SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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X QUARTERLY REPORT
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FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
-- or --
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TRANSITION REPORT
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OR THE TRANSITION PERIOD FROM TO
OSTEX INTERNATIONAL, INC.
Name of Registrant as Specified in Its Charter
0-25250
Commission File Number
STATE OF WASHINGTON
State or Other Jurisdiction of Incorporation or Organization
91-1450247
I.R.S. Employer Identification Number
2203 AIRPORT WAY SOUTH, SUITE 400, SEATTLE, WASHINGTON 98134
206-292-8082
Address and Telephone Number of Principal Executive Offices
[N/A]
Former name, address and fiscal year, if changed since last report
Indicate by checkmark 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
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THE NUMBER OF SHARES OF THE REGISTRANT'S COMMON STOCK OUTSTANDING AS OF
NOVEMBER 5, 1997 WAS 12,636,250.
<PAGE>
OSTEX INTERNATIONAL, INC.
INDEX TO FORM 10-Q
PART I - FINANCIAL INFORMATION
PAGE
ITEM 1 - FINANCIAL STATEMENTS
Condensed Balance Sheets F-1
Condensed Statements of Operations F-2
Condensed Statements of Cash Flow F-3
Notes to Condensed Financial Statements F-4
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2
PART II -- OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS 4
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 5
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Attached hereto are Ostex International, Inc.'s (the "Company's or Ostex'
") unaudited condensed balance sheet as of September 30, 1997, and audited
condensed balance sheet as of December 31, 1996, the unaudited condensed
statements of operations for the three months ended September 30, 1997 and 1996,
and for the nine months ended September 30, 1997 and 1996, and the statements of
cash flow for the nine months ended September 30, 1997 and 1996.Notes follow
the unaudited financial statements and are an integral part thereof.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking statements
which reflect the Company's current views with respect to future events and
financial performance. These forward-looking statements are subject to certain
risks and uncertainties, including those discussed below, that could cause
actual results to differ materially from historical results or those
anticipated. Words used herein such as "believes," "anticipates," "expects,"
"intends," and similar expressions are intended to identify forward-looking
statements but are not the exclusive means of identifying such statements. In
addition, the disclosures under the caption "Other Factors that May Affect
Operating Results", consist principally of a brief discussion of risks which may
affect future results and are thus, in their entirety, forward-looking in
nature. Readers are urged to carefully review and consider the various
disclosures made by the Company in this report and in the Company's other
reports previously filed with the Securities and Exchange Commission (the
"SEC"), including the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, that attempt to advise interested parties of the risks
and factors that may affect the Company's business.
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
Total revenues were $1,505,000 for the quarter ended September 30, 1997,
compared to $1,859,000 for the quarter ended September 30, 1996. Product sales
were $1,055,000 during the three month period ended September 30, 1997, compared
to $776,000 for the same period in 1996. The 36 % increase was due to higher
volumes of OSTEOMARK-registered trademark- kits sold to domestic
laboratories and foreign distributors during the 1997 quarter compared to
the same period of 1996. License and research and development fees were $450,000
during the three month period ended September 30, 1997, compared to $1,083,000
during the same period in 1996. The $633,000 reduction in fees collected under
license and research and development agreements with Mochida Pharmaceutical Ltd.
("Mochida") was expected and is due to attainment of scheduled milestones. The
Company does not expect to receive any further milestone payments under the
license agreement with Mochida and future payments of up to $750,000 under the
research and development agreement are contingent upon Mochida's decision to
exercise its option to license the NTx serum assay and achievement of certain
serum assay development milestones.
The Company's cost of products sold totaled $228,000 for the quarter
ended September 30, 1997, compared to $247,000 for the same period of 1996. The
decrease was primarily due to elimination of excess facility costs. The cost of
products sold decreased as a percentage of product sales to 22% in the 1997
third quarter compared to 32% in the 1996 third quarter due to a reduction in
unit manufacturing costs resulting from increased production volume allowing
fixed manufacturing costs to be spread over a higher base of units produced
during the quarter ended September 30, 1997, compared to the same period in
1996.
The Company's research and development expenditures totaled $1,090,000
for the quarter ended September 30, 1997, compared to $757,000 for the quarter
ended September 30, 1996. The $333,000 increase was primarily attributable to
the NTx assay point-of-care development programs with Metrika Laboratories, Inc.
("Metrika") and Hologic, Inc. ("Hologic"). In addition, research and development
expenses increased due to the cost of clinical studies commenced at the end of
1996 and during the first quarter 1997. Included in the Company's studies in the
1997 quarter was a study for the determination of variability and the NTx
reference range in males, a study for variability of NTx in postmenopausal
women, and a study for the use of the Osteomark test in helping to identify bone
metastases.
<PAGE>
Selling, general and administrative expenses totaled $1,903,000 for the
quarter ended September 30, 1997, compared to $2,328,000 for the three month
period ended September 30, 1996. The $425,000 decrease was primarily due to
completion of the Company's free testing program in 1996 and the completion of a
hearing before the American Arbitration Association against Boehringer Mannheim
in September 1996, partially offset by increased costs of litigation in
connection with the Osteometer and C.R. Bard cases (see "Legal Proceedings" in
Part II, Item 1 of this 10-Q). The Company anticipates a substantial increase in
legal expenses in connection with the Osteometer patent infringement lawsuit
during the fourth quarter of 1997 as the proceeding enters a discovery phase,
and continuing into fiscal year 1998.
Interest income totaled $196,000 for the quarter ended September 30,
1997, compared to $299,000 for the quarter ended September 30, 1996. The
decrease is due to lower invested balances resulting from using cash to fund the
Company's operating losses.
