SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission File No.
December 31, 1995 1-12210
HOUSTON BIOTECHNOLOGY INCORPORATED
(Exact name of Registrant as specified in its charter)
DELAWARE 76-0102032
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3608 RESEARCH FOREST DRIVE
THE WOODLANDS, TEXAS 77381 77381
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (713) 363-0999
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED COMMON STOCK,
$.01 PAR VALUE AMERICAN STOCK EXCHANGE WARRANTS TO PURCHASE COMMON STOCK
AMERICAN STOCK EXCHANGE
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 Registrant's 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. [ ]
The number of shares outstanding of the Registrant's Common Stock as of
March 27, 1996, was 5,638,707 shares. The aggregate market value of the voting
stock held by non-affiliates of the Registrant based on the closing price of
these shares on the American Stock Exchange as of March 27, 1996 was $5,268,350.
Documents incorporated by reference:
DOCUMENT FORM 10-K PART
Portions of the Registrant's definitive
proxy statement filed
April 29, 1996
are incorporated by reference III
================================================================================
<PAGE>
***EXPLANATORY NOTE***
THIS FORM 10-K/A IS FILED SOLELY TO REFILE EXHIBIT 10.47
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) 3. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Restated Certificate of Incorporation, as amended.(4)
3.2 Bylaws, as amended.(1)
4.1 Form of Warrant Agreement between the Company and Mellon
Securities Trust Company as Warrant Agent, including the form of
Warrant.(3)
4.2 Portions of Restated Certificate of Incorporation defining rights
of security holders (incorporated by reference to Exhibit 3.1).
10.1 Research and Development Agreement between Santen Pharmaceutical
Co., Ltd. and the Company dated November 6, 1986.(1)
10.2 Exclusive License Agreement by and between Baylor College of
Medicine and the Company dated June 19, 1984; Amendment No. 1 to
Exclusive License Agreement dated October 10, 1986; Letter
Amendment dated February 13, 1989 and February 17, 1989; Amendment
to Schedule V. (A) to Exclusive License Agreement dated December
14, 1992.(2)
10.3 License Agreement by and between the Company and Sanofi S.A. dated
August 19, 1988.(1)
10.4 Lease Agreement between the Company and The Woodlands Corporation
dated February 5, 1987; Rider No. 1 to Lease Agreement dated
February 5, 1987; Rider No. 2 to Lease Agreement dated February 5,
1987; Addendum to Lease Agreement dated March 1, 1987;
Modification and Ratification of Lease dated July 1, 1990;
Correction, Modification, Extension and Ratification of Lease
dated March 1, 1992.(1)
10.5 Lease Agreement between the Company and The Woodlands Corporation
dated December 30, 1986; Addendum to Lease Agreement dated
December 30, 1986; Amendment to Lease Agreement dated as of
December 30, 1986; Modification, Extension and Ratification of
Lease dated October 1, 1991.(1)
10.6 1992 Unsubordinated Stock Option Plan.(1)(8)
10.7 1992 Subordinated Stock Option Plan, as amended.(2)(8)
10.8 Consulting Agreement between the Company and John L. Crary dated
April 30, 1992.(1)(8)
10.9 Confidentiality, Inventions and Discoveries and Non-Competition
Agreement between the Company and J. Russell Denson dated February
24, 1992.(1)
10.10 Letter Agreement regarding Terms of Employment of J. Russell
Denson dated February 21, 1992.(1)(8)
10.11 Severance Agreement between the Company and Donald S. Clark dated
April 30, 1992.(1)(8)
10.12 Confidentiality, Inventions and Discoveries and Non-Competition
Agreement between the Company and Donald S. Clark dated October 3,
1989.(1)
10.13 Letter Agreement regarding Terms of Employment of Donald S. Clark
dated August 31, 1989.(1)(8)
10.14 Severance Agreement between the Company and John N. Bingham dated
April 30, 1992.(1)(8)
10.15 Confidentiality, Inventions and Discoveries and Non-Competition
Agreement between the Company and John N. Bingham dated September
8, 1986.(1)
10.16 Stock Transfer Restriction and Buyback Agreement dated September
8, 1986 by and between the Company and John N. Bingham.(1)
10.17 Confidentiality, Inventions and Discoveries and Non-Competition
Agreement between the Company and Alexandra J. Baran dated
September 1, 1986.(1)
10.18 Form of Confidentiality, Inventions and Discoveries and
Non-Competition Agreement between the Company and other employees
and consultants.(1)
10.19 Sub-license and License Agreement dated July 14, 1989 by and
between the Company and Genetic Engineered Systems, Inc.(1)
10.20 Restated and Amended Agreement of Limited Partnership of Houston
Biotech Partners, L.P. dated April 30, 1992.(1)
10.21 Agreement of Limited Partnership of VRP Management Associates,
L.P. dated December 31, 1991.(1)
10.22 Houston Biotechnology Incorporated 1986 Stock Option Plan.(1)(8)
10.23 Houston Biotechnology Incorporated 1986 Consultants and Advisors
Stock Option Plan.(1)(8)
10.24 1988 Non-Qualified Stock Option Plan and Agreement.(1)(8)
10.25 Consulting Agreement dated August 1, 1991 by and between the
Company and Jared M. Emery, M.D.; Amendment to Consulting
Agreement dated August 1, 1992.(1)(8)
10.26 Consulting Agreement dated August 1, 1992 by and between the
Company and Dominic Man-Kit Lam, Ph.D.(1)(8)
10.27 Letter Agreement dated October 21, 1986 by and between the Company
and Torsten N. Wiesel, M.D.(1)
10.28 Scientific Advisor Agreement dated December 9, 1992 by and between
the Company and Jere E. Goyan, Ph.D.(2)
10.29 Scientific and Clinical Advisor Agreement dated May 20, 1988 by
and between the Company and Herbert E. Kaufman, M.D.(1)
10.30 Scientific Advisor Agreement dated October 1, 1992 by and between
the Company and Vernon Knight, M.D.(1)
10.31 Letter Agreement dated October 21, 1986 by and between the Company
and Alice McPherson, M.D.(1)
10.32 Agreement dated June 19, 1984 by and among Baylor College of
Medicine, Dominic Man-Kit Lam and Jared M. Emery.(1)
10.33 Form of Indemnity Agreements with Directors and Officers.(1)
10.34 Development Agreement dated October 13, 1987 by and between the
Company and Houston Biotech Partners, L.P.; First Amendment to
Development Agreement dated October 13, 1987.(1)
10.35 Consulting Agreement dated May 1, 1992 by and between the Company
and Zsolt P. Harsanyi, Ph.D.(2)(8)
10.36 Amended and Restated Agreement of Recapitalization and Asset
Exchange dated as of April 30, 1992 by and among the Company,
Houston Biotech Partners, L.P., VRP Management Associates, L.P.,
certain holders of Warrants of the Company, and the holders of the
Company's Preferred Stock.(1)
10.37 Lease Agreement between the Company and The Woodlands Corporation
dated July 20, 1993.(6)
10.38 Houston Biotechnology Incorporated 1993 Stock Option Plan.(6)(8)
10.39 Collaborative Research Agreement effective April 30, 1993, by and
between Genentech, Inc. and the Company.(5)
10.40 Consulting Agreement dated July 1, 1993 by and between the Company
and A. Douglas Peabody.(8)
10.41 Houston Biotechnology Incorporated 1994 Stock Option Plan.(8)
10.42 Houston Biotechnology Incorporated 1994 Replacement Stock Option
Plan.(7) (8)
10.43 Houston Biotechnology Incorporated 1994A Stock Option Plan.(7) (8)
10.44 Sublease Agreement with GenoMetrix. (9)
10.45 Research Agreement with Alcon Laboratories, Inc. (9)
10.46 Fourth Modification and Ratification of Lease between the Company
and Technology Buildings - 94 Limited, Lessor, (successor to The
Woodlands Corporation) dated June 1, 1995, Promissory Note in
favor of The Woodlands Corporation dated June 1, 1995, and
Modification of Note and Lien dated May 31, 1995.(10)
+10.47 Codevelopment and License Agreement between the Company and Santen
Pharmaceutical Co., Ltd. dated December 29, 1995.
