHEREAS ENZO manufactures and/or sells certain PRODUCTS ("PRODUCT(S)")
covered by claims of PATENTS;
WHEREAS AMERSHAM wishes to market and distribute some of said PRODUCTS
as listed in EXHIBIT B;
NOW, THEREFORE, in consideration of the good and valuable mutual
agreements hereinafter set forth, the parties hereto agree as follows:
DEFINITIONS:
AMERSHAM Affiliate means an entity controlled by or under common control with
AMERSHAM, including United States Biochemical Corporation (USB), as
listed in EXHIBIT C. For purposes of this AGREEMENT, control shall
mean the ownership of a majority of the voting equity interest.
AMERSHAM Distributor means a local company, outside the countries listed in
EXHIBIT C, in which AMERSHAM does not sell directly or through an
AMERSHAM Affiliate. AMERSHAM Distributors do not have rights to sell
in the countries listed in EXHIBIT C.
AMERSHAM means AMERSHAM International, including USB, AMERSHAM Affiliates and
AMERSHAM Distributors.
PRODUCT means an individual reagent or combination of reagents (kit) that are,
individually or combined, covered by ENZO PATENTS (EXHIBIT A) as
listed in EXHIBIT B.
<PAGE>
COMPONENT, listed in EXHIBIT D, means a reagent that is a necessary part of the
PRODUCT.
COMPONENT 1 means a COMPONENT, as listed in EXHIBIT E, that is covered by ENZO
PATENT(S) and by AMERSHAM patent(s) either assigned or licensed to
AMERSHAM and not sublicensed to a third party for Life Science
research use (not an AMERSHAM Affiliate or AMERSHAM Distributor as
defined above and as listed in EXHIBIT C).
1. Distributor Appointment
1.1 ENZO hereby appoints AMERSHAM to act as its nonexclusive distributor
worldwide for the distribution and sale of PRODUCTS through AMERSHAM
Affiliates listed in EXHIBIT C, and AMERSHAM Distributors and AMERSHAM
agrees to act as such distributor under the terms and conditions set
forth herein.
1.2 AMERSHAM agrees:
a. not to purchase any PRODUCTS from other suppliers;
b. not to manufacture PRODUCTS, except as otherwise stated in this
AGREEMENT;
c. to rely on ENZO as its sole source of PRODUCTS;
d. not to use any PRODUCT to manufacture new products or other PRODUCTS,
except when designated by ENZO to manufacture such PRODUCTS for ENZO
as provided in Paragraph 3.3 below;
e. that all PRODUCTS sold by AMERSHAM are for research use only and are
not intended for or to be used for diagnostic or therapeutic
purposes; and
f. that except for DISTRIBUTION under the terms and conditions as set
forth in this AGREEMENT, purchase does not include any right or
license to exploit these PRODUCTS commercially, including any right
to sell these PRODUCTS to other distributors who are not AMERSHAM
Affiliates or AMERSHAM Distributors (EXHIBIT C) and
- 2 -
<PAGE>
that any commercial use or development of these PRODUCTS without the
express written authorization of ENZO is strictly prohibited.
2. Relationship between ENZO and AMERSHAM
2.1 Nothing herein creates or constitutes a partnership or an agreement of
agency between the parties with respect to any activities whatsoever. The
relationship between ENZO and AMERSHAM shall be that of seller and buyer,
and neither party shall conclude any contract or agreement or make any
commitment, representation or warranty which binds the other party or
otherwise acts in the name of or on behalf of the other party.
2.2 This AGREEMENT may not be assigned or otherwise transferred by AMERSHAM
without the prior written consent of ENZO. Any attempted assignment or
transfer without such consent shall be void.
2.3 AMERSHAM agrees that it has manufactured and sold in the past a range of
COMPONENTS, COMPONENTS 1 and PRODUCTS and maintains in its current
inventory the aforementioned COMPONENTS, COMPONENTS 1 and PRODUCTS all as
set forth in EXHIBIT F. AMERSHAM agrees that it will transfer to ENZO the
value of its current inventory of such COMPONENTS, COMPONENTS 1 AND
PRODUCTS to ENZO upon signing this AGREEMENT. ENZO agrees that this
transfer will be applied as full consideration for satisfaction of
damages incurred by ENZO arising from the past manufacture, use and sale
of said COMPONENTS, COMPONENTS 1 and PRODUCTS by AMERSHAM, AMERSHAM
Affiliates and AMERSHAM Distributors.
2.4 ENZO and AMERSHAM agree that the distribution relationship between them
does not constitute, nor does it imply a license of any of ENZO's
technology or patents, nor does it abrogate any of ENZO's rights under
its patents. ENZO maintains full rights under its PATENTS. The foregoing
statements are paramount to this AGREEMENT.
3. PRODUCTS, Price and Payment
3.1 PRODUCTS covered by this Agreement are listed in EXHIBIT B attached
hereto. The price to AMERSHAM for each product shall be as listed in
- 3 -
<PAGE>
EXHIBIT B. Prices are based upon the purchase by AMERSHAM of at least
* kits per calendar year as follows. If this volume purchased by
AMERSHAM falls below * kits, the discount to AMERSHAM will be
lowered to *% of the selling price; if the volume purchased by AMERSHAM
falls below * kits, the discount to AMERSHAM will be lowered to *%
of the selling price.
Prices to AMERSHAM may be adjusted no more than once during a calendar
year. ENZO has the right to negotiate to adjust prices to AMERSHAM after
providing AMERSHAM with forty-five (45) days written notice. Any price
adjustment will affect future purchases, but will not affect those
already under existing firm purchase order commitment. AMERSHAM shall be
free to set all resale prices to its customers.
3.2 ENZO or AMERSHAM may propose in writing to add, to modify or to delete a
PRODUCT or PRODUCTS in EXHIBIT B. Both ENZO and AMERSHAM must agree to
such additions to, deletions from or modifications of PRODUCTS in EXHIBIT
B before such additions, deletions or modifications are incorporated
therein.
3.3 Upon signing of this AGREEMENT, ENZO designates AMERSHAM to manufacture
certain COMPONENTS or PRODUCTS (EXHIBIT E) for ENZO for the duration of
the AGREEMENT. AMERSHAM is designated as an exclusive supplier to ENZO of
these COMPONENTS or PRODUCT and ENZO will not sell such COMPONENTS or
PRODUCTS to parties other than AMERSHAM.
3.4 ENZO, may, at its discretion, and for a specified period of time,
designate AMERSHAM as an interim manufacturer to manufacture certain
COMPONENTS or certain PRODUCTS, including the corresponding packaging,
other than those specified by Paragraph 3.3 for ENZO. These COMPONENTS
and PRODUCTS and prices to ENZO are listed in EXHIBIT D. Upon six (6)
months written notice to AMERSHAM, ENZO may either manufacture
COMPONENT(s) or PRODUCT(s) or may designate an alternate manufacturer.
3.5 Whenever prices for PRODUCTS are adjusted, prices of COMPONENTS may be
adjusted upon mutual agreement of the parties; the ratio of COMPONENT
price to PRODUCT price will not increase.
4. Terms of Payment and Audit
4.1 Net, thirty (30) days from the end of the month in which the PRODUCTS are
delivered to AMERSHAM.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
- 4 -
<PAGE>
4.2 Net, thirty (30) days from the end of the month in which the COMPONENTs
are delivered to ENZO.
4.3 AMERSHAM agrees to permit its books and records to be examined by ENZO on
reasonable prior notice, as necessary, but not more often than once per
year to verify receipts. Such examination is to be made by ENZO, at
ENZO's expense, except in the event that the results of the audit reveal
a discrepancy benefiting ENZO by five percent (5%) then the audit fees
shall be paid by AMERSHAM.
5. PRODUCT Shipments
5.1 ALL PRODUCTS shipped by ENZO to AMERSHAM will be shipped F.O.B.
Farmingdale, NY. ENZO shall ensure PRODUCTS are suitably, safely and
securely packaged and labeled before dispatch.
5.2 ALL COMPONENTS shipped by AMERSHAM to ENZO will be shipped F.O.B. Cardiff
Laboratories, Wales. AMERSHAM shall ensure COMPONENTS are suitably,
safely and securely packaged and labeled before dispatch.
6. Forecasts and Purchase Orders
6.1 AMERSHAM shall issue a forecast schedule during the mid-month of each
calendar quarter covering its estimated requirements for PRODUCTS for the
succeeding two (2) calendar quarters. Such forecast shall be considered
for planning purposes only and do not represent a purchase commitment.
6.2 A purchase order will be issued by AMERSHAM at least sixty (60) days in
advance of the requested delivery date of PRODUCT. This purchase order
will indicate specific delivery and/or shipping requirements. Purchase
orders will be delivered to ENZO by Federal Express or similar carrier so
that the receipt can be confirmed. ENZO shall meet such requirements
unless it advises AMERSHAM within fifteen (15) business days of the date
of the receipt of such purchase order that it is unable to supply PRODUCT
as ordered by AMERSHAM whereupon the parties agree to discuss a revised
schedule for delivery of PRODUCT to AMERSHAM. After ENZO and AMERSHAM
have agreed to the provisions of a revised schedule, ENZO will make its
best efforts to fulfill the provisions of the revised schedule, but if
unable to do so
- 5 -
<PAGE>
or if agreement on a revised schedule cannot be reached, ENZO by good
faith effort will designate AMERSHAM as an interim or temporary
manufacturer for such PRODUCT for ENZO until such time as ENZO gives
AMERSHAM written notice that ENZO is ready to recommence supply.
6.3 ENZO shall place orders for COMPONENTS within fourteen (14) days
following receipt of AMERSHAM's purchase order for PRODUCTS. COMPONENTS
shall comply with the written specification therefor supplied by AMERSHAM
with COMPONENTS. ALL OTHER WARRANTIES EXPRESS OR IMPLIED INCLUDING
WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE HEREBY EXCLUDED.
6.4 Each purchase order shall be governed by the relevant provisions of this
AGREEMENT (unless otherwise expressly provided in the individual purchase
order and confirmed in writing by ENZO) and no term or condition which
may appear in the printed matter in AMERSHAM's order form or any form
from ENZO shall be binding on either party or apply to any transaction
under this AGREEMENT.
7. PRODUCT Deliveries and Specifications
7.1 Within about forty five (45) days after the effective date of this
AGREEMENT, ENZO and AMERSHAM shall agree on PRODUCT specifications and
package inserts for the PRODUCTS which shall otherwise be in the form set
out in EXHIBIT B. Quality Control (QC) specifications for the PRODUCTS in
EXHIBIT B, to be agreed upon by ENZO and AMERSHAM, are also listed in
EXHIBIT B.
7.2 When an order is placed by AMERSHAM, ENZO shall ship the PRODUCT in
accordance with section 5 above. Failure by AMERSHAM to notify ENZO of
rejection of the PRODUCT within thirty (30) days of receipt of PRODUCT
will constitute acceptance. ENZO shall supply, at the time of shipment of
the PRODUCT to AMERSHAM, a statement that the PRODUCT conforms to the
PRODUCT specifications. If after receipt of the PRODUCT, AMERSHAM
determines that it does not conform to the PRODUCT specifications
provided by ENZO, and that the failure to conform to the PRODUCT
specifications was not the result of shipping and handling or quality of
COMPONENTS delivered by AMERSHAM, AMERSHAM will provide ENZO with
- 6 -
<PAGE>
documentation of this failure to conform to the PRODUCT specifications.
If ENZO accepts the documentation provided by AMERSHAM, ENZO will replace
the order. If ENZO does not accept the documentation provided by
AMERSHAM, then the differences in the determination of the manufacturing
specifications will be settled by representatives of the technical staffs
of ENZO and AMERSHAM.
7.3 If AMERSHAM receives a notice from a third party asserting that any of
the PRODUCTS infringe on an issued patent in the country in which they
are sold, then AMERSHAM shall immediately give notice to ENZO. Upon
notice to ENZO or AMERSHAM from a third party asserting that any of the
PRODUCTS of this AGREEMENT infringe on an issued patent in the country in
which such PRODUCTS are sold, ENZO has the right to exclude such PRODUCTS
from this AGREEMENT for that country and can further instruct AMERSHAM to
cease all such distribution of such PRODUCT in that country. Further
distribution of PRODUCTS after such instruction from ENZO to AMERSHAM
will be at the sole risk of AMERSHAM and AMERSHAM shall indemnify and
hold harmless ENZO from all infringement liability and damages with
respect to such PRODUCTS, including legal costs, compensatory and
punitive damages, and attorneys fees.
7.3.1 ENZO will use its best efforts to obtain a license under commercially
reasonable terms from any such third party asserting patents as described
in Paragraph 7.3. In this event ENZO has the right to adjust prices to
AMERSHAM to reflect the licensing cost and ENZO and AMERSHAM will
negotiate in good faith to arrive at the amended price.
7.3.2 In the absence of instructions from ENZO to cease sales, ENZO will
indemnify AMERSHAM against claims or proceedings for infringements.
7.3.3 Notwithstanding any third party infringement claims, all provisions of
this AGREEMENT, including Section 7, shall not be affected but shall
remain in full force and effect.
8. Sales Promotions
8.1 AMERSHAM shall use its best efforts in sales promotions and advertisement
of the PRODUCTS such as direct mailings, direct customer contact, catalog
listings and trade meeting promotions. ENZO will provide AMERSHAM with
one copy of the literature, technical data, specifications and the like
describing the PRODUCTS as they are currently produced for the assistance
of AMERSHAM in the preparation of advertising, catalog and other sales
and promotional material. AMERSHAM will list PRODUCTS in its next
available
- 7 -
<PAGE>
or published product catalog(s) in which the PRODUCTS can be listed and
continued such listing after the effective date of this AGREEMENT.
AMERSHAM will modify the listings of PRODUCTS in its product catalog(s)
as soon as reasonably possible after any corresponding modification of
the list of such PRODUCTS in EXHIBIT B.
9. PRODUCT Warranty
9.1 ENZO warrants that the PRODUCTS sold by ENZO to AMERSHAM shall meet the
specifications accompanying the PRODUCT delivery. ENZO's sole obligation
is to replace the PRODUCTS or give credit therefor to the extent of the
purchase price. THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER
WARRANTIES OR LIABILITIES, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
9.2 ENZO further warrants that all relevant quality control tests and quality
assurance procedures will be performed for each batch of PRODUCTS so that
each batch of PRODUCT conforms with the Product Specifications as listed
in EXHIBIT B, that the PRODUCTS will be contained, packaged and labeled
as specified by the Product Specifications for such PRODUCTS and that the
PRODUCTS will comply with product safety regulations as indicated in
EXHIBIT G.
10. Storage and Stock Rotation
10.1 ENZO agrees to share with AMERSHAM all necessary storage and stock
rotation practices which apply to the PRODUCTS.
10.2 AMERSHAM further agrees to take diligent care not to ship PRODUCTS to its
customers which have expired, been damaged in storage or handling, or
improperly stored. AMERSHAM will be responsible for damages arising from
its shipment of expired, damaged, or improperly stored PRODUCTS.
- 8 -
<PAGE>
11. PRODUCT Labels
11.1 AMERSHAM agrees to ship all PRODUCTS with a joint PRODUCT label which
prominently includes the name
ENZO DIAGNOSTICS, INC.
and
AMERSHAM INTERNATIONAL plc
with their respective company logos where appropriate. AMERSHAM further
agrees to ship all PRODUCTS intact with ENZO's package inserts and any
notice(s) appearing thereon.
12. Force Majeure
12. No liability shall result to either party from delay in performance or
from nonperformance under this AGREEMENT caused by circumstances beyond
the control of the party who has delayed performance or not performed.
The nonperforming party shall be diligent in attempting to remove any
such cause and shall promptly notify the other party of its extent and
probable duration.
13. Duration and Termination
13.1 This AGREEMENT shall become effective as of the date hereinabove written
and shall continue for a period of three (3). Unless terminated, it will
continue thereafter for successive renewal terms of one (1) year each.
Notwithstanding such period or any renewal, either party may terminate
this AGREEMENT without cause at any time by giving the other party notice
in writing at least six (6) months in advance of the effective
termination date stated in such notice.
13.2 Upon termination of this AGREEMENT all rights, including distribution
rights to AMERSHAM and AMERSHAM Affiliates and AMERSHAM Distributors
(EXHIBIT C) will be deemed canceled and returned to ENZO.
14. Confidentiality
14.1 Each party undertakes to keep secret and not disclose any information of
a confidential nature received from the other relating to the subject of
this AGREEMENT or the business affairs of the other both during and after
this
- 9 -
<PAGE>
AGREEMENT. This undertaking will not apply to any such information which
is or falls into the public domain through no fault of the recipient or
is lawfully received from a third party or independently developed by the
recipient's staff without reverence to the discloser's information.
14.2 Neither party shall make any public announcement in relation to this
AGREEMENT without the prior written approval of the other or as otherwise
required by law.
15. Indemnification
15.1 Except to the extent the other is negligent or commits an act of wilful
misconduct or in default of the terms hereof, each party shall hold the
other party harmless from responsibility or liability for damages related
to the PRODUCTS or COMPONENTS of this AGREEMENT arising from the fault of
such party, its affiliated companies, or its agents or employees.
16. Notices
16.1 All notices to be given with respect to this AGREEMENT shall be in
writing and shall be deemed effectively given:
a. when delivered personally;
b. seven calendar days after being deposited in the mail, registered or
certified mail, return receipt requested;
c. when telecopied or faxed, receipt acknowledged; or
d. when telexed, confirmed;
addressed as set forth below, or to such other address that either party
designates by written notice to the other party;
ENZO: Enzo Diagnostics, Inc.
575 Fifth Avenue, 18th Floor
New York, New York 10017
Attn: Dr. Barbara E. Thalenfeld
Vice President, Scientific Affairs
Fax No.: (212) 856-0878
- 10 -
<PAGE>
AMERSHAM: AMERSHAM INTERNATIONAL PLC
Amersham Place
Little Chalfont
Buckinghamshire HP7 9NA
England
Att: Company Secretary
Fax No.: (494) 542266
17. Governing Law
17.1 This Agreement is made under and shall be governed by the laws of the
State of New York.
18. Waiver
18.1 Waiver by ENZO or AMERSHAM of any provision of this AGREEMENT shall not
be deemed a waiver of future compliance therewith and such provision as
well as all other provisions hereunder shall remain in full force and
effect.
19. Compliance with Laws
19.1 Each party will comply with all United States laws, ordinances and
regulations properly applicable to the manufacture, sale and distribution
of the PRODUCTS described herein.
20. Headings and Numbers
20.1 All Headings and Numbers of the clauses of this AGREEMENT are inserted
for convenience only and shall not affect any construction or
interpretation of this AGREEMENT.
21. Severability
21.1 IN THE EVENT that any clause of this Agreement shall be found to be void
or unenforceable, such finding shall not be construed to render any other
clause of this AGREEMENT either void or unenforceable, and all other
clauses shall remain in full force and effect unless the clause(s) which
is/are invalid or unenforceable shall substantially affect the rights or
obligations granted to or undertaken by either party.
- 11 -
<PAGE>
22. Entirety
22.1 THIS AGREEMENT together with the EXHIBITS attached hereto embodies the
entire understanding between AMERSHAM and ENZO, and there are no
contracts or prior drafts of the Agreement, understandings, conditions,
warranties or representations, oral or written, express or implied, with
reference to the subject matter hereof which are not merged herein.
Except as otherwise specifically stated, no modification here to shall be
of any force or effect unless (1) reduced to writing and signed by both
parties hereto, and (2) expressly referred to as being modifications of
this AGREEMENT.
IN WITNESS, WHEREOF, the parties have caused this AGREEMENT to be
executed by their duly authorized representatives.
ENZO DIAGNOSTICS, INC. AMERSHAM INTERNATIONAL PLC
By: By:
------------------------------ ----------------------------------
Elazar Rabbani ((name))
Title: President Title: Commercial Director
--------------------------- ---------------------------
Date: Feb 16 1995 Date: 21. 2. 95
--------------------------- ---------------------------
* * * * * * *
- 12 -
<PAGE>
EXHIBIT A
Enzo Diagnostics, Inc. Issued Patents
U.S. Patents
================================================================================
Grant of
Patent
Patent Number Title/Inventor Issue Date
- --------------------------------------------------------------------------------
4,687,732 Visualization Polymers and Their Aug. 18, 1987
Application to Diagnostic Medicine
David C. Ward et al.
- --------------------------------------------------------------------------------
4,707,352 Method of Radioactively Labeling Nov. 17, 1987
Diagnostic and Therapeutic Agents
Containing a Chelating Group
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,707,440 Nucleic Acid Hybridization Assay and Nov. 17, 1987
Detectable Molecules Useful in Such Assay
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,711,955 Modified Nucleotides and Methods of Dec. 8, 1987
Preparing and Using Same
David C. Ward et al.
- --------------------------------------------------------------------------------
4,746,604 Specific Binding Assays Utilizing A Viable May 24, 1988
Cell as a Label
Solomon Mowshowitz
- --------------------------------------------------------------------------------
4,755,458 Composition and Method for the Detection Jul. 5, 1988
of the Presence of a Polynucleotide
Sequence of Interest
Elazar Rabbani et al.
- --------------------------------------------------------------------------------
4,767,609 Therapeutic and Diagnostic Processes Aug. 30, 1988
Using Isotope Transfer to Chelator-Target
Recognition Molecule Conjugate
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,772,548 Radioisotopicassay Using Isotope Transfer Sep. 20, 1988
to Chelator-Target Recognition Molecule
Conjugate
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,843,122 Detectable Molecules, Method of June 27, 1989
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,849,208 Detectable Molecules, Method of Jul. 18, 1989
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
- 1 -
<PAGE>
================================================================================
Grant of
Patent
Patent Number Title/Inventor Issue Date
- --------------------------------------------------------------------------------
4,849,505 Detectable Molecules, Method of Jul. 18, 1989
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,868,103 Analyte Detection by Means of Energy Sep. 19, 1989
Transfer
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,889,798 Heterologous System for the Detection of Dec. 26, 1989
Chemically Labeled DNA and other
Biological Materials Providing a Receptor or
Target Moiety Thereon
Elazar Rabbani
- --------------------------------------------------------------------------------
4,894,325 Hybridization Method for the Detection of Jan. 16, 1990
Genetic Material
Dean Engelhardt et al.
- --------------------------------------------------------------------------------
4,900,659 Nucleotide Sequence Composition and Feb. 13, 1990
Method for Detection for Neissera
Gonorrhoeae and Method for Screening for
a Nucleotide Sequence that is Specific for
a Genetically Distinct Group
Andrew Lo et al.
- --------------------------------------------------------------------------------
4,943,523 Detectable Molecules, Method of Jul. 24, 1990
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,952,685 Detectable Molecules, Method of Aug. 28, 1990
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
4,987,065 In Vivo Labelling of Polynucleotide Jan. 22, 1991
Sequences
Jannis G. Stavrianopoulos et al.
- --------------------------------------------------------------------------------
4,994,373 Method and Structures Employing Feb. 19, 1991
Chemically-Labelled Polynucleotide Probes
Jannis G. Stavrianopoulos et al.
- --------------------------------------------------------------------------------
5,002,885 Detectable Molecules, Method of Mar. 26, 1991
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
5,013,831 Detectable Molecules, Method of May 7, 1991
Preparation and Use
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
5,024,933 Method and Kit for Sample Adherence to June 18, 1991
Test Substrate
Huey-Lang Yang et al.
- --------------------------------------------------------------------------------
5,061,076 Time-Resolved Fluorometer Oct. 29, 1991
Ian Hurley
- --------------------------------------------------------------------------------
- 2 -
<PAGE>
================================================================================
Grant of
Patent
Patent Number Title/Inventor Issue Date
- --------------------------------------------------------------------------------
5,082,830 End Labeled Nucleotide Probe Jan. 21, 1992
Christine L. Brakel et al.
- --------------------------------------------------------------------------------
5,175,269 Compound and Detectable Molecules Dec. 29, 1992
Having An Oligo- or Polynucleotide with
Modifiable Reactive Group
Jannis G. Stavrianopoulos
- --------------------------------------------------------------------------------
5,241,060 Base Moiety-Labeled Detectable Nucleotide Aug. 31, 1993
Dean Engelhardt et al.
- --------------------------------------------------------------------------------
5,260,433 Saccharide Specific Binding System Nov. 9, 1993
Labeled Nucleotides
Dean Engelhardt et al.
- --------------------------------------------------------------------------------
5,288,609 Capture Sandwich Hybridization Method Feb. 22, 1994
and Composition
Dean Engelhardt et al.
- --------------------------------------------------------------------------------
5,328,824 Methods of Using Labeled Nucleotides Jul. 12, 1994
David C. Ward
- --------------------------------------------------------------------------------
Allowed claims (195-267) transmitted on
Feb. 6, 1995 to Amersham under
Confidientiality Agreement
================================================================================
- 3 -
<PAGE>
================================================================================
Patent Number Publication Date
(Country) Title/Inventor of Patent Grant
- --------------------------------------------------------------------------------
560 651 (Australia) Modified Nucleotides and Methods of Oct. 16, 1987 (16
Preparing and Using Same yr. term began Apr.
David C. Ward et al. 13, 1982)
- --------------------------------------------------------------------------------
1 219 824 (Canada) Modified Nucleotides and Methods of Mar. 31, 1987
Preparing and Using Same
David C. Ward et al.
- --------------------------------------------------------------------------------
1 223 831 (Canada) Modified Nucleotides, Methods of Jul. 7, 1987
Preparing and Utilizing and
Compositions Containing the Same
Dean L. Engelhardt et al.
- --------------------------------------------------------------------------------
EP 0 285 057 B1 Modified Nucleotides, Methods of May 10, 1988
Preparing and Utilizing and
Compositions Containing the Same
Dean L. Engelhardt et al.
- --------------------------------------------------------------------------------
EP 0 063 879 B1 Modified Nucleotides and Methods of Nov. 23, 1989
Preparing and Using Same
David C. Ward et al.
- --------------------------------------------------------------------------------
1,237,369 Visualization Polymers and Their May 31, 1988
Application to Diagnostic Medicine
David C. Ward et al.
- --------------------------------------------------------------------------------
1,254,525 Kit for Terminally Chemically Labeling May 23, 1989
DNA Christine L. Brakel et al.
- --------------------------------------------------------------------------------
1,256,023 Method of Radioactively Labeling June 20, 1989
Diagnostic and Therapeutic Agents
Containing a Chelating Group
Jannis Stavrianopoulos
- --------------------------------------------------------------------------------
1,260,368 Composition and Method for the Sept. 26, 1989
Detection of the Presence of a Polynucleotide Sequence of
Interest Elazar Rabbani et al.
- --------------------------------------------------------------------------------
1,260,372 Hybridization Method for the Sept. 26, 1989
Detection of Genetic Materials
Elazar Rabbani et al.
================================================================================
- 4 -
<PAGE>
================================================================================
Patent Number Publication Date
(Country) Title/Inventor of Patent Grant
- --------------------------------------------------------------------------------
1,268,115 Method and Composition for Detecting April 24, 1990
Analyte Moieties
Solomon Mowshowitz
- --------------------------------------------------------------------------------
1,281,283 (Canada) Method for Detecting an Analyte Moiety Mar. 12, 1991
by Means of Signal Localization
Elazar Rabbani
- --------------------------------------------------------------------------------
1,285,330 Analyte Detection by Means of Energy June 25, 1991
Transfer Jannis Stavrianopoulos et al.