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
Total revenues were $3,108,000 for the nine month period ended September
30, 1997, compared to $3,300,000 for the nine month period ended September 30,
1996. Product sales were $2,658,000 during the nine month period ended September
30, 1997, compared to $2,217,000 for the same period in 1996. The 20 % increase
was due to higher volumes of Osteomark kits sold to domestic laboratories and
foreign distributors during the 1997 period compared to the same period of 1996.
License and research and development fees were $450,000 during the nine month
period ended September 30, 1997, compared to $1,083,000 during the same period
in 1996. The reduction in fees collected under license and research and
development agreements with Mochida was expected and is due to attainment of
scheduled milestones. The Company does not expect to receive any further
milestone payments under the license agreement with Mochida and future payments
of up to $750,000 under the research and development agreement are contingent
upon Mochida's decision to exercise its option to license the NTx serum assay
and achievement of certain serum assay development milestones.
The Company's cost of products sold totaled $640,000 for the nine month
period ended September 30, 1997, compared to $682,000 for the nine months ended
September 30, 1996. The decrease was primarily due to a reduction of excess
facility costs. The cost of products sold decreased as a percentage of product
sales to 24% in the 1997 period compared to 31% in the 1996 period due to a
reduction in unit manufacturing costs resulting from increased production volume
allowing fixed manufacturing costs to be spread over a higher base of units
produced during the nine months ended September 30, 1997, compared to the same
period in 1996.
The Company's research and development expenditures totaled $3,522,000
for the nine month period ended September 30, 1997, compared to $2,203,000 for
the nine months ended September 30, 1996. The increase of $1,319,000 is due to
research spending in connection with the development of NTx assay point-of-care
devices under the development agreements with Metrika and Hologic discussed
above, as well as funding of research conducted at the University of Washington.
Research at the University of Washington is focused on molecular markers of
connective tissue degradation, and on developing a further understanding of the
osteoclast colony stimulating factor ("O-CSF") as a potential therapeutic agent.
This research funding is expected to continue through 1999. In addition,
research and development expenses increased due to the cost of clinical studies
commenced at the end of 1996 and during the first quarter 1997.
Selling, general and administrative expenses totaled $5,688,000 for the
nine month period ended September 30, 1997, compared to $6,695,000 for the nine
months ended September 30, 1996. The lower expense level was due to the
completion of a hearing before the American Arbitration Association against
Boehringer Mannheim in September 1996 (see "Legal Proceedings" in Part II, Item
1 of this 10-Q), and the completion of the Company's free testing program in
1996. However, the decrease was partially offset by increased costs of
litigation in connection with the Osteometer and C.R. Bard cases (see "Legal
Proceedings" in Part II, Item 1 of this 10-Q). As discussed above, legal costs
associated with the Osteometer patent infringement lawsuit are expected to
increase substantially in the fourth quarter 1997, and continue into fiscal year
1998.
<PAGE>
Interest income totaled $675,000 for the nine month period ended
September 30, 1997, compared to $1,036,000 for the same period in 1996. The
decrease is due to lower invested balances resulting from using cash to fund the
Company's operating losses.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Company had $14,178,000 in cash and cash
equivalents and short-term investments, working capital of $14,214,000 and total
shareholders' equity of $17,635,000. As a result of funding operating losses
during the nine months ended September 30, 1997, cash, cash equivalents and
short-term investments decreased by $7,051,000, working capital decreased by
$6,687,000 and shareholders equity decreased by $5,891,000. During the nine
month period ended September 30, 1997 the Company purchased $1,093,000 in
property and equipment, received $124,000 from the exercise of stock options and
paid $121,000 of notes payable.
In October 1997, the Company received $6,200,000 in settlement of
certain litigation (see "Legal Proceedings" in Part II, Item 1 of this 10-Q).
The Company did not reflect the settlement in its balance sheet at September 30,
1997. This will be reflected in income and assets during the quarter ending
December 31, 1997.
The Company's future capital requirements depend upon many factors,
including effective commercialization activities and collaborative arrangements,
continued progress in its research and development programs, progress toward
development of the O-CSF technology, the costs involved in filing, prosecuting
and enforcing patent claims, and the time and costs involved in obtaining
regulatory approvals. The Company may require additional funds from equity or
debt financings. There can be no assurance that such additional funds will be
available on favorable terms, if at all. Because of the Company's significant
long-term cash requirements, it may seek to raise additional capital if
conditions in the public equity markets are favorable, even if the Company does
not have an immediate need for additional cash at that time. If additional
financing is not available, the Company anticipates that its existing available
cash, its future license and research revenues from existing collaboration
agreements, product sales and interest income from short-term investments will
be adequate to satisfy its capital requirements and to fund operations through
mid 1999. No assurance can be given, however, that such funds will in fact be
adequate until that time, since the Company's prediction is subject to a number
of risks and uncertainties, including those discussed in the following
paragraph.
OTHER FACTORS THAT MAY AFFECT OPERATING RESULTS
The Company's operating results may fluctuate due to a number of
factors including, but not limited to, volume and timing of product sales,
product pricing, market acceptance of the Company's products, changing economic
conditions in the healthcare industry, delays and increased costs of product and
technology development, the Company's ability to develop and maintain
collaborative arrangements, the outcome of litigation, and the effect of the
Company's accounting policies, as well as other risk factors detailed in the
Company's 1996 Form 10-K and other SEC filings. All of the foregoing factors are
difficult for the Company to predict and can materially adversely affect the
Company's business and operating results.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On November 4, 1997, the Company announced settlement with Boehringer
Mannheim under which the Company received a lump sum payment of $6,200,000. The
settlement between the two parties is the result of the previously reported
January 28, 1997 ruling by the American Arbitration Association in connection
with the Company's claims against Boehringer Mannheim.
<PAGE>
In June 1996, the Company filed an action in the United States District
Court for the Western District of Washington against Osteometer Biotech A/S, a
medical technology company based in Denmark ("Osteometer"), and Diagnostic
Systems Laboratories Inc. for patent infringement of United States Patent No.