*10.48 Severance Agreement between the Company and J. Russell Denson
dated January 29, 1996. (8)
*11 Calculation of Net Loss Per Share.
*23 Consent of Arthur Andersen LLP.
*24 Powers of Attorney from certain directors of Houston Biotechnology
Incorporated whose signatures are to be affixed to this Form 10-K
for the year ended December 31, 1995.
- -----------------
+ Filed herewith. Confidential treatment has been requested with
respect to portions of this Exhibit.
* Filed with the Form 10-K.
(1) Incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 33-56236), filed December 23,
1992.
(2) Incorporated herein by reference to the Company's Registration
Statement on Form S-1, Amendment No. 1 (Reg. No. 33-56236), filed
February 26, 1993.
(3) Incorporated herein by reference to the Company's Registration
Statement on Form S-1, Amendment No. 1 (Reg. No. 33-56236), filed
March 10, 1993.
(4) Incorporated herein by reference to the Company's Registration
Statement on Form S-1, Post Effective Amendment No. 2 (Reg. No.
33-56236), filed November 29, 1993.
(5) Incorporated herein by reference to the Company's Registration
Statement on Form S-1, Post Effective Amendment No. 1 (Reg. No.
33-56236), filed November 8, 1993.
(6) Incorporated herein by reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1993.
(7) Incorporated herein by reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1994.
(8) Management contract or compensatory plan or arrangement.
(9) Incorporated herein by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
(10) Incorporated herein by reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1995.
(B) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Company during the three
months ended December 31, 1995.
SIGNATURES
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.
HOUSTON BIOTECHNOLOGY INCORPORATED
Dated: July 16, 1996 By: /s/ J. RUSSELL DENSON
J. Russell Denson,
President and Chief Executive Officer
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Restated Certificate of Incorporation, as amended.(4)
3.2 Bylaws, as amended.(1)
4.1 Form of Warrant Agreement between the Company and Mellon
Securities Trust Company as Warrant Agent, including the form of
Warrant.(3)
4.2 Portions of Restated Certificate of Incorporation defining rights
of security holders (incorporated by reference to Exhibit 3.1).
10.1 Research and Development Agreement between Santen Pharmaceutical
Co., Ltd. and the Company dated November 6, 1986.(1)
10.2 Exclusive License Agreement by and between Baylor College of
Medicine and the Company dated June 19, 1984; Amendment No. 1 to
Exclusive License Agreement dated October 10, 1986; Letter
Amendment dated February 13, 1989 and February 17, 1989; Amendment
to Schedule V. (A) to Exclusive License Agreement dated December
14, 1992.(2)
10.3 License Agreement by and between the Company and Sanofi S.A. dated
August 19, 1988.(1)
10.4 Lease Agreement between the Company and The Woodlands Corporation
dated February 5, 1987; Rider No. 1 to Lease Agreement dated
February 5, 1987; Rider No. 2 to Lease Agreement dated February 5,
1987; Addendum to Lease Agreement dated March 1, 1987;
Modification and Ratification of Lease dated July 1, 1990;
Correction, Modification, Extension and Ratification of Lease
dated March 1, 1992.(1)
10.5 Lease Agreement between the Company and The Woodlands Corporation
dated December 30, 1986; Addendum to Lease Agreement dated
December 30, 1986; Amendment to Lease Agreement dated as of
December 30, 1986; Modification, Extension and Ratification of
Lease dated October 1, 1991.(1)
10.6 1992 Unsubordinated Stock Option Plan.(1)(8)
10.7 1992 Subordinated Stock Option Plan, as amended.(2)(8)
10.8 Consulting Agreement between the Company and John L. Crary dated
April 30, 1992.(1)(8)
10.9 Confidentiality, Inventions and Discoveries and Non-Competition
Agreement between the Company and J. Russell Denson dated February
24, 1992.(1)
10.10 Letter Agreement regarding Terms of Employment of J. Russell
Denson dated February 21, 1992.(1)(8)
10.11 Severance Agreement between the Company and Donald S. Clark dated
April 30, 1992.(1)(8)
10.12 Confidentiality, Inventions and Discoveries and Non-Competition
Agreement between the Company and Donald S. Clark dated October 3,
1989.(1)
10.13 Letter Agreement regarding Terms of Employment of Donald S. Clark
dated August 31, 1989.(1)(8)
10.14 Severance Agreement between the Company and John N. Bingham dated
April 30, 1992.(1)(8)
10.15 Confidentiality, Inventions and Discoveries and Non-Competition
Agreement between the Company and John N. Bingham dated September
8, 1986.(1)
10.16 Stock Transfer Restriction and Buyback Agreement dated September
8, 1986 by and between the Company and John N. Bingham.(1)
10.17 Confidentiality, Inventions and Discoveries and Non-Competition
Agreement between the Company and Alexandra J. Baran dated
September 1, 1986.(1)
10.18 Form of Confidentiality, Inventions and Discoveries and
Non-Competition Agreement between the Company and other employees
and consultants.(1)
10.19 Sub-license and License Agreement dated July 14, 1989 by and
between the Company and Genetic Engineered Systems, Inc.(1)
10.20 Restated and Amended Agreement of Limited Partnership of Houston
Biotech Partners, L.P. dated April 30, 1992.(1)
10.21 Agreement of Limited Partnership of VRP Management Associates,
L.P. dated December 31, 1991.(1)
10.22 Houston Biotechnology Incorporated 1986 Stock Option Plan.(1)(8)
10.23 Houston Biotechnology Incorporated 1986 Consultants and Advisors
Stock Option Plan.(1)(8)
10.24 1988 Non-Qualified Stock Option Plan and Agreement.(1)(8)
10.25 Consulting Agreement dated August 1, 1991 by and between the
Company and Jared M. Emery, M.D.; Amendment to Consulting
Agreement dated August 1, 1992.(1)(8)
10.26 Consulting Agreement dated August 1, 1992 by and between the
Company and Dominic Man-Kit Lam, Ph.D.(1)(8)
10.27 Letter Agreement dated October 21, 1986 by and between the Company
and Torsten N. Wiesel, M.D.(1)
10.28 Scientific Advisor Agreement dated December 9, 1992 by and between
the Company and Jere E. Goyan, Ph.D.(2)
10.29 Scientific and Clinical Advisor Agreement dated May 20, 1988 by
and between the Company and Herbert E. Kaufman, M.D.(1)
10.30 Scientific Advisor Agreement dated October 1, 1992 by and between
the Company and Vernon Knight, M.D.(1)
10.31 Letter Agreement dated October 21, 1986 by and between the Company
and Alice McPherson, M.D.(1)
10.32 Agreement dated June 19, 1984 by and among Baylor College of
Medicine, Dominic Man-Kit Lam and Jared M. Emery.(1)