- --------------------------------------------------------------------------------
1,288,811 Assay Method Utilizing Polynucleotide Nov. 3, 1987
Sequences
Robert Pergolizzi et al.
- --------------------------------------------------------------------------------
EP 0 133 473 B1 In Vivo Labelling of Polynucleotide March 23, 1994
Sequences Jannis Stavrianopoulos et al.
- --------------------------------------------------------------------------------
EP 0 173 339 B1 Composition and Method for the Jan. 22, 1992
Detection of the Presence of a
Polynucleotide Sequence of Interest
Elazar Rabbani et al.
- --------------------------------------------------------------------------------
EP 0 212 546 B1 Method for Labeling Polynucleotide Apr. 1, 1992
Sequences
Jannis Stavrianopoulos et al.
- --------------------------------------------------------------------------------
1,295,559 Method for Labeling Polynucleotide Feb. 11, 1992
Sequences
Jannis Stavrianopoulos et al.
- --------------------------------------------------------------------------------
1,299,073 Nucleotide Sequence Composition Method Apr. 21, 1992
for Detection of Neisseria gonorrhoeae
and Method
(Canada) for Screening for a Nucleotide Sequence
that is Specific for a Genetically
Distinct Group
Andrew Lo & Huey-Lang Yang
- --------------------------------------------------------------------------------
1,309,672 Methods and Structures Employing Non- Nov. 3, 1992
Radioactive Chemically-Labeled
Polynucleotide Probes
Jannis Stavrianopoulos
================================================================================
- 5 -
<PAGE>
================================================================================
Patent Number Publication Date
(Country) Title/Inventor of Patent Grant
- --------------------------------------------------------------------------------
1,314,503 Detectable Moelcules, Method of March 16, 1993
Preparation And Use
Jannis Stavrianopoulos
- --------------------------------------------------------------------------------
1,314,810 Heterologous System for the Detection March 23, 1993
of Chemically-Labeled DNA and Other
Biological Materials Providing a
Receptor or Target
Moiety Thereon
Elazar Rabbani
- --------------------------------------------------------------------------------
EP 0 242 527 B1 Analyte Detection by Means of Energy May 13, 1992
Transfer
Jannis Stavrianopoulos et al.
- --------------------------------------------------------------------------------
1,315,222 Polynucleotide Probes and a Method for March 30, 1993
Their Preparation
David Mao et al.
- --------------------------------------------------------------------------------
0 149 654 B1 Detecting Agent Carrying Polymer Sep. 9, 1992
Having Multiple Units of Visualization
Monomer
David C. Ward et al.
- --------------------------------------------------------------------------------
EP 0 097 373 B1 Modified Nucleotides, Methods of Oct. 7, 1992
Preparing and Utilizing and
Compositions Containing the Same
Dean L. Engelhardt et al.
- --------------------------------------------------------------------------------
EP 0 212 670 B1 Method for Detecting an Analyte Moiety Nov. 4, 1992
by Means of Signal Localization
Elazar Rabbani
- --------------------------------------------------------------------------------
EP 0 117 440 B1 Method and Structures Employing Apr. 7, 1993
Chemically-Labelled Polynucleotide
Probes
Jannis G. Stavrianopoulos et al.
- --------------------------------------------------------------------------------
EP 0 244 860 B1 Polynucleotide Probes and a Method Apr. 7, 1993
for their Preparation
David T. Mao et al.
================================================================================
EP 0 343 424 B1 Method and Kit for Sample Adherence Apr. 21, 1993
to Test Substrate
Huey-Lang Yang et al.
================================================================================
- 6 -
<PAGE>
================================================================================
Patent Number Publication Date
(Country) Title/Inventor of Patent Grant
- --------------------------------------------------------------------------------
EP 0 159 719 B1 Hybridization Method for the Jun. 30, 1993
Detection of Genetic Material
Dean Engelhardt et al.
- --------------------------------------------------------------------------------
EP 0 122 614 B1 Kit for Terminally Chemically Jul. 14, 1993
Labelling DNA
Christine Brakel
- --------------------------------------------------------------------------------
EP 0 150 844 B1 Method of Radioactively Labeling Jul. 28, 1993
Diagnostic and Therapeutic Agents
Containing a Chelating Group
Jannis Stavrianpoulos
- --------------------------------------------------------------------------------
0 237 737 B1 A Composition Specific for Neisseria Sep. 8, 1993
Gonorrhoea
Andrew Lo et al.
================================================================================
- 7 -
<PAGE>
Exhibit B: Products and Transfer Price Paid by Amersham
RPN3000 ECL direct labelling and detection system
QC test: 0.5pg detected in an ECL detection on a genomic
Southern blot (n-ras) Background less than 2.5 on kodak
scale.
Transfer Price: $*
RPN3001 ECL Direct labelling and detection system
QC test: 0.5pg detected in an ECL detection on a genomic
Southern blot (n-ras) Background less than 2.5 on kodak
scale.
Transfer Price: $*
RPN3005 ECL direct labeling system
QC test: 0.5pg detected in an ECL detection on a genomic
Southern blot (n-ras) Background less than 2.5 on kodak
scale.
Transfer Price: $*
RPN3004 ECL detection reagents (2000cm3)
QC test [lambda]Hind III blots hybridized overnight with
Lambda probe labelled with ECL direct. The 4.36kb band in
the 10pg loading must be visualized after a 30 minute
exposure. Background less than 2.5 on kodak scale.
Transfer Price: $*
RPN2105 ECL detection reagents (4000cm3)
QC tested as RPN 3004
Transfer Price: $*
RPN2130 ECL 3' oligolabelling system
QC test: Tested in a full functional assay, using the
supplied controls. A sensitivity of 20 x 10-28 moles of
target (equivalent to 48pg of single stranded M13) can be
achieved in 2 hours. Background less than 2.5 on kodak
scale.
Transfer Price: $*
RPM2131 ECL 3' oligolabelling and detection system
Combination of RPN2130 and RPN2105
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
4
<PAGE>
RPN3029 ECL random prime labelling and detection system
QC test: Full functional human genomic hybridization -
detection of a single copy gene representing a maximum
sensitivity of 0.5pg of target in a lug loading. It is also
tested in Southern blots with the unlabelled control DNA to
ensure a l(micrometer)g detection level can be attained.
The fluorescein-labelled DNA is tested on dot blots to
ensure a detection of 0.5pg
Transfer Price: $*
RPN3040 ECL random prime labelling system
QC test: Full functional human genomic hybridization -
detection of a single copy gene representing a maximum
sensitivity of 0.5pg of target in a l microgram
loading. It is also tested in Southern blots with the
unlabelled control DNA to ensure a lpg detection level can
be attained. The fluorescein-labelled DNA is tested on dot
blots to ensure a detection of 0.5pg. Background less than
2.5 on kodak scale. Transfer Price: $*
RPN3041 ECL random prime labelling system
QC test: As RPN3040
Trnasfer Price: $*
RPN3030 ECL random prime labelling and detection system
Combination of l pack each of RPN3040 and RPN3004
Transfer Price: $*
RPN3031 ECL random prime labelling and detection system
Combination of 2 packs each of RPN3040 and RPN3004
Transfer Price: $*
RPN2111
ECL 5'-thiol labelling system QC test: All components are
tested for performance in a standard labelling reaction
using 5 microgram of M13 forward sequencing primer
followed by hybridization of dot blots of single stranded
M13mp8. The 0.lng dot is detected after a l hour exposure.
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
RPN3020 ECL probe-amp reagents
QC test: tested to ensure incorporation into a DNA
amplification product of 910bp. In combination with ECL
detection, a single copy gene in human genomic DNA,
representing a maximum sensitivity of lpg of target in
2 microgram genomic DNA.
Transfer Price: $*
RPN3021 ECL probe-amp reagents
Consists of 2x RPN3020 as above
Transfer Price: $*
RPN3006 ECL gold buffer
QC test same as ECL direct (RPN3000)
Transfer Price: $*
RPN3200 DNA colour kit
QC test: Full functional in-situ test detection of POMC
mRNA in rat pituitary sections. The antibody conjugate,
fluorescein labelled DNA and detection reagents also tested
individually.
Transfer Price: $*
RNA3300 RNA colour kit
QC test: Full functional in situ test detection of POMC
mRNA in rat pituitary sections. The antibody conjugate,
fluorescein labelling components and detection reagents
also tested individually.
Transfer Price: $*
RPN3400 Oligo colour kit
QC test: Full functional in situ test detection of POMC
mRNA in rat pituitary sections. The antibody conjugate and
detection reagents also tested individually.
Transfer Price: $*
RPN3540 Fluorescein Gene Images Random prime module
QC test: Full functional test with RPN3510. detection of
0.05pg on a human genomic Southern blot. (n-ras)
Representing single copy gene detection.
Transfer Price: $*
RPN3541 Fluorescein Gene Images Random prime module
Combination of 2 packs of RPN3540
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
6
<PAGE>
RPN3510 Fluorescein Gene Images dioxetane detection module
QC test: Full functional test with RPN3540. detection of
0.05pg on a human genomic Southern blot. (n-ras)
Representing single copy gene detection.
Transfer Price: $*
RPN3511 Fluorescein Gene Images dioxetane detection module
2 packs of RPN3510 Fluorescein Gene Images dioxetane
detection module
Transfer Price: $*
RPN3500 Fluorescein Gene Images labelling and detection system
l pack each of RPN3540 and RPN3510
Transfer Price: $*
RPN3501 Fluorescein Gene Images labelling and detection system
2 packs each of RPN3540 and RPN3510
Transfer Price: $*
RPN3601 Liquid blocking agent
QC tested in the same test as Fluorescein Gene Images
Transfer Price: $*
RPN2071 Labelled (Fl-dUTP) markers lambda Hind III
QC tested by running a gel 5 microliter and 10 microliter
l - o/n blot, block for 1 hour, HRP conj. 1 hr. ECL
detection, 30 minute exposure - 7 bands visualized with 5
microliter loading Transfer Price: $*
RPN2072 Labelled (FL-dUTP) markers E coT 141 QC tested by running a
gel 5 microliter and 10 microliter - o/n blot, block
for 1 hour, HRP conj l hr. ECL detection, 30 minutes
exposure - 9 bands visualized with 5 microliter loading.
Transfer Price: $*
RPN5770 3'-oligolabelling module
QC test: After l hour 240pg band visible, after 24 hours
120pg band visible, when used with RPN5750
Transfer Price: $*
RPN5750 Signal amplification module
QC test: As RPN5770 and RPN5751
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
7
<PAGE>
RPN5751 Random prime labelling module
QC test: Genomic Southern - 250fg band visible after 24
hours when used with RPN5750
Transfer Price: $*
RPN55752 Random prime labelling and signal amplification system
QC test: As above
Transfer Price: $*
RPN5775 3'-oligolabelling and signal amplification system
QC test: As RPN5770 and RPN5750
Transfer Price: $*
RPN2121 FluoroGreen
Fl-ll-dUTP 30nmol
QC test: Purified by HPCL and analyzed by TLC to monitor
fluorescence. Standard nick transaction to measure
incorporation (less than 60% incorporation). Greater than
90% incorporation when compared to control batch of
fluorescent nucleotide. In rapid labelling assay it should
equal control batch and be less than 1:2000 of the neat
nucleotide
Transfer Price: $*
RPN2122 FluoroRed
Rhodamine-4-dUTP 30nmol
QC test: As above
Transfer Price: $*
RPN2123 FluroBlue
Coumarin-4-dUTP 30nmol
QC test: Purified by HPLC and analyzed by TLC to monitor
fluorescence. Standard nick translation to measure
incorporation greater than 60% (incorporation). Greater
than 90% incorporation when compared to control batch of
fluorescent nucleotide. In rapid labelling assay it should
equal control batch and be less than 1:500 of the neat
nucleotide
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
8
<PAGE>
The transfer price paid by Amershares will be ** times the
prices listed on pages 6-9 of EXHIBIT B
PRICE INDEX 1995
IN SITU HYBRIDIZATION ASSAY SYSTEMS
<TABLE>
<CAPTION>
Cat. No. Product Quantity Price
BioPap(TM) Kits for Detection of HPV on Cervical Smear Specimens
<S> <C> <C> <C>
32881 BioPap Human papillomavirus DNA Assay for Cervical Smears 20 test kit $ 345.00
32892 BioPap Human papillomavirus DNA Typing Assay for
Cervical Specimens (Types 6/11, 16/18, 31/33/51 10 test kit 305.00
32883 BioPap Human Papillomavirus DNA Typing Assay
Certival Specimen Transport Kit for 10 specimen 35.00
PathoGene(R) Kits for Detection of HPV on Formalin-fixed, Paraffin-embedded Tissue Sections
32879 PathoGene in situ Screening Assay for Human Papillomavirus 20 test kit 425.00
32895 PathoGene in situ Typing Assay for Human Papillomavirus
(Types 6/11, 16/18, 31/33/51) 10 test kit 305.00
32877 PathoGene DNA Probe Assay for Identification of Human Papillomavirus
(Types 6/11, 16/18, 31/33/51 20 test kit 525.00
32878 PathoGene HPV 18 DNA Probe Reagent 1 ml 140.00
PathoGene(R) Kits for Detection of Infectious Agents on Formalin-fixed, Paraffin-embedded Tissue Sections
Peroxidase-AEC Substrate Detection Kits
32871 PathoGene DNA Probe Assay for Identification of Adenovirus
32872 PathoGene DNA Probe Assay for Identification of Cytomegalovirus 20 test kit 235.00
32873 PathoGene DNA Probe Assay for Identification of Epstein-Barr Virus 20 test kit 260.00
32874 PathoGene DNA Probe Assay for Identification of Hepatitis B Virus 20 test kit 235.00
32875 PathoGene DNA Probe Assay for Identification of Herpes Simplex Virus 20 test kit 235.00
32876 PathoGene DNA Probe Assay for Identification of Chlamydia trachomatis 20 test kit 235.00
Peroxidase-DAB Substrate Detection Kits
32861 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
32862 PathoGene DNA Probe Assay for identification of 20 test kit 260.00
32863 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
32864 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
32865 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
32866 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
</TABLE>
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
- 2 -
<PAGE>
<TABLE>
<CAPTION>
Alkaline Phosphatase-BCIP/NBT Substrate Detection Kit
<C> <C> <C> <C>
32851 PathoGene DNA Probe Assay for identification of Adenovirus 20 test kit $250.00
32852 PathoGene DNA Probe Assay for identification of Cytomegalovirus 20 test kit 275.00
32853 PathoGene DNA Probe Assay for identification of Epstein-Barr Virus 20 test kit 250.00
32854 PathoGene DNA Probe Assay for identification of Hepatitus B Virus 20 test kit 250.00
32855 PathoGene DNA Probe Assay for identification of Herpes Simplex Virus 20 test kit 250.00
32856 PathoGene DNA Probe Assay for identification of Chlamydia trachomatis 20 test kit 250.00
IN SITU HYBRIDIZATION ASSAY SYSTEMS
Cat. No. Product Quantity Price
32870 Peroxidase-ABC Detection Kit (ready-to-use) 20 test kit 95.00
32860 Peroxidase-ABC Detection Kit (ready-to-use) 20 test kit 95.00
32850 Alkaline Phosphate-BCIP/NBT (ready-to-use) 20 test kit 105.00
32700 Enhanced in situ Detection Kit, alkaline phosphatase 20 test kit 195.00
32600 Enhanced in situ Detection Kit, peroxidase 20 test kit 195.00
IN SITU HYBRIDIZATION ASSAY SYSTEMS
Cat. No. Product Quantity Price
46305 Dot Blot Hybridization and Detection Assay Kit 1 kit 750.00
46305C Dot Blot Hybridization and Detection Assay Kit, Control DNA Pack 1 kit 170.00
46307 Dot Blot Hybridization and Detection Assay Kit, CMV Control DNA Pack 1 kit 135.00
46308 Dot Blot Hybridization and Detection Assay Kit, HBV Control DNA Pack 1 kit 135.00
44300 Dot Blot Manifold 1 unit 425.00
46330 HIV-1 Microplate Hybridization Assay 96 test kit 625.00
46331 SK 38K/SK 39 Oligonucleotide pair
complementary to HIV-1 gag region 5 nanomoles each 175.00
46340 MTB Microplate Hybridization Assay 96 test kit 625.00
46341 MTB 10/MTB 11 Oligonucleotide pair complementary to MTB 5 nanomoles each 175.00
46350 HBV Microplate Hybridization Assay 96 test kit 625.00
46351 HBO1/HBO2 Oligonucleotide pair
complementary to HBV core region 5 nanomoles each 175.00
46352 HBV Serum Specimen Preparation Kit for 96 specimens 50.00
46353 HBV Enhanced Microplate Hybridization Assay for 96 specimens 700.00
46354 HBV Serum Specimen Titration Standards for 4 assay determinations 50.00
46360 HIV-2 Microplate Hybridization Assay 96 test kit 625.00
46361 B306/VB310 Oligonucleotide pair complementary to HIV-2 5 nanomoles each 175.00
</TABLE>
- 3 -
<PAGE>
<TABLE>
<CAPTION>
BIOPROBE(R) LABELED PROBES
<S> <C> <C>
Cat. No. Product Quantity Price
40834 Adenovirus 80ul $175.00
40835 Cytomegalovirus 80ul 205.00
40836 Epstein-Barr Virus 80ul 175.00
40837 Hepatitus B Virus 80ul 175.00
40838 Herpes Simplex Virus 80ul 175.00
40839 Chlamydia trachomatis 80ul 175.00
40840 Lambda 80ul 175.00
40841 pBR322 (negative DNA control) 80ul 75.00
40842 Hepatitis A Virus 80ul 175.00
40843 Mycoplasma pneymoniae 80ul 175.00
40845 SV40 80ul 175.00
40846 Campylobacter jejuni 80ul 175.00
40847 JC Virus 80ul 175.00
40848 BK Virus 80ul 175.00
40849 Blur 8 (human alu repeat) (positive DNA control) 80ul 75.00
40714 c-Ha-ras (activated, human) 80ul 220.00
40717 c-Myc (human) 80ul 220.00
40718 N-Myc (human) 80ul 220.00
BIOPROBE(R) LABELING SYSTEMS FOR NUCLEIC ACIDS
Cat. No. Product Quantity Price
42803 Nick Translation System (containing Bio II-dUTP) for 10u DNA 230.00
42804 Nick Translation System (to be used with nucleotide of choice) for 10u DNA 105.00
42809 Terminal Labeling Kit for 10u DNA 285.00
42810 Random Priming Kit (containing Bio 11-dUTP) for 10u DNA 230.00
42813 BioBridge Labeling System for 8u DNA 295.00
42814 BioBridge Lebaling Molecule for 8u DNA 210.00
42807 RNA Labeling System - T3/T7 for 20 reactions (1u each) 330.00
42808 RNA Labeling System - SP6 for 20 reactions (1u each) 330.00
BIOPROBE(R) LABELING SYSTEMS FOR NUCLEIC ACIDS - BIOTINYLATED NUCLEOTIDES
Cat. No. Product Quantity Price
42806 Bio-11dUTP (0.3 mM) 22.5 nanomoles 225.00
42806-50 Bio-11dUTP (1.0 mM) 50.0 nanomoles 285.00
42811 Bio-16dUTP (0.3 mM) 22.5 nanomoles 230.00
42811-50 Bio-16dUTP (1.0 mM) 50.0 nanomoles 285.00
42816 Bio-11dCTP (0.3 mM) 22.5 nanomoles 225.00
42816-50 Bio-11dCTP (1.0 mM) 50.0 nanomoles 285.00
42819 Bio-7-dATP (0.3 mM) 22.5 nanomoles 225.00
42819-50 Bio-71dATP (1.0 mM) 50.0 nanomoles 285.00
</TABLE>
- 4 -
<PAGE>
<TABLE>
<S> <C> <C> <C>
42812 Bio-AP3-dCTP (0.3 mM) 22.5 nanomoles $230.00
42815 Bio-11-CTP (20 mM) 1u mole 385.00
42801 Bio-11-CTP (20 mM) 1u mole 385.00
42817 Allylamine UTP (20 mM) 400 nanomoles 230.00
DETEK(R) SIGNAL GENERATING SYSTEMS
Cat. No. Product Quantity Price
43818* DETEK I-f for 200 slides 180.00
43861* IgG fraction rabbit anti-biotin 0.4 ml 210.00
43805* DETEK-fav 5 ml 110.00
43820* DETEK-hrp Kit 00 ml working solution or 150.00
40 membranes (100 cm2 each)
43822* DETEK-alk Kit 500 ml working solution or 225.00
40 membranes (100 cm2 each)
42823* DETEK Enhancer Kit for 20 slides 135.00
43825 Peroxidase Substrate Kit (AEC) 300 ml working solution 90.00
43826 Peroxidase Substrate Kit (DAB) 300 ml working solution 90.00
43827 Alkaline Phospharase Substrate Kit (NBT/BCIP) 400 ml working solution 160.00
43406 ENZOITIN(R)Biotinylating Reagent 100 mg 150.00
GLASS FIBER FILTERS
Cat. No. Product Quantity Price
44524 Disc (24 min diameter) 400/box 60.00
44525 Disc (25 min diameter) 400/box 60.00
44101 Rectangle (10.25 cm x 25.4 cm) 100/box 120.00
</TABLE>
* These PRODUCTS are designated for nucleic acid detection
- 5 -
<PAGE>
EXHIBIT C: AMERSHAM AFFILIATES
Australia: Amersham Australia Pty Ltd
16 Anella Avenue
Castle Hill, Sydney
NSW 2154
Australia
Belgium: Amersham Belgium NV/SA
Ottergemseteenweg 644 Z
9000 gent
Belgium
Canada: Amersham Canada Ltd
1166 South Service Road West
Oakville
Ontario L6L 5T7
Canada
Denmark: Amersham Denmark ApS
Blokken 11
DK-3460 Birkerod
Denmark
France: Amersham France SA
12 Avenue des Tropiques
ZA Courtaboeuf
91944 Les Ulis
France
Germany: Amersham Buchler
GmbH & Co KG
Geschaftsbereich Life Science
Gieselweg 1
D - 38110 Braunschweig
Germany
Hong Kong: Amersham Far East Trading Ltd
Suite 1001-7
Sun Hung Kai Centre
30 Harbour Road
Wanchai, Hong Kong
Italy: Amersham Italia S.r.L
Via Quintilliano 30
20138 Milano
Italy
- 1 -
<PAGE>
Japan: Amersham KK
Tokyo Toyama Kaikan
1-3 Hakusan 5-Chome
Bunkyo-Ku
Tokyo 112
Japan
Netherlands: Amersham Nederland B.V
Amerikastraat 3a
5232 BE's Hertogenbosch
Netherlands
Norway: Amersham Denmark Aps
Norway Branch
Baerumsveien 373
PO Box 170
N-1346 Gjettum
Norway
Russia: Amersham International plc
Moscow Office
Tverskaya 22A, 5th Floor
Moscow 103050, Russia
Spain: Amersham Iberica S.A
Alfonso Gomex 38-4a
28037 Madrid
Spain
Sweden: Amersham Sweden AB
Parkvagen 4B
171 23 Solna
Sweden
Switzerland: Amersham Rahn
Dorflistrasse 120
CH-8050
Zurich
Switzerland
USA: Amersham North America
2636 South Clearbrook Drive
Arlington Heights
Illinois 60005
- 2 -
<PAGE>
EXHIBIT D: Component and transfer price paid by Enzo
<TABLE>
<CAPTION>
<S> <C> <C> <C>
RPN2130 ECL 3' oligolabelling system
Terminal transferase 100 microliter *
Cacodylate buffer 100 microliter *
Deionized water lml
Control unlabelled probe 30 microliter *
Control labelled DNA 50 microliter *
Control target DNA 10 microliter *
Anti Fluorescein HRP conj. 2x500 microliter *
Liquid blocking agent 100ml
Hybridization buffer component lg
Transfer Price: $*
RPN2131 ECL 3' oligolabelling and detection system
Combination of RPN2130 and RPN2105
Transfer Price: $*
RPN3029 ECL random prime labelling and detection system
Primers 75 microliter
Exo free Kleno 30 microliter *
Deionized water 1ml
Control unlabelled DNA 50 microliter *
Control labelled DNA 50 microliter *
Anti fluorescein HRP conj. 250 microliter *
Liquid blocking agent 50ml
ECL detection reagent 1 62.5ml
ECL detection reagent 1 62.5ml
Transfer Price: $*
RPN3040 ECL random prime labelling system
Primers 150 microliter
Exo Free Klenow 40 microliter *
Deionized water 1ml
Control unlabelled DNA 50 microliter *
Control labelled DNA 50 microliter *
Anti Fluorescein HRP conj. 500 microliter *
Liquid blocking agent 100ml
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
RPN3041 ECL random prime labelling system
Primers 75 microliter
Exo free Klenow 20 microliter *
Deionized water 1ml
Control unlabelled DNA 50 microliter *
Control labelled DNA 50 microliter *
Anti fluorescein HRP conj. 250 microliter *
Liquid blocking agent 50ml
Transfer Price: $*
RPN3030 ECL random prime labelling and detection system
Combination of l pack each of RPN3040 and RPN3004
Transfer Price: $*
RPN3031 ECL random prime labelling and detection system
Combination of 2 packs each of RPN3040 and RPN3004
Transfer Price: $*
RPN2111 ECL 5'-thiol labelling system
Lyophilized derivatized HRP 5 tubes *
Control HRP labelled probel 25 microliter *
Control target DNA 10 microliter *
Blocking reagent 20g
Transfer Price: $*
RPN3020 ECL probe-amp reagents
Anti-Fluorescein HRP conj. 500 microliter *
Blocking reagent 10g
Transfer Price: $*
RPN3021 ECL probe-amp reagents
Consists of 2x RPN3020 as above
Transfer Price: $*
RPN3006 ECL gold buffer
2 x 500ml
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
RPN3200 DNA colour kit
Primers 75 microliter
Exo free Klenow 15 microliter *
Deionized water lml
Control unlabelled DNA 50 microliter *
Anti fluorescein AP conj. 40 microliter *
Hybridization Buffer 5ml
Blocking agent 10g
BCIP 500 microliter *
NBT 500 microliter *
Transfer Price: $*
RPN3300 RNA colour kit
Transcription buffer 80 microliter *
HPRI 20 microliter *
SP6 RNA polymerase 40 microliter *
T7 RNA polymerase 40 microliter *
Deionized water lml
Control template 5 microliter *
Anti fluorescein AP conj. 40 microliter *
Hybridization Buffer 5ml
Blocking agent 10g
BCIP 500 microliter *
NBT 500 microliter *
Transfer Price: $*
RPN3400 Oligo colour kit
Terminal transferase 100 microliter *
Cacodylate buffer 100 microliter
Deionized water 1ml
Control unlabelled probe 30 microliter *
Anti fluorescein AP conj. 40 microliter *
Hybridization Buffer 5ml
Blocking agent 10g
BCIP 500 microliter *
NBT 500 microliter *
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
RPN3540 Fluorescein Gene Images Random prime module
Primers 150 microliter
Exo free Klenow 40 microliter *
Deionized water lml
Control unlabelled DNA 50 microliter *
Control labelled DNA 50 microliter *
Liquid blocking agent 100ml
Transfer Price: $*
RPN3541 Fluorescein Gene Images Random prime module
Combination of 2 packs of RPN3540
Transfer Price: $*
RPN3510 Fluorescein Gene Images dioxetane detection module
Anti-fluorescein AP conj. 150 microliter *
Liquid blocking agent 2x100ml
Dioxetane detection reagent 40ml *
Development bags 8
Transfer Price: $*
RPN3511 Fluorescein Gene Images dioxetane detection module
2 packs of RPN3510 Fluorescein Gene Images dioxetane
detection module
Transfer Price: $*
RPN3500 Fluorescein Gene Images labelling and detection system
l pack each of RPN3540 and RPN3510
Transfer Price: $*
RPN3501 Fluorescein Gene Images labelling and detection system
2 packs each of RPN3540 and RPN3510
Transfer Price: $*
RPN3601 Liquid blocking agent
100ml
Transfer Price: $*
RPN2071 Labelled (Fl=dUTP) markers lambda Hind III
200 microliter
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
RPN2072 Labelled (Fl-dUTP) markers E coT 141
200 microliter
Transfer Price: $*
RPN5770 3'-oligolabelling module
Terminal transferase 40 microliter *
Cacodylate buffer 100 microliter *
Deionized water lml
Control unlabelled probe 30 microliter *
Control labelled DNA 50 microliter *
Control target DNA 10 microliter *
Transfer Price: $*
RPN5750 Signal amplification module
Anti-fluorescein AP conj. 150 microliter *
Liquid blocking agent 2X100ml
Detection reagent (attophos) 36mg
Detection buffer 60ml
Detection bags 16
Transfer Price: $*
RPN5751 Random prime labelling module
Primers 150 microliter
Exo free Klenow 40 microliter *
Deionized water 1ml
Control unlabelled DNA 50 microliter *
Control labelled DNA 50 microliter *
Liquid blocking agent 100ml
Transfer Price: $*
RPN5752 Random prime labelling and signal amplification system
Combination of RPN5751 and RPN5750
Transfer Price: $*
RPN5775 3'-oligolabelling and signal amplification system
Combination of RPN5770 and RPN5750
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
</TABLE>
<PAGE>
EXHIBIT E-1/2
Exhibit E: Component 1 and Transfer Price Paid by Enzo
RPN3000 ECL direct labelling and detection system
DNA labelling reagent 0.5ml
Glutaraldehyde solution 0.5ml
Water lml
lambda HindIII control DNA 0.1ml *
Gold hybridization buffer 500ml
Blocking reagent 25g
ECL detection reagent l 125ml
ECL detection reagent 2 125ml
Transfer Price: $*
RPN3001 ECL direct labelling and detection system
DNA labelling reagent 2x0.5ml
Glutaraldehyde solution 2x0.5ml
Water 2xlml
lambda HindIII control DNA 2x0.lml *
Gold hybridization buffer 2x500ml
Blocking reagent 2x25g
ECL detection reagent l 2x125ml
ECL detection reagent 2 2x125ml
Transfer Price: $*
RPN3005 ECL direct labelling system
DNA labelling reagent 0.5ml
Glutaraldehyde solution 0.5ml
Water lml
lambda HindIII control DNA 0.lml *
Gold hybridization buffer 500ml
Blocking reagent 25g
Transfer Price: $*
RPN3004 ECL detection reagents (2000cm2)
ECL detection reagent l 125ml
ECL detection reagent 2 125ml
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
RPN2105 ECL detection reagents (4000cm2)
ECL detection reagent 1 250ml
ECL detection reagent 2 250ml
Transfer Price: $*
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
EXHIBIT E2/2
Patents licensed to Amersham International
================================================================================
Country Patent Number Inventor
- --------------------------------------------------------------------------------
UK/Belgium/France/Germany/Italy/ EPO 116454 Whitehead T.P. et al.