5,455,179. The Company believes Osteometer's bone resorption immunoassay
incorporates technology which infringes patented Ostex technology. In September
1996, the defendants filed a response denying infringement and counterclaimed
that Ostex' patent is invalid and unenforceable. By order dated July 7, 1997,
the Court granted Ostex's motion to file a supplemental complaint, to add a
second cause of action based upon United States Patent No. 5,641,837, which
issued on June 24, 1997. On October 24, 1997, Ostex filed a second supplemental
complaint to add third and fourth causes of action based upon U.S. Patent No.
5,652,112, which issued on July 29, 1997, and U.S. Patent No. 5,656,439, which
issued on August 12, 1997. The lawsuit is currently scheduled for trial
commencing June 30, 1998. At the present time management cannot predict the
outcome of the lawsuit but intends to continue to vigorously assert its
position.
On April 9, 1997, the Company was served with a lawsuit filed in the
United States District Court, Central District of California by C.R. Bard
("Bard"). The complaint alleges that Ostex' Osteomark product infringes U.S.
Patent No. 4,628,027 assigned to Bard in 1993. Management believes that this
suit is without merit and that Ostex' Osteomark product falls outside the claims
of the subject patent.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
The following exhibits are filed herewith:
10.32 1 Joint Development, License and Co-Marketing Agreement dated
April 10, 1997 with Metrika Laboratories.
27.1 Financial Data Schedule
1 Confidential treatment requested. Exhibit omits information that has
been filed separately with the Securities and Exchange Commission.
(B) REPORTS ON FORM 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OSTEX INTERNATIONAL, INC.
DATED: November 13, 1997 By /S/ ROBERT M. LITTAUER
-------------------------------
Robert M. Littauer
Senior Vice President,
Finance and Administration
(principal financial and principal
accounting officer)
<PAGE>
<TABLE>
<CAPTION>
OSTEX INTERNATIONAL, INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
September 30, December 31,
1997 1996
-------------------- ---------------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,941 1,289
Short-term investments 12,237 19,940
Trade receivables and other current assets 1,295 1,161
Inventory, at cost 144 153
-------------------- ---------------------
Total current assets 15,617 22,543
PROPERTY, PLANT AND EQUIPMENT, less
accumulated depreciation and amortization 3,120 2,474
OTHER ASSETS 673 674
==================== =====================
Total assets $ 19,410 $ 25,691
==================== =====================
CURRENT LIABILITIES:
Accounts payable, accrued expenses and other $ 1,403 $ 1,642
NONCURRENT LIABILITIES:
Noate Payable, net of current portion 372 523
-------------------- ---------------------
Total liabilities 1,775 2,165
-------------------- ---------------------
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value, 50,000,000
authorized; 12,636,250 and 12,441,617 issued
and outstanding, respectively 127 125
Additional paid-in capital 45,515 45,195
Unrealized (loss)/gain on short-term investments (19) 70
Accumulated deficit (27,988) (21,864)
-------------------- ---------------------
Total shareholders' equity 17,635 23,526
-------------------- ---------------------
Total liabilities and shareholders' equity $ 19,410 $ 25,691
==================== =====================
The accompanying notes are an integral part of these condensed balance sheets.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OSTEX INTERNATIONAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended Nine Months Ended
------------------------------------ ------------------------------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
----------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
REVENUE:
Product sales and research testing services $ 1,055 $ 776 $ 2,658 $ 2,217
License and research and development fees 450 1,083 450 1,083
----------------- ----------------- ----------------- ------------------
Total revenues 1,505 1,859 3,108 3,300
OPERATING EXPENSES:
Cost of products sold 228 247 640 682
Research and development 1,090 757 3,522 2,203
Selling, general and administrative 1,903 2,328 5,688 6,695
----------------- ----------------- ----------------- ------------------
Total operating expenses 3,221 3,332 9,850 9,580
----------------- ----------------- ----------------- ------------------
Loss from operations (1,716) (1,473) (6,742) (6,280)
OTHER INCOME (EXPENSE):
Interest income 196 299 675 1,036
Interest expense (18) (23) (57) (23)
----------------- ----------------- ----------------- ------------------
Net loss $ (1,538) $ (1,197) $ (6,124) $ (5,267)
================= ================= ================= ==================
NET LOSS PER COMMON AND COMMON
EQUIVALENT SHARE $ (0.12) $ (0.10) $ (0.49) $ (0.42)
Shares used in calculation 12,635 12,442 12,547 12,441
The accompanying notes are an integral part of these condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OSTEX INTERNATIONAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Nine Months Ended September 30,
--------------------------------------------
1997 1996
--------------------- --------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $ (5,872) $ (5,786)
--------------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments (3,592) (16,872)
Proceeds from sales of short-term investments 11,206 17,622
Purchase of property, plant and equipment (1,093) (275)
--------------------- --------------------
Net cash provided by investing activities 6,521 475
--------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of common stock options 124 41
Proceeds from borrowings on note payable - 746
Payments on note payable (121) (36)
--------------------- --------------------
Net cash provided by financing activities 3 751
--------------------- --------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 652 (4,560)
CASH AND CASH EQUIVALENTS, beginning of period 1,289 6,241
--------------------- --------------------
CASH AND CASH EQUIVALENTS, end of period $ 1,941 $ 1,681
===================== ====================
The accompanying notes are an integral part of these condensed financial statements.
</TABLE>
<PAGE>
OSTEX INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
The unaudited condensed financial statements include the accounts of Ostex
International, Inc. (a Washington corporation) (the "Company"). These financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial reporting and pursuant to the rules and
regulations of the Securities and Exchange Commission. While these statements
reflect all normal recurring adjustments which are, in the opinion of
management, necessary for fair presentation of the results of the interim
periods, they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. For
further information, refer to the financial statements and footnotes thereto
included in the Company's Annual Report filed on Form 10-K for the year ended
December 31, 1996.