10.33 Form of Indemnity Agreements with Directors and Officers.(1)
10.34 Development Agreement dated October 13, 1987 by and between the
Company and Houston Biotech Partners, L.P.; First Amendment to
Development Agreement dated October 13, 1987.(1)
10.35 Consulting Agreement dated May 1, 1992 by and between the Company
and Zsolt P. Harsanyi, Ph.D.(2)(8)
10.36 Amended and Restated Agreement of Recapitalization and Asset
Exchange dated as of April 30, 1992 by and among the Company,
Houston Biotech Partners, L.P., VRP Management Associates, L.P.,
certain holders of Warrants of the Company, and the holders of the
Company's Preferred Stock.(1)
10.37 Lease Agreement between the Company and The Woodlands Corporation
dated July 20, 1993.(6)
10.38 Houston Biotechnology Incorporated 1993 Stock Option Plan.(6)(8)
10.39 Collaborative Research Agreement effective April 30, 1993, by and
between Genentech, Inc. and the Company.(5)
10.40 Consulting Agreement dated July 1, 1993 by and between the Company
and A. Douglas Peabody.(8)
10.41 Houston Biotechnology Incorporated 1994 Stock Option Plan.(8)
10.42 Houston Biotechnology Incorporated 1994 Replacement Stock Option
Plan.(7) (8)
10.43 Houston Biotechnology Incorporated 1994A Stock Option Plan.(7) (8)
10.44 Sublease Agreement with GenoMetrix. (9)
10.45 Research Agreement with Alcon Laboratories, Inc. (9)
10.46 Fourth Modification and Ratification of Lease between the Company
and Technology Buildings - 94 Limited, Lessor, (successor to The
Woodlands Corporation) dated June 1, 1995, Promissory Note in
favor of The Woodlands Corporation dated June 1, 1995, and
Modification of Note and Lien dated May 31, 1995.(10)
+10.47 Codevelopment and License Agreement between the Company and Santen
Pharmaceutical Co., Ltd. dated December 29, 1995.
*10.48 Severance Agreement between the Company and J. Russell Denson
dated January 29, 1996. (8)
*11 Calculation of Net Loss Per Share.
*23 Consent of Arthur Andersen LLP.
*24 Powers of Attorney from certain directors of Houston Biotechnology
Incorporated whose signatures are to be affixed to this Form 10-K
for the year ended December 31, 1995.
- -----------------
+ Filed herewith. Confidential treatment has been requested with
respect to portions of this Exhibit.
* Filed with the Form 10-K.
(1) Incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 33-56236), filed December 23,
1992.
(2) Incorporated herein by reference to the Company's Registration
Statement on Form S-1, Amendment No. 1 (Reg. No. 33-56236), filed
February 26, 1993.
(3) Incorporated herein by reference to the Company's Registration
Statement on Form S-1, Amendment No. 1 (Reg. No. 33-56236), filed
March 10, 1993.
(4) Incorporated herein by reference to the Company's Registration
Statement on Form S-1, Post Effective Amendment No. 2 (Reg. No.
33-56236), filed November 29, 1993.
(5) Incorporated herein by reference to the Company's Registration
Statement on Form S-1, Post Effective Amendment No. 1 (Reg. No.
33-56236), filed November 8, 1993.
(6) Incorporated herein by reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1993.
(7) Incorporated herein by reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1994.
(8) Management contract or compensatory plan or arrangement.
(9) Incorporated herein by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
(10) Incorporated herein by reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1995.
EXHIBIT 10.47
***Omitted Information Denoted by Asterisks (***) Has Been Separately Filed with
the Commission and is Subject to a Confidential Treatment Request***
CODEVELOPMENT AND LICENSE AGREEMENT
THIS CODEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is entered
into and effective this 29th day of December 1995, by and between HOUSTON
BIOTECHNOLOGY INCORPORATED, a Delaware corporation located in The Woodlands,
Texas ("Licensor"), and SANTEN PHARMACEUTICAL CO., LTD., a company located in
Osaka, Japan ("Licensee").
WITNESSETH:
WHEREAS, Licensor is the exclusive worldwide licensee of certain patent
rights owned by Baylor College of Medicine ("Baylor") pursuant to an agreement
between Licensor and Baylor dated as of June 19, 1984 (the "Baylor License"),
all of which patent rights are described on Schedule A hereto (collectively, the
"Patent Rights").
WHEREAS, Licensor has developed a product coming within such Patent
Rights, the 4197X-RA Immunotoxin (the "Immunotoxin"), for the treatment and
prevention of secondary cataract (or lens capsule opacification), has developed
technical know how related to the manufacture, testing, formulation, packaging
and administration of the Immunotoxin, has conducted and is conducting
preclinical and clinical trials with the Immunotoxin, and is developing the
Immunotoxin for the purpose of obtaining marketing approval of the U.S. Food and
Drug Administration (the "FDA") and similar agencies in major countries around
the world.
WHEREAS, Licensee desires to obtain from Licensor a nontransferable,
exclusive license under the Patent Rights and to use the Licensed Know How and
to sell the Licensed Product in the Licensed Territory (as those terms are
hereinafter defined), and Licensor is willing to grant such license to Licensee
subject to the terms and conditions of this Agreement;
WHEREAS, Licensee has the experience and technical know how to conduct
preclinical and clinical studies with respect to the Licensed Product, to obtain
government approvals for the sale of the Licensed Product and effectively to
exploit the Licensed Product in the Licensed Territory;
WHEREAS, Licensor and Licensee desire to enter into this Agreement to
define the terms and conditions on which Licensor will license the Licensed
Product under the Patent Rights and Licensed Know How to Licensee;
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions hereinafter set forth, the parties agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Affiliate" shall mean any person or entity that controls,
is controlled by, or is under common control with, any other person or
entity. For purposes of this definition, "control" means beneficial
ownership, directly or indirectly, of more than fifty percent (50%) of
the outstanding voting securities or equity of such entity (or other
equivalent ownership interest with respect to an entity other than a
corporation).
(b) "Bridge Study" shall mean the first human clinical study
by Licensor using the Refined Immunotoxin, as further described on
Schedule B to this Agreement as modified, amended or updated by
Licensor from time to time.