Netherlands/Sweden/Switzerland
- --------------------------------------------------------------------------------
Australia 575552 Whitehead T.P. et al.
- --------------------------------------------------------------------------------
Canada 1217121 Whitehead T.P. et al.
- --------------------------------------------------------------------------------
Finland 76380 Whitehead T.P. et al.
- --------------------------------------------------------------------------------
Japan 1649 482 Whitehead T.P. et al.
- --------------------------------------------------------------------------------
New Zealand 207095 Whitehead T.P. et al.
- --------------------------------------------------------------------------------
South Africa 84/0909 Whitehead T.P. et al.
- --------------------------------------------------------------------------------
USA 4598044 Whitehead T.P. et al.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Europe 120376 Renz M
- --------------------------------------------------------------------------------
USA 5053326 Renz M
- --------------------------------------------------------------------------------
Japan 1634268 Renz M
================================================================================
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
- 1 -
<PAGE>
EXHIBIT F
Completed Kits
Cat. Code Description Stock Level
- --------- ----------- -----------
RPN 3000 ECL direct labelling & detection system *
RPN 3001 ECL direct labelling & detection system *
RPN 3005 ECL direct labelling system *
RPN 3004 ECL detection reagents *
RPN 2105 ECL detection reagents *
RPN 2130 ECL 3'oligolabelling system *
RPN 2131 ECL 3'oligolabelling and detection system *
RPN 3029 ECL random prime labelling & detection system *
RPN 3030 ECL random prime labelling & detection system *
RPN 3031 ECL random prime labelling & detection system *
RPN 3040 ECL random prime labelling system *
RPN 3041 ECL random prime labelling system *
RPN 3020 ECL probe-amp reagents *
RPN 3021 ECL probe-amp reagents *
RPN 2111 ECL 5' thiol labelling system *
RPN 3006 ECL Gold buffer *
RPN 3200 DNA colour kit *
RPN 3300 RNA colour kit *
RPN 3400 Oligo colour kit *
RPN 3500 Fluorescein Gene Images labelling & detection system *
RPN 3501 Fluorescein Gene Images labelling & detection system *
RPN 3510 Fluorescein Gene Images dioxetane detection system *
RPN 3511 Fluorescein Gene Images dioxetane detection system *
RPN 3540 Fluorescein Gene Images random prime module *
RPN 3541 Fluorescein Gene Images random prime module *
RPN 3601 Liquid blocking agent *
RPN 2071 Labelled markers [lambda]HINDiii *
RPN 2072 Labelled markers [lambda]Eco T141 *
RPN 2121 FluoroGreen *
RPN 2122 FluoroRed *
RPN 2123 FluoroBlue *
RPN 5770 3' oligolabelling module *
RPN 5750 Signal amplification module *
*The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
RPN 5751 Random prime labelling module *
RPN 5752 Random prime labelling signal amplification *
RPN 5775 3' oligolabelling & signal amplification system *
Work in progress
- ----------------
Code Description Number
- ---- ----------- ------
1046311 exo-klenow 5u/ul *
1047882 vial liquid block *
1058925 vial, exo-klenow, 40ul *
1058932 vial, exo-klenow, 20ul *
1059304 vial, liquid block, 100ml *
1059441 bags, polyprop 300x250-mm, pk of 8 *
1059632 Batch mix, RPN3540 *
1059687 Batch mix RPN3510 *
1064285 vial, AP conj. monoclonal *
1065794 Batch mix RPN3601 *
1067811 vial attophos unlabelled *
1067873 vial attophos *
1067880 vial attophos buffer *
1068931 vial, terminal transferase 44ul *
10669136 Batch mix RPN5750 *
1075700 Casein, hamersten, irradiated *
AR/MB/103 1nm Fl UTp *
NIF539FB Control probe *
NIF816 Control target 11ul *
NIF818 Control unlabelled DNA 55ul *
NIF822 Control DNA 100ul *
NIF935 Lumiphos 530 *
NIF948 Fl-dUTP 33ul *
NIF948FB Fl-11-dUTP *
NIF965 HRP conj.275ul *
NIF994 BCIP soln.500ul *
NIF995 NBT soln. 500ul *
NIF996 Anti-Fl AP conj. *
NIF997 Hybridization buffer 5ml *
NIF999 Nucleotide mix 176ul *
RPN2071V HINdIII marker 220ul *
RPN2072V EcoT14iDNA 220ul *
RPN2111K ECL oligolabelling *
RPN2121V Fl-green 33ul *
RPN2122FB Fl-red *
RPN2122V Fl-red 33ul *
RPN2123FB Fl-blue *
RPN2123V Fl-blue 33ul *
*The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
<PAGE>
RPN2130K Batch mix RPN 2130 153
RPN3004K Batch mix RPN 3004 142
RPN3005K Batch mix RPN 3005 204
RPN3020K Batch mix RPN 3020 2
RPN3040K Batch mix RPN 3040 9
RPN3200K Batch mix RPN3200 18
RPN3300K Batch mix RPN3300 60
RPN5751 Batch mix RPN 5751 25
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
- 1 -
<PAGE>
Exhibit G:
Product Safety Regulations
- --------------------------
US: OSHA Hazard Communication Standards
UK: Chemical (Hazardous Information and Packaging)
Japan: Poisonous and Deleterious Substance Control Law
- 1 -
<PAGE>
EXHIBIT 10(aa)
ENZO DIAGNOSTICS, INC. - DAKO A/S
DISTRIBUTORSHIP AGREEMENT
THIS AGREEMENT, effective upon acceptance by both parties below by and between
ENZO DIAGNOSTICS, INC. ("ENZO"), a New York corporation having its principal
place of business at 60 Executive Boulevard, Farmingdale, New York 11735, and
DAKO A/S ("DAKO") a private Danish Corporation having its principal place of
business at Produktionsvej 42, DK-2600 Glostrup, Denmark and its American
subsidiary, DAKO CORPORATION a California corporation having its principal place
of business at 6392 Via Real, Carpinteria, California 93013.
WHEREAS, ENZO owns rights to certain patents and patent applications listed
in EXHIBIT A ("PATENTS");
WHEREAS ENZO manufactures and/or sells certain products, including products
covered by claims of PATENTS ("PRODUCTS") listed in EXHIBIT B and products
not covered by claims of PATENTS listed in EXHIBIT C;
WHEREAS DAKO wishes to market and distribute some of said PRODUCTS listed
in EXHIBIT B and products listed in EXHIBIT C as agreed upon;
NOW, THEREFORE, in consideration of the good and valuable mutual agreements
hereinafter set forth, the parties hereto agree as follows:
DEFINITIONS:
DAKO Affiliate means an entity controlled by or under common control with DAKO
as listed in EXHIBIT D. For purposes of this AGREEMENT, control shall mean
the ownership of a majority of the voting equity interest.
DAKO Distributor means a local company, outside the countries in which a DAKO
Affiliate is located, in which DAKO does not sell directly or through a
DAKO Affiliate. Dako Distributors listed in EXHIBIT D have rights to sell
only in the country in which they are located.
DAKO means DAKO A/S, including DAKO Affiliates and DAKO Distributors.
1. Distributor Appointment
ENZO hereby appoints DAKO to act as its nonexclusive distributor worldwide
for the distribution and sale of such PRODUCTS (EXHIBIT B) and products
(EXHIBIT C) as agreed upon, and DAKO agrees to act as such distributor
under the terms and conditions set forth herein.
<PAGE>
DAKO hereby agrees:
a. not to purchase any PRODUCTS from other suppliers;
b. not to manufacture PRODUCTS;
c. to rely on ENZO as its sole source of PRODUCTS;
d. not to use any PRODUCT to manufacture new or other PRODUCTS;
e. that all PRODUCTS distribributed by DAKO are for research use
only and are not intended for or to be used for diagnostic or
therapeutic purposes; and
f. that except for DISTRIBUTION under the terms and conditions as
set forth in this AGREEMENT, purchase does not include any right
or license to exploit these PRODUCTS commercially, including any
right to sell these PRODUCTS to other distributors who are not
DAKO Affiliates or DAKO Distributors (EXHIBIT D) and that any
other commercial use or development of these PRODUCTS without the
express written authorization of ENZO is strictly prohibited.
2. Relationship between ENZO and DAKO
Nothing herein creates or constitutes a partnership or an agreement of
agency between the parties with respect to any activities whatsoever. The
relationship between ENZO and DAKO shall be that of seller and buyer, and
neither party shall conclude any contract or agreement or make any
commitment, representation or warranty which binds the other party or
otherwise act in the name of or on behalf of the other party.
This AGREEMENT may not be assigned or otherwise transferred by DAKO without
the prior written consent of ENZO. Any attempted assignment or transfer
without such consent shall be void.
DAKO certifies that past sales of PRODUCTS as of * were * . A one-time
payment of * will constitute full consideration for damages of past
infringement.
ENZO and DAKO agree that the distribution relationship between them does
not constitute, nor does it imply, a license of any of ENZO's technology or
patents, nor does it abrogate any of ENZO's rights under its patents. ENZO
maintains full rights under its PATENTS. The foregoing statements are
paramount to this AGREEMENT.
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 406.
2
<PAGE>
3. PRODUCTS and Price and Payment
PRODUCTS covered by this AGREEMENT are listed in EXHIBIT B and EXHIBIT C
attached hereto. The price to DAKO for each product shall be * times the
current domestic (i.e. United States) retail price as reflected by the
prices in ENZO's most recently published price list.
When yearly retail price of sales of these products by DAKO is greater than
5 million dollars (US), the price to DAKO for each product shall be * times
the current domestic (i.e. United States) retail price as reflected by the
prices in ENZO's most recent published price list.
The current domestic retail prices at the time of execution of this
AGREEMENT are listed in EXHIBIT B and EXHIBIT C. Prices to DAKO may be
adjusted no more than once during a calendar year. ENZO has the right to
adjust prices to DAKO after providing DAKO with forty-five (45) days
written notice. Any price adjustment will affect future purchases, but will
not affect those already under existing firm purchase order commitment.
ENZO or DAKO may propose in writing to add, to modify or to delete PRODUCT
or products in EXHIBIT B or EXHIBIT C. Both ENZO and DAKO must agree in
writing to such additions, deletions or modifications of PRODUCTS in
EXHIBITS B or C before such changes are incorporated therein.
4. Terms of Payment and Audit
Payment shall be net, thirty (30) days from the end of the month in which
the PRODUCTS are delivered.
DAKO agrees to permit its books and records to be examined by ENZO to
verify receipts. Examination will take place on reasonable prior notice, as
necessary, but not more than once per year. Such examination is to be made
by an independent auditor of ENZO's choice, at ENZO's expense, except in
the event that the results of the audit reveal a discrepancy benefiting
ENZO by five percent (5%) or more, then the audit fees shall by paid by
DAKO.
5. PRODUCT Shipments
All PRODUCTS shipped by ENZO to DAKO will be shipped F.O.B. Farmingdale,
NY.
6. Forecasts and Purchase Orders
DAKO shall issue a forecast schedule during the mid-month of each calendar
quarter covering its estimated requirements for PRODUCTS for the succeeding
two (2) calendar quarters. Such forecast shall be considered for planning
purposes only and not a purchase commitment.
A purchase order will be issued by DAKO at least sixty (60) days in advance
of the requested delivery of PRODUCT. This purchase order will indicate
specific delivery and/or shipping requirements. Purchase orders will be
delivered to ENZO by Federal Express or similar carrier so
- ----------
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
3
<PAGE>
that the receipt can be confirmed. ENZO shall meet such requirements unless
it advises DAKO within ten (10) business days of the date of such purchase
order that it is unable to supply PRODUCT as ordered by DAKO whereupon the
parties agree to discuss a revised schedule for delivery of PRODUCT to
DAKO. After ENZO and DAKO agree to the provisions of a revised schedule,
ENZO will make its best efforts to fulfill the provisions of the revised
schedule.
Each purchase order shall be governed by the relevant provisions of this
AGREEMENT (unless otherwise expressly provided in the individual purchase
order and confirmed in writing by ENZO) and no term or condition which may
appear in the printed matter in DAKO's order form or any form from ENZO
shall be binding on either party or apply to any transaction under this
AGREEMENT.
7. PRODUCT Deliveries and Specifications
Within thirty (30) days after the effective date of this Agreement, ENZO
shall provide DAKO with PRODUCT specifications and package inserts for
those PRODUCTS in EXHIBIT B that DAKO intends to distribute.
When an order is placed by DAKO, ENZO shall ship the PRODUCT in accordance
with Section 5 above. Failure by DAKO to notify ENZO of rejection of the
PRODUCT within fifteen (15) days of receipt of PRODUCT will constitute
acceptance. ENZO shall supply, at the time of shipment of the PRODUCT to
DAKO, a statement that the PRODUCT conforms to the PRODUCT specifications.
If after receipt of the PRODUCT, DAKO determines that it does not conform
to the PRODUCT specification provided by ENZO, and that the failure to
conform to the PRODUCT specifications was not the direct result of shipping
and handling, DAKO will provide ENZO with documentation of this failure to
conform to the PRODUCT specifications. If ENZO accepts the documentation
provided by DAKO, ENZO will ship a replacement order. If ENZO does not
accept the documentation provided by DAKO, then the differences in the
determination of the manufacturing specifications for the allegedly
nonconforming PRODUCT will be settled by representatives of the technical
staffs of ENZO and DAKO.
If DAKO receives a notice from a third party asserting that any of the
PRODUCTS of this AGREEMENT infringe on an issued patent in the country of
sale, then DAKO shall immediately give written notice to ENZO. Upon notice
to ENZO or DAKO from a third party asserting that any of the PRODUCTS of
this AGREEMENT infringe on an issued patent in the country in which such
PRODUCTS are sold, ENZO has the right to exclude such PRODUCTS from this
AGREEMENT for that country and can further instruct DAKO to cease all such
distribution of such PRODUCT in that country. Further distribution of
PRODUCTS after such instruction from ENZO to DAKO will be at the sole risk
of DAKO and DAKO shall indemnify and hold harmless ENZO from all
infringement liability and damages with respect to such PRODUCTS, including
legal costs and attorneys fees.
Notwithstanding any third party infringement claims, all provisions of this
AGREEMENT, including Section 7, shall not be affected but shall remain in
full force and effect to the fullest extent possible.
4
<PAGE>
8. Sales Promotions
DAKO shall exert on its own account, its best efforts in sales promotions
and advertisement of the PRODUCTS such as individual client contact, direct
mailings, catalog listings and trade meeting promotions. ENZO will provide
DAKO with one (1) copy of the literature, technical data, specifications
and the like describing the PRODUCTS that DAKO is distributing as they are
currently produced for the assistance of DAKO in the preparation of
advertising, catalog and other sales and promotional material. DAKO will
list PRODUCTS in its next available or published product catalog(s) in
which the PRODUCTS can be listed after the effective date of this
Agreement. DAKO will modify the listings of PRODUCTS in its product
catalog(s) as soon as reasonably possible after any corresponding
modification of the list of such PRODUCTS in EXHIBIT B and EXHIBIT C that
it intends to distribute.
9. PRODUCT Warranty
ENZO warrants that the PRODUCTS manufactured by ENZO for distribution by
DAKO shall meet the specifications described in ENZO's PRODUCT or package
inserts. ENZO's sole obligation is to replace the PRODUCTS with similar
PRODUCTS to the extent of the purchase price. THIS WARRANTY IS EXPRESSLY IN
LIEU OF ANY OTHER WARRANTIES OR LIABILITIES, EXPRESS OR IMPLIED, INCLUDING
THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
10. Storage and Stock Rotation
ENZO agrees to share with DAKO all necessary storage and stock rotation
practices which apply to the PRODUCTS.
DAKO further agrees to take diligent care not to ship PRODUCTS to its
customers which have expired, been damaged in storage or handling, or
improperly stored. DAKO will be responsible for damages arising from its
shipment of expired, damaged, or improperly stored PRODUCTS.
11. PRODUCT Labels
All PRODUCTS will be labeled with the ENZO DIAGNOSTICS, INC. label. DAKO
further agrees to ship all PRODUCTS intact with ENZO's package inserts and
any notice(s) appearing thereon.
12. Confidentiality of Information
DAKO and ENZO agree that they will not disclose any proprietary and
confidential information made available to them by the other party. Both
parties further agree that all confidential material will be in writing and
marked confidential and that they will not make more copies than necessary
of documents or materials which are provided under this AGREEMENT, nor will
they distribute such documents or materials, or copies thereof, to any
third party. Furthermore, both parties agree to return any such documents
or materials, or copies thereof, which are provided under this AGREEMENT if
directed or requested to do so.
5
<PAGE>
The above obligations shall not apply to those portions of ENZO's and
DAKO's proprietary and confidential information which (1) are or become
generally publicly available through no act or failure to act by the
recipient party, (2) were demonstrably known to both parties prior to
disclosure under this Agreement, or (3) are subsequently disclosed by a
third party having a legal right to do so and not having a confidential
relationship with respect thereto.
13. Force Majeure
NO LIABILITY shall result to either party from delay in performance or from
nonperformance under this Agreement caused by circumstances beyond the
control of the party who has delayed performance or not performed. The
nonperforming party shall be diligent in attempting to remove any such
cause and shall promptly notify the other party of its extent and probable
duration.
14. Duration and Termination
This AGREEMENT shall become effective as of the date hereinabove written
and shall continue for a period of three (3) years. Unless terminated, it
will continue thereafter for successive renewal terms of one (1) year.
Either party may terminate this AGREEMENT without cause at any time by
giving the other party notice in writing at least six (6) months in advance
of the effective termination date stated in such notice.
Upon termination of this AGREEMENT all distribution rights to DAKO will be
deemed immetiately canceled and returned in toto to ENZO.
15. Indemnification
Except to the extent the other is negligent or commits an act of wilful
misconduct or in default of the terms hereof, ach party shall hold the
other party harmless from responsibility or liability for damages related
to the PRODUCTS of this AGREEMENT arising from the fault of such party, its
affiliated companies, or its agents or employees.
16. Notices
All notices to be given with respect to this AGREEMENT shall be in writing
and shall be deemed effectively given:
when delivered personally;
seven (7) calendar days after being deposited in the mail, registered or
certified mail, return receipt requested;
when telecopied or faxed, receipt acknowledged; or
when telexed, confirmed;
6
<PAGE>
addressed as set forth below, or to such other address that either party
designates by written notice to the other party;
ENZO:
Enzo Biochem, Inc.
575 Fifth Avenue, 18th Floor
New York, NY 10017
Attn: Dr. Barbara E. Thalenfeld
Vice President, Corporate Development
Fax No.: (212) 856-0878
DAKO:
DAKO A/S
Produktionsvej 42
DK-2600 Glostrup
Denmark
Attn: John Place
Business Development Manager
Fax No.: 45 42 841822
17. Governing Law
This Agreement is made under and shall be governed by the laws of the State
of New York.
18. Waiver
Waiver by ENZO or DAKO of any provision of this AGREEMENT shall not be
deemed a waiver of future compliance therewith and such provision as well
as all other provisions hereunder shall remain in full force and effect.
19. Compliance with Laws
Each party will comply with all United States laws, ordinances and
regulations properly applicable to the manufacture, sale and distribution
of the PRODUCTS described herein. Where applicable, the parties will comply
with the laws of the country in which the product is being sold.
20. Headings
All Headings of the clauses of this AGREEMENT are inserted for convenience
only and shall not affect any construction or interpretation of this
AGREEMENT.
21. Severability
In the event that any clause of this AGREEMENT shall be found to be void or
unenforceable, such finding shall not be construed to render any other
clause of this AGREEMENT either void or unenforceable, and all other
clauses shall remain in full force and effect unless the clause(s) which
7
<PAGE>
is/are invalid or unenforceable shall substantially affect the rights or
obligations granted to or undertaken by either party.
22. Entirety
This AGREEMENT together with the EXHIBITS attached hereto embodies the
entire understanding between DAKO and ENZO, and there are no contracts or
prior drafts of the AGREEMENT, understandings, conditions, warranties or
representations, oral or written, express or implied, with reference to the
subject matter hereof which are not merged herein. Except as otherwise
specifically stated, no modification here to shall be of any force or
effect unless (1) reduced to writing and signed by both parties hereto, and
(2) expressly referred to as being modifications of this AGREEMENT.
IN WITNESS, WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.
ENZO DIAGNOSTICS, INC. DAKO A/S
By: By:
------------------------------ -----------------------------------
Elazar Rabbani
Title: President & CEO Title: President
--------------------------- --------------------------------
Date: Mar 21 1995 Date: 5 May 1995
------------------------------ -----------------------------------
* * * * * * *
8
<PAGE>
EXHIBIT A
ENZO BIOCHEM, INC.
ISSUED PATENTS AND PUBLISHED PATENT APPLICATIONS
US 4,711,955 US 4,889,798
US 5,328,824 EPO 151,492 A2
EPO 063,8799 B1 Canada 1,314,810
Denmark 164,407 US 4,898,325
Canada 1,219,824 US 5,228,609
EPO 329,198 A EPO 159,719 B1
US 5,241,060 Canada 1,260,372
US 5,260,433 EPO 526,912 A3
EPO 097,373 B1 US 4,987,065
EPO 285,057 A2 EPO 133,473 B1
EPO 302,175 A2 US 4,755,458
EPO 286,898 A2 EPO 173,339 B1
EPO 285,058 A2 Canada 1,260,368
Canada 1,223,831 US 4,746,604
US 4,994,373 Canada 1,268,115
EPO 117,440 B1 EPO 202,688 A2
Canada 1,309,672 Canada 1,295,559
EPO 525,821 A2 EPO 212,546 B1
EPO 128,322 A1 EPO 213,495 A2
EPO 154,788 A2 EPO 224,860 B1
EPO 122,614 B1 Canada 1,315,222 B1
Candad 1,254,525 US 4,687,732
US 4,707,440 EPO 149,654 B1
US 4,843,122 Canada 1,237,369 B1
US 4,943,523 EPO 294,595 A3
US 4,849,208 US 5,082,830
US 4,952,685 EPO 330,221
US 5,002,885 US 5,024,933 A2
US 5,013,831 EPO 343,424 B1
US 5,175,269 EPO 435,150 A2
US 4,849,505 EPO 492,570 A1
The PRODUCTS listed in Exhibit B are covered by one or more patents of
Enzo, including the patents listed above.
This list may be updated quarterly at Enzo's discretion.