Net Loss per Common and Common Equivalent Share
For the three and nine months ended September 30,1997, net loss per common and
common equivalent share was based on the weighted average number of common
shares outstanding during each period. Common stock equivalents include shares
issuable upon the exercise of outstanding stock options. These shares are not
included in the computation of net loss per share because the effect of
including such shares would be antidilutive.
2. CONTINGENCIES
Legal Proceedings
Refer to Part II, Item 1 of this Form 10-Q.
3. NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share (SFAS 128), which is
effective for periods beginning after December 15, 1997. SFAS 128 establishes
new standards for computing and presenting earnings per share (EPS). Upon
adoption of SFAS 128, companies will report basic EPS and diluted EPS instead of
previously reported primary and fully diluted EPS. Under the new standard, both
the Company's basic and diluted EPS for the quarter ended September 30, 1997,
would be a net loss per share of $.12, and for the nine months ended September
30, 1997, both basic and diluted EPS would be a net loss per share of $.49.
4. SUBSEQUENT EVENTS
In October 1997, the Company received $6,200,000 in settlement of
certain litigation (see "Legal Proceedings" in Part II, Item 1 of this 10-Q).
The Company did not reflect the settlement in its balance sheet at September 30,
1997. This will be reflected in income and assets during the quarter ending
December 31, 1997.
<PAGE>
NOTE: CONFIDENTIAL TREATMENT REQUESTED. EXHIBIT OMITS INFORMATION THAT HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
JOINT DEVELOPMENT, LICENSE
AND CO-MARKETING AGREEMENT
This Joint Development, License and Co-Marketing Agreement (this
"Agreement") is entered into as of the 10th day of April, 1997 ("Effective
Date"), by and between OSTEX INTERNATIONAL, INC., a Washington corporation
having its principal place of business at 2203 Airport Way South, Suite 400,
Seattle, Washington 98134 ("Ostex"), and METRIKA LABORATORIES, INC., a
California corporation having its principal place of business at 510 Oakmead
Parkway, Sunnyvale, CA 94086 ("Metrika").
RECITALS
A. The Washington Research Foundation, a nonprofit Washington
corporation ("WRF"), is the owner, by way of assignment from the University
of Washington, of all right, title, and interest in certain technology developed
out of research conducted by Dr. David Eyre and generally described as the
"Urinary Assay for Bone Resorption."
B. Pursuant to that certain Restated Exclusive License Agreement
between Ostex and WRF, effective June 29, 1992 as amended, the ("WRF/Ostex
Exclusive License Agreement"), WRF granted Ostex an exclusive, worldwide license
to make, have made, assign, sublicense, lease, develop, enhance, modify,
produce, reproduce, demonstrate, market, promote, sell, distribute, use, exploit
and otherwise commercialize and prepare derivations of certain of the Bone
Resorption Technology (as defined below).
C. Ostex engages in the research, development, manufacture, and sale of
diagnostic and therapeutic products in the field of bone and mineral metabolism
in applications related to bone resorption and collagen and connective tissue
degradation, and has developed a proprietary immunoassay to determine the levels
of NTx epitope collagen metabolite resulting from bone resorption ("NTx Assay
Technology" as further defined in SECTION 1.17 hereof), which it has implemented
in a microtiter format suitable for use in centralized laboratories
("OsteomarkAE Laboratory Test").
D. Metrika is developing a single-use disposable diagnostic
device featuring Metrika's proprietary Digital ResponseAE technology (the
"Digital Response Device").
E. Ostex and Metrika entered into that certain Agreement dated November
4, 1994 (the "Development Agreement") pursuant to which Ostex and Metrika have
collaborated in the adaptation of Ostex's NTx Assay for use on Metrika's Digital
Response Device. The product of this collaboration shall be referred to herein
as the "NTx/Digital Response Device." The Development Agreement anticipated that
the parties would later enter into an agreement to govern the ultimate
manufacture, promotion, marketing and sale of the NTx/Digital Response Device.
<PAGE>
F. The parties now desire to enter into this Agreement to govern the
terms and conditions under which the parties will continue the development of
the NTx/Digital Response Device, provide for the financing of such development,
and provide for the manufacture, co-promotion, marketing and sale of the
NTx/Digital Response Device
G. In particular, Ostex desires to contribute to this continued
development project by granting to Metrika a license to use the NTx Assay
Technology in connection with this development project, by providing "Critical
Reagents" (as this term is defined in SECTION 1.5 hereof) needed for this
development project at no charge, by contributing to the costs of said project,
and by selling Critical Reagents needed for manufacture of the NTx/Digital
Response Devices at its manufacturing cost, all as more specifically described
in this Agreement.
H. In return, Metrika will share the responsibility for funding the
development project and will undertake to complete the development of the
NTx/Digital Response Device, Metrika will purchase Critical Reagents at Ostex's
manufacturing cost, and Metrika and Ostex will co-promote and market the
NTx/Digital Response Device, Metrika will sell the NTx/Digital Response Device,
and shall share the profits of such sales, all as more specifically described in
this Agreement.
TERMS OF AGREEMENT
In consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. The following definitions shall apply throughout
this Agreement.
1.1 "Affiliate" means, with respect to any person or entity,
any individual, corporation, company, firm, partnership or other entity
controlled by, in control of, or under common control with, such person or
entity, where "control" means direct or indirect legal or beneficial ownership
of fifty percent (50%) or more of the shares, business interests, or voting
securities of another corporation, company, firm, partnership or other entity.