(c) "Improvement" shall mean any development by Licensor or
Licensee, including know how, that enhances the effectiveness of the
Licensed Product, other than manufacturing process improvements, and
excluding distinguishable compounds. For purposes of this Agreement,
the Refined Immunotoxin shall constitute an Improvement to the Licensed
Product.
(d) "Invention" shall mean a patentable discovery related or
relating to the Licensed Product made by Licensor or Licensee during
the term of this Agreement.
(e) "Licensed Indication" shall mean prevention and treatment
of secondary cataract and lens capsule opacification.
(f) "Licensed Know How" shall mean all information in the
possession of Licensor, in addition to the Patent Rights, of benefit to
Licensee in the performance of its obligations under this Agreement,
whether or not patentable, constituting materials, methods, processes,
trade secrets, techniques and data, and which Licensor is free to
license or disclose to Licensee without violating existing contractual
obligations to third parties, or contractual obligations entered into
after the date of this Agreement pursuant to which new information is
obtained, licensed or developed; provided, however, Licensed Know How
shall not include any information independently developed by Licensee
prior to, during or after the term of this Agreement.
(g) "Licensed Product" shall mean the Immunotoxin and
Improvements thereto (including the Refined Immunotoxin), as further
described in Schedule C to this Agreement.
(h) "Licensed Territory" shall mean Japan.
(i) "Manufacturing Cost" shall mean the fully burdened cost
per Unit of manufacturing Licensed Product, calculated by using the
direct and indirect cost of labor, materials and overheads computed in
accordance with standard cost accounting principles consistently
applied, and divided by the number of Units produced.
(j) "Milestone Product Development Payments" shall mean the
Milestone Product Development Payments made to Licensor by Licensee as
described in Section 3.
(k) "Net Sales" shall mean the revenues earned by Licensee
from Sales of the Licensed Product, net of all applicable discounts,
returns and credits in the ordinary course of business. Net Sales does
not include any sales, use, VAT or other similar taxes.
(l) "Net Sales Price per Unit" shall mean Net Sales divided by
the number of Units Sold for comparable periods.
(m) "Prime Rate" shall mean the prime lending rate or
reference rate announced from time to time by Bank of America.
(n) "Product Development Payments" shall mean the Product
Development Payments to be made to Licensor by Licensee as described in
Section 3.
(o) "Refined Immunotoxin" shall mean the Immunotoxin in its
most refined condition as of the date of this Agreement, as further
described in Schedule C to this Agreement.
(p) "Sale", "Sold" or "Sell" shall mean the transfer or
similar disposition on an arm's-length basis of Licensed Product for
value or use of Licensed Product to provide non-experimental services
to a third party for a fee determined on an arm's-length basis.
Licensed Product shall be considered Sold when invoiced. The use of
Licensed Product in clinical trials and for promotional demonstration
shall not be considered uses for which a royalty is payable.
(q) "Unit" shall mean a single dose of Licensed Product.
2. LICENSE
2.1 Licensor hereby grants to Licensee an exclusive license under the
Patent Rights to use the Licensed Product in clinical trials and for such other
purposes as are reasonably necessary to permit Licensee to cause the Licensed
Product to be approved for Sale in the Licensed Territory and to Sell directly
or indirectly through third party distributors the Licensed Product in the
Licensed Territory for the Licensed Indication, and an exclusive license to use
the Licensed Know How in the Licensed Territory for the Licensed Indication (the
"License").
2.2 (a) Licensee shall not use the Licensed Product for purposes other
than those specifically authorized herein, nor make any Sale of Licensed Product
outside the Licensed Territory or other than for the Licensed Indication. All
Licensed Product purchased by Licensee shall be purchased exclusively from
Licensor.
(b) Ninety days prior to the start of each quarter, Licensee shall give
Licensor written notice of its requirements of Licensed Product for such
quarter, and Licensor shall use its commercially reasonable best efforts to
provide Licensee with its requirements. In fulfilling its obligations hereunder,
Licensor may contract with third parties to manufacture Licensed Product.
Licensee agrees to purchase from Licensor all of the Licensed Product it has
notified Licensor that it requires.
(c) In the event Licensor consistently is unable to provide Licensee's
requirements of Licensed Product, Licensee shall have the right and license
under the Patent Rights to manufacture and have manufactured, the Licensed
Product (which shall include the right to use the Licensed Know How in
connection with such manufacture), subject to Licensee's obligations to pay
royalties to Licensor as provided in Article 4 of the Agreement.
2.3 Except as otherwise provided in Article 11, the License granted
hereby is non-transferable by Licensee, directly or indirectly, and Licensee may
not grant any sublicenses of the Licensed Product or the Licensed Know How.
2.4 During the term of this Agreement so long as Licensee is continuing
to make discretionary Milestone Product Development Payments and Product
Development Payments for the development of the Licensed Product and so long as
Licensee is obligated to make royalty payments under Article 4 of this
Agreement, Licensee agrees that it will not, directly or indirectly, for its own
account or that of an Affiliate undertake the formulation of clinical programs,
conduct clinical trials, attempt to have approved for sale in the Licensed
Territory or sell in the Licensed Territory any product for the Licensed
Indication comprised of a protein conjugated to a toxin that is selective for
and kills or inhibits the proliferation of lens epithelial cells other than the
Licensed Product.
2.5 Licensor hereby grants Licensee a right of access to and use for
the purposes of this Agreement of all experimental or other data in the
possession of or reasonably available to Licensor which relate in any manner to
the Licensed Product, including without limitation, all data which Baylor or
Licensor has provided to the FDA or any other state, federal, foreign or local
regulatory authority which relate in any manner to the Licensed Product.
Licensee hereby grants Licensor a right of access to and use of all experimental
or other data in the possession of or reasonably available to Licensee which
relate in any manner to the Licensed Product, including without limitation, all
data which Licensee has provided to the Japanese Ministry of Health and Welfare
("MHW") or any other regulatory authority which relate in any manner to the
Licensed Product. Nothing in this section shall require either Licensor or
Licensee to violate any confidentiality or other similar obligation.
2.6 Licensor shall promptly provide Licensee and shall continue to
provide Licensee, during the term of this Agreement, with all requested
information relating to (i) pharmacological, toxicological or clinical data,
(ii) formulative or analytical data, and (iii) such other chemical, physical or
biological data which Licensor may now or in the future possess or control which
relates in any manner to the Licensed Product and which Licensor is permitted to
disclose to Licensee.
2.7 The License granted hereby shall be exclusive only for so long as
Licensee continues to make the discretionary Milestone Product Development
Payments and Product Development Payments described in Article 3 hereof, and is
not otherwise in default under its other obligations hereunder. In addition to
any other remedies that Licensor may have hereunder, in the event that Licensee
fails to make any Milestone Product Development Payment or Product Development
Payment or is otherwise in default hereunder, Licensor may convert the License
granted herein to a nonexclusive license.
2.8 The License granted herein shall be subject to termination only as
set forth in Section 9 hereof.