1
<PAGE>
EXHIBIT B
PRODUCT LISTING
IN SITU HYBRIDIZATION ASSAY SYSTEMS
<TABLE>
<CAPTION>
Cat. No. Product Quantity Price
BioPap(TM) Kits for Detection of HPV on Cervical Smear Specimens
<S> <C> <C> <C>
32881 BioPap Human papillomavirus DNA Assay for Cervical Smears 20 test kit $ 345.00
32892 BioPap Human papillomavirus DNA Typing Assay for
Cervical Specimens (Types 6/11, 16/18, 31/33/51 10 test kit 305.00
32883 BioPap Human Papillomavirus DNA Typing Assay
Certival Specimen Transport Kit for 10 specimen 35.00
PathoGene(R) Kits for Detection of HPV on Formalin-fixed, Paraffin-embedded Tissue Sections
32879 PathoGene in situ Screening Assay for Human Papillomavirus 20 test kit 425.00
32895 PathoGene in situ Typing Assay for Human Papillomavirus
(Types 6/11, 16/18, 31/33/51) 10 test kit 305.00
32877 PathoGene DNA Probe Assay for Identification of Human Papillomavirus
(Types 6/11, 16/18, 31/33/51 20 test kit 525.00
32878 PathoGene HPV 18 DNA Probe Reagent 1 ml 140.00
PathoGene(R) Kits for Detection of Infectious Agents on Formalin-fixed, Paraffin-embedded Tissue Sections
Peroxidase-AEC Substrate Detection Kits
32871 PathoGene DNA Probe Assay for Identification of Adenovirus
32872 PathoGene DNA Probe Assay for Identification of Cytomegalovirus 20 test kit 235.00
32873 PathoGene DNA Probe Assay for Identification of Epstein-Barr Virus 20 test kit 260.00
32874 PathoGene DNA Probe Assay for Identification of Hepatitis B Virus 20 test kit 235.00
32875 PathoGene DNA Probe Assay for Identification of Herpes Simplex Virus 20 test kit 235.00
32876 PathoGene DNA Probe Assay for Identification of Chlamydia trachomatis 20 test kit 235.00
Peroxidase-DAB Substrate Detection Kits
32861 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
32862 PathoGene DNA Probe Assay for identification of 20 test kit 260.00
32863 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
32864 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
32865 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
32866 PathoGene DNA Probe Assay for identification of 20 test kit 235.00
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Alkaline Phosphatase-BCIP/NBT Substrate Detection Kit
<S> <C> <C> <C>
32851 PathoGene DNA Probe Assay for identification of Adenovirus 20 test kit $250.00
32852 PathoGene DNA Probe Assay for identification of Cytomegalovirus 20 test kit 275.00
32853 PathoGene DNA Probe Assay for identification of Epstein-Barr Virus 20 test kit 250.00
32854 PathoGene DNA Probe Assay for identification of Hepatitus B Virus 20 test kit 250.00
32855 PathoGene DNA Probe Assay for identification of Herpes Simplex Virus 20 test kit 250.00
32856 PathoGene DNA Probe Assay for identification of Chlamydia trachomatis 20 test kit 250.00
IN SITU HYBRIDIZATION ASSAY SYSTEMS
Cat. No. Product Quantity Price
32870 Peroxidase-ABC Detection Kit (ready-to-use) 20 test kit 95.00
32860 Peroxidase-ABC Detection Kit (ready-to-use) 20 test kit 95.00
32850 Alkaline Phosphate-BCIP/NBT (ready-to-use) 20 test kit 105.00
32700 Enhanced in situ Detection Kit, alkaline phosphatase 20 test kit 195.00
32600 Enhanced in situ Detection Kit, peroxidase 20 test kit 195.00
IN SITU HYBRIDIZATION ASSAY SYSTEMS
Cat. No. Product Quantity Price
46305 Dot Blot Hybridization and Detection Assay Kit 1 kit 750.00
46305C Dot Blot Hybridization and Detection Assay Kit, Control DNA Pack 1 kit 170.00
46307 Dot Blot Hybridization and Detection Assay Kit, CMV Control DNA Pack 1 kit 135.00
46308 Dot Blot Hybridization and Detection Assay Kit, HBV Control DNA Pack 1 kit 135.00
44300 Dot Blot Manifold 1 unit 425.00
46330 HIV-1 Microplate Hybridization Assay 96 test kit 625.00
46331 SK 38K/SK 39 Oligonucleotide pair
complementary to HIV-1 gag region 5 nanomoles each 175.00
46340 MTB Microplate Hybridization Assay 96 test kit 625.00
46341 MTB 10/MTB 11 Oligonucleotide pair complementary to MTB 5 nanomoles each 175.00
46350 HBV Microplate Hybridization Assay 96 test kit 625.00
46351 HBO1/HBO2 Oligonucleotide pair
complementary to HBV core region 5 nanomoles each 175.00
46352 HBV Serum Specimen Preparation Kit for 96 specimens 50.00
46353 HBV Enhanced Microplate Hybridization Assay for 96 specimens 700.00
46354 HBV Serum Specimen Titration Standards for 4 assay determinations 50.00
46360 HIV-2 Microplate Hybridization Assay 96 test kit 625.00
46361 B306/VB310 Oligonucleotide pair complementary to HIV-2 5 nanomoles each 175.00
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
BIOPROBE(R) LABELED PROBES
<S> <C> <C> <C>
Cat. No. Product Quantity Price
40834 Adenovirus 80ul $175.00
40835 Cytomegalovirus 80ul 205.00
40836 Epstein-Barr Virus 80ul 175.00
40837 Hepatitus B Virus 80ul 175.00
40838 Herpes Simplex Virus 80ul 175.00
40839 Chlamydia trachomatis 80ul 175.00
40840 Lambda 80ul 175.00
40841 pBR322 (negative DNA control) 80ul 75.00
40842 Hepatitis A Virus 80ul 175.00
40843 Mycoplasma pneymoniae 80ul 175.00
40845 SV40 80ul 175.00
40846 Campylobacter jejuni 80ul 175.00
40847 JC Virus 80ul 175.00
40848 BK Virus 80ul 175.00
40849 Blur 8 (human alu repeat) (positive DNA control) 80ul 75.00
40714 c-Ha-ras (activated, human) 80ul 220.00
40717 c-Myc (human) 80ul 220.00
40718 N-Myc (human) 80ul 220.00
BIOPROBE(R) LABELING SYSTEMS FOR NUCLEIC ACIDS
Cat. No. Product Quantity Price
42803 Nick Translation System (containing Bio II-dUTP) for 10u DNA 230.00
42804 Nick Translation System (to be used with nucleotide of choice) for 10u DNA 105.00
42809 Terminal Labeling Kit for 10u DNA 285.00
42810 Random Priming Kit (containing Bio 11-dUTP) for 10u DNA 230.00
42813 BioBridge Labeling System for 8u DNA 295.00
42814 BioBridge Lebaling Molecule for 8u DNA 210.00
42807 RNA Labeling System - T3/T7 for 20 reactions (1u each) 330.00
42808 RNA Labeling System - SP6 for 20 reactions (1u each) 330.00
BIOPROBE(R) LABELING SYSTEMS FOR NUCLEIC ACIDS - BIOTINYLATED NUCLEOTIDES
Cat. No. Product Quantity Price
42806 Bio-11dUTP (0.3 mM) 22.5 nanomoles 225.00
42806-50 Bio-11dUTP (1.0 mM) 50.0 nanomoles 285.00
42811 Bio-16dUTP (0.3 mM) 22.5 nanomoles 230.00
42811-50 Bio-16dUTP (1.0 mM) 50.0 nanomoles 285.00
42816 Bio-11dCTP (0.3 mM) 22.5 nanomoles 225.00
42816-50 Bio-11dCTP (1.0 mM) 50.0 nanomoles 285.00
42819 Bio-7-dATP (0.3 mM) 22.5 nanomoles 225.00
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
42819-50 Bio-71dATP (1.0 mM) 50.0 nanomoles 285.00
42812 Bio-AP3-dCTP (0.3 mM) 22.5 nanomoles $230.00
42815 Bio-11-CTP (20 mM) 1u mole 385.00
42801 Bio-11-CTP (20 mM) 1u mole 385.00
42817 Allylamine UTP (20 mM) 400 nanomoles 230.00
DETEK(R) SIGNAL GENERATING SYSTEMS
Cat. No. Product Quantity Price
43818* DETEK I-f for 200 slides 180.00
43861* IgG fraction rabbit anti-biotin 0.4 ml 210.00
43805* DETEK-fav 5 ml 110.00
43820* DETEK-hrp Kit 00 ml working solution or 150.00
40 membranes (100 cm2 each)
43822* DETEK-alk Kit 500 ml working solution or 225.00
40 membranes (100 cm2 each)
42823* DETEK Enhancer Kit for 20 slides 135.00
43825 Peroxidase Substrate Kit (AEC) 300 ml working solution 90.00
43826 Peroxidase Substrate Kit (DAB) 300 ml working solution 90.00
43827 Alkaline Phospharase Substrate Kit (NBT/BCIP) 400 ml working solution 160.00
43406 ENZOITIN(R)Biotinylating Reagent 100 mg 150.00
GLASS FIBER FILTERS
Cat. No. Product Quantity Price
44524 Disc (24 min diameter) 400/box 60.00
44525 Disc (25 min diameter) 400/box 60.00
44101 Rectangle (10.25 cm x 25.4 cm) 100/box 120.00
</TABLE>
* These PRODUCTS are designated for nucleic acid detection
4
<PAGE>
EXHIBIT C
PRODUCT LISTING
<TABLE>
<CAPTION>
HYBRIDIZATION ACCESSORIES
Cat. No. Product Quantity Price
<S> <C> <C> <C>
31871 Adenovirus Control Slide 1 slide $ 15.00
31872 Cytomegalovirus Control Slide 1 slide 15.00
31873 Epstein-Barr Virus Control Slide 1 slide 15.00
31875 Herpes Simplex Virus Control Slide 1 slide 15.00
31876 Chlamydia trachomatis Control Slide 1 slide 15.00
31802/20 Pretreated slides, teflon coated, single well 20-pack 25.00
31802/100 Pretreated slides, teflon coated, single well 100-pack 85.00
31500 Heating Block for use with DNA Probe Assays 110V, 50/60HZ 1 unit 300.00
31508 Heating Block for use with DNA Probe Assays 220V, 50 HZ 1 unit 300.00
32800 PathoGene Tissue Preparation Kit for 20 specimens 145.00
43825 Peroxidase Substrate Kit (AEC) 300 ml working solution 90.00
43826 Peroxidase Substrate Kit (DAB) 300 ml working solution 90.00
43827 Alkaline Phosphatase Suibstrate Kit (NBT/BCIP) 400 ml working solution 160.00
43406 ENZOITIN Biotinylating Reagent 100 mg 150.00
GLASS FIBER FILTERS
Cat. No. Product Quantity Price
44524 Disc (24 mm diameter) 400/box $ 60.00
44525 Disc (25 mm diameter) 400/box 60.00
44101 Retangle (10.25 x 25.4 cm) 100/box 120.00
</TABLE>
1
<PAGE>
EXHIBIT D
DAKO COMPANIES AND DISTRIBUTORS
Distribution
<TABLE>
<CAPTION>
less than CAPTIONgreater than
<S> <C> <C>
Argentina Brazil Costa Rica
Chemetron Latinoamericana S.A. Embrabio-Empresa Laboratorics Zeiedon S.A.
Junin 262 Brasileira de Biotecnologia Ltda. Apartado Postal 5236-1000
PB 1 Capital Federal rua Apirages 1081 San Jose
1028 Buenos Aires BR-05017 Sao Pauio/SP Tel. 506 235 3959
Tel/Fax 54 1 953 8918 Tel. 55 11 262 5511 Fax 506 235 1275
Tlx. 9900 Fax 55 11 263 0272
Tlx. 1182970 Cuba
Australia Lablink SA
Bio Scientific Pty. Ltd. Brunei Calle 134. No.138, e/19 y 21A
P.O. Box 78 SPD Scientific Pte Ltd. Cubanacan
Gymea N.S.W. 2227 108 Pasir Panjang Road La Habana
(28 Monroe Ave. Kurawee) #02-02 Amcol Warehouse Tel/Fax +537 336 446
Tel. 612 521 2177 Singapore 0511
Toll-free line (outside Sidney Metro): Singapore Cyprus
1 800 25 1437 Tel. 65 4733720 Meticell Co. Ltd.
Fax 61 2 542 3037 Fax 65 4732503 55A Limissol Ave.
Fax (technical inquiries): P.O. Box 8318
61 2 542 3100 Canada Nicosta
Dimension Laboratories Inc. Tel. 2-494300
Austria 12 Falconer Drive, Unit 4 Fax 2-311362
Bender & Co. GmbH Mississauga, Ontario L5N 3L9
Dr. Boenhringer-Gasse 5-11 Tel. 905 858 8510 Czech Republic
P.O. Box 103 Fax 905 858 8801 BioVendor, s.r.o.
A-1121 Viena Elasova 27
Tel. 1/80105-0 Chile 616 00 Bmo
Telex 132430 PROLAB Tel. 5 77 21 23
Fax 1/80105-488 Vergara 24 Fax 5 41 21 49 84
Oficina 908
Belgium Castilla 3645 Denmark
Prosan b.v.b.a Santiago DAKO A/S
Maums Sabbestraat 61 Tel. 56 2 698 7215 Producktionsvei 42
B-9050 Gentrugge Fax 56 2 698 9617 DK-2600 Giostrup
Tel. 09 231 37 04 Denmark
Fax 09 231 98 98 China Tel. +45 44 92 00 44
China South Technology Ltd. Tlx. 35 128
Rm. 1303-4, 13/F. Remex Centre Fax + 45 42 84 18 22
42 Wong Chuk hang Road
Hong Kong
Tel. 852 552 8339
Fax 852 552 6883
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Ecuador Greece Iran
Proveedores Para Laborationos O. Ange M. Cailiphronas Eskan Teb Tech Co.
Ltda. 4, Eyripidou Street 6 Business Section, Eskan Buildings
Edificio Pro-Lab GR-10559 Athens Minstamad Ave.
Luis Urdaneta Y Ave. del Ejercito Tel. 01 3218 871 P.O. Box 19395
Guayaquil Fax 01 3213 272 1836 Teheran
Tel. 593 4 281943 Tel. 21 808 7602
Tlx. 42985 Holland Tlx 21 4158
Fax 593 4 285953 ITK diagnostics bv Fax 64 3 338 0028
Johan Enschadeweg 13
Egypt NL-1422 DR Uithoom Israel
Lab Technology Tel. 02975 68893 Tzamal Ltd.
4 Leith Ben Saad Street Fax 02975 63458 21, Gonan Street
P.O. Box 5959 Kiryat Matalon
Heliopolis West 113351 Hong Kong P.O. Box 3064
Cairo China South Technology Ltd. Petach-Tikya 49130
Tel. 2-2361785 Rm. 1303-4, 13/F. Remex Centre Te. 03 9240 288
Fax 2-2428366 42, Wong Chuk Hang Road Tlx 38 1542
Hong Kong Fax 03 9240 259
Finland Tel. 852 552 8339
OY ALGOLAB Fax 852 552 6883 Italy
Karapellonite 6 DAKO S.p.A.
PL 13 Hungary Via P. Portaluggi n. 17
02611 Espco Frank Diagnostica Ltd. 1-20138 Milano
Tel. 90 50991 Dereglye Str. 2 Italy
Fax 90 5099258 1036 Budapest Tel. (02) 58 01 12 21
Tel. 36 1 188 3114 Tech. Inq. (02) 50 60 311/211
France Fax 36 1 168 5721 Fax (02) 50 47 78
DAKO S.A.
2, rue Albert Einstein India Japan
B.P.149 J. Mitra & Co. (Pvt.) Ltd. DAKO Japan Co., Ltd.
F-78196 TRAPPES Cedex A-180, Okhia Industrial Area - Hiraoka Building
France Phase-1 Nishinocuin-Higashiru, Shijo-dori,
Tel. (1) 30 50 00 50 Okhia Shimogyo-ku, Kyoto 600
Telex 695 029 New Delhi 110 020 Tel. 81 75 211 3655
Fax (1) 30 50 00 11 Tel. 011-6818 971/972/973 Fax 81 75 211 1755/1928
Telex 031-75114/031-62789
Germany Fax 011-6818970/0945 Tokyo Office:
DAKO Diagnostika GmbH* Chiyoda Panon Building
Arn Staotrand 52 Indonesia 2-3-16 Kanda-sudacno, Chiyoda-ku,
22047 Hamburg P.T. DW1 Marga Sakti Tokyo 101
Postrach 70 04 07 JL, Kedoya Azalea Vi, Tel. 81 3 5256 6436
Hamburg 22004 Block AXi No.7 Fax 81 3 5256 6431
Tel. (040) 69 69 47-0 Taman Kedaya Baru
Fax (040) 695 27 41 Jakarta Barat 11520
Tel. 62 21 5807-381,382,383,384
Fax 62 21 5807385
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Hong Kong Office: Malta Oman
2802-2804 Admiralty Centre, Micnete Peresso Ltd. Mustata & Jawad Trading Co. LLC
Tower 1, 18 Harcourt Road Catalunya Buildings S&I Dept.
Hong Kong Psaila Street P.O. Box 1918
Tel. 852 529 0356 P.O. Box 30 112 Ruwi
Tlx. 73553 B'Kara Tel. 709955
Fax 852 861 3420/865 0790 Tel. 492191/446744 Tlx 5611
Tlx. 1498 Fax 56 4005
Jordan Fax 482593
Medical Business Center Panama
Sonamiyi Center Mexico Importadora DMD S.A.
P.O. Box 509 Main Office: Apartoda 8556 Calle 31
Amman DOSTYM, S.A. De C.V. Este No. 1-95
Tel 6 694865 J.G.P.E. Montenegro No. 2325 Tel. 507 270537/251247
Col. Arcas Sur. C.P. 44150 Fax 507 271246
Korea Guadalajara, Jaiisco
Fine Chemical Co. Ltd. Tel. 52 3 615 3385/3258/3130 Paraguay
Garden Tower Bldg. Rm. No. 1703 Dr. Ruben A. Sosky
98-78, Wun Ni-Dong, Jong Ro-Gu Tlx. 683226 Calidad
KPO Box 1260 Fax 52 3 615 3513 Mexico 923
Seoul Asuncion
Tel. 82 2 744 7859 Mexico City Office: Tel. 595 21 447 680/595 21 210
Fax 82 2 744 5281 DCSTYM, S.A. De C.V. - 064
Reforma 24 No. 39 P.A.
Kuwait Col. Avante Peru
WAREA Medical Supplies Co. Mexico, D.F.C.P. 04460 Representacciones Atlanta S.A.
Nakib Building, 4th Floor Tel/Fax 52 5 689 9843 Av. Republica De Panama No. 465
Abu Bakir Street, Al Jiblah Callao 1-Peru
P.O. Box 26267 New Zealand Tel. 51 14 65 2421
KT-13123 Safat Med-Bio Enterprises Ltd. Fax 51 14 65 4833
Tel. 2 426939/2 469949/2 423573 P.O. Box 33-135
Tlx. 44470 Barrington Philippines
Fax 2 429482 Christchurch Levin's International Corporation
Tel. 643 338 1020/64 9 655 912 3rd Floor R. Syjuco Building
Malaysia Fax 64 3 338 0028 993 E. Delos Santos Ave.
General Scientific Co. Sdn. Blvd. Cor. Bansalangin St.
No. 7 Jalan 222, Section 51A Norway Diliman, Quezon City
Petailing Jaya Bio-Test AVS Tel. 63 2 97 44 75/76
Setangor Danul Easan Idretsveien 2 Tlx 65507
Tel. (03) 7575 433 P.O. Box 66 Fax 63 2 98 4841
Tlx. 374431 N-1580 Rygge
Fax (03) 7571 768 Tel. 69 26 17 77 Poland
Fax 69 26 17 60 ALAB sp. z o.o.
uL Pasteura 3
FL-02-093 Warsaw
Tel. 02-659 8571
Tel/Fax 02-658 2059
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Portugal Sweden United Arab Emirates
Labormeter LDA DAKOPATTS AB Al-Zanrawi Medical
Rua Duque de Palmera, No. 30, Box 13 P. O. Box No. 5973
1(degree)-G S-125 21 Alvsjo Dubai
P-1200 Lisbon Tel. 08-99 60 00 Tel. 4-622728
Tel. 01 3537284 Fax 08-99 60 65 Fax 4-625506
Fax 01 3525066
Switzerland United Kingdom
Republic of South Africa DAKO Diagnostics AG DAKO Ltd
Southern Cross Biotechnology (PTY) Untermuli 7 16 Manor Courtyard
Ltd. 6302 Zug Hughenden Avenue
P. O. Box 23681 Tel. 042 32 11 66 High Wycombe
Claremont 7735 Fax 042 32 11 77 Bucks, HP13 5RE
Cape Town Tel. 01494 452016
Tel. 021-615166/7 Syria Fax 01494 441846
Fax 021-617734 Medical Business Center
P. O. Box 30589 DAKO Diagnostics Ltd.
Saudi Arabia Damascus Denmark House
Medical Business Center, M.B.C. Tel. (11) 22 46139/424676 Cambridgeshire Business Park
P. O. Box 189 Fax (11) 22 46139 Angel Drove
Jeddah 21411 Ey
Tel. 2 6429200 Taiwan Cambridge CB7 4ET
Fax 2 6435488 Hong Jing Co. Ltd Tel. 01353 669911
6F-3 No. 60, Ai kuo E. Rd. Fax 01353 668989
Singapore Taipei
SPD Scientific Pte Ltd. Tel. 886 2 3930185 United States of America
108 Pasir Panjang Road Fax 886 2 3923864 DAKO Corporation*
#02-02 Amcol Warehouse 6392 Via Reel
Singapore 0511 Thailand Carpinteria
Tel. 65 4733720 Science Tech Co. Ltd CA 93013
Fax 65 4732503 321/43 Nanglinchee Road Tel. 805 566 6655
Chongnondsee, Yannawa Fax 805 566 6688
Slovenia A-Z Consulting d.o.o. Bangkok 10120
Miklosiceva 38 Tel. 66 2 285 4101-3/4871-2 Uruguay
61 000 Liubljana Tlx 82731 Poliuruguay S.R.L
Tel. 386 61 133 6322 Fax 66 2 285 4856 Avda Uruguay 1771
/301 884/325 860 Montevideo 11200
Fax 386-61 301 985 Turkey Tel. 59 82 402365/484126
Hayat Inc. Fax 59 82 409017
Spain Miller Cad. 75/8
ATOM S.A. 34280 Findikzace Zimbabwe
Passeig D'Amunt, 29 Istanbul National Diagnostics Ltd.
E-08024 Barcelona Tel. 212 632 1341 (4 lines) P. O. Box 3535
Tel. 93 284 79 04 Fax 212 587 9402 Harare
Fax 93 210 82 55 Tel. 4 791615
Fax 4 728055
</TABLE>
* Special DAKO catalogue available
4
<PAGE>
EXHIBIT 10(bb)
ENZO DIAGNOSTICS, INC. - BAXTER HEALTHCARE CORPORATION,
SCIENTIFIC PRODUCTS AND LIFESCIENCES DIVISION
DISTRIBUTORSHIP AGREEMENT
THIS AGREEMENT, effective upon acceptance by both parties below by and between
ENZO DIAGNOSTICS, INC. ("ENZO"), a New York corporation having its principal
place of business at 60 Executive Boulevard, Farmingdale, New York 11735, and
the Scientific Products, Industrial and Lifesciences division of Baxter
Healthcare Corporation ("BAXTER") a Delaware Corporation having its principal
place of business at 1430 Waukegan Road, McGaw Park, Illinois 60085.
WHEREAS, ENZO owns rights to certain PATENTS listed in EXHIBIT A
("PATENTS");
WHEREAS ENZO manufactures and/or sells certain products covered by
claims of PATENTS which products are listed in EXHIBIT B hereto
("PRODUCTS");
WHEREAS BAXTER wishes to market and distribute some of said PRODUCTS
on a nonexclusive basis in accordance with the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the good and valuable mutual
agreements hereinafter set forth, the parties hereto agree as follows:
1. Distributor Appointment
ENZO hereby appoints BAXTER to act as its nonexclusive distributor
worldwide for the distribution and sale of PRODUCTS (EXHIBIT B), and BAXTER
agrees to act as such distributor under the terms and conditions set forth
herein.
BAXTER agrees:
a. not to purchase any PRODUCTS from other suppliers;
b. not to manufacture PRODUCTS;
c. to rely on ENZO as its sole source of PRODUCTS;
<PAGE>
d. not to use any PRODUCT to manufacture new or other PRODUCTS;
e. that all PRODUCTS distributed by BAXTER are for research use only
and are not intended for or to be used for diagnostic or
therapeutic purposes; and
f. that except for DISTRIBUTION under the terms and conditions as
set forth in this AGREEMENT, purchase does not include any right
or license to exploit these PRODUCTS commercially, including any
right to sell these PRODUCTS to other distributors and that any
other commercial use or development of these PRODUCTS without the
express written authorization of ENZO is strictly prohibited.
Nothing herein creates or constitutes a partnership or an agreement of
agency between the parties with respect to any activities whatsoever. The
relationship between ENZO and BAXTER shall be that of seller and buyer, and
neither party shall conclude any contract or agreement or make any
commitment, representation or warranty which binds the other party or
otherwise act in the name of or on behalf of the other party.
ENZO and BAXTER agree that the distribution relationship between them does
not constitute, nor does it imply, a license of any of ENZO's technology or
patents, nor does it abrogate any of ENZO's rights under its patents. ENZO
maintains full rights under its PATENTS. The foregoing statements are
paramount to this AGREEMENT.
2. PRODUCTS, Price and Payment
A list of Enzo's current domestic retail price index is included in EXHIBIT
B hereto and incorporated by reference herein. The price to BAXTER for each
product shall be * the current domestic retail price as reflected by the
price index.
Prices to BAXTER may be adjusted no more than once during each calendar
year. ENZO has the right to adjust prices to BAXTER after providing BAXTER
with forty-five (45) days written notice. Any such price adjustment will
affect future purchases only and ENZO agrees to honor BAXTER's
- ----------
* The information omitted is confidential and has been filed separately with the
Commission pursuant to Rule 24b-2.
- 2 -
<PAGE>
existing purchase orders on the effective date of such price adjustment at
the prices in effect prior to such effective date.
ENZO or BAXTER may propose in writing to delete PRODUCT in EXHIBIT B. ENZO
or BAXTER may propose to add PRODUCT or products to EXHIBIT B. Both
partners must agree in writing to such additions before such changes are
incorporated therein.
3. Distributor Duties
BAXTER shall:
a. submit its orders for the PRODUCTS on its standard purchase
order form. To the extent that the terms and conditions of
BAXTER's standard purchase order form are inconsistent with
the terms and conditions of this Agreement, the terms and
conditions of this Agreement shall govern;
b. pay for all such orders within thirty (30) days of the
invoice date for such order;
c. advertise and promote the PRODUCTS by methods which in
BAXTER's judgment are best suited for the sale of such
PRODUCTS;
4. Supplier's Duties
ENZO shall:
a. promptly ship to all BAXTER distribution centers in
accordance with the shipping instructions (compatible with
ENZO's shipping policy and PRODUCT stability) specified in
BAXTER's purchase orders, collect, F.O.B. origin, with
carrier to bill third party freight charges to Baxter
Healthcare Corporation, Scientific Products freight payment,
P.O.Box 815, Deerfield, Illinois 60015. All direct (drop)
shipments to BAXTER's customers by ENZO shall be F.O.B.
destination, Prepaid and Add. Baxter reserves the right to
determine the carriers to be selected for shipment to its
customers (compatible with ENZO's shipping policy and
PRODUCT stability);
-3-
<PAGE>
b. adequately package and deliver the PRODUCTS, using those
references to and trademarks of BAXTER as BAXTER shall
specify in writing;
c. execute and comply with the provisions of BAXTER's
Continuing Guaranty, a copy of which is attached hereto as
EXHIBIT C.
5. Forecasts and Purchase Orders for BAXTER Inventory
BAXTER shall issue a forecast schedule by the end of the mid-month of each
calendar quarter covering its estimated requirements for PRODUCTS for the
succeeding two (2) calendar quarters. Such forecast shall be considered for
planning purposes only and not in any way be considered a purchase
commitment.