1.2 "Bone Resorption Technology" means all technology to which
Ostex has any rights as of the Effective Date or during the term of this
Agreement relating to assays, methods, and materials, including Critical
Reagents, for measuring bone collagen metabolites; including, without
limitation, that technology developed in connection with research conducted by
Dr. David Eyre, owned by the Washington Research Foundation, and licensed
exclusively to Ostex. The Bone Resorption Technology includes, without
limitation, the urinary diagnostic assay known as the Osteomark immunoassay.
1.3 "Confidential Information" means any and all normally
non-public information communicated or disclosed by one party ("Discloser") to
the other party ("Recipient"), including information describing or relating to
the Disclosing Party's business and marketing plans and strategies, financial
information, or customer information, and any and all information communicated
or disclosed by the Discloser to Recipient describing or relating to the
Disclosing Party's research and development, Know-How, inventions, trade
secrets, technical
<PAGE>
data, formulae, drawings, designs, software, models, samples, kits, processes,
product development data and information and other data and information related
to the business of Discloser, provided, however, that "Confidential Information"
shall not be deemed to include information which the Recipient can demonstrate
by written proof: (i) is now, or hereafter becomes, through no fault on the part
of the Recipient, generally known or available; (ii) is known by the Recipient
at the time of receiving such information; (iii) is furnished generally to
others by Discloser without restriction on disclosure; (iv) is hereafter
furnished to the Recipient by a third party unrelated to Discloser, as a matter
of right and without any breach of any duty of non-disclosure; (v) is
independently developed by the Recipient without use of or reference to any
Confidential Information of Discloser; or (vi) is the subject of express written
permission to disclose provided by Discloser. Without limiting the generality of
the foregoing, Confidential Information may include information developed by a
Disclosing Party during the course of this Agreement.
1.4 "COGS" means all costs of materials and components
(including purchase costs and royalties payable to third parties other than
Royalties) and personnel expended on manufacturing and quality control, relating
to goods sold and any free promotional or rebated goods, plus a portion of
manufacturing overhead (including, but not limited to, inventory costs relating
to spoilage, insurance, depreciation, administrative expenses, indirect employee
expenses and quality assurance expenses) based on the portion of resources
allocated to manufacturing, calculated in accordance with generally accepted
accounting principles, less that portion of such costs attributable to capacity
allocated to other products manufactured by Metrika.
1.5 "Critical Reagents" means the set of reagents necessary or
useful for the measurement of the antibody for the NTx Epitope by the
NTx/Digital Response Device, currently consisting of: monoclonal antibodies or
fragments thereof, for example the monoclonal antibody produced by hybridoma
1H11, that shows specific immunoaffinity for the NTx Epitope (at concentrations
to be agreed on, appropriate for use in the NTx/Digital Response Device);
antibody diluent; analyte (NTx Epitope)-containing controls; and other reagents.
Reagents will be supplied by Ostex "in bulk," provided that Ostex shall also
supply a reasonable number of Osteomark(R) Laboratory Test Kits in a microtiter
plate format for Metrika's use for comparison and control purposes. As of the
Effective Date of this Agreement, Critical Reagents include the 1H11 and/or
alternative antibodies, monoclonal antibody, diluent, calibrators and controls.
These reagents may be changed upon mutual agreement of the parties and
reasonable notice to scale up to commercial quantities. The term "Critical
Reagents" shall also include any improvement to or successor antibody(ies) with
immunoaffinity to the NTx Epitope or similar NTx epitopes resulting from bone
resorption which may be developed or marketed by Ostex in any form during the
term of this Agreement.
1.6 "Digital Response Technology" means that certain
technology developed by Metrika for use in the performance of, and the
measurement and display of the results of, diagnostic immunoassays, including
technology developed by Metrika relating to the integration of dry reagent
immunochemistry into a digital device for quantitative use.
<PAGE>
1.7 "Discovery" means any scientific, technological, or
commercial invention, discovery, development, improvement, Know-How, or product
made in the course of performing the activities contemplated by the parties
under this Agreement, whether or not the same is patentable.
1.8 "Field of Use" means the point-of-care and
over-the-counter markets and any other commercial markets, in each case for any
approved indication (including but not limited to osteoporosis, cancers and
dental indications), for the NTx/Digital Response Device designated by the
Product Management Committee.
1.9 "First Commercial Sale" means the first Sale of an
NTx/Digital Response Device by Metrika for value in an arms length transaction
with an independent third party following market clearance by the United States
Food and Drug Administration or a comparable authority in another country.
1.10 "Gross Profit" means Net Sales less (a) COGS; (b) costs
of shipping and receiving, accounts receivable, and collections associated with
Sales of the NTx/Digital Response Device; (c) product liability and warranty
expenses not allocated expressly to a party by this Agreement; (d) sales, use,
value added and/or other excise taxes or duties actually paid based on Sales,
including, but not limited to, those paid pursuant to SECTION 7.3.6; and (e)
Metrika's costs of providing customer service and technical support, less any
portion of such costs allocated to other products manufactured by Metrika
attributable to Metrika's excess capacity in its shipping, collections and
customer services areas.
1.11 "Gross Sales" means gross receipts, royalties, fees and
other valuable consideration of any kind received directly or indirectly by, or
credited to the benefit of the seller and permitted Affiliates in connection
with all Sales by Metrika of the NTx/Digital Response Device to end-users and
third-party distributors. Without limiting the generality of the foregoing,
Gross Sales include without limitation, interest, late charges, time-price
differentials and other receipts or credits of a similar nature.
1.12 "Know-How" means any method, information, procedure,
process, composition of matter, biological material, or other subject matter.
1.12.1 "Metrika Know-How" means Know-How that
has been developed or acquired by Metrika, prior to or during the term of
this Agreement.
1.12.2 "Ostex Know-How" means Know-How that has
been developed or acquired by Ostex, prior to or during the term of this
Agreement.