3. LICENSEE'S OPTION TO MAKE MILESTONE PRODUCT DEVELOPMENT PAYMENTS AND PRODUCT
CODEVELOPMENT PAYMENTS; LICENSOR'S CLINICAL TRIALS
3.1 Licensee in its discretion may contribute research and development
funds for services for the development of the Licensed Product by making the
following Milestone Product Development Payments to Licensor:
Milestone 1 Product Development Payments:
(a) a payment of $166,667 within five days of the
date hereof; and
(b) a payment of $166,667 within thirty days of the
date hereof; and
(c) a payment of $166,667 within sixty days of the
date hereof; and
(d) a payment of $166,667 within ninety days of the
date hereof; and
(e) a payment of $83,332 within one hundred twenty
days of the date hereof.
Licensee shall give Licensor five (5) days advance written
notice of its decision not to make any of the foregoing discretionary
payments.
Milestone 2 Product Development Payments:
(f) Within sixty days of the delivery to Licensee of
the results of the interim report from the Bridge Study,
Licensee in its discretion may pay to Licensor the sum of
$1,000,000 as a Milestone Product Development Payment as
additional research and development funds for services for the
development of the Licensed Product.
(g) In the event Licensee does not make the payment
described in Section 3.1(f) within sixty days following
delivery of the results of the interim report, within thirty
days of the time that Licensor enrolls the first patient in
Phase III clinical trials on the Licensed Product, Licensee in
its discretion may pay to Licensor the $1,000,000 Milestone
Product Development Payment.
3.2 Upon Licensee's giving the five (5) days advance written notice of
its decision not to make any of the discretionary Milestone 1 Product
Development Payments or its failure to make any of the Milestone 2 Product
Development Payments, other than that provided for in Section 3.1(f), when due,
Licensor may terminate this Agreement, provided, however, that no termination of
this Agreement shall relieve Licensor or Licensee of any of its undischarged
obligations to the other.
3.3 Commencing January 1, 1996, until December 31, 2001, Licensee in
its discretion may contribute additional research and development funds for
services for the development of the Licensed Product by making quarterly Product
Development Payments to Licensor in the amount of $250,000 each. The Product
Development Payments shall be due and payable on February 14, May 15, August 15
and November 14 of each year in which such payments are to be made.
Licensee shall give Licensor sixty (60) days advance written notice of
its decision not to make any of the foregoing discretionary payments.
3.4 Upon Licensee's giving the sixty (60) days advance written notice
of its decision not to make any of the discretionary quarterly Product
Development Payments provided for in Section 3.3, or its failure to make any of
the Product Development Payments when due, Licensor may terminate this
Agreement; provided, however, that no termination of this Agreement shall
relieve Licensor or Licensee of any of its undischarged obligations to the
other.
3.5 Licensor agrees to use all of the funds received from Licensee as
Milestone Product Development Payments and Product Development Payments for the
purpose of developing the Licensed Product and obtaining the approval of the FDA
and similar agencies in major countries around the world, excluding Japan, for
the Licensed Product.
3.6 Once each calendar quarter, Licensor shall deliver to Licensee a
written report as to Licensor's efforts and accomplishments during the preceding
quarter, including an accounting of expenditures, in successfully completing its
clinical trials for the purpose of obtaining FDA approval for the manufacture,
sale and use of the Licensed Product and its plans for the succeeding quarter.
3.7 Licensee shall be under no obligation to make any of the above
mentioned Milestone Product Development Payments or Product Development Payments
and all such payments shall be in its discretion; provided, however, that in the
event Licensee fails to give the five (5) day notice of its decision not to make
any of the Milestone Product Development Payments or the sixty (60) day notice
of its decision not to make any of the quarterly Product Development Payments in
timely fashion, then Licensee shall become obligated to make that specific and
particular payment. In the event Licensee fails to make any of the Milestone
Product Development Payments (other than the Milestone 2 Product Development
Payment provided for in Section 3.1(f)) or any of the quarterly Product
Development Payments then Licensor may convert the License granted herein to a
nonexclusive License or terminate this Agreement, provided, however, that no
termination of this Agreement shall relieve Licensor or Licensee of any of its
undischarged obligations to the other.
4. ROYALTY PAYMENTS; REPORTS
4.1 Commencing six calendar months after the approval by the MHW of a
New Drug Application ("NDA") filed by Licensee on the Licensed Product, Licensee
shall commence the payment of minimum royalties in the amount of ***CONFIDENTIAL
TREATMENT REQUESTED*** payable within forty-five (45) days after the end of each
calendar quarter. On a quarterly basis any amounts paid to Licensor pursuant to
Section 4.2 shall be credited against amounts payable to Licensor under this
Section 4.1.
4.2 Licensee shall pay Licensor an earned royalty in the amount of
***CONFIDENTIAL TREATMENT REQUESTED*** payable within forty-five (45) days after
the end of each calendar quarter. Thereafter, the earned royalty rate shall be
***CONFIDENTIAL TREATMENT REQUESTED***
4.3 The royalties provided for herein shall be payable for so long as
the Licensed Product has patent protection in the Licensed Territory, but in no
event shall the royalty term be for a period of less than ***CONFIDENTIAL
TREATMENT REQUESTED*** Thereafter, all Licenses for Licensed Know How granted
hereunder shall be fully paid-up, perpetual and royalty-free with respect to
such Licensed Product. If patent protection for the Licensed Product expires in
the Licensed Territory prior to the expiration of the foregoing ***CONFIDENTIAL
TREATMENT REQUESTED*** period, the royalties payable under this Agreement shall
be reduced by ***CONFIDENTIAL TREATMENT REQUESTED***
4.4 During the Term of this Agreement and for one year thereafter,
Licensee shall keep complete and accurate records of its Sales of Licensed
Product under the License granted in this Agreement in sufficient detail to
enable the royalties payable hereunder to be determined. Licensee shall permit
Licensor, at Licensor's expense and through an independent auditor subject to an
obligation of confidentiality to Licensee, to examine periodically its books,
ledgers and records during regular business hours for the purpose of and to the
extent necessary to verify any report required under this Agreement. In the
event the amounts due to Licensor are determined to have been underpaid,
Licensee shall pay the amount of the underpayment, plus accrued interest from
the date such underpayment should have been paid, at the Prime Rate in effect
from time to time during such period, plus two percent. In addition, in the
event that the amounts due to Licensor are determined to have been underpaid in
an amount of 5% or more of the total amounts due, Licensee shall pay the
reasonable cost of such examination.
4.5 Commencing with the first Sale of Licensed Product by Licensee,
Licensee shall deliver to Licensor a true and accurate report, giving such
particulars of the business conducted by Licensee during the preceding three
calendar months under this Agreement as are pertinent to an accounting for
payments hereunder. Such report shall include at least (a) Net Sales of Licensed
Product (b) the number of Units Sold, (c) the calculation of the Net Sales Price
per Unit and (d) the calculation of royalties thereon. The report for each
period shall be delivered by Licensee to Licensor at the time each payment of
royalties is made.