A purchase order will be issued by BAXTER at least sixty (60) days in
advance of the requested delivery of PRODUCT. This purchase order will
indicate specific delivery and/or shipping requirements. Purchase orders
will be delivered to ENZO by Federal Express or similar carrier so that the
receipt can be confirmed. Orders placed with ENZO may not be canceled by
BAXTER more than (15) fifteen days after issuance of order. ENZO shall meet
such requirements unless it advises BAXTER within fifteen (15) days of the
date of such purchase order that it is unable to supply PRODUCT as ordered
by BAXTER whereupon the parties agree to discuss a revised schedule for
delivery of PRODUCT to BAXTER. After ENZO and BAXTER agree to the
provisions of a revised schedule, ENZO will make its best efforts to
fulfill the provisions of the revised schedule.
6. PRODUCT Deliveries and Specifications for BAXTER Inventory
Within thirty (30) days after the effective date of this Agreement, ENZO
shall provide BAXTER with PRODUCT specifications and package inserts for
those PRODUCTS in EXHIBIT B that BAXTER intends to distribute.
When an order is placed by BAXTER for its inventory ENZO shall ship the
PRODUCT in accordance with Section 4 above. ENZO shall supply, at the time
of shipment of the PRODUCT to BAXTER a statement that the PRODUCT conforms
to the PRODUCT specifications. If after receipt of the PRODUCT BAXTER
determines that it does not conform to the PRODUCT
-4-
<PAGE>
specification provided by ENZO, and that the failure to conform to the
PRODUCT specifications was not the direct result of shipping and handling,
BAXTER will provide ENZO with documentation of this failure to conform to
the PRODUCT specifications. If ENZO accepts the documentation provided by
BAXTER ENZO will ship a replacement order. If ENZO does not accept the
documentation provided by BAXTER then the differences in the determination
of the manufacturing specifications for the allegedly nonconforming PRODUCT
will be settled by representatives of the technical staffs of ENZO and
BAXTER.
7. Patents and Trademarks
a. Patents
ENZO shall defend, indemnify and hold harmless BAXTER from and against
any liability arising out of a claim of patent infringement with
respect to any of the PRODUCTS.
If BAXTER receives a notice from a third party asserting that any of
the PRODUCTS of this AGREEMENT infringe on an issued patent in the
country of sale, then BAXTER shall immediately give written notice to
ENZO. Upon notice to ENZO or BAXTER from a third party asserting that
any of the PRODUCTS of this AGREEMENT infringe on an issued patent in
the country in which such PRODUCTS are sold, ENZO has the right to
exclude such PRODUCTS from this AGREEMENT for that country and can
further by written notice instruct BAXTER to cease all such
distribution of such PRODUCT in that country. Further distribution of
PRODUCTS after such instruction from ENZO to BAXTER will be at the
sole risk of BAXTER and BAXTER shall indemnify and hold harmless ENZO
from all infringement liability and damages with respect to further
distribution of such PRODUCTS, including legal costs and attorneys
fees.
Notwithstanding any third party infringement claims, all provisions of
this AGREEMENT, including Section 6, shall not be affected but shall
remain in full force and effect to the fullest extent possible.
ENZO agrees to repurchase from BAXTER, at a price equivalent to the
full purchase price paid by BAXTER any quantity of PRODUCT in BAXTER's
inventory which BAXTER (i) has been instructed by ENZO to discontinue
the sale of such PRODUCT, or (ii) reasonably believes it should or
cannot sell, based upon an opinion of BAXTER's counsel that future
sales by BAXTER may result in patent infringement, or
-5-
<PAGE>
because of a decision, whether interlocutory or final, rendered in any
patent infringement action.
b. Trademarks
ENZO recognizes that BAXTER is the owner of the trademarks and trade names
connoting BAXTER which it may elect to use in the promotion and sale of the
PRODUCTS and that ENZO has no ownership or other rights or interests in
such trademarks and trade names.
BAXTER recognizes that ENZO is the owner of the trademarks and trade names
connoting ENZO and ENZO's PRODUCTS which it may elect to use in the
promotion and sale of the PRODUCTS and that BAXTER has no ownership or
other rights or interests in such trademarks and trade names.
8. Sales Promotions
BAXTER shall use its best efforts in sales promotions and advertisement of
the PRODUCTS such as individual client contact, direct mailings, catalog
listings and trade meeting promotions. ENZO will provide BAXTER with one
(1) copy of the literature, technical data, specifications and the like
describing the PRODUCTS that BAXTER is distributing as they are currently
produced for the assistance of BAXTER in the preparation of advertising,
catalog and other sales and promotional material. BAXTER shall use its best
efforts to list PRODUCTS in its future published product catalog(s) in
which the PRODUCTS can be listed after the effective date of this
AGREEMENT.
9. PRODUCT Warranty
In addition to all other warranties given by ENZO in this AGREEMENT and the
exhibits hereto or otherwise, ENZO warrants that the PRODUCTS will conform
to the specifications and samples provided by ENZO for such PRODUCTS; will
be free from defects in design, materials and workmanship and are
merchantable and fit for their intended purposes. ENZO's sole obligation is
to replace the PRODUCTS with similar PRODUCTS to the extent of the purchase
price. THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES OR
LIABILITIES, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
-6-
<PAGE>
10. Storage and Stock Rotation
ENZO agrees to share with BAXTER all necessary storage and stock rotation
practices which apply to the PRODUCTS.
BAXTER further agrees to take diligent care not to ship PRODUCTS to its
customers which have expired, been damaged in storage or handling, or
improperly stored. BAXTER will be responsible for damages arising from its
shipment of expired, damaged, or improperly stored PRODUCTS.
11. Confidentiality of Information
BAXTER and ENZO agree that they will not disclose any proprietary and
confidential information made available to them by the other party. Both
parties further agree that all confidential material will be in writing and
marked confidential and that they will not make more copies that necessary
of documents or materials which are provided under this AGREEMENT, nor will
they distribute such documents or materials, or copies thereof, to any
third party. Furthermore, both parties agree to return any such documents
or materials, or copies thereof, which are provided under this AGREEMENT if
directed or requested to do so.
The above obligations shall not apply to those portions of ENZO's and
BAXTER's proprietary and confidential information which (1) are or become
generally publicly available through no act or failure to act by the
recipient party, (2) were demonstrably known to the other party prior to
disclosure under this AGREEMENTS, or (3) are subsequently disclosed by a
third party having a legal right to do so and not having a confidential
relationship with respect thereto.
12. Force Majeure
No liability shall result to either party from delay in performance or from
nonperformance under this Agreement caused by circumstances beyond the
reasonable control of the party who has delayed performance or not
performed. The nonperforming party shall be diligent in attempting to
remove any such cause and shall promptly notify the other party of its
extent and probable duration.
-7-
<PAGE>
13. Duration and Termination
This AGREEMENT shall become effective as of the date hereinabove written
and shall continue for a period of three (3) years. Unless terminated, it
will continue thereafter for successive renewal terms of one (1) year each.
Either party may terminate this AGREEMENT without cause at any time by
giving the other party notice in writing at least six (6) months in advance
of the effective termination date stated in such notice.
Each party may also terminate this AGREEMENT upon thirty (30) days prior
written notice to the other party for a material breach by the other party
of any of the provisions of this AGREEMENT where such breach is not cured
within said notice period.
Upon termination of this AGREEMENT all distribution rights to BAXTER will
be deemed immediately canceled and returned in toto to ENZO.
15. Indemnification
Except to the extent the other is negligent or commits an act of wilful
misconduct or in default of the terms hereof, each of the parties agrees to
indemnify, defend and hold harmless the other party hereto, its successors
and assigns, employees and agents, from and against, any and all claims,
losses, liabilities, demands, damages, actions, suits, judgments, costs and
expenses (including reasonable attorneys' fees), incurred, relating to,
caused by or arising out of the breach of any covenant or agreement of such
party under this AGREEMENT.
16. Notices
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be sent by personal delivery;
certified mail, return receipt requested; telecopier; or overnight courier
to the parties at the addresses set forth below or to such other address as
a party shall have previously designated by written notice to the other
party hereto in accordance with this section. Such notices shall be deemed
given at the time delivered, if delivered personally; five (5) days after
the day sent, if sent by certified mail; and one (1) business day after the
day sent, if telecopied or sent by overnight courier.
-8-
<PAGE>
ENZO: Enzo Biochem, Inc.
575 Fifth Avenue, 18th Floor
New York, New York 10017
Attn: Dr. Barbara E. Thalenfeld
Vice President, Corporate Development
Fax No.: (212) 856-0878
BAXTER: BAXTER Healthcare Corporation
1430 Waukegan Road
McGaw Park, IL 60085
Attn: Ms. Casey Rooney
Fax No. (708) 473-3971
17. Governing Law
This Agreement shall be governed, construed and enforced in accordance with
the internal laws of the State of New York, including the Uniform
Commercial Code as enacted in that jurisdiction, without giving effect to
any choice of law rules which may direct the application of the laws of
another jurisdiction.
18. Waiver
Any terms and conditions of this AGREEMENT may be waived at any time by the
party or parties entitled to the benefit thereof but only by a written
notice signed by the party or parties waiving such term or condition.
Waiver by ENZO or BAXTER of any provision of this AGREEMENT shall not be
deemed a waiver of future compliance therewith and such provision as well
as all other provisions hereunder shall remain in full force and effect.
19. Compliance with Laws
Each party will comply with all United States laws, ordinances and
regulations properly applicable to the manufacture, sale and distribution
of the PRODUCTS described herein. Where applicable, the parties will comply
with the laws of the country in which the product is being sold.
20. Headings
All Headings of the clauses of this AGREEMENT are inserted for convenience
only and shall not affect any construction or interpretation of this
AGREEMENT.
-9-
<PAGE>
21. Severability
In the event that any clause of this Agreement shall be found to be void or
unenforceable, such finding shall not be construed to render any other
clause of this AGREEMENT either void or unenforceable, and all other
clauses shall remain in full force and effect unless the clause(s) which
is/are invalid or unenforceable shall substantially affect the rights or
obligations granted to or undertaken by either party.
22. Assignment
This AGREEMENT may not be assigned by either party without the prior
written consent of the other party hereto, provided that BAXTER may assign
this AGREEMENT to any purchaser of all or substantially all of the assets
of the Sellers' Scientific Products, Industrial and Lifesciences division.
Any assignment which does not comply with the foregoing shall be null and
void.
23. Counterparts
This AGREEMENT may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
22. Entire Agreement
This AGREEMENT together with the EXHIBITS attached hereto embodies the
entire understanding between the parties hereto with respect to the subject
matter hereof, and there are no contracts or prior drafts of the AGREEMENT,
understandings, conditions, warranties or representations, oral or written,
express or implied, with reference to the subject matter hereof which are
not merged herein. Except as otherwise specifically stated, no amendment or
modification of this AGREEMENT shall be of any force or effect unless
reduced to writing and signed by both parties hereto.
-10-
<PAGE>
IN WITNESS, WHEREOF, the parties have caused this AGREEMENT to be executed
by their duly authorized representatives.
Enzo Diagnostics, Inc. Baxter Healthcare Corporation
Scientific Products, Industrial and
Lifesciences Division
By:___________________________ By:___________________________
Title: President Title: V.P. Marketing
------------------------ ------------------------
Date: 9/14/95 Date: 9/15/95
------------------------- -------------------------
* * * * * * *
-11-
<PAGE>
EXHIBIT A
Enzo Diagnostics, Inc. Issued Patents
<TABLE>
<CAPTION>
U.S. Patents
======================================================================================================
Patent Number Title/Inventor Issue Date
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
4,687,732 Visualization Polymers and Their Aug. 18, 1987
Application to Diagnostic Medicine
David C. Ward et al.
- ------------------------------------------------------------------------------------------------------
4,707,352 Method of Radioactively Labeling Nov. 17, 1987
Diagnostic and Therapeutic Agents
Containing a Chelating Group
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
4,707,440 Nucleic Acid Hybridization Assay and Nov. 17, 1987
Detectable Molecules Useful in Such Assay
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
4,711,955 Modified Nucleotides and Methods of Dec. 8, 1987
Preparing and Using Same
David C. Ward et al.
- ------------------------------------------------------------------------------------------------------
4,746,604 Specific Binding Assays Utilizing A Viable May 24, 1988
Cell as a Label
Solomon Mowshowitz
- ------------------------------------------------------------------------------------------------------
4,755,458 Composition and Method for the Detection Jul. 5, 1988
of the Presence of a Polynucleotide
Sequence of Interest
Elazar Rabbani et al.
- ------------------------------------------------------------------------------------------------------
4,767,609 Therapeutic and Diagnostic Processes Aug. 30, 1988
Using Isotope Transfer to Chelator-Target
Recognition Molecule Conjugate
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
4,772,548 Radioisotopicassay Using Isotope Transfer Sep. 20, 1988
to Chelator-Target Recognition Molecule
Conjugate
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
4,843,122 Detectable Molecules, Method of June 27, 1989
Preparation and Use
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
</TABLE>
-12-
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
4,849,208 Detectable Molecules, Method of Jul. 18, 1989
Preparation and Use
Jannis G. Stavrianopoulos
======================================================================================================
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================
Patent Number Title/Inventor Issue Date
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
4,849,505 Detectable Molecules, Method of Jul. 18, 1989
Preparation and Use
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
4,868,103 Analyte Detection by Means of Energy Sep. 19, 1989
Transfer
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
4,889,798 Heterologous System for the Detection of Dec. 26, 1989
Chemically Labeled DNA and other
Biological Materials Providing a Receptor or
Target Moiety Thereon
Elazar Rabbani
- ------------------------------------------------------------------------------------------------------
4,894,325 Hybridization Method for the Detection of Jan. 16, 1990
Genetic Material
Dean Engelhardt et al.
- ------------------------------------------------------------------------------------------------------
4,900,659 Nucleotide Sequence Composition and Feb. 13, 1990
Method for Detection for Neissera
Gonorrhoeae and Method for Screening for
a Nucleotide Sequence that is Specific for
a Genetically Distinct Group
Andrew Lo et al.
- ------------------------------------------------------------------------------------------------------
4,943,523 Detectable Molecules, Method of Jul. 24, 1990
Preparation and Use
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
4,952,685 Detectable Molecules, Method of Aug. 28, 1990
Preparation and Use
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
4,987,065 In Vivo Labelling of Polynucleotide Jan. 22, 1991
Sequences
Jannis G. Stavrianopoulos et al.
- ------------------------------------------------------------------------------------------------------
4,994,373 Method and Structures Employing Feb. 19, 1991
Chemically-Labelled Polynucleotide Probes
Jannis G. Stavrianopoulos et al.
- ------------------------------------------------------------------------------------------------------
5,002,885 Detectable Molecules, Method of Mar. 26, 1991
Preparation and Use
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
5,013,831 Detectable Molecules, Method of May 7, 1991
Preparation and Use
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
5,024,933 Method and Kit for Sample Adherence to June 18, 1991
Test Substrate
Huey-Lang Yang et al.
- ------------------------------------------------------------------------------------------------------
5,061,076 Time-Resolved Fluorometer Oct. 29, 1991
Ian Hurley
- ------------------------------------------------------------------------------------------------------
5,082,830 End Labeled Nucleotide Probe Jan. 21, 1992
Christine L. Brakel et al.
======================================================================================================
</TABLE>
-15-
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================
Patent Number Title/Inventor Issue Date
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
5,175,269 Compound and Detectable Molecules Dec. 29, 1992
Having An Oligo- or Polynucleotide with
Modifiable Reactive Group
Jannis G. Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
5,241,060 Base Moiety-Labeled Detectable Nucleotide Aug. 31, 1993
Dean Engelhardt et al.
- ------------------------------------------------------------------------------------------------------
5,260,433 Saccharide Specific Binding System Nov. 9, 1993
Labeled Nucleotides
Dean Engelhardt et al.
- ------------------------------------------------------------------------------------------------------
5,288,609 Capture Sandwich Hybridization Method Feb. 22, 1994
and Composition
Dean Engelhardt et al.
- ------------------------------------------------------------------------------------------------------
5,328,824 Methods of Using Labeled Nucleotides Jul. 12, 1994
7 David C. Ward
- ------------------------------------------------------------------------------------------------------
5,449,767 Modified Polynucleotides and Methods of Sep. 12, 1995
Preparing Same
David C. Ward et al.
- ------------------------------------------------------------------------------------------------------
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
Foreign Patents Granted
======================================================================================================
Patent Number Publication
(Country) Title/Inventor Date
of Patent Grant
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
560 651 Modified Nucleotides and Methods Oct. 16, 1987
(Australia) of Preparing and Using Same (16 yr. term
David C. Ward et al. began Apr. 13,
1982)
- ------------------------------------------------------------------------------------------------------
1 219 824 Modified Nucleotides and Methods Mar. 31, 1987
(Canada) of Preparing and Using Same
David C. Ward et al.
- ------------------------------------------------------------------------------------------------------
1 223 831 Modified Nucleotides, Methods of Jul. 7, 1987
(Canada) Preparing and Utilizing and
Compositions Containing the Same
Dean L. Engelhardt et al.
- ------------------------------------------------------------------------------------------------------
EP 0 285 057 B1 Modified Nucleotides, Methods of May 10, 1988
Preparing and Utilizing and
Compositions Containing the Same
Dean L. Engelhardt et al.
- ------------------------------------------------------------------------------------------------------
EP 0 063 879 B1 Modified Nucleotides and Methods Nov. 23, 1989
of Preparing and Using Same
David C. Ward et al.
- ------------------------------------------------------------------------------------------------------
1,237,369 Visualization Polymers and Their May 31, 1988
Application to Diagnostic Medicine
David C. Ward et al.
- ------------------------------------------------------------------------------------------------------
1,254,525 Kit for Terminally Chemically May 23, 1989
Labeling DNA
Christine L. Brakel et al.
- ------------------------------------------------------------------------------------------------------
1,256,023 Method of Radioactively Labeling June 20, 1989
Diagnostic and Therapeutic Agents
Containing a Chelating Group
Jannis Stavrianopoulos
- ------------------------------------------------------------------------------------------------------
1,260,368 Composition and Method for the Sept. 26, 1989
Detection of the Presence of a Polynucleotide
Sequence of Interest Elazar Rabbani et al.
- ------------------------------------------------------------------------------------------------------
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
1,260,372 Hybridization Method for the Sept. 26, 1989
Detection of Genetic Materials
Elazar Rabbani et al.
======================================================================================================
</TABLE>
-18-
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Patent Number Publication
(Country) Title/Inventor Date
of Patent Grant
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
1,268,115 Method and Composition for April 24, 1990
Detecting Analyte Moieties
Solomon Mowshowitz
- -----------------------------------------------------------------------------------------------------
1,281,283 Method for Detecting an Analyte Mar. 12, 1991
(Canada) Moiety by Means of Signal
Localization
Elazar Rabbani
- -----------------------------------------------------------------------------------------------------
1,285,330 Analyte Detection by Means of June 25, 1991
Energy Transfer
Jannis Stavrianopoulos et al.
- -----------------------------------------------------------------------------------------------------
1,288,811 Assay Method Utilizing Nov. 3, 1987
Polynucleotide Sequences
Robert Pergolizzi et al.
- -----------------------------------------------------------------------------------------------------
EP 0 133 473 B1 In Vivo Labelling of Polynucleotide March 23,
Sequences 1994
Jannis Stavrianopoulos et al.
- -----------------------------------------------------------------------------------------------------
EP 0 173 339 B1 Composition and Method for the Jan. 22, 1992
Detection of the Presence of a Polynucleotide
Sequence of Interest Elazar Rabbani et al.
- -----------------------------------------------------------------------------------------------------
EP 0 212 546 B1 Method for Labeling Polynucleotide Apr. 1, 1992
Sequences
Jannis Stavrianopoulos et al.
- -----------------------------------------------------------------------------------------------------
1,295,559 Method for Labeling Polynucleotide Feb. 11, 1992
Sequences
Jannis Stavrianopoulos et al.
- -----------------------------------------------------------------------------------------------------
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
1,299,073 Nucleotide Sequence Composition Apr. 21, 1992
Method for Detection of Neisseria
(Canada) gonorrhoeae and Method for
Screening for a Nucleotide
Sequence that is Specific for a
Genetically Distinct Group
Andrew Lo & Huey-Lang Yang
- -----------------------------------------------------------------------------------------------------
1,309,672 Methods and Structures Employing Nov. 3, 1992
Non-Radioactive Chemically-Labeled
Polynucleotide Probes
Jannis Stavrianopoulos
=====================================================================================================
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Patent Number Publication
(Country) Title/Inventor Date
of Patent Grant
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
1,314,503 Detectable Moelcules, Method of March 16,
Preparation And Use 1993
Jannis Stavrianopoulos
- -----------------------------------------------------------------------------------------------------
1,314,810 Heterologous System for the March 23,
Detection of Chemically-Labeled 1993
DNA and Other Biological Materials
Providing a Receptor or Target
Moiety Thereon
Elazar Rabbani
- -----------------------------------------------------------------------------------------------------
EP 0 242 527 B1 Analyte Detection by Means of May 13, 1992
Energy Transfer
Jannis Stavrianopoulos et al.
- -----------------------------------------------------------------------------------------------------
1,315,222 Polynucleotide Probes and a March 30,
Method for Their Preparation 1993
David Mao et al.
- -----------------------------------------------------------------------------------------------------
0 149 654 B1 Detecting Agent Carrying Polymer Sep. 9, 1992
Having Multiple Units of
Visualization Monomer
David C. Ward et al.
- -----------------------------------------------------------------------------------------------------
EP 0 097 373 B1 Modified Nucleotides, Methods of Oct. 7, 1992
Preparing and Utilizing and
Compositions Containing the Same
Dean L. Engelhardt et al.
- -----------------------------------------------------------------------------------------------------
EP 0 212 670 B1 Method for Detecting an Analyte Nov. 4, 1992
Moiety by Means of Signal
Localization
Elazar Rabbani
- -----------------------------------------------------------------------------------------------------
EP 0 117 440 B1 Method and Structures Employing Apr. 7, 1993
Chemically-Labelled Polynucleotide
Probes
Jannis G. Stavrianopoulos et al.
- -----------------------------------------------------------------------------------------------------
EP 0 244 860 B1 Polynucleotide Probes and a Apr. 7, 1993
Method for their Preparation
David T. Mao et al.
=====================================================================================================
</TABLE>
-21-
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Patent Number Publication
(Country) Title/Inventor Date
of Patent Grant
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
EP 0 343 424 B1 Method and Kit for Sample Apr. 21, 1993
Adherence to Test Substrate
Huey-Lang Yang et al.
- -----------------------------------------------------------------------------------------------------
EP 0 159 719 B1 Hybridization Method for the Jun. 30, 1993
Detection of Genetic Material
Dean Engelhardt et al.
- -----------------------------------------------------------------------------------------------------
EP 0 122 614 B1 Kit for Terminally Chemically Jul. 14, 1993
Labelling DNA
Christine Brakel
- -----------------------------------------------------------------------------------------------------
EP 0 150 844 B1 Method of Radioactively Labeling Jul. 28, 1993
Diagnostic and Therapeutic Agents
Containing a Chelating Group
Jannis Stavrianpoulos
- -----------------------------------------------------------------------------------------------------
EP 0 237 737 B1 A Composition Specific for Sep. 8, 1993
Neisseria Gonorrhoea
Andrew Lo et al.
=====================================================================================================
</TABLE>
The PRODUCTS listed in Exhibit B are covered by one or more patents of Enzo,
including the patents listed above.
This list may be updated quarterly at Enzo's discretion.