<PAGE>
Note: Confidential Treatment Requested.
1.13 "Metrika Intellectual Property Rights" means all Metrika
Patent Rights, Metrika Know-How, trade secrets, Confidential Information,
statutory and common law trademark rights, and other intellectual property
rights owned, licensed or controlled by Metrika individually or in conjunction
with others and related to the Digital Response Technology.
1.14 "Metrika Patent Rights" means all rights of Metrika in
and to any and all subject matter claimed in or disclosed by U.S. or foreign
patents and patent applications relating to the Metrika Digital Response
Technology, including but not limited to U.S. Patent Application No. 5,580,794
issued December 3, 1996 and foreign applications related thereto, and XXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXalong with any and all other patent
rights applicable, and related to, derived from, or claiming priority from any
such patents or applications, as well as any divisions, continuations,
continuations-in-part or reissues arising therefrom or issuing thereon.
1.15 "NTx Assay Technology" means an immunoassay for bone
collagen metabolites comprising an NTx Epitope, and any successor immunoassay
utilizing Bone Resorption Technology, together with associated controls and
other related products to which Ostex has rights as of the Effective Date or
during the term of this Agreement.
1.16 "Net Sales" means Gross Sales, less normal and customary
rebates, trade, quantity, and cash discounts allowed and actually taken,
allowances for credits granted or returns, commissions paid or allowed to
third-party distributors or sales representatives, and reasonable allowances for
uncollectable amounts.
1.17 "NTx/Digital Response Device" shall mean that certain
diagnostic device providing a quantitative readout (but shall not include any
similar device merely providing a qualitative result) developed pursuant to this
Agreement combining the NTx Epitope and Metrika's Digital Response Technology,
as defined in the 510(K)(s) filed with the U.S. FDA by the parties in accordance
with SECTION 5.1 below; upon clearance by the U.S. FDA of the 510(K)(s), the
"NTx/Digital Response Device" shall mean that certain device combining the NTx
Epitope and Metrika's Digital Response Technology specified in such clearance.
1.18 "NTx Epitope" means a conformational structure included
within the natural crosslinked telopeptides from type I collagen, to which the
monoclonal antibody (mAb) produced from the hybridoma 1H11 and/or an appropriate
alternative antibody binds specifically by immunoaffinity, or similar NTx
epitopes resulting from bone resorption which may be developed or marketed by
Ostex in any form during the term of this Agreement.
1.19 "Ostex Intellectual Property Rights" means all Ostex
Patent Rights, Ostex Know-How, trade secrets, Confidential Information,
statutory and common-law trademark rights, and other intellectual property
rights owned, licensed or controlled by Ostex individually or in conjunction
with others and related to the Bone Resorption Technology, NTx Assay Technology
or Critical Reagents.
<PAGE>
1.20 "Ostex Patent Rights" means all rights of Ostex,
as licensee under the WRF/Ostex Exclusive License Agreement, in and to any
and all NTx subject matter claimed in or disclosed by U.S. patents and patent
applications referred to in the WRF/Ostex Exclusive License Agreement, including
without limitation U.S. Patent Application Serial No. 118,234 filed November 6,
1987, and any divisions, continuations, continuations-in-part or reissues
arising therefrom or issuing thereon, including Australian Patent No. 645,049,
Australian Patent No. 665,953, European Patent No. 394,296, European Patent No.
502,928, Irish Patent No. 65,280, Spanish Patent No. 2,014,540, U.S. Patent No.
4,973,666, U.S. Patent No. 5,300,434, U.S. Patent No. 5,320,970, U.S. Patent No.
5,472,884, U.S. Patent No. 5,473,052, U.S. Patent No. 5,576,189, U.S. Patent No.
5,607,862, along with any and all other patent rights applicable, owned by WRF
and licensed to Ostex, and related to, derived from, or claiming priority from
any such U.S. patent applications, including without limitation International
Application No. PCT/US88/03722, International Application No. PCT/US90/7015,
International Application No. PCT/US92/04104, International Patent Application
No. PCT/US96/07132, or any other patent rights owned or controlled by Ostex and
related to the NTx Assay Technology or Critical Reagents.
1.21 "Royalties" shall mean amounts required to be paid by
Ostex to the WRF pursuant to the WRF/Ostex Exclusive License Agreement in
connection with Sales of the NTx/Digital Response Device.
1.22 "Sale" means any and all transactions whereby Metrika
sells, leases, rents, or otherwise transfers or disposes of to (i) any end-user,
including without limitation any physician's office or clinical laboratory
purchaser, or (ii) any third-party distributor, any right of ownership, or any
other right to possession.
1.23 "Territory" means all of the countries of the world
except Japan.
1.24 "Valid Claim" means a claim in any unexpired Ostex Patent
Right which has not been held invalid by a non-appealed or unappealable decision
by a court or other appropriate body of competent jurisdiction.
2. LICENSE GRANTS.
2.1 NTX/DIGITAL RESPONSE DEVICE. Ostex hereby grants to
Metrika and to Metrika's permitted assigns for the term of this Agreement, and
Metrika hereby accepts, a nonexclusive, worldwide, nontransferable (except as
provided in SECTION 16 below), license in and under the Ostex Intellectual
Property Rights, to develop, manufacture and have manufactured, use, and to
market, promote, offer to sell, sell, import, export, distribute and have
marketed, promoted, sold and distributed throughout the Territory the
NTx/Digital Response Device within the Field of Use.