5. CLINICAL TRIALS PERFORMED BY LICENSEE;
PERFORMANCE ASSURANCES
5.1 Promptly on receipt from Licensor of preclinical data and clinical
data and Licensed Product, which is sufficient in the reasonable judgement of
Licensee for initiating a program of obtaining government approval of the
Licensed Product from MHW, Licensee agrees, at its sole cost and expense, to use
its reasonable best efforts to formulate such programs, conduct pre-clinical and
clinical trials and undertake the necessary development and other work to have
the Licensed Product approved for sale in Japan by the MHW.
5.2 Once each calendar quarter, Licensee shall deliver to Licensor a
written report as to Licensee's efforts and accomplishments during the preceding
quarter in commercializing the Licensed Product and its plans for the succeeding
quarter.
5.3 In the event Licensee develops any Improvement to the Licensed
Product, it shall promptly disclose such Improvement to Licensor. Licensor shall
have the nonexclusive right to practice and use such Improvement outside the
Licensed Territory only in connection with the Licensed Product and only for use
for the Licensed Indication, without additional consideration to Licensee.
5.4 In the event Licensor develops any Improvement to the Licensed
Product, it shall promptly disclose such Improvement to Licensee for use and
sale under the License granted in this Agreement.
6. TECHNICAL ASSISTANCE FROM LICENSOR
6.1 Licensor agrees to manufacture and provide to Licensee lots of the
Licensed Product at a cost of ***CONFIDENTIAL TREATMENT REQUESTED*** sufficient
to permit Licensee to conduct preclinical studies, stability testing and
clinical trials and otherwise to develop the Licensed Product in the Licensed
Territory in accordance with this Agreement. Payment shall be 50% upon receipt
of Licensor's invoice (as estimated by Licensor) and the balance upon delivery
of the Licensed Product. Licensor agrees to provide Licensee with technical
assistance and to participate in the development of Licensee's development
program described in Section 5, and in efficacy analysis design.
6.2 Licensor and Licensee agree to provide each other with a written
report describing the development data and the results obtained from their
respective development programs not less frequently than quarterly. During and
after the termination of their respective programs, Licensor and Licensee agree
to report promptly to the other any information which could affect governmental
approvals of the sale of Licensed Product in the United States or Japan.
7. SALES PRICE OF LICENSED PRODUCT TO LICENSEE
7.1 Licensor agrees to use its commercially reasonable best efforts to
manufacture or cause to be manufactured and sell to Licensee Licensee's total
requirements for Licensed Product. Licensor shall manufacture and package the
Licensed Products in conformance with the established specifications therefor,
including Licensee's packaging and labeling requirements; providing that any
additional cost caused by Licensee's packaging and labeling requirements shall
be reimbursed to Licensor by Licensee.
7.2 Licensor will sell Licensed Product in final packaged form to
Licensee at a price per Unit ***CONFIDENTIAL TREATMENT REQUESTED***
7.3 Licensee shall order the Licensed Product by submitting written
purchase orders to Licensor. Licensor shall ship the Licensed Product to
Licensee F.O.B. the delivery point in the United States, within sixty (60) days
of the date of Licensee's order, or, if applicable, on the date mutually agreed
to between the parties. Title to and risk of loss of Licensed Product shall pass
from Licensor to Licensee at the Delivery Point.
7.4 All Licensed Product delivered pursuant to the terms of this
Agreement shall be suitably packed for shipment in Licensor's standard shipping
cartons, marked for shipment to Licensee's designated delivery point in the
purchase order. Unless otherwise instructed in writing by Licensee, Licensor
shall select the carrier. All freight, insurance, and other shipping expenses,
as well as any special packing expense, shall be borne and paid by Licensee.
Licensee shall bear all applicable taxes, duties, and similar charges that may
be assessed against the Licensed Product after delivery to the carrier.
7.5 No earlier than shipment of the Licensed Product, Licensor shall
invoice Licensee for the Licensed Product shipped. Payment shall be due no later
than thirty (30) days after the date of Licensor's invoice.
7.6 The terms and conditions of this Article 7 shall govern the sale of
Licensed Product by Licensor to Licensee, and no additional or conflicting terms
contained in any purchase orders, invoices or similar documents shall have any
force or effect.
8. INVENTIONS
8.1 Any Invention invented by Licensor shall be the exclusive property
of Licensor and shall be licensed to Licensee without additional cost, other
than the obligation to make earned royalty payments with respect to Licensed
Product under this Agreement.
8.2 Any Invention invented by Licensee shall be the property of
Licensee. Licensee shall promptly notify Licensor of the existence of any
Invention invented by Licensee. In the event Licensee elects not to obtain
patents on such Invention outside the Licensed Territory, it shall provide
Licensor the right and opportunity to do so in the name of Licensee and at
Licensor's expense prior to any disclosure thereof. In the event Licensee (or
Licensor, as permitted herein) seeks patent protection for such Invention
outside of the Licensed Territory, Licensee shall grant Licensor an irrevocable,
royalty free, nonexclusive, worldwide (except for the Licensed Territory)
license to make, use and sell such Invention only as such Invention may be
incorporated into the Licensed Product and only for the Licensed Indication.
9. TERMINATION
9.1 This Agreement shall continue in full force and effect until
terminated in accordance with a provision of this Section 9.
9.2 This Agreement shall terminate automatically on the written
agreement of Licensor and Licensee to do so.
9.3 This Agreement shall terminate automatically upon the termination
of the Baylor License.
9.4 In the event that either Licensor or Licensee shall commit a
Material Breach (as hereinafter defined) of the terms and conditions of this
Agreement, and shall fail to cure such Material Breach within sixty days of
written notice thereof (except in the case of a Material Breach described in
clause (i) below, with respect to which no notice of breach shall be required
and such Material Breach shall be actionable unless cured within five days from
the date on which performance is required), the nondefaulting party may, at its
option, and without limiting the other remedies available to such party,
terminate this Agreement by sending written notice of termination to the
defaulting party. For the purposes of this Agreement, a Material Breach shall be
(i) the failure of a party to pay sums owed to another party hereto when such
payment is due; (ii) the breach by a party hereto of a covenant, representation
or warranty contained herein, which breach has a material adverse effect on the
ability of the breaching party to perform its obligations hereunder; or (iii)
the breach by a party hereto of a covenant, representation or warranty contained
herein, which breach deprives the nonbreaching party hereto of a material
benefit afforded such nonbreaching party under this Agreement.
9.5 Licensor may terminate this Agreement in the event that Licensee
has notified Licensor of its intention to terminate its obligation to make or
has failed to make Milestone Product Development Payments or Product Development
Payments by delivering to Licensee written notice of termination.
9.6 In the event of termination of the Agreement for any reason
whatsoever, neither Licensor nor Licensee shall thereby be discharged from any
liability or obligation to the other which became due or payable prior to the
effective date of such termination.