-22-
<PAGE>
EXHIBIT B
ENZO PRICE INDEX 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
NONRADIOACTIVE LABELING OF NUCLEIC ACIDS
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
BIOPROBE(R) NICK TRANSLATION DNA LABELING SYSTEM
Nick Translation Labeling Kits
<S> <C> <C> <C>
42710-11 Nick Translation Kit with Bio-11-dUTP.....................................25 reactions $230.00
42710-12 Nick Translation Kit with Bio-16-dUTP.....................................25 reactions 230.00
42710-13 Nick Translation Kit with Bio-11-dCTP.....................................25 reactions 230.00
42710-14 Nick Translation Kit with Bio-7-dATP......................................25 reactions 230.00
42710-16 Nick Translation Kit with Fluorescein-12-dUTP.............................25 reactions 230.00
Nick Translation Deoxynucleotide Packs
42711 Bio-11-dUTP for Nick Translation..........................................25 reactions 140.00
42712 Bio-16-dUTP for Nick Translation..........................................25 reactions 140.00
42713 Bio-11-dCTP for Nick Translation..........................................25 reactions 140.00
42714 Bio-7-dATP for Nick Translation...........................................25 reactions 140.00
42716 Fluorescein-12-dUTP for Nick Translation..................................25 reactions 140.00
Nick Translation Reagent Pack
42710 Reagent Pack for Nick Translation.........................................25 reactions 105.00
BIOPROBE(R) RANDOM PRIMED DNA LABELING SYSTEM
Random Primed Labeling Kits
42720-21 Random Primed Labeling Kit with Bio-11-dUTP...............................25 reactions 230.00
42720-22 Random Primed Labeling Kit with Bio-16-dUTP...............................25 reactions 230.00
42720-23 Random Primed Labeling Kit with Bio-11-dCTP...............................25 reactions 230.00
42720-24 Random Primed Labeling Kit with Bio-7-dATP................................25 reactions 230.00
42720-26 Random Primed Labeling Kit with Fluorescein-12-dUTP.......................25 reactions 230.00
Random Primed Deoxynucleotide Packs
42721 Bio-11-dUTP for Random Primed Labeling....................................25 reactions 140.00
42722 Bio-16-dUTP for Random Primed Labeling....................................25 reactions 140.00
42723 Bio-11-dCTP for Random Primed Labeling....................................25 reactions 140.00
42724 Bio-7-dATP for Random Primed Labeling.....................................25 reactions 140.00
42726 Fluorescein-12-dUTP for Random Primed Labeling............................25 reactions 140.00
Random Primed Labeling Reagent Pack
42720 Reagent Pack for Random Primed Labeling...................................25 reactions 105.00
</TABLE>
- --------------------------------------------------------------------------------
NONRADIOACTIVE LABAELING OF NUCLEIC ACIDS
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
BIOPROBE(R) 3' OLIGONUCLEOTIDE LABELING SYSTEM
3' Oligo Labeling Kits
<S> <C> <C> <C>
42730-31 3' Oligo Labeling Kit with Bio-16-ddUTP...................................25 reactions $315.00
42730-33 3' Oligo Labeling Kit with Fluorescein-12-ddUTP...........................25 reactions 315.00
3'Oligo Dideoxynucleotide Packs
42731 Bio-16-ddUTP for 3' Oligo Labeling........................................25 reactions 140.00
42733 Fluorescein-12-ddUTP for 3' Oligo Labeling................................25 reactions 140.00
3' OligoTailing Kits
42730-41 3' Oligo Tailing Kit with Bio-11-dUTP.....................................25 reactions 315.00
42730-42 3' Oligo Tailing Kit with Bio-16-dUTP.....................................25 reactions 315.00
42730-43 3' Oligo Tailing Kit with Bio-11-dCTP.....................................25 reactions 315.00
42730-44 3' Oligo Tailing Kit with Bio-7-dATP......................................25 reactions 315.00
42730-46 3' Oligo Tailing Kit with Fluorescein-12-dUTP.............................25 reactions 315.00
3'Oligo Deoxynucleotide Packs
42741 Bio-11-dUTP for 3' Oligo Tailing..........................................25 reactions 140.00
42742 Bio-16-dUTP for 3' Oligo Tailing..........................................25 reactions 140.00
42743 Bio-11-dCTP for 3' Oligo Tailing..........................................25 reactions 140.00
42744 Bio-7-dATP for 3' Oligo Tailing...........................................25 reactions 140.00
42746 Fluorescein-12-dUTP for 3' Oligo Tailing..................................25 reactions 140.00
OligoBridge(TM) Labeling Kits
42730-36 OligoBridge(TM)Labeling Kit.................................................25 reactions 315.00
OligoBridge(TM) Nucleotide Pack
42736 Nucleotide Pack for OligoBridge(TM)Labeling.................................25 reactions 140.00
Oligo Labeling Reagent Pack
42730 Reagent Pack for Oligonucleotide Labeling.................................25 reactions 190.00
BIOPROBE(R) RNA TRANSCRIPT LABELING SYSTEM
RNA Labeling Kits
42750-51 RNA Labeling Kit with Bio-11-UTP..........................................20 reactions 330.00
42750-52 RNA Labeling Kit with Bio-16-UTP..........................................20 reactions 330.00
42750-53 RNA Labeling Kit with Bio-11-CTP..........................................20 reactions 330.00
42750-54 RNA Labeling Kit with Bio-17-ATP..........................................20 reactions 330.00
42750-56 RNA Labeling Kit with Fluorescein-12-UTP..................................20 reactions 330.00
</TABLE>
- 2 -
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
NONRADIOACTIVE LABAELING OF NUCLEIC ACIDS (continued)
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Ribonucleotide Packs
<S> <C> <C> <C>
42751 Bio-11-UTP for RNA Labeling...............................................25 reactions $225.00
42752 Bio-16-UTP for RNA Labeling...............................................25 reactions 225.00
42733 Bio-11-CTP for RNA Labeling...............................................25 reactions 225.00
42754 Bio-17-ATP for RNA Labeling...............................................25 reactions 225.00
42756 Fluorescein-12-UTP for RNA Labeling.......................................25 reactions 225.00
RNA Labeling Reagent Pack
42720 Reagent Pack for RNA Labeling.............................................25 reactions 225.00
- -------------------------------------------------------------------------------------------------------------------
NUCLEOTIDES
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
DEOXYNUCLEOTIDES
42806 Bio-11-dUTP....................................................................50 nmol $285.00
42811 Bio-16-dUTP....................................................................50 nmol 285.00
42816 Bio-11-dCTP....................................................................50 nmol 285.00
42812 Bio-AP3-dCTP.................................................................22.5 nmol 230.00
42819 Bio-7-dATP.....................................................................50 nmol 285.00
42831 Fluorescein-12-dUTP............................................................25 nmol 140.00
42841 Rhodamine-dUTP.................................................................25 nmol 140.00
42851 Coumarin-dUTP..................................................................25 nmol 140.00
DIDEOXYNUCLEOTIDES
42813 Bio-16-ddUTP...................................................................25 nmol 140.00
42833 Fluorescein-12-ddUTP...........................................................25 nmol 140.00
RIBONUCLEOTIDES
42815 Bio-11-UTP....................................................................250 nmol 140.00
42814 Bio-16-UTP....................................................................250 nmol 140.00
42818 Bio-11-CTP....................................................................250 nmol 140.00
42817 Bio-17-ATP....................................................................250 nmol 140.00
42834 Fluorescein-12-UTP............................................................250 nmol 140.00
- -------------------------------------------------------------------------------------------------------------------
LABELING ACCESSORIES - GLASS FIBER FILTERS
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
44524 Disc (24 mm diameter)..........................................................400/box $ 60.00
44525 Disc (25 mm diameter)..........................................................400/box 60.00
44101 Rectangle (10.25 cm x 25.4 cm).................................................100/box 120.00
</TABLE>
- 3 -
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
MEMBRANE HYBRIDIZATION AND DETECTION
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
MaxSense(TM) Membrane Hybridization Systems
<S> <C> <C> <C>
45500 MaxSense(TM) BioProbe(R) Membrane Hybridization System
(for DNA & RNA Probes) .........10 blots 10 x 10 cm each $135.00
45600 MaxSense(TM) OligoProbe Membrane Hybridization System
(for Oligonucleotide Probes) ...10 blots 10 x 10 cm each 135.00
MaxSense(TM) Detection Systems
45401 BioDETEK(R)HP Hrp Membrane Detection System...................................1000 cm2 195.00
45402 BioDETEK(R)Alk Membrane Detection System......................................1000 cm2 195.00
45405 FluorDETEK(R)Hrp Membrane Detection System....................................1000 cm2 195.00
45406 FluorDETEK(R)AP Membrane Detection System.....................................1000 cm2 195.00
MaxSense(TM) BioProbe(R)Hybridization and Detection System Kits
for DNA and RNA Probes
Horseradish Peroxidase Detection System
45501 BioDETEK(R)HP Hrp Complete BioProbe(R)Membrane System..........10 blots 10 x 10 cm each 310.00
45505 FluorDETEK(R)Hrp Complete BioProbe(R)Membrane System...........10 blots 10 x 10 cm each 310.00
Alkaline Phosphatase Detection System
45502 BioDETEK(R)Alk Complete BioProbe(R)Membrane System.............10 blots 10 x 10 cm each 310.00
45506 FluorDETEK(R)AP Complete BioProbe(R)Membrane System............10 blots 10 x 10 cm each 310.00
MaxSense(TM) OligoProbe Hybridization and Detection System Kits
for Oligonucleotide Probes
Horseradish Peroxidase Detection System
45601 BioDETEK(R)HP Hrp Complete OligoProbe Membrane System..........10 blots 10 x 10 cm each 310.00
45605 FluorDETEK(R)Hrp Complete OligoProbe Membrane System...........10 blots 10 x 10 cm each 310.00
Alkaline Phosphatase Detection System
45602 BioDETEK(R)Alk Complete OligoProbe Membrane System.............10 blots 10 x 10 cm each 310.00
45606 FluorDETEK(R)AP Complete OligoProbe Membrane System............10 blots 10 x 10 cm each 310.00
MaxSense(TM) Hybridization and Detection System Accessories
45701 Hybridization Membrane..............................................roll, 30 cm x 3 m 225.00
45702 Hybridization Membrane........................................10 sheets, 15 cm x 10 cm 95.00
45703 Liquid Blocking Solution........................................................100 ml 50.00
45704 Liquid Blocking Reagent (concentrated)..........................................100 ml 80.00
45705 MaxSense(TM)BioProbe(R)Hybridization Buffer.....................................150 ml 50.00
45706 MaxSense(TM)OligoProbe Hybridization Buffer.....................................150 ml 50.00
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
MEMBRANE HYBRIDIZATION AND DETECTION (continued)
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Dot Blot System
<S> <C> <C> <C>
46305 Dot Blot Hybridization and Detection Assay Kit............................100 test kit $750.00
46305/C Dot Blot Control DNA Pack.......................................................1 pack 170.00
46307 Dot Blot CMV Control DNA Pack...................................................1 pack 135.00
46308 Dot Blot HBV Control DNA Pack...................................................1 pack 135.00
- -------------------------------------------------------------------------------------------------------------------
IN SITU HYBRIDIZATION ASSAY SYSTEMS
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Simply Sensitive Detection Systems
32830 Hrp - AEC System for in situ Detection.......................................20 slides $95.00
32840 Hrp - DAB System for in situ Detection......................................20 slides 95.00
32850 Fl-SA System for in situ Detection...........................................20 slides 95.00
32860 Alk Phos - INT / BCIP System for in situ Detection...........................20 slides 95.00
32870 Alk Phos - NBT / BCIP System for in situ Detection...........................20 slides 95.00
Ultrasensitive Enhanced Detection Systems
32300 Enhanced Hrp - AEC System for in situ Detection..............................30 slides 140.00
32400 Enhanced Hrp - DAB System for in situ Detection.............................30 slides 140.00
32500 Enhanced Fl -SA System for in situ Detection.................................30 slides 140.00
32600 Enhanced Alk Phos - INT / BCIP System for in situ Detection..................30 slides 140.00
32700 Enhanced Alk Phos - NBT / BCIP System for in situ Detection..................30 slides 140.00
Simply Sensitive - Horseradish Peroxidase - AEC Detection
32801-30 PathoGene(R)Assay for Adenovirus / Hrp - AEC..................................20 slides 235.00
32802-30 PathoGene(R)Assay for Cytomegalovirus / Hrp - AEC.............................20 slides 235.00
32803-30 PathoGene(R)Assay for Epstein-Barr Virus / Hrp - AEC..........................20 slides 235.00
32804-30 PathoGene(R)Assay for Hepatitis B Virus / Hrp - AEC...........................20 slides 235.00
32805-30 PathoGene(R)Assay for Herpes Simplex Virus / Hrp - AEC........................20 slides 235.00
32806-30 PathoGene(R)Assay for Chlamydia trachomatis / Hrp - AEC.......................20 slides 235.00
Simply Sensitive - Horseradish Peroxidase - DAB Detection
32801-40 PathoGene(R)Assay for Adenovirus / Hrp - DAB..................................20 slides 235.00
32802-40 PathoGene(R)Assay for Cytomegalovirus / Hrp - DAB.............................20 slides 235.00
32803-40 PathoGene(R)Assay for Epstein-Barr Virus / Hrp - DAB..........................20 slides 235.00
32804-40 PathoGene(R)Assay for Hepatitis B Virus / Hrp - DAB...........................20 slides 235.00
32805-40 PathoGene(R)Assay for Herpes Simplex Virus / Hrp - DAB........................20 slides 235.00
32806-40 PathoGene(R)Assay for Chlamydia trachomatis / Hrp - DAB.......................20 slides 235.00
</TABLE>
- 5 -
<PAGE>
<TABLE>
<CAPTION>
IN SITU HYBRIDIZATION ASSAY SYSTEMS (continued)
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Simply Sensitive - Fluorescent Streptavidin Detection
<S> <C> <C> <C>
32801-50 PathoGene(R)Assay for Adenovirus / Fl-SA......................................20 slides 235.00
32802-50 PathoGene(R)Assay for Cytomegalovirus / Fl-SA.................................20 slides 235.00
32803-50 PathoGene(R)Assay for Epstein-Barr Virus / Fl-SA..............................20 slides 235.00
32804-50 PathoGene(R)Assay for Hepatitis B Virus / Fl-SA...............................20 slides 235.00
32805-50 PathoGene(R)Assay for Herpes Simplex Virus / Fl-SA............................20 slides 235.00
32806-50 PathoGene(R)Assay for Chlamydia trachomatis / Fl-SA...........................20 slides 235.00
Simply Sensitive - Alkaline Phosphatase - INT / BCIP Detection
32801-60 PathoGene(R)Assay for Adenovirus / Alk Phos - NBT / BCIP.....................20 slides $235.00
32802-60 PathoGene(R)Assay for Cytomegalovirus / Alk Phos - NBT / BCIP................20 slides 235.00
32803-60 PathoGene(R)Assay for Epstein-Barr Virus / Alk Phos - NBT / BCIP.............20 slides 235.00
32804-60 PathoGene(R)Assay for Hepatitis B Virus / Alk Phos - NBT / BCIP..............20 slides 235.00
32805-60 PathoGene(R)Assay for Herpes Simplex Virus / Alk Phos - NBT / BCIP...........20 slides 235.00
32806-60 PathoGene(R)Assay for Chlamydia trachomatis / Alk Phos - NBT / BCIP..........20 slides 235.00
Simply Sensitive - Alkaline Phosphatase - NBT / BCIP Detection
32801-70 PathoGene(R)Assay for Adenovirus / Alk Phos - NBT / BCIP.....................20 slides 235.00
32802-70 PathoGene(R)Assay for Cytomegalovirus / Alk Phos - NBT / BCIP................20 slides 235.00
32803-70 PathoGene(R)Assay for Epstein-Barr Virus / Alk Phos - NBT / BCIP.............20 slides 235.00
32804-70 PathoGene(R)Assay for Hepatitis B Virus / Alk Phos - NBT / BCIP..............20 slides 235.00
32805-70 PathoGene(R)Assay for Herpes Simplex Virus / Alk Phos - NBT / BCIP...........20 slides 235.00
32806-70 PathoGene(R)Assay for Chlamydia trachomatis / Alk Phos - NBT / BCIP..........20 slides 235.00
Ultrasensitive Enhanced - Horseradish Peroxidase - AEC Detection
32801-33 PathoGene(R)Assay for Adenovirus / Enhanced Hrp - AEC .......................20 slides 290.00
32802-33 PathoGene(R)Assay for Cytomegalovirus / Enhanced Hrp - AEC...................20 slides 290.00
32803-33 PathoGene(R)Assay for Epstein-Barr Virus / Enhanced Hrp - AEC................20 slides 290.00
32804-33 PathoGene(R)Assay for Hepatitis B Virus / Enhanced Hrp - AEC.................20 slides 290.00
32805-33 PathoGene(R)Assay for Herpes Simplex Virus / Enhanced Hrp - AEC..............20 slides 290.00
32806-33 PathoGene(R)Assay for Chlamydia trachomatis / Enhanced Hrp - AEC.............20 slides 290.00
Ultrasensitive Enhanced - Horseradish Peroxidase - DAB Detection
32801-44 PathoGene(R)Assay for Adenovirus / Enhanced Hrp - DAB........................20 slides 290.00
32802-44 PathoGene(R)Assay for Cytomegalovirus / Enhanced Hrp - DAB...................20 slides 290.00
32803-44 PathoGene(R)Assay for Epstein-Barr Virus / Enhanced Hrp - DAB................20 slides 290.00
32804-44 PathoGene(R)Assay for Hepatitis B Virus / Enhanced Hrp - DAB.................20 slides 290.00
32805-44 PathoGene(R)Assay for Herpes Simplex Virus / Enhanced Hrp - DAB..............20 slides 290.00
32806-44 PathoGene(R)Assay for Chlamydia trachomatis / Enhanced Hrp - DAB.............20 slides 290.00
</TABLE>
- 6 -
<PAGE>
<TABLE>
<CAPTION>
IN SITU HYBRIDIZATION ASSAY SYSTEMS (continued)
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Ultrasensitive Enhanced - Fluorescent Streptavidin Detection
<S> <C> <C> <C>
32801-55 PathoGene(R)Assay for Adenovirus / Enhanced Fl -SA...........................20 slides 290.00
32802-55 PathoGene(R)Assay for Cytomegalovirus / Enhanced Fl -SA......................20 slides 290.00
32803-55 PathoGene(R)Assay for Epstein-Barr Virus / Enhanced Fl -SA...................20 slides 290.00
32804-55 PathoGene(R)Assay for Hepatitis B Virus / Enhanced Fl -SA....................20 slides 290.00
32805-55 PathoGene(R)Assay for Herpes Simplex Virus / Enhanced Fl -SA.................20 slides 290.00
32806-55 PathoGene(R)Assay for Chlamydia trachomatis / Enhanced Fl -SA................20 slides 290.00
Ultrasensitive Enhanced - Alkaline Phosphatase - INT / BCIP Detection
32801-66 PathoGene(R)Assay for Adenovirus / Enhanced Alk Phos - INT / BCIP............20 slides 290.00
32802-66 PathoGene(R)Assay for Cytomegalovirus / Enhanced Alk Phos - INT / BCIP.......20 slides 290.00
32803-66 PathoGene(R)Assay for Epstein-Barr Virus / Enhanced Alk Phos - INT / BCIP....20 slides 290.00
32804-66 PathoGene(R)Assay for Hepatitis B Virus / Enhanced Alk Phos - INT / BCIP.....20 slides 290.00
32805-66 PathoGene(R)Assay for Herpes Simplex Virus / Enhanced Alk Phos - INT / BCIP..20 slides 290.00
32806-66 PathoGene(R)Assay for Chlamydia trachomatis / Enhanced Alk Phos - INT / BCIP.20 slides 290.00
Ultrasensitive Enhanced - Alkaline Phosphatase - NBT / BCIP Detection
32801-77 PathoGene(R)Assay for Adenovirus / Enhanced Alk Phos - NBT / BCIP............20 slides $290.00
32802-77 PathoGene(R)Assay for Cytomegalovirus / Enhanced Alk Phos - NBT / BCIP.......20 slides 290.00
32803-77 PathoGene(R)Assay for Epstein-Barr Virus / Enhanced Alk Phos - NBT / BCIP....20 slides 290.00
32804-77 PathoGene(R)Assay for Hepatitis B Virus / Enhanced Alk Phos - NBT / BCIP.....20 slides 290.00
32805-77 PathoGene(R)Assay for Herpes Simplex Virus / Enhanced Alk Phos - NBT / BCIP..20 slides 290.00
32806-77 PathoGene(R)Assay for Chlamydia trachomatis / Enhanced Alk Phos - NBT / BCIP.20 slides 290.00
PathoGene(R) Tissue Preparation Kit and Control Slides
32800 PathoGene(R)Tissue Preparation Kit........................................20 specimens 145.00
31871 Adenovirus Control Slide.......................................................1 slide 15.00
31872 Cytomegalovirus Control Slide..................................................1 slide 15.00
31873 Epstein-Barr Control Slide.....................................................1 slide 15.00
31875 Herpes Simplex Virus Control Slide.............................................1 slide 15.00
31876 Chlamydia trachomatis Control Slide............................................1 slide 15.00
31877 HPV 16 Probe Control Slide....................................................1 slide 15.00
ApopDETEK(R) in situ Cell Death Assay Systems
32930 ApopDETEK(R)in situ Cell Death Assay / Hrp - AEC..............................20 slides 175.00
32940 ApopDETEK(R)in situ Cell Death Assay / Hrp - DAB..............................20 slides 175.00
32950 ApopDETEK(R)in situ Cell Death Assay / Fl -SA.................................20 slides 175.00
32960 ApopDETEK(R)in situ Cell Death Assay / Alk Phos - INT / BCIP..................20 slides 175.00
32970 ApopDETEK(R)in situ Cell Death Assay / Alk Phos - NBT / BCIP..................20 slides 175.00
</TABLE>
- 7 -
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
IN SITU HYBRIDIZATION ASSAY SYSTEMS (continued)
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Human Papillomavirus Identification Systems
<S> <C> <C> <C>
32881 BioPap(R)Human Papillomavirus in situ Screening Assay for Cervical Smears...20 test kit 345.00
32892 BioPap(R)Human Papillomavirus in situ Typing Assay for
Cervical Specimens (Types 6/11, 16/18 and 31/33/51)..................10 test kit 305.00
32883 BioPap(R)Human Papillomavirus in situ Typing Assay
Cervical Specimen Transport Kit.................................for 10 specimens 35.00
32879 PathoGene(R)Human Papillomavirus in situ Screening Assay for
Tissue Sections .....................................................20 test kit 425.00
32895 PathoGene(R) Human Papillomavirus in situ Typing Assay for
Tissue Sections (Types 6/11, 16/18 and 31/33/51).....................10 test kit 305.00
32877 PathoGene(R)Hrp-AEC Human Papillomavirus in situ Typing Assay fo r
Tissue Sections (Types 6/11, 16/18 and 31/33/51).....................20 test kit 525.00
32874 PathoGene(R)Hrp-DAB Human Papillomavirus in situ Typing Assay for
Tissue Sections (Types 6/11, 16/18 and 31/33/51).....................20 test kit 525.00
In Situ HYBRIDIZATION ASSAY ACCESSORIES
Specimen Slides
31802-20 Pretreated slides / single well..............................................20 slides $25.00
31802-100 Pretreated slides / single well.............................................100 slides 85.00
31803-20 Pretreated slides / double well..............................................20 slides 25.00
31803-100 Pretreated slides / double well.............................................100 slides 85.00
Heating Blocks and Surface Thermometer
31500 Heating Block for use with 110V, 50/60 Hz.......................................1 unit 325.00
31508 Heating Block for use with 220V, 50 Hz..........................................1 unit 325.00
31580 Surface Thermometer.............................................................1 unit 30.00
Biological Reagents and Buffers
33801 Proteinase K..................................................................2 x 5 mg 30.00
33808 In situ Hybridization Buffer (1.25 X concentrate)................................10 ml 25.00
33809 In situ Hybridization Wash Reagent...............................................30 ml 25.00
33802 Enzo Wash Buffer Salts.........................................3 Packets, 1 liter each 15.00
33803 Enzo SignaSure(R)Wash Buffer...................................3 Packets, 1 liter each 25.00
33805 Dilution Buffer for Alkaline Phosphatase-linked Detection Reagents..............100 ml 30.00
33804 Dilution Buffer for Horseradish Peroxidase-linked Detection Reagents............100 ml 30.00
33806 Dilution Buffer for Fluorescence-linked Streptavidin............................100 ml 30.00
33807 Dilution Buffer for Double Antibody Enhancement Procedures......................100 ml 30.00
</TABLE>
- 8 -
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
BIOPROBE(R) LABELED PROBES
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Infectious Agents
<S> <C> <C> <C>
40834 Adenovirus........................................................................2 ug $175.00
40835 Cytomegalovirus...................................................................2 ug 175.00
40836 Epstein-Barr Virus................................................................2 ug 175.00
40837 Hepatitis B Virus.................................................................2 ug 175.00
40838 Herpes Simples Virus..............................................................2 ug 175.00
40839 Chlamydia trachomatis.............................................................2 ug 175.00
40842 Hepatitis A Virus.................................................................2 ug 175.00
40843 Mycoplasma pneumonia..............................................................2 ug 175.00
40845 SV40..............................................................................2 ug 175.00
40846 Campylobacter jejuni..............................................................2 ug 175.00
40847 JC Virus..........................................................................2 ug 175.00
40848 BK Virus..........................................................................2 ug 175.00
Oncogenes
40714 c-Ha-ras..........................................................................2 ug 175.00
40717 c-Myc.............................................................................2 ug 175.00
40718 N-Myc.............................................................................2 ug 175.00
Hybridization Controls
40840 Lambda............................................................................2 ug 175.00
40849 Blur 8 (human alu repeat)........................................................2 ug 175.00
- -------------------------------------------------------------------------------------------------------------------
DETEK(R) SIGNAL GENERATING SYSTEMS
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Fluorescent Biotin Detection
43818 DETEK(R)f (Double Antibody Fuorescence Detection).......................for 200 slides $200.00
43821 DETEK(R)FS (Fluorescent Streptavidin Detection)..........................for 100 slides 110.00
DETEK(R) Colorimetric Signal Generating Systems
43820 DETEK(R)Hrp Kit (Hrp - AEC Detection).....................500 ml working solution or 150.00
...........................................................40 membranes (100 cm2 each)
43840 FluorDETEK(R)Hrp Kit (Hrp - AEC Detection)................500 ml working solution or 150.00
...........................................................40 membranes (100 cm2 each)
43822 DETEK(R)Alk Kit (Alk Phos- NBT/BCIP Detection)............500 ml working solution or 200.00
...........................................................40 membranes (100 cm2 each)
43842 FluorDETEK(R)AP Kit (Alk Phos- NBT/BCIP Detection).........500 ml working solution or 200.00
...........................................................40 membranes (100 cm2 each)
</TABLE>
- 9 -
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
DETEK(R) SIGNAL GENERATING SYSTEMS (continued)
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
Anti-Biotin Antibody Reagents
<S> <C> <C> <C>
43823 DETEK(R)Enhancer Kit (Double Antibody Enhanced Detection).....................30 slides 125.00
43861 Rabbit anti-Biotin Antibody Concentrate........................400 ml working solution 210.00
Colorimetric Signal Generating Reagents
43825 AEC Substrate Kit..............................................300 ml working solution 90.00
43826 DAB Substrate Kit..............................................300 ml working solution 90.00
43827 NBT/BCIP Substrate Kit.........................................400 ml working solution 125.00
43828 INT /BCIP Substrate Kit........................................400 ml working solution 125.00
- -------------------------------------------------------------------------------------------------------------------
MICROPLATE HYBRIDIZATION ASSAYS
- -------------------------------------------------------------------------------------------------------------------
Cat. No. Product Quantity Price
46330 HIV 1 Microplate Hybridization Assay.......................................96 test kit $625.00
46340 MTB Microplate Hybridization Assay.........................................96 test kit 625.00
46350 HBV (core antigen sequences) Microplate Hybridization Assay...............96 test kit 625.00
46360 HIV 2 Microplate Hybridization Assay.......................................96 test kit 625.00
46380 HBV (surface antigen sequences) Microplate Hybridization Assay.............96 test kit 625.00
46353 Enhanced Microplate Hybridization Assay for Hepatitis B....................96 test kit 700.00
46354 Enhanced Microplate Hybridization Assay for Hepatitis B
Serum Titration Standards.....................4 runs 50.00
46331 Oligonucleotide Pair SK38/SK39..............................................2 x 5 nmol $175.00
46341 Oligonucleotide Pair MTB10/MTB11............................................2 x 5 nmol 175.00
46351 Oligonucleotide Pair HB01/HB02..............................................2 x 5 nmol 175.00
46355 Oligonucleotide Pair HB07/HB08..............................................2 x 5 nmol 175.00
46361 Oligonucleotide Pair VB306/VB310............................................2 x 5 nmol 175.00
46381 Oligonucleotide Pair HB011/HB014............................................2 x 5 nmol 175.00
46382 Oligonucleotide Pair HB012/HB013............................................2 x 5 nmol 175.00
</TABLE>
- 10 -
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
NONOCLONAL ANTIBODIES FOR IMMUNOPATHOLOGY
- -------------------------------------------------------------------------------------------------------------------
Product Cat. No. Price Cat. No. Price
Ready-to-Use for Concentrated for
Format 6 ml Format 0.5 ml
<S> <C> <C> <C> <C>
anti-Cytokeratin, 35(beta)H11, (low MW, 52.5 kd)........30902 $110.00 34902 $140.00
anti-Cytokeratin, 34(beta)E12 Keratin-903(TM)
(high MW, 68, 58, 56.5, 50 kd)...............30903 110.00 34903 140.00
anti-Cytokeratin, 34(beta)B4, (high MW, 68 kd)..........30904 110.00 34904 140.00
anti-Melanoma, HMB45....................................30930 110.00 34930 140.00
anti-Muscle Actin, HHF35................................30931 110.00 34931 140.00
anti-Neuroendocrine, PHE5...............................30932 110.00 34932 140.00
anti-Smooth Muscle Actin, CGA7..........................30933 110.00 34933 140.00
anti-GFAP...............................................30934 110.00 34934 140.00
anti-Macrophage, HAM56..................................30935 110.00 34934 140.00
</TABLE>
- 11 -
<PAGE>
EXHIBIT C
Continuing Guaranty
Baxter Healthcare Corporation
Deerfield, Illinois 60015-4633
Vendor: Enzo Diagnostics, Inc.
60 Executive Blvd.
Farmingdatel, NY 11735
1. Compliance with Laws: Vendor guarantees that each product shipped to, or on
the order of, Baxter Healthcare Corporation or any affiliated corporation
("Baxter") is as of the date of shipment in compliance with all federal,
state and local laws, regulations, rules and orders.