<PAGE>
2.2 METRIKA OPTION TO MANUFACTURE.
2.2.1 CRITICAL REAGENTS FOR NTX/DIGITAL
RESPONSE DEVICE(S). Ostex hereby grants
Metrika an option, exercisable by Metrika pursuant to the terms of SECTION 6.3.3
below, to a temporary, non-exclusive, nontransferable (except as provided in
SECTION 16 below), royalty-bearing license under the Ostex Patent Rights and
Ostex Know-How to manufacture or have manufactured, and use, Critical Reagents
at a manufacturing facility in the United States (or such other country as the
parties may agree), for the sole purpose of manufacturing NTx/Digital Response
Devices for sale and other exploitation within the Field of Use pursuant to the
terms of this Agreement.
2.2.2 Any license granted pursuant to the
option of this SECTION 2.2 shall be revocable by Ostex upon ninety (90)
days prior notice accompanied by demonstration by Ostex that it has recovered
the manufacturing capacity to resume supply of Metrika's anticipated needs as
forecasted pursuant to SECTION 6.3.1 hereof (provided, however, that such
license may be revoked no sooner than six (6) months following Metrika's
exercise of the option, and upon reasonable agreement as to appropriate
phase-out of Metrika production and phase-in of Ostex production, whereupon
Metrika will again have available to it, in the event of subsequent default by
Ostex as described in SECTION 6.3.3, a license option under this SECTION 2.2.
Any Metrika start-up and termination costs associated with the phase-in or
phase-out of production pursuant to this Section shall be attributable to
development costs and shall be shared equally by the parties.
2.2.3 Ostex agrees to maintain in effect at
all times during the term of this Agreement an American Tissue Type Culture
Collection (ATTCC) deposit for any and all cell lines necessary or useful to
manufacture the Critical Reagents. In addition, upon request by Metrika, Ostex
will provide all other information, cooperation and technical assistance
necessary or useful for Metrika to exercise its rights pursuant to the license
granted herein.
2.3 EXPRESS RESERVATION OF RIGHTS. The scope of
license granted by Ostex to Metrika hereunder is limited by the scope of
the express grants set forth in this SECTION 2. Without limiting the generality
of the foregoing:
2.3.1 RIGHTS SPECIFICALLY EXCLUDED FROM SCOPE
OF GRANT TO METRIKA. Ostex retains all rights in the Bone Resorption
Technology and Ostex Intellectual Property Rights, including without limitation
all rights with respect to all products, applications, fields of use, markets
and uses, that are not expressly included within the scope of the grant of
rights to Metrika as set forth in this Agreement. This Agreement shall not under
any circumstances be construed or interpreted to provide for the grant, license,
or any other transfer to Metrika of any rights in the Bone Resorption
Technology, other than the right to use Critical Reagents and otherwise exploit
the Bone Resorption Technology within the scope of the license as granted in
this SECTION 2.
2.3.2 METRIKA. Metrika shall retain its
ownership and control of all Metrika Intellectual Property Rights and other
proprietary rights and interests in and relating to the Digital Response
Technology.
<PAGE>
2.3.3 ACTIONS REQUIRING OSTEX'S PRIOR WRITTEN
CONSENT. Metrika shall not, without Ostex's prior written consent, which
consent may be withheld at Ostex's sole discretion, manufacture or use any
Critical Reagent other than as provided for within the scope of the license
grants as set forth in this SECTION 2 to the extent such Critical Reagents are
proprietary to Ostex.
2.3.4 COMPULSORY LICENSES. Ostex and Metrika
acknowledge that the Ostex Patent Rights are subject to the rights and
limitations of United States Code, Title 35, Chapter 18, and administrative
regulations thereunder, and equivalents thereof in other jurisdictions, and that
the grants of licenses under SECTION 2 above are subject to such rights and
limitations. In the event that Ostex receives notice that any governmental
agency in any country or territory having valid authority and jurisdiction has
granted, or intends to grant or to cause to be granted, a compulsory license
with respect to all or any portion of the Ostex Patent Rights, Ostex shall so
notify Metrika and shall grant that third party a license to exercise the Ostex
Patent Rights to the extent required by the governmental agency. The grant of
such license to a third party or the taking of rights by or on behalf of any
government shall under no circumstances be considered a breach of this Agreement
by Ostex, provided that Metrika shall be deemed to have received an equivalent
license under the same terms and conditions.
2.4 OSTEX RIGHT TO CO-MARKET NTX/DIGITAL RESPONSE DEVICE.
Metrika hereby grants to Ostex and its Affiliates and permitted assigns, for the
term of this Agreement, and Ostex hereby accepts, a nonexclusive,
nontransferable right in and under Metrika Intellectual Property Rights, to
market, promote, and have marketed and promoted, but not to make, have made, or
sell, under trademarks as set forth in SECTION 15 below throughout the
Territory, the NTx/Digital Response Device in accordance with the marketing plan
established under SECTION 6.2 below under the terms set forth herein. All Sales
will be made by Metrika, and all revenues shall be booked by Metrika.
3. SUPPLY OF CRITICAL REAGENTS.
3.1. CRITICAL REAGENTS FOR DEVELOPMENT OF NTX/DIGITAL RESPONSE
DEVICE(S). Ostex shall supply to Metrika, without charge, such reasonable
quantities of Critical Reagents as shall be necessary or useful for the purpose
of developing the NTx/Digital Response Device(s) pursuant to the terms and
conditions of this Agreement, together with such reasonable consulting advice as
Metrika may request.
3.2 CRITICAL REAGENTS FOR MANUFACTURING NTX/DIGITAL RESPONSE
DEVICE(S). Ostex shall sell to Metrika (or such manufacturer(s) as Metrika shall
designate), and Metrika (or said manufacturer(s)) shall purchase from Ostex,
Critical Reagents for the purpose of manufacturing NTx/Digital Response
Device(s) pursuant to the terms and conditions of this Agreement.
<PAGE>
Note: Confidential Treatment Requested.
3.2.1 Metrika or its designated manufacturer(s)
shall pay Ostex a non-royalty transfer price for Critical Reagents sold
pursuant to this SECTION 3.2 equal to XXXXXX.