9.7 In the event of termination of the Agreement by Licensor on account
of Licensee's breach of this Agreement and failure to cure such breach:
(a) If Licensee then possesses Licensed Product or has
accepted orders therefor, Licensee shall have the right to sell its
inventories thereof and market such fully manufactured Licensed Product
in order to fulfill such accepted orders, subject to the obligation of
Licensee to pay Licensor the earned royalty therefor as provided in
Section 4 of this Agreement;
(b) Subject to Section 9.7(a) Licensee shall discontinue the
use, marketing and sale of Licensed Product, and Licensee shall
immediately discontinue use of the words "Baylor" and "Baylor College
of Medicine" or any language which would connect sales of product by
Licensee with or imply the sponsorship of Baylor, except that packaging
and advertising material may be used for products permitted to be sold
under Section 9.7(a); and
(c) All rights licensed by Licensor to License hereunder shall
revert to Licensor, and Licensee agrees to execute all instruments
necessary and desirable to revest said rights in Licensee.
9.8 In the event of a Material Breach of this Agreement by Licensor and
failure to cure such Material Breach within the period provided in Section 9.4,
Licensee may, to the exclusion of its other remedies hereunder, terminate this
Agreement and on such termination, Licensee's Licenses hereunder shall become
fully paid-up, perpetual and royalty free.
9.9 This Agreement shall not terminate in the event of the acquisition
of Licensor by a third party or the sale by Licensor of substantially all of its
assets.
10. INFRINGEMENT BY THIRD PARTIES
10.1 Licensor and Licensee each shall have the right to protect the
rights to the Licensed Products, Patent Rights and Licensed Know How granted
herein.
10.2 When either Licensor or Licensee becomes aware that a third party
is or may be substantially infringing the Licensed Products, Patent Rights and
Licensed Know How, Licensor or Licensee as the case may be, shall give the other
written notice thereof, which notice shall fully describe the actual or
potentially infringing actions by such third party.
10.3 Within a reasonable period of time following the receipt of the
notice described in Section 10.2, Licensor and Licensee agree to consult with
one another in an effort to determine whether a reasonably prudent person would
institute litigation to enforce the Licensed Products, Patent Rights and
Licensed Know How in question in light of all relevant business and economic
factors (including, but not limited to, the projected cost of such litigation,
the likelihood of success on the merits, the probable amount of any damage
award, the prospects for satisfaction of any judgment against the alleged
infringer, the possibility of counterclaims against Licensor or Licensee, the
diversion of human and economic resources, the impact of any possible adverse
outcome on Licensor or Licensee and the effect any publicity might have on
Licensor and Licensee and the respective reputations and goodwill of Licensor
and Licensee). If after such consultation the parties have not reached agreement
as to a course of action, either Licensor or Licensee may file suit or take
other appropriate actions to enforce the Licensed Product, Patent Rights and
Licensed Know How licensed hereunder on behalf of itself and the other party
hereto.
10.4 Unless the parties otherwise agree, money damages recovered for an
infringement shall be applied first towards the repayment of the expenses
incurred by the party bringing and maintaining the action or otherwise
terminating the infringement, including, without limitation: sums paid on
account of out-of-pocket expenses (including without limitation attorneys' fees
and all related costs). Any additional money damages will divided two-thirds to
the party bringing and maintaining the action and one-third to the other party.
10.5 In any enforcement action, including a suit or dispute involving
an infringement the parties shall cooperate fully, and upon the request and at
the expense of the party bringing suit against the infringer, the other party
shall make available to the party bringing suit at reasonable times and under
appropriate conditions all relevant personnel, records, papers, information,
samples, specimens, and the like which are in its possession.
10.6 In the event Licensor determines not to institute litigation
against a third party substantially infringing the Licensed Products, Patent
Right and Licensed Know How, or institutes such litigation unsuccessfully, then
Licensor and Licensee shall consult with one another and agree upon an
appropriate reduction of the royalties provided in Article 4 to compensate
Licensee for any diminution in value of its rights under this Agreement.
11. ASSIGNMENT
11.1 This Agreement may not be assigned by either party without the
prior written consent of the other party; provided, however, Licensor agrees not
to unreasonably withhold its consent to an assignment by Licensee to any
financially responsible Affiliate of Licensee (which thereafter shall have sole
liability hereunder) which expressly assumes all of the obligations and
liabilities of Licensee under this Agreement, and provided further, that
Licensor may assign this Agreement without the consent of Licensee if such
assignment is a part of the sale or other disposition of substantially all of
the assets of Licensor. Licensor may assign its rights to receive payments
hereunder.
12. PATENT AND TRADEMARK MARKINGS
12.1 Licensee shall not remove any patent notices affixed to the
Licensed Product by Licensor.
12.2 Licensee shall at all times recognize, respect, and protect the
Licensor's right of total ownership in the trademarks pertaining to the Licensed
Product that Licensor will adopt and notify to Licensee (but subject to any then
existing trademark rights of Licensee or any third party) (the "Trademarks") in
the Licensed Territory and elsewhere and shall not in any way derogate, diminish
or weaken Licensor's sole property rights in the Trademarks. Licensee shall not
attack or contest the ownership, validity or enforceability of the Trademarks
and Licensee shall not register or attempt to register any Trademark in any
country.
12.3 Should the laws and regulations of the Licensed Territory invest
Licensee with any property rights in any Trademark, Licensee shall properly,
freely, and cooperatively relinquish and assign to Licensor any and all rights
upon termination of this Agreement for any reason, without recourse or cost to
Licensor, and shall thereafter refrain from any further usage of the Trademark.
12.4 Should Licensor decide to apply for the registration of one or
more of the Trademarks in any part or all of the Licensed Territory, Licensor
shall duly notify Licensee in writing. Licensee shall execute any documents
requested by Licensor to assist in the registration of the Trademarks.
12.5 In the event the Trademarks used by Licensor on the Licensed
Product are in the reasonable judgment of Licensee, offensive or objectionable,
Licensee shall not be obligated to place the Trademarks on the Licensed Product
or use the Trademarks in connection with the Licensed Product.
12.6 Licensee shall be free to use its own trademarks on the Licensed
Product ("Santen Trademarks"), which Licensor shall affix to the Licensed
Product in accordance with Licensee's instructions when manufacturing and
packaging the Licensed Product for Licensee.
13. INDEMNIFICATION
13.1 Licensee shall hold harmless and indemnify Licensor and its
Affiliates, officers, directors, employees and agents (collectively, "Licensor
Indemnified Persons") from and against any claims, demands, or causes of action
whatsoever, including without limitation those arising on account of any injury
or death of persons or damage to property arising from or related to the
exercise or practice of the License granted hereunder by Licensee or its
officers, employees, agents or representatives; provided, however, that the
following is excluded from Licensee's obligation to indemnify and hold harmless
the Licensor Indemnified Persons:
(a) the negligence of any Licensor Indemnified Person,
including resulting injury or property damage;
(b) the willful malfeasance of any Licensor Indemnified
Person;
(c) the failure of Licensor to manufacture the Licensed
Product to its designed specifications; or
(d) any claims that the Licensed Product or Licensed Know How
infringes or otherwise violates the proprietary rights of any third
party.