Vendor specifically guarantees that:
(Equal opportunity statement-required because Baxter is a government
contractor) The products are not manufactured or sold in violation of
any applicable Equal Employment Opportunity requirements, including
those set forth in Section 202 of Executive Order 11246, as amended.
2. Insurance: Vendor agrees to procure and maintain general comprehensive
liability insurance covering each occurrence of bodily injury and property
damage in the amount of not less than One Million Dollars ($1,000,000)
combined single limit (or such higher limits as Baxter shall reasonably
request) with endorsements for product and completed operations, blanket
contractual liability, and vendor's liability. Vendor shall on or before
delivery of first PRODUCT, furnish a certificate of insurance evidencing
the foregoing coverages and limits, stating that the insurer shall give
Baxter written notice at least thirty (30) days prior to any cancellation,
non-renewal or material change in coverage. At Baxter's request, Vendor
will also provide assurance of such insurance.
3. Indemnification: Vendor agrees to indemnify and hold harmless Baxter from
any liability, loss, expense, cost, claim or judgment, arising out of:
a. (Products Liability) Any claim for property damage, or personal
injury or death where the product is alleged to have caused or
contributed to the damage, injury or death. This indemnification
does not extent to injuries, damages or death to the extent caused
by negligence on the part of Baxter or any of its employees or
agents.
b. (Patent infringement) Any claim that the products infringe the
patent, trademark or other proprietary rights of any other party.
4. Recalls: Vendor agrees that it will reimburse Baxter for costs associated
with product corrective actions (including recalls), except those recalls
that result from Baxter negligence.
5. Survival of Guaranty: This guaranty shall be continuing and shall be
binding upon the Vendor and his or its heirs, executors, administrators,
successors and/or assigns and shall inure to the benefit of Baxter, its
successors and assigns and to the benefit of its officers, directors,
agents and employees.
- 1 -
<PAGE>
Date:
Corporate Seal Enzo Diagnostics, Inc.
---------------------------------------------------------------
Corporate Name or Name Under Which Business is Conducted
Attect: (If Corporation)
---------------------------------------------------------------
Signataure & Title of Authorized Officer, Partner or Proprietor
Secretary
---------------------------------------------------------------
Printed Name & Title of Authorized Officer, Partner of
Proprietor
- 2 -
<PAGE>
EXHIBIT 10(cc)
AGREEMENT FOR LICENSE BETWEEN
YALE UNIVERSITY AND ENZO BIOCHEM, INC.
THIS AGREEMENT entered into as of the fourth, (4th) day of December, 1981,
by and between Yale University (hereinafter called Yale) a corporation organized
and existing under and by virtue of a charter granted by the General Assembly of
the Colony and State of Connecticut and located in New Haven, Connecticut 06510,
and Enzo Biochem, Inc. (hereinafter called Enzo), a corporation of the State of
New York having its principal office at 325 Hudson Street, New York, New York
10013;
WITNESSETH THAT:
IN CONSIDERATION OF the mutual promises herein contained THE PARTIES HAVE
AGREED AND DO AGREE AS FOLLOWS:
I. LICENSE GRANT
A. Yale hereby grants to Enzo, upon and subject to all the terms and
conditions of this agreement, an EXCLUSIVE LICENSE of limited term as defined by
Article II B, to make, use and sell the invention covered by the LICENSED
PATENTS as defined by Article III, in the countries where the LICENSED PATENTS
are effective or applications are pending.
B. Yale grants to Enzo a NONEXCLUSIVE LICENSE for a residual term as
defined by Article II C to make, use and sell the invention covered by the
LICENSED PATENTS as defined by Article III in the countries where the LICENSED
PATENTS are effective or applications are pending.
<PAGE>
C. Yale further grants to Enzo the right to sublicense third parties under
terms and conditions no greater than those acquired by Enzo and provided that
the terms and provisions of the following clauses of this agreement are met
where applicable.
D. All rights granted by Yale to Enzo under this agreement are subject to
any rights required to be granted to the Government and any rights reserved or
determined by the Government thereunder.
II. TERMS OF AGREEMENT
A. The terms, conditions and obligations of this agreement become effective
as of the date of signing.
B. The term of the EXCLUSIVE LICENSE granted under this agreement shall be
for ten (10) years commencing with the effective date pursuant to Article XXIII
of this agreement or for a shorter period as may be determined or approved by
the Federal Government or any agency thereof.
C. The term of the NONEXCLUSIVE LICENSE granted under this agreement shall
be for the remaining years of the life of each patent, domestic or foreign, of
the LICENSED PATENTS exceeding the EXCLUSIVE LICENSE term.
III. LICENSED PATENTS
As used in the agreement, the phrase "LICENSED PATENTS" shall mean and
include:
A. United States Patent Application Serial No. 255,223, entitled "Modified
Nucleotides and Methods of
2
<PAGE>
Preparing and Using Same," filed April 17, 1981, by David C. Ward, Pennina R.
Langer and Alexander A. Waldrop III (hereinafter called the Ward application);
B. Any divisional, continuation or substitute United States patent
application which shall be based on the Ward application;
C. Any patents which shall issue on any of the above- described patent
applications, and any reissues and extensions thereof;
D. And, foreign patents or patent applications corresponding to each of the
above-described patent applications.
IV. PATENT PROSECUTION
A. If not already accomplished at the time of execution of this agreement,
the patent applications included within the LICENSED PATENTS shall be prepared,
filed and prosecuted to issuance, grant or final disposition by Enzo at its own
cost and expense.
B. Enzo shall prepare and file foreign patent applications corresponding to
the LICENSED PATENTS within the Paris Convention time period in those countries
where valid patent protection is obtainable, including at least the Common
Market European Countries, Japan and Canada, and in other foreign countries
mutually agreeable to Yale and Enzo. Enzo shall prosecute these applications,
and any renewals or extensions thereof at its own cost and expense.
3
<PAGE>
C. Any taxes, annuities, working fees, maintenance fees, renewal and
extension charges with respect to each patent application and patent subject to
this agreement shall be punctually paid by Enzo. A mutually acceptable patent
counsel for these purposes shall be engaged by Enzo.
V. ROYALTIES
A. During the EXCLUSIVE LICENSE term as defined by Article II B, Enzo shall
pay to Yale a royalty of:
1. * percent of all domestic or foreign sales covered by the LICENSED
PATENTS in each country in which the invention is manufactured, sold or used
and,
2. * percent of the unit price of diagnostic kits applied to the
diagnosis of human or animal disorders and in which the invention of the
LICENSED PATENTS is a component part.
3. * percent of the unit price of research kits (e.g., nick
translation, cDNA kits) in which the invention of the LICENSED PATENTS is a
component part.
B. After the expiration of the EXCLUSIVE LICENSE term and during the
NONEXCLUSIVE LICENSE term as defined by Article II, Enzo shall pay a royalty of:
1. * percent of all domestic and foreign sales covered by the LICENSED
PATENTS which includes the unit price of diagnostic kits applied to the
diagnosis of human
- ----------
* The information omitted is confidential and has been filed separately with the
Commission pursuant to Rule 24b-2.
4
<PAGE>
or animal disorders and in which the invention of the LICENSED PATENTS is a
component part, in each country in which the invention is manufactured, sold or
used.
2. * percent of the unit price of research kits (e.g., nick
translation, cDNA kits) in which the invention of the LICENSED PATENTS is a
component part.
C. As used in this agreement, "sales" shall mean Enzo's billings for
products, processes, kits, etc. covered by the LICENSED PATENTS, less the sum of
the following:
1. Sales and/or use taxes directly imposed upon and with particular
reference to particular sales of apparatus;
2. Outbound freight separately charged or prepaid;
3. Special packing or crating separately charged;
4. Refunds paid for sales previously credited.
D. In countries where no patent application is filed and Enzo licenses
others to practice the invention of the LICENSED PATENTS, Enzo shall pay to Yale
a royalty of *
- ----------
* The information omitted is confidential and has been filed separately with the
Commission pursuant to Rule 24b-2.
5
<PAGE>
VI. PAYMENTS AND REPORTS
A. On or before the last business day of January, April, July and October
of each year of this agreement, Enzo shall submit to Yale a written report
stating:
1. The billings by Enzo issued during the preceding calendar quarter
for sales covered by the LICENSED PATENTS;
2. Any deductions therefrom under Article V B 1-4;
3. a) A calculation of the minimum payment due as defined by Article
VII; b) a calculation of the amount of royalty due; and a payment to
Yale each quarter of an amount equal to the greater of the aforesaid
calculations a) or b).
B. Enzo shall maintain at its principal office usual books of account and
records showing its actions under this agreement. Such books and records shall
be open to inspection and copying, during usual business hours, by an
independent certified public accountant to whom Enzo has no reasonable
objection, for two (2) years after the calendar quarter to which they pertain,
for the purposes of verifying the accuracy of the royalties paid by Enzo under
this agreement.
VII. MINIMUM PAYMENTS
A. Enzo agrees to pay to Yale the following annual minimum payments for the
licenses herein granted under the LICENSED PATENTS. The term of the minimum
payments schedule
6
<PAGE>
commences with the Effective Date of this Agreement of Article XXIII January 1,
1982 and payments shall be made quarterly whether or not any annual sales of the
invention covered by the LICENSED PATENTS have been made:
First year $ 5,000.00 Sixth year $100,000.00
Second year $10,000.00 Seventh year $200,000.00
Third year $15,000.00 Eighth year $300,000.00
Fourth year $20,000.00 Ninth year $400,000.00
Fifth year $25,000.00 Tenth year $500,000.00
B. Each quarter one-fourth of the annual minimum payment shall become due
and payable in accordance with the provision of Article VI. Royalty payments due
and payable during each quarter shall be credited against any minimum payment
due for the particular quarter.
C. Enzo may terminate the EXCLUSIVE LICENSE granted under this Agreement at
the end of the sixth year without incurring future liabilities under the minimum
payment provisions of this Agreement. Termination under this paragraph must be
made in writing by Enzo to Yale during the ninety (90) days immediately
proceeding the conclusion of the sixth anniversary year of this Agreement. If
this Agreement is terminated by Enzo under this paragraph, all royalties accrued
under this agreement shall immediately become due. Yale may immediately seek
another licensee to succeed Enzo.
D. In the event that Enzo fails to pay fully and promptly any of the
minimum payments or the royalties due under this agreement, Enzo shall be in
material breach of the agreement. If after notice thereof to Enzo by Yale, Enzo
fails to cure its failure to pay within thirty (30) days of notice, Yale may by
ten (10) days notice to Enzo terminate this agreement. Upon such termination for
failure to pay, the full
7
<PAGE>
amount of minimum payments shall immediately become due and payable. Upon
payment by Enzo of the unpaid minimum payments, Yale will grant to Enzo a
nonexclusive license to the LICENSED PATENTS without the right to sublicense
others. Payment of royalties under such nonexclusive license shall be off-set by
the amount paid under the termination minimum payment provision.
VIII. TERM OF PAYMENTS
A. Royalties due under Article VI and minimum payments due under Article
VII shall be payable as long as the Ward application or any division,
continuation, reissue or extension which is the subject of the LICENSED PATENTS,
remains pending in the appropriate countries wherein the royalty was incurred.
Upon said application's issuance as a patent, the royalty shall be payable for
the term of the patent.
B. In the event that the patent lapses or if all of its claims are declared
invalid by a court of competent jurisdiction through no fault or cause of Enzo,
the obligation to pay the patent royalty for that patent shall terminate but the
Agreement shall remain in effect as to the remaining applications or patents. In
the event that the patent lapses, terminates or all of its claims are declared
invalid through fault or cause by Enzo then as to Enzo its obligations under
this agreement remain in effect and Yale does not waive rights to sue for any
wrongful acts of Enzo.
8
<PAGE>
IX. BEST EFFORTS
A. For the license granted herein, Enzo shall employ its best efforts to
perfect and market the invention. Best efforts shall be judged by Yale using an
objective standard and the reports and records provided by Enzo as well as other
resources and literature available to or developable by Yale. Should there be
disagreement as to the use of best efforts, a mutually acceptable impartial
third party shall be appointed who shall objectively judge the efforts of Enzo.
Said party shall have suitable scientific and business training in the field or
fields to which the invention applies.
B. Marketing shall include sales, offers for sale, sales development,
technical consultation pursuant to sales, manufacture, production or processing
pursuant to the invention and sale or possible sale thereof, detailing to
suitable buyers, advertisement, publication of technical reports, sponsorship of
scientific meetings pursuant to or directed to the invention, and further
activities of similar types.
C. Yale on its part shall employ its best efforts to obtain for Enzo a
ten-year exclusive license under this Agreement.
X. RESEARCH AND DEVELOPMENT
A. For the licenses granted herein, Enzo shall furthermore plan, initiate
and maintain research and development efforts related to the invention covered
by the LICENSED PATENTS, which are directed to commercial application of said
invention. Such commercial applications include but are not limited to use of
the invention for analytic or investigative purposes in hospitals and other
health institutions, production of useful and
9
<PAGE>
valuable products from "DNA" based tissue or cells, detection and analysis of
human pathological conditions and disease and other similar uses.
B. Pursuant to this effort, Enzo shall spend a minimum of $300,000.00
annually for each of the first three years of this agreement, to conduct
research and development of new and improved diagnostic procedures in which the
sensitivity for detection and/or quantification of genetic material from
microbial or multicellular organisms is increased. Payments made by Enzo under
this Article X for research and development during the first year of this
Agreement in excess of $300,000 shall be credited to the second year and,
payments made during the first and second years in excess of $600,000 shall be
credited to the third year. It is recognized that ENZO, prior to the signing of
this Agreement, has made expenditures for research and development and a credit
of $150,000 for this effort shall be applied against the $300,000 obligation of
the third year.
1. As a part of this minimum expense, Enzo shall employ the following
minimum personnel, who shall devote their full efforts and time to
this work:
a. An Organic Chemist trained in suitable fields of research and
having a Ph.D. degree or its equivalent;
b. An Immunologist trained in suitable fields of research and
having an M.D. degree
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<PAGE>
or a Ph.D. degree or the equivalent thereof; and
c. A Molecular Biologist trained in suitable fields of research
and having a Ph.D. degree or the equivalent thereof.
2. As a further part of this minimum expense, Enzo shall purchase or
rent the appropriate laboratory and/or clinical equipment, computer
capacity and other materials appropriate for the work required by the
foregoing personnel.
C. A written report describing the development efforts shall be given
annually by Enzo to Yale. An annual audit of the expenditures made in
conjunction with the development efforts including an audit of the minimum
required expenditures shall be made at Yale's expense by an independent,
mutually acceptable auditor or accountant and the audit shall be reported to
Yale. Material produced by Enzo to Yale under this Agreement which has been
marked "confidential" and contains confidential or proprietary information of
Enzo shall not be disclosed by Yale without first obtaining from Enzo written
approval.
D. Failure to perform substantially the provisions of this article or to
spend the minimum amount for research and development herein set forth, shall
constitute a material breach by Enzo.
11
<PAGE>
XI. SUBLICENSES
The right to sublicense granted by Yale to Enzo shall be exclusive,
coterminable and transferable with this agreement and the license granted under
it. Enzo may grant one or more sublicenses under the LICENSED PATENTS which
shall be treated according to the terms and provisions hereunder. In the event
that the same royalty schedule is applied by Enzo to its sublicense agreement as
is herein applied, the royalty payment due from Enzo to Yale shall include the
sales of Enzo's sublicensee or sublicensees. In the event that a different
royalty schedule is applied by Enzo to its sublicense agreement, Yale shall
receive an amount of the royalties paid by the sublicensee or sublicensees to
Enzo as if Enzo had manufactured and sold the products.
XII. TERMINATION
This agreement and the license granted under it may be terminated:
A. By Yale, upon thirty (30) days notice to Enzo, for Enzo's material
breach of the agreement and Enzo's failure to cure in accordance with Article
XIII B.
B. At any time, by Enzo, after the sixth anniversary of this agreement and
upon sixty (60) days notice to Yale and upon payment of the minimum payments
defined in Article VII.
C. Should Enzo commit any act of bankruptcy, become insolvent, file a
petition under any bankruptcy or insolvency act or have any such petition filed
against it, or offer any general composition to its creditors, without notice to
Yale and because of the happening of such act, event or offer;
D. Upon any termination of this agreement and any license granted under it,
Enzo shall have the right for one year
12
<PAGE>
to dispose of all products of the invention or substantially completed products
thereof then on hand which would bear royalty under this agreement, and to
complete all orders for such products of the invention then on hand, and
royalties shall be paid with respect to such products of the invention as though
this agreement had not terminated;
E. Upon any termination of this agreement all sublicensees granted by Enzo
under it shall terminate simultaneously, subject nevertheless to Article XII D.
F. Termination of this agreement shall not terminate Enzo's obligation to
pay all royalties which shall have been accrued hereunder.
G. It is understood and agreed that should Yale for any reason grant a
license having a more favorable royalty rate than that charged herein, Yale will
give to Enzo the benefit of such more favorable rate from and after the date of
its establishment.
XIII. BREACH, CURE
A. In addition to the applicable legal standards, Enzo shall be in material
breach of this agreement for the following reasons:
1. Failure to use best efforts pursuant to Article IX;
2. Failure to pay royalties or minimum payments pursuant to Articles V
and VII;
3. Breach pursuant to Article X;
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4. Failure to prosecute reasonably the U.S. and foreign patent
applications which are the subject of the LICENSED PATENTS, such
failure including failure to appoint adequate mutually acceptable
counsel, failure to pay all fees and monies due, failure to pay
maintenance taxes, failure to follow advice of counsel and
failure to meet prosecution deadlines after being so notified by
counsel. Such failure shall not include failure caused by Yale;
and
5. Failure to pay patent taxes.
Termination of this agreement by Enzo or by any act of Enzo shall not
terminate Enzo's obligation to pay any remaining minimum payments under Article
VII.
B. Enzo shall have the right to cure its material breach; the cure shall be
effected within a reasonable time or within the specific time period set forth
for breach pursuant to Article VII C and in no event later than sixty (60) days
after notice of breach given by Yale. If complete cure cannot be rendered, Enzo
shall have the right to make a substantial cure using its best efforts as judged
according to Article IX A.
XIV. INFRINGEMENT, PATENT MARKINGS
A. Enzo shall notify Yale of the infringement by a third party of any claim
of any of the LICENSED PATENTS, and Enzo shall proceed to take steps to end such
infringement. Enzo shall
14
<PAGE>
initiate all legal actions and shall in consultation with Yale select counsel
mutually acceptable and prosecute such actions.
B. Enzo shall pay the first $100,000 in legal fees and disbursements
pursuant to legal action taken in regard to infringement.
The remainder of the legal fees and disbursements shall be paid three
quarters by Enzo, one quarter by Yale but in no event shall Yale's payment
exceed the amount of royalties due or minimum payment due from Enzo to Yale
whichever is greater.
C. Any recovery awarded for patent infringement shall first be used to
reimburse Enzo and Yale for legal fees, disbursements and costs incurred
pursuant to XIV B. Excess recovery over reimbursement shall be * between Yale
and Enzo.
D. Enzo agrees, and agrees to require its sublicensees, to mark all
products of the invention manufactured under this agreement and the license
granted under it, and under any sublicense granted by it hereunder, in
accordance with the pertinent local patent law.
E. Any actions brought by third parties against Enzo for products or
processes made, used or sold by Enzo under this agreement are the sole
responsibility of Enzo and do not terminate Enzo's obligations under this
agreement.
15
<PAGE>
XV. TITLE, OWNERSHIP
A. Ownership and legal title to all inventions made by Yale or its
employees with funds not provided by Enzo and covered by the LICENSED PATENTS,
and ownership and legal title to the corresponding domestic and foreign patent
applications and the prospective patents which may issue, shall remain with
Yale.
B. Ownership and legal title to all inventions made by Enzo or its
employees which are related to the field of art covered by the LICENSED PATENTS
and made pursuant to Enzo's further research and development, and ownership and
legal title to the corresponding domestic and foreign patent applications and
prospective patents which may issue, shall remain with Enzo. Yale shall have a
nonexclusive, royalty free license to make and use said inventions and a
nonexclusive, royalty free license under said patent applications and
prospective patents.
C. Ownership and legal title to all inventions, patent applications and
prospective patents which may issue and which are sponsored or are made jointly
by Enzo and Yale or their employees and are related to the field of art covered
by the LICENSED PATENTS and made pursuant to Yale's and Enzo's further research
efforts, shall remain with Yale. Enzo shall have a limited EXCLUSIVE LICENSE for
a term defined in Article II B and a residual NONEXCLUSIVE LICENSE for the life
of the patent Article II C to make, use and sell embodiments of said inventions.
The filing and prosecution of said patent
16
<PAGE>
applications and prospective patents, which shall conform in all respects to the
terms of this agreement.
XVI. NOTICE
Any notice which is required to be or may be given under this agreement
shall be deemed duly given if given in writing, and dispatched by prepaid first
class registered or certified mail addressed to the party notified at its
address stated in the preamble of this agreement. Each party reserves the right
to change that address from time to time by notice so given.
XVII. ASSIGNABILITY
This agreement and the license granted under it may be assigned by Enzo
with substantially all its related business, or to any firm or corporation
directly or indirectly controlling, controlled by, or under common control with
Enzo. Enzo shall promptly advise Yale of any such assignment.
XVIII. WARRANTY
Nothing in this agreement shall be construed as a warranty or
representation by either party as to the validity of any prospective, domestic
or foreign patent which may issue pursuant to the LICENSED PATENTS covering the
invention. Further, nothing in this agreement shall be construed as a warranty
or representation by either party that anything made, used, sold or otherwise
disposed of under any license granted under this agreement is or will be free
from infringement of domestic or foreign patents of third parties.
17
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XIX. PROHIBITION AGAINST USE OF YALE NAME
The use of the name Yale, Yale University, or Yale Medical School in any
form for public distribution is prohibited unless written approval is first
obtained from an officer of the University or Dean of the Medical School.
XX. COMPLIANCE WITH GOVERNMENTAL OBLIGATIONS
A. Notwithstanding any provisions in this agreement, Yale disclaims any
obligations or liabilities arising under the license provisions if Enzo is
charged in a governmental action for not complying with or fails to comply with
governmental regulations to take effective steps to bring the invention to a
point of practical application. Enzo shall bear the entire cost of justifying
and defending any action brought by any governmental agency.
B. Enzo shall comply with all governmental requests directed to either Yale
or Enzo and to provide all information and assistance necessary to comply with
the government requests. Failure to take necessary action and to comply with
said requests will be a material breach.
C. Enzo shall insure that research, development, and marketing under this
agreement will comply with all governmental regulations including, but not
limited to, Federal, State, and municipal legislation and that Enzo will hold
Yale harmless for any of its acts or failure to act arising under this
agreement.
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XXI. U.S. GOVERNMENTAL APPROVAL
This agreement and the licenses herein granted shall be conditioned upon
United States governmental approval of the ten- year EXCLUSIVE LICENSE herein
described or for any other shorter period as determined or approved by the
Federal Government or any agency thereof. Yale shall take all reasonable and
necessary action to secure such approval from the appropriate governmental
agencies such as the National Institute of Health.
XXII. APPLICABLE LAW
This agreement shall be construed, interpreted and applied in accordance
with the laws of the State of Connecticut.
XXIII. EFFECTIVE DATE
The effective date for establishing and calculating all rights and
obligations under this Agreement shall be January 1, 1982.
IN WITNESS WHEREOF, each of the parties has caused this agreement to be
executed in duplicate originals by its duly authorized representative.
YALE UNIVERSITY
/s/ D W By /s/ J Owens
- --------------------------- -------------------------
Acknowledgement Title
ENZO BIOCHEM, INC.
/s/ By /s/
- --------------------------- -------------------------
Acknowledgement Title
19
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AGREEMENT, entered into this 10th day of April, 1986, by and between
Yale University ("Yale"), a corporation organized and existing under and by
virtue of a charter granted by the General Assembly of the Colony and State of
Connecticut and located in New Haven, Connecticut; and Enzo Biochem, Inc.
("Enzo"), a New York corporation having its principal office at 325 Hudson
Street, New York, New York 10013.
W I T N E S S E T H :
WHEREAS, Yale and Enzo, as of December 4, 1981, entered into a License
Agreement relating to the invention covered by U.S. Serial No. 255,223 entitled
"Modified Nucleotides and Methods of Preparing and Using Same" (the "License
Agreement"); and
WHEREAS, Yale subsequently filed U.S. Patent Application Serial No.
503,298 entitled "Novel Visualization Polymers and their Application to
Diagnostic Medicine" and corresponding foreign patent applications, covering an
invention owned by Yale; and
WHEREAS, the applicability of provisions of the License Agreement to
the invention described in Application Serial No. 503,298 has been disputed by
Yale and Enzo, and Yale and Enzo desire hereby to resolve such dispute; and
WHEREAS, this Agreement is entered into in a spirit of compromise and
will not be used in any proceeding to suggest impropriety by either of the
parties or their employees or agents prior to the date hereof; and
<PAGE>
WHEREAS, Yale and Enzo desire to modify and amend certain terms and
conditions of the License Agreement;
NOW THEREFORE, in consideration of the foregoing and of the mutual
promises herein contained, the parties hereto do agree as follows:
1. The invention described in U.S. Patent Application Serial No.
503,298 and counterpart foreign patent applications, and any divisional,
continuation, or substitute patent applications, and any patents that issue
therefrom, shall be deemed to be a "Licensed Patent" under the License
Agreement.
2. Promptly following execution hereof, Yale shall cause to be
transferred to patent counsel mutually agreed upon by Yale and Enzo existing
file documents pertaining to U.S. patent application Serial No. 503,298 and to
counterpart foreign applications filed by Yale. Enzo shall assume the
obligation, under Article IV of the License Agreement, at its own expense and
through such mutually agreed upon patent counsel, to prosecute to issuance,
grant or final disposition the foregoing patent applications, including any
divisional, continuation, or substitute patent applications and any reissues and
extensions of any patents issued with respect to such applications. Enzo shall
use its best efforts to furnish or cause to be furnished to Yale for comments in
advance of their filing all documents prepared in connection with the
prosecution and issuance of such patent applications. Upon receipt by patent
counsel of the file documents transferred as descried above in this paragraph 2,
Enzo
2
<PAGE>
shall reimburse Yale $50,400 for amounts expended by Yale prior to the date
hereof in preparing and filing such patent applications.
3. Article IV of the License Agreement shall be and hereby is amended
to add the following Section D:
"D. Notwithstanding any other provision of this or any other
agreement, with respect to any Licensed Patent for which Enzo is
a non-exclusive licensee, Enzo shall be responsible only for its
pro-rata share of patent prosecution expenses, taxes, annuities,
working and maintenance fees, renewal and extension charges,
based upon the total number of non-exclusive licensees of such
patent at the time such expenses are incurred."
4. Subject, in the case of U.S. Patent Application Serial No. 255,223,
to the approval by the U.S. Government of Yale's request for the right to extend
the term of exclusive license, which request Yale shall pursue with its best
efforts, the Exclusive License term defined in Article IIB of the License
Agreement, shall be and hereby is extended to a term of fourteen years. At the
end of the fourteenth year of the term of Exclusive License and if Enzo is then
in compliance with all of the material terms and conditions of the License
Agreement, with an opportunity for curing any breach having been provided, Enzo
shall have the option to further extend the term of the Exclusive License until
the expiration of the life of the first U.S. Patent to issue under U.S. Patent
Application Serial No. 255,223 or if no such patent shall issue, April 17, 2003.
3
<PAGE>
5. The schedule set forth in Section A of Article VII "Minimum
Payments" of the License Agreement shall be and hereby is amended to read as
follows:
*
Notwithstanding the preceding, there shall be no Minimum Payments
payable with respect to any period during which the invention
described in Patent Application U.S. Serial No. 503,298, and any
foreign patent applications, divisional, continuation or substitute
patent applications and any patents issued thereon, are the sole
Licensed Patents for which an Exclusive License is in effect."
6. Section C of Article VII of the License Agreement shall be and
hereby is amended to read as follows:
"Enzo shall have the right to convert the EXCLUSIVE LICENSE
granted under this Agreement to a NONEXCLUSIVE LICENSE, or to
terminate this Agreement, at the end of the tenth or fourteenth
year of this Agreement without incurring subsequent liabilities
under the minimum payments provision hereof. An election to
convert or terminate under this Section must be made in writing
by Enzo to Yale within 90 days preceding the conclusion of the
year of this Agreement in which the right is exercised. If this
Agreement is terminated by Enzo under this Section, all royalties
accrued hereunder shall at once become due, and Yale may
immediately seek another licensee or licensees to succeed Enzo."
7. Article XIV of the License Agreement shall be and hereby is amended
to add new Sections F and G as follows:
* The information omitted is confidential and has been filed separately with the
Commission pursuant to Rule 24b-2.
4
<PAGE>
"F. Should Enzo become a non-exclusive licensee under this
Agreement, during such period:
(i) Yale shall, in the first instance have the right to
bring and prosecute or settle at its expense any suit for
patent infringement and shall be entitled to retain any
damages collected therefrom; and
(ii) Should Yale decline to bring any such suit after notice
by Enzo of a substantial infringer then Enzo shall have the
right to bring and conduct at its expense a patent
infringement suit against such infringer. Enzo shall, in
such event, be entitled to retain any damages collected
therefrom. A substantial infringer shall be one who has at
least 10% of the market for products within scope of the
Licensed Patents.
G. Under this Article XIV Yale shall have ninety (90) days
within which to initiate any action contemplated by
subsection F(i) and Enzo shall not be permitted to bring any
suit against an infringer while an action by Yale with
respect to the same patent is pending against that or
another infringer."
8. Article XV, Section C of the License Agreement shall be and hereby
is amended to read as follows:
"Ownership and legal title to all inventions, patent
applications and prospective patents which may issue and which
are sponsored or are made jointly by Enzo and Yale or their
employees and which are related to the field of art covered by
the LICENSED PATENTS and made pursuant to Yale's and Enzo's
further research efforts, under a written agreement stipulating
such sponsorship by Enzo or joint effort by Enzo and Yale and
referring to this Section of this Agreement, shall remain with
Yale. Enzo shall have, and hereby is granted, a limited EXCLUSIVE
LICENSE for a term defined in such agreement and a residual
NONEXCLUSIVE LICENSE for the life of the patent as described in
Article IIC to make, use and sell embodiments of said inventions.
The filing and prosecution of patent applications with respect to
such inventions shall be carried out in accordance with the
provisions of Article IV of this
5
<PAGE>
Agreement, Enzo shall use its best efforts to provide copies of
all documents pertaining to the filing and prosecution of such
patent applications to Yale for comment in advance of filing. Any
written agreement referred to in this Article XVC shall be
binding upon on Yale only if signed by a representative duly
authorized by vote of the Yale Corporation to execute funding
agreements on behalf of Yale."
9. Enzo hereby releases Yale and its Officers, fellows, employees
(including without limitation Dr. David Ward) and agents from and against any
and all claims, demands, causes of action and liability arising out of any and
all acts or omissions heretofore by Yale or its employees or agents within the
scope of his or their employment or agency and relating to the subject matter of
the invention described in U.S. Patent Application Serial No. 503,298 (and
corresponding foreign applications, any divisional, continuation or substitute
patent applications, and any patents issued therefrom) or of the License
Agreement as related thereto.
IN WITNESS WHEREOF, the parties have hereby executed this Agreement as
of the day above written by their duly authorized representatives.
YALE UNIVERSITY
By:
------------------------------------------
Its VICE PRESIDENT FOR FINANCE
ENZO BIOCHEM, INC.
By:
------------------------------------------
Its E.V.P.
6
<PAGE>
YALE UNIVERSITY
July 18, 1996
Dr. Elazer Rabbani
Enzo Biochem, Inc.
575 Fifth Avenue
New York, NY 10017
Dear Dr. Rabbani:
Yale University has now concluded its investigation of Enzo's
compliance with the material terms and conditions of the Yale-Enzo Agreement.
Based upon the information made available to us, and Enzo's
representations as to the accuracy and completeness of such information, the
University has concluded that Enzo was in compliance with its obligations to
Yale as of January 1, 1996. Accordingly, Enzo is entitled to exercise the option
provided by Paragraph 4 of the 1986 Amendment to the 1981 Yale-Enzo Agreement to
extend the term of its Exclusive License.
In light of Mr. Fedus' letter of October 31, 1995, which we have
interpreted as indicating Enzo's desire to exercise the extension option, it is
the position of the University that Enzo's option has now been exercised, and
that the term of Enzo's Exclusive License has, since January 1, 1996, been
extended, subject to the terms of the existing Yale-Enzo Agreement of 1981, as
amended, "until the expiration of the life of the first U.S. Patent to issue
under U.S. Patent Application Serial No. 255,223 or if no such patent shall
issue, April 17, 2003."
As you may know, I only recently became Director of the Office of
Cooperative Research. I look forward to meeting with you upon your return from
Europe. I hope this letter which disposes the issues of compliance and the
exercise of the January 1, 1996 option will allow the two of us to initiate
discussions on how to conduct this relationship in a way that benefits both Enzo
and Yale.
Sincerely yours,
Gregory E. Gardiner
- ----------------------------
Gregory E. Gardiner, Ph.D.
Director
cc: J. L. Auerbach
R. J. Bickerton
W. D. Stempel
7
<PAGE>
EXHIBIT 10(dd)
AGREEMENT
between
THE RESEARCH FOUNDATION OF STATE
UNIVERSITY OF NEW YORK
and
ENZO BIOCHEM, INC
<PAGE>
INDEX
Article Title Page
- ------- ----- ----
1. DEFINITIONS
2. GRANT
3. SUPPLEMENTAL INFORMATION
4. ROYALTY; FEES
5. REPORTS AND PAYMENTS
6. PATENTS
7. PATENTS INDEMNITY
8. PATENT ENFORCEMENT
9. TECHNICAL DEVELOPMENT
10. CONFIDENTIALITY
11. WARRANTY
12. TERM, RIGHT & OBLIGATIONS ON
TERMINATION
13. NOTICES AND REPORTS
14. MISCELLANEOUS
15 GOVERNING LAW
SCHEDULE A
ANNEX A
<PAGE>
Stoneybrook gene function
SIM Rev. 050587A
page 1
AGREEMENT
THIS AGREEMENT, effective this 15 day of May, 1987, by and between the Research
Foundation of State University of New York, a corporation of the State of New
York, having a place of business at State University Plaza, Albany, New York
13201-0009 (hereinafter referred to as "FOUNDATION") and Enzo Biochem Inc., a
corporation of the State of New York, having a place of business at 325 Hudson
Street, New York, New York 10013 (hereinafter referred to as "ENZO")
WITNESSETH
WHEREAS, the manipulation of gene function by inhibitory nucleic acid in
prokaryotic cells and in eukaryotic cells has recently been shown to be possible
utilizing interfering nucleic acid sequences within such cells;
WHEREAS, the FOUNDATION has done certain work in this technical area;
WHEREAS, the FOUNDATION has filed applications for patent in the United States
and in certain countries foreign to the United States on the results of certain
work on interfering nucleic acid sequences done in the laboratory of Dr.
Masayori Inouye;
WHEREAS, ENZO is involved in developing gene therapy technology, including
various methods of manipulation of gen function;
WHEREAS, ENZO desires to establish an effort to do continuing research in gene
therapy technology and to staff this effort with a minimum of five (5)
professionals; and
WHEREAS, ENZO desires to obtain a license under FOUNDATION's PATENTS and
TECHNICAL INFORMATION (as hereinafter defined) and FOUNDATION is willing to
grant such a license
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows.
1
<PAGE>
Stoneybrook gene function
SIM Rev. 050587A
page 2
ARTICLE 1 DEFINITIONS
1.1 "PATENTS" means patents and applications for patent covering TECHNICAL
INFORMATION including the patents and applications for paten set forth in
Schedule A, together with any patents 1) issuing on or as a result of any
continuation, continuation-in-part, or division thereof or 2) issuing as a
result of any other patent application which may be substituted therefor or 3)
which are reissues and/or extensions of any such patents or patent applications.
It also includes any patents which have issued or which may in the future issue
anywhere in the world to the extent that such patents contain claims equivalent
to those contained in the patents or application for patents set forth in
Schedule A.
1.2 "LICENSED PROCESS" means a process which relates to the regulation,
stimulation or inhibition of the function of a gene.
1.3 GENETIC MATERIAL(S) means nucleic acid material(s) including but not limited
to plasmids and vectors (including virus vectors) or nucleic acid constructs or
transcripts therefrom which
1) are oligonucleotides or polynucleotides that act to regulate, stimulate
or inhibit the functioning of a gene; or
2) produce an oligonucleotide or polynucleotide capable of acting to
regulate stimulate, or inhibit the functioning of a gene,
1.4 "PRODUCT(S)" means formulation(s) which contain GENETIC MATERIALS
1.5 "TECHNICAL INFORMATION" means all information, including information
contained in pending application for patent, 1) developed in the laboratory of
Dr. Masayori Inouye, 2) which the FOUNDATION has the right to license as of the
effective date of this Agreement and 3) which relates to the manipulation of
gene function, to the practice of the LICENSED PROCESS, to the GENETIC
MATERIALS, or to the production and use of PRODUCTS.
1.6 "SUPPLEMENTAL INFORMATION" means information first developed or acquired by
FOUNDATION after the effective date of this Agreement and which is within the
scope of a) the claims of PATENTS or b) TECHNICAL INFORMATION.
2
<PAGE>
Stoneybrook gene function
SIM Rev. 050587A
page 3
1.7 "CONFIDENTIAL INFORMATION" means TECHNICAL INFORMATION and SUPPLEMENTAL
INFORMATION relating to the LICENSED PROCESS, GENETIC MATERIALS or PRODUCTS
disclosed in writing marked confidential by FOUNDATION to ENZO pursuant to this
Agreement; provided, however, that there is excluded any part of such
information which
a) was known to ENZO prior to disclosure thereof by of for FOUNDATION; or
b) is or becomes generally publicly available through no fault of ENZO;
or
c) is furnished to ENZO by a third party no under the secrecy obligation
to FOUNDATION.
1.8 "NET SALES VALUE" means, with regard to PRODUCTS sold or otherwise disposed
of, the greater of a) the actual sum of money do or b) the sum of money which
would be due in an arm's length transaction with a non-affiliated third party
calculated in accordance with ENZO's normal pricing policy for PRODUCTS sold at
time of invoicing, less the following:
(i) Transportation charges or allowances, if any, paid, or allowed;
(ii) Trade discounts and quality discounts allowed, if any;
(iii) Cash discounts allowed, if any;
(iv) Any taxes or duties imposed on sales of PRODUCTS and payable directly
by ENZO;
(v) Allowance of credits to customers on account of rejection or return of
PRODUCTS or retroactive price reduction.
PRODUCTS shall be considered sold when billed out, or if not billed out, when
delivered to a purchaser or to a carrier for delivery to a purchaser.
3
<PAGE>
Stoneybrook gene function
SIM Rev. 050587A
page 4
ARTICLE 2. GRANT
2.1 FOUNDATION grants to ENZO a world-wide exclusive license, with right to
sublicense, under PATENTS and TECHNICAL INFORMATION, to utilize the LICENSED
PROCESS, to make use and sell PRODUCTS and to make, use and sell GENETIC
MATERIALS.
2.2 FOUNDATION grants and agrees to grant ENZO a world wide exclusive license
with right to sublicense, under SUPPLEMENTAL INFORMATION and any patents issuing
thereon, to utilize the LICENSED PROCESS, to make, use and sell PRODUCTS and to
make, use and sell GENETIC MATERIALS.
ARTICLE 3. SUPPLEMENTAL INFORMATION; DISCLOSURE
3.1 During the term of this agreement, Foundation shall notify ENZO of all
SUPPLEMENTAL INFORMATION developed or acquired by it with right of disclosure.
3.2 Notification of each item of SUPPLEMENTAL INFORMATION shall be made by
FOUNDATION with reasonable promptness after the development or acquisition of
such SUPPLEMENTAL INFORMATION and shall include a disclosure of such
SUPPLEMENTAL INFORMATION in written or other tangible form, in sufficient detail
to enable ENZO to utilize the SUPPLEMENTAL INFORMATION in its own facilities.
ARTICLE 4. ROYALTY FEES
4.1 ENZO shall pay a royalty to FOUNDATION on all commercial sales of PRODUCTS,
commencing with the first commercial sale of PRODUCTS.
4.2 With respect to each country of the world, ENZO shall pay a royalty of *
percent of NET SALES VALUE of each PRODUCT sold in that country during the
period 1) PATENTS are being prosecuted or are in existence in that country and
2) such PRODUCT is covered by a claim of PATENTS existing in that country.
4.3 ENZO shall pay to FOUNDATION a royalty of * percent of the royalties
actually received by ENZO from a sublicensee where such royalty is attributable
to the NET SALES VALUE of each PRODUCT sold in a country during
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
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the period 1) PATENTS are being prosecuted or are in existence in that country
and 2) such PRODUCT is covered by a claim of PATENTS existing in that country.
4.4 ENZO shall pay to FOUNDATION an amount equal to * percent of any initial
fees actually received by ENZO from a sublicensee where such fees are
attributable to the grant of sublicense under PATENTS or TECHNICAL INFORMATION.
ARTICLE 5. REPORTS AND PAYMENTS
5.1 ENZO shall, commencing with the quarter during which the first commercial
sale of PRODUCT is made, report to FOUNDATION in writing within thirty (30) days
after each December 31, March 31, June 30, and September 30 during the term of
and within thirty (30) days after termination of this Agreement stating the
royalty then due and the basis for the calculation of such royalty; and the
appropriate payments accruing pursuant to ARTICLE 4 shall accompany such
reports.
5.2 All payments made pursuant to Article 4 shall be payable at Albany, New York
in United States currency. Where payment is received by ENZO in a currency other
than United States currency, the United States currency payments made hereunder
shall be determined on the basis of the official rate of exchange quoted in New
York, New York on the date payment is made to FOUNDATION or on the last day on
which the payment to FOUNDATION is due, whichever is earlier.
5.3 ENZO shall keep records of its sale of PRODUCTS and of payments form
sublicensees and shall allow inspection of such records by a certified public
account selected by FOUNDATION and to whom ENZO has not reasonable objection
during reasonable hours and upon reasonable prior notice during the term of the
Agreement and for ninety (90) days thereafter.
5.4 ENZO shall report to FOUNDATION in writing within (30) days after each
December 31, and June 30 during the term of this Agreement setting forth the
status of ENZO's technical development efforts as set forth in Annex A.
* The information omitted is confidential and has been filed separately with
the Commission pursuant to Rule 24b-2.
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ARTICLE 6. PATENTS
6.1 The FOUNDATION, with the agreement of ENZO, shall select and outside patent
attorney to handle patent prosecution matters relating to the filing,
prosecution and maintenance of PATENTS and for the filing, prosecution and
maintenance of patents on SUPPLEMENTAL INFORMATION.
6.2 Both parties shall have the right to review and comment upon patent
prosecution matters.
6.3 ENZO shall have the right to determine if it desires to have applications
for patent filed in the USA or in various countries foreign to the United
States. If ENZO does not desire to have applications for patent filed in the USA
or in certain countries foreign to the United States or if ENZO desires to
terminate prosecution maintenance of any PATENT or any patent or application for
patent covering SUPPLEMENTAL INFORMATION, FOUNDATION shall have the right to
prosecute or maintain such patent or application for patent and shall be
responsible for all costs and expenses associated with the prosecution or
maintenance of such patent or application for patent and such patent or
application for patent shall no longer be considered to be within the scope of
PATENTS.
6.4 With the exception provided in paragraph 6.3, Enzo shall pay all costs and
expenses relating to the prosecution or maintenance of patents for patents
covering SUPPLEMENTAL INFORMATION and shall reimburse FOUNDATION for such costs
and expenses in and amount not to exceed $55,000 as expended by FOUNDATION prior
to the effective date of the Agreement.
ARTICLE 7. PATENT INDEMNITY
7.1 FOUNDATION represents and warrants that, to the best of it's knowledge, the
information furnished or to be furnished to ENZO under this Agreement is free
from infringement of any third party patent.
7.2 Each party hereto shall promptly notify the other party of any third party
patent of which it becomes aware where such third party patent may be infringed
by the practice of the LICENSED PROCESS or the use or sale of GENETIC MATERIALS
or PRODUCTS.
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7.3 FOUNDATION shall indemnify ENZO against all costs and expenses of defending
itself against any suit claiming infringement of a third party patent due to
ENZO's use of TECHNICAL INFORMATION, against any damages awarded in such suit or
for any payment made by ENZO to obtain the right of use of the patent that would
be otherwise infringed.
7.4 At such time as FOUNDATION becomes aware of a third party patent within the
scope of paragraph 7.2, FOUNDATION shall, in appropriate manner, set aside
payments received from ENZO pursuant to this agreement and based on sales of
PRODUCT in the country where the infringement is allege to have occurred, until
the matter is resolved and such payments shall be used, if necessary to fund
FOUNDATION'S liability pursuant to paragraph 7.3
7.5 FOUNDATION's liability pursuant to paragraph 7.3 is limited to 1)the amount
of payments set aside pursuant to paragraph 7.4 and 2) other future payments to
be made by ENZO pursuant to this Agreement and based on sales of PRODUCTS in the
country where the infringement is alleged to have occurred.
ARTICLE 8. PATENT ENFORCEMENT
8.1 Each party shall notify the other party of any possible third party
infringement of one or more claims of PATENTS or of patents covering
SUPPLEMENTAL INFORMATION.
8.2 FOUNDATION and ENZO shall discuss any allege third party infringement issue
and FOUNDATION may at its sole option, take steps to abate any infringement of
the claims of PATENTS or of patents covering SUPPLEMENTAL INFORMATION.
8.3 ENZO's licenses hereunder shall become paid up and royalty free during the
period the alleged infringement continues unless 1) FOUNDATION cause abatement
of the infringement within ninety (90) days after the infringement comes to its
attention or 2) FOUNDATION files suit against the alleged infringer within one
hundred and eighty (180) days after the infringement comes to its attention and
diligently prosecutes such suit or 3) FOUNDATION, within one hundred and eighty
(180) days after the infringement comes to its attention, obtains the opinion of
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counsel acceptable to ENZO (which acceptance shall not be unreasonably withheld)
that the third party is not infringing PATENTS.
8.4 In addition to the paid-up and royalty free licenses under paragraph 8.3, if
FOUNDATION does not cause abatement of the infringement within ninety (90) days
after the infringement comes to its attention or if FOUNDATION does not file
suit against the alleged infringer within one hundred and eighty (180) days
after the infringement comes to its attention or if FOUNDATION does not
diligently prosecute such suit, then ENZO shall have the right to negotiate with
and file suit against the alleged infringer and FOUNDATION shall do all things
reasonable and necessary to facilitate such acts by ENZO.
8.5 If ENZO, in accordance with paragraph 8.4, negotiates and/or files suit
against the alleged infringer, ENZO shall deduct all costs and expenses incurred
by it in such negotiations or suit from any amount owed hereunder to FOUNDATION
to a maximum of 50% in any given calendar year. Any amounts received from the
infringer for past infringement shall be retained by ENZO and any amounts
received form the infringer for future use of PATENTS will be paid
proportionately to FOUNDATION pursuant to ARTICLE 4.
ARTICLE 9. TECHNICAL DEVELOPMENT
ENZO agrees to establish technical effort, as set forth in Annex A to this
Agreement, to work on the development of gene therapy technology.
ARTICLE 10. CONFIDENTIALITY
ENZO shall maintain the confidentiality of CONFIDENTIAL INFORMATION
ARTICLE 11. WARRANTY
FOUNDATION warrants that it has full right and title to PATENTS and TECHNICAL
INFORMATION, that it has not entered into any agreements with a third party
which are inconsistent with the rights granted to ENZO hereunder and that it has
the right to enter into this Agreement.
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ARTICLE 12. TERM, RIGHTS & OBLIGATIONS ON TERMINATION
12.1 This agreement shall be effective as of the date first above written and
shall extend thereafter until the last to occur of
a) termination of active prosecution of an application for patent
included within PATENTS or
b) the expiration of the last to expire of PATENTS.
12.2 Upon termination of this Agreement as above provided, and subject to ENZO's
payment to FOUNDATION of all fees and royalties due hereunder, ENZO shall have a
perpetual, paid-up, exclusive license, with right to sublicense, under TECHNICAL
INFORMATION, PATENTS, SUPPLEMENTAL INFORMATION and patents covering SUPPLEMENTAL
INFORMATION.
12.3 ENZO may at any time terminate this agreement by giving FOUNDATION thirty
(30) days written.
12.4 Upon default of any material provision herein by either party, including
payment of applicable royalties the injured party may give to the defaulting
party written notice of intent to terminate this Agreement, specifying the
allege default and if, within sixty (60) days after the giving of such notice
the default is not cured, then the injured party may terminate this Agreement
forthwith by written notice to such effect to the defaulting party.
12.5 If ENZO shall become bankrupt or insolvent and/or the business of ENZO
shall be placed in the hands of a receiver, assignee or trustee for the benefit
of creditors, whether by the voluntary act of ENZO or otherwise, FOUNDATION may
terminate this Agreement by giving notice to ENZO of such termination and
specifying the effective date thereof, which shall be at least sixty (60) days
after the date the notice is mailed by the FOUNDATION. If within such sixty (60)
day period, the receiver , assignee or trustee for the benefit of creditors does
not agree in writing to be bound by the obligations assumed under this
agreement, then the rights, privileges and license granted hereunder shall
thereupon immediately terminate and neither party shall have any further rights,
duties or obligations hereunder except as may have then accrued under this
Agreement.
12.6 Upon termination of this Agreement for any reason ENZO and any of its
sublicensees may, after the effective date of such termination, sell all
PRODUCTS
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and GENETIC MATERIALS then in existence, and complete PRODUCT and GENETIC
MATERIALS in the process of manufacture at the time of such termination and sell
the same, provided that ENZO pays to FOUNDATION the royalties due thereon and
provides the reports required by ARTICLE 5.
ARTICLE 13. NOTICES AND REPORTS
Any written notice which and party hereto is required or permitted to
give to the other party may be made (and shall be deemed to have duly been
served) by personal delivery or by telex or postal service (registered air mail,
return receipt requested) at the telex number or the address set forth below or
at such other address as shall have been previously designated by written notice
to the other party.
FOR ENZO: ENZO BIOCHEM, INC
Corporate Counsel
325 Hudson Street
New York, New York 10014
Telex: ENZO Bio 424633
FOR FOUNDATION: RESEARCH FOUNDATION OF STATE UNIVERSITY OF NEW YORK
Technology Transfer Office
P.O. Box 9
Albany, New York 13201
The date of receipt for personal delivery, ten (10) days from the date of
mailing for postal service,or the date of transmission for telex shall be deemed
the date of any such notice or report.
ARTICLE 14. MISCELLANEOUS RIGHTS AND OBLIGATIONS.
14.1 Entire Agreement. This Agreement represents the full and complete
understanding between the parties, and there are not understandings,
representations or warranties of any kind between the parties except as
expressly set forth in this Agreement.
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14.2 Amendments. This Agreement shall not be amended except by an instrument in
writing signed by the parties and stating the parties' intent by such instrument
to amend this Agreement.
14.3 Non-Waiver. The failure by either party to exercise, or delay in
exercising, or any partial exercise by such party of any rights, power or
privilege available to such party hereunder shall not operate as a waiver
thereof, or preclude any other or further exercise thereof, or the exercise by
such party of any other right, power or privilege.
14.4 Force Majeure. The failure in performance of any obligation assumed
hereunder by either party shall not be deemed a breach of this Agreement is such
failure arises from any cause beyond the control of such party.
14.5 Condition. The performance of each party's obligations under this Agreement
shall be conditioned on the other party's performance of its obligations under
this Agreement.
14.6 Severability. If any provision of this Agreement, or the application
thereof to either party hereto, is held illegal, unenforceable or otherwise
invalid by government promulgations or court decree, such holding shall not
affect the other provisions or applications of this Agreement which can be given
effect without the invalid provision; provided that the parties shall promptly
negotiate in good faith as to adjustments in this Agreement as may be necessary
to make it fair and equitable to both parties.
14.7 Succession and Assignment. This Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of the respective parties
hereto provided, however, that this Agreement shall not be assigned by either
party, other than to an affiliate or subsidiary of such party, without the prior
written consent of the other
14.8 Product Liability. Enzo agrees to indemnify, defend and hold harmless
FOUNDATION from any loss, claim, damage or other liability arising out of a
claim of personal injury or property damage caused by the use of GENETIC
MATERIALS or PRODUCTS.
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ARTICLE 15. GOVERNING LAW
This Agreement is governed by the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
representative have caused this Agreement to be executed as of the day first
above written.
ENZO BIOCHEM, INC.
By: E. Rabbani
--------------------------------
Title: President
--------------------------------
RESEARCH FOUNDATION OF STATE UNIVERSITY OF NEW YORK
By: Leonard EA Godfrey 5/14/87
--------------------------------
Title: Director of Technology Transfer
--------------------------------
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SCHEDULE A
1. USSN 585,282 filed March 1, 1984
(CIP of USSN 543,528 filed Oct. 30, 1983)
ANNEX A
TECHNICAL DEVELOPMENT EFFORTS
As set forth in ARTICLE 9, ENZO agrees to establish a technical group in its own
facilities to work on the development of gene therapy technology. This group
will be established as soon as reasonably possible within the twelve (12) month
period after the effective date of the ENZO-FOUNDATION Agreement.
A separate laboratory shall be established by ENZO for this work. This
laboratory shall be staffed by one (1) Ph.D. level senior scientist and four (4)
support personnel. ENZO will support this effort for a period of not less than
two (2) years.
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Exhibit 21
Subsidiaries of the registrant:
Enzo Clinical Labs, Inc., a New York corporation.
Enzo Diagnostics, Inc., a New York corporation.
Enzo Therapeutics, Inc., a New York corporation.
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Forms S-3, No. 33-58736, 33-60229, 33-78760, 33-72170, 33-68542, 333-15533 and
Forms S-8 No. 33-45348, 33-75466 and 33-88826) of Enzo Biochem, Inc. and in the
related Prospectus of our report dated October 15, 1996, with respect to the
consolidated financial statements and schedule of Enzo Biochem, Inc. included in
this Annual Report (Form 10-K) for the fiscal year ended July 31, 1996.
/s/ Ernst & Young LLP
Melville, New York
January 17, 1996