13.2 Licensor shall hold harmless and indemnify Licensee and its
Affiliates, officers, directors, employees and agents from and against any
claims, demands, or causes of action whatsoever, including without limitation
those arising on account of any injury or death of persons or damage to property
arising from or related to:
(a) the negligence of any Licensor Indemnified Person,
including resulting injury or property damage;
(b) the willful malfeasance of any Licensor Indemnified
Person;
(c) any Material Breach (or any claimed act or omission that
would constitute a Material Breach) by Licensor of any of the terms and
conditions of this Agreement, including without limitation any Material
Breach of Licensor's representations or warranties under this
Agreement; or
(d) any claims that the Licensed Product infringes or
otherwise violates the proprietary rights of any third party.
13.3 Licensor and Licensee each agree to maintain policies of product
liability insurance covering their respective roles in the design, manufacture
and sale of Licensed Product, in such amounts as they may agree from time to
time.
14. USE OF BAYLOR'S NAME
14.1 Licensee shall not use any trademark, service mark, trade name, or
the name of "Baylor" or "Baylor College of Medicine" for advertising or other
purposes, without prior express written consent of Baylor.
15. CONFIDENTIAL INFORMATION
15.1 Licensor and Licensee each agree that all information contained in
documents marked "confidential" that are furnished by one party to the other for
purposes of this Agreement shall be received in strict confidence, be used only
for the purposes of this Agreement, and not be disclosed by the recipient party
(except as required by law or court order) its agents or employees without the
prior written consent of the other party, unless such information:
(a) was in the public domain at the time of disclosure;
(b) later became part of the public domain through no act or
omission of the recipient party, its employees, agents, successors or
assigns;
(c) was lawfully disclosed to the recipient party by a third
party having the right to disclose it, without obligation of
confidentiality;
(d) was independently developed by the recipient party prior
to the time of disclosure; or
(e) is required to be submitted to a government agency
pursuant to any preexisting obligation.
15.2 Each party's obligation of confidentiality hereunder shall be
fulfilled by using reasonable measures, but no less than the same degree of care
with the other party's confidential information as it uses to protect its own
confidential information. This obligation shall apply to each disclosure for the
term of this Agreement and for three years thereafter.
16. WARRANTIES AND DISCLAIMERS
16.1 Licensor hereby represents and warrants to Licensee:
(a) Licensor is a corporation, validly existing and in good
standing under the laws of the State of Delaware.
(b) The execution, delivery and authority to execute and
deliver this Agreement have been duly authorized by all necessary
action on the part of Licensor.
(c) Licensor has the power and authority to execute and
deliver this Agreement and to perform its obligations under this
Agreement.
(d) Except as set forth herein, Licensor has not encumbered,
restricted, transferred or otherwise burdened the Patent Rights in the
Licensed Territory for the Licensed Application.
(e) Licensor's audited financial statements present fairly, in
all material respects, the financial position of Licensor as of the
date thereof in conformity with generally accepted accounting
principles.
(f) Licensor shall manufacture the Licensed Product in
material conformance with all laws, ordinances and regulations
applicable thereto, and in material conformance with Good Manufacturing
Practices as established by the FDA.
(g) All rights licensed to Licensor by third parties and
necessary for Licensee to exercise the Licenses granted under this
Agreement are in current force and effect. Licensor covenants and
agrees to use commercially reasonable best efforts to maintain all such
third party licenses in full force and effect during and after the term
of this Agreement as necessary for Licensee to exercise its rights
hereunder.
16.2 Except as otherwise provided in this Agreement, Licensor hereby
disclaims and negates any and all warranties, whether express or implied, with
respect to the Licensed Product or any rights hereunder transferred, including
but not limited to, any IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE.
16.3 Licensor shall fulfill all governmental formalities with respect
to exportation of Licensed Product and tangible materials embodying or
reflecting same from the United States.
17. GENERAL
17.1 This Agreement constitutes the entire and only agreement between
the parties with respect to the subject matter hereof, and all other prior
negotiations, representations, agreements, and understandings are superseded
hereby. No agreements altering or supplementing the terms hereof may be made
except by means of a written document signed by the duly authorized
representatives of the parties.
17.2 Any notice required by this Agreement may be given by Express Mail
or other recognized courier services and shall be effective on the date the
notice is scheduled by the transmitting agent for delivery to the addressee. In
the case of Licensor, notice must be addressed to:
Houston Biotechnology Incorporated
3608 Research Forest Drive
The Woodlands, Texas 77381
Attn.: Mr. J. Russell Denson
President and Chief Executive Officer
In the case of Licensee, notice must be addressed to:
Santen Pharmaceutical Co., Ltd.
9-19 Shimoghinjo 3-chome
Higashi Yodogawa-ku
Osaka, Japan
Attn.: Mr. T. Morita
President
The parties may change notice addresses from time to time under the
terms of this notice provision. Actual notice shall always be effective at the
time received, irrespective of means of transmission.
17.3 Licensee shall comply with all applicable laws and regulations in
connection with its activities pursuant to this Agreement.
17.4 This Agreement shall be construed and enforced in accordance with
the laws of New York. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof, shall be settled by final and binding
arbitration, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The number of arbitrators
shall be three. The place of arbitration shall be New York, New York and shall
be conducted in accordance with the Arbitration Rules of the American
Arbitration Association. The arbitration shall be conducted in the English
language.
17.5 Failure of a party hereto to enforce a right under this Agreement
shall not act as a waiver of that right or the ability to later assert that
right relative to the particular situation involved.
17.6 Headings included herein are for convenience only and shall not be
used to construe this Agreement.
17.7 If any provisions of this Agreement shall be found by a court to
be void, invalid or unenforceable, the same shall be reformed to comply with
applicable law or stricken if not so conformable, so as not to affect the
validity or enforceability of the remainder of this Agreement.
17.8 All payments made hereunder shall be made in United States Dollars
and shall be made after deduction of all taxes required to be withheld. Licensee
shall furnish Licensor with an appropriate withholding certificate or receipt to
evidence payment of such taxes. Currency conversion rates shall be those quoted
from time to time by Bank of America for the purchase of United States Dollars,
and the exchange rate used shall be the rate quoted on the date payment is made.
Any payments not made when due shall bear interest at the Prime Rate, plus two
percent (2%).
17.9 It is agreed that the relationship of the Licensee to Licensor in
the performance of this Agreement is as an independent licensee and that the
Licensee is not an agent of Licensor. Licensee agrees to refrain from
representing itself as being the agent of Licensor in performing or acting
pursuant to this Agreement. Licensee shall not have the power or authority to
bind or otherwise commit Licensor and shall not attempt to do so.
17.10 Nothing contained herein shall be construed to limit the right of
Licensor to have the Licensed Product manufactured in Japan without breaching
the terms of this Agreement.
ENTERED INTO AND EFFECTIVE AS OF THE DATE SET FORTH ABOVE.
HOUSTON BIOTECHNOLOGY INCORPORATED
By: /s/ J. RUSSELL DENSON
J. Russell Denson
President and Chief Executive Officer
SANTEN PHARMACEUTICAL CO., LTD.
By: /s/ T. MORITA
T. Morita
President