3.2.2 Payment for each shipment of Critical
Reagents shall be made by Metrika or its designated manufacturer(s) within
30 days of the date of invoice, it being agreed that such invoice shall not be
dated prior to shipment of the Critical Reagents to which such invoice relates.
In the event that Metrika or its designated manufacturer(s) fails to comply with
the payment terms of this SECTION 3, Ostex shall have the right, in addition to
all other rights available under this Agreement, to suspend further shipment of
Critical Reagents until such breach is cured.
3.3 THIRD-PARTY MANUFACTURING ON BEHALF OF OSTEX. In the event
that Ostex contracts with a third party to manufacture Critical Reagents to be
supplied under this Agreement, Ostex shall ensure and provide evidence to
Metrika demonstrating that such third-party manufacturer complies with good
manufacturing practices (GMP) and all applicable governmental regulations
relating thereto and is either in compliance with or working toward compliance
with the quality standards established by the International Standards
Organization, Rules 9000 et seq. and amendments or successors thereto ("ISO
9000").
3.4 PRODUCT WARRANTY; QUALITY CONTROL. Ostex warrants to
Metrika and its designated manufacturer(s) that all Critical Reagents sold by
Ostex or its contract manufacturer hereunder shall (i) comply with the
specifications set out in ATTACHMENT 3.4 hereof when used in accordance with
Ostex instructions for use as set forth in such attachment or of a similar
nature thereto, and amendments thereto as mutually agreed upon by the parties,
(ii) be free from defects in material and workmanship, and (iii) comply with all
applicable laws, rules and regulations related to the manufacture and
distribution of such product (to the extent applicable to a manufacturer).
Without limiting the generality of the foregoing, Ostex warrants that all
Critical Reagents manufactured and supplied for the United States market under
this Agreement shall be manufactured, tested, documented, packaged, and
transported in compliance with GMP requirements of the FDA including, without
limitation, 21 CFR Part 820 and any amendments or successors thereto; and that
all Critical Reagents manufactured and supplied under this Agreement, regardless
of intended market, shall be manufactured, tested, documented, packaged and
transported in compliance with Metrika's reasonable quality assurance
requirements. Metrika shall have the right to audit and inspect Ostex
facilities, books, and records to confirm such compliance. Ostex further
represents that it is working toward compliance with the quality standards
established by ISO 9000 and warrants that it will comply with such standards
when legally required to do so. In the event that Metrika or its designated
manufacturer(s) demonstrates within one year of receipt that any Critical
Reagent supplied pursuant to this Agreement fails to meet these specifications
and warranties, Ostex shall, as Metrika's sole remedy for such failure,
immediately replace said product (demonstrated by Metrika or its designated
manufacturer(s) as non-conforming, in accordance with reasonable procedures,
with product which conforms to the above specifications and warranties. These
warranties shall not apply to any item that is subjected to abuse, stress, or
misuse; or used in any manner inconsistent with applicable Ostex instructions.
<PAGE>
3.5 DELIVERY. All Critical Reagents purchased under
this Agreement shall be shipped F.O.B. Origin.
3.6 INVENTORY. At all times during the distribution term of
this Agreement, Ostex shall supply and keep sufficient inventory of Critical
Reagents to carry out reasonable demand or orders for the NTx/Digital Response
Device(s) without undue delay.
3.7 FACILITIES STANDARDS. At all times during the term of this
Agreement, Ostex and its designated manufacturer(s) shall provide or cause to be
provided such warehousing and transport facilities as are both commercially
reasonable and adequate under the applicable regulations, product requirements,
and industry standards of all relevant jurisdictions under this Agreement.
4. PRODUCT MANAGEMENT COMMITTEE. Within thirty (30) day of the
Effective Date, the parties shall form a Product Management Committee consisting
of two (2) named representatives each from Metrika and Ostex, which committee
shall have the responsibility to oversee and coordinate development, marketing,
promotion, sales, and distribution efforts and other activities required or
permitted by this Agreement respecting the NTx/Digital Response Device. The
committee shall meet at least once per quarter, at locations and at times to be
agreed, and shall undertake the responsibilities set out in this Agreement, as
well as the obligation to regularly review development status, marketing and
sales forecasts, actual sales performance, competitive activities, and
promotional plans, and to establish the price and terms on which the NTx/Digital
Response Device will be sold. The committee shall attempt to operate by
consensus, and shall take no action without approval of a majority of voting
members. The committee may delegate certain of its functions to subcommittees or
individual members. Each party shall cause its members to work diligently to
promote the commercial success of the NTx/Digital Response Device. Either party
may change its representatives assigned to said committee by fifteen (15) days
advance written notice provided pursuant to SECTION 21 of this Agreement.
5. ROLE OF THE PARTIES IN THE DEVELOPMENT AND REGULATORY
APPROVAL OF THE NTX/DIGITAL RESPONSE DEVICE.
5.1 GOALS. The parties have established the development goals
set out herein, which goals are anticipated to be accomplished within the
general time periods established by the parties, as said development goals may
be specified in more detail or amended from time to time, provided that Metrika
shall use its commercially reasonable efforts to complete development of the
NTx/Digital Response Device and both parties will use their commercially
reasonable efforts to obtain regulatory approval (a) for the United States in
accordance with a timeline agreed upon in writing by the parties prior to the
execution of this Agreement, and (b) for other countries in accordance with
timelines to be established by the Product Management Committee.
5.2 CONSULTATION AND AVAILABILITY OF OSTEX KNOW-HOW.
Each party shall perform the activities assigned to it, and shall make
available key employees to provide consultation, advice, assistance, and
scientific direction in furtherance of the objectives of this
<PAGE>
Note: Confidential Treatment Requested.
Agreement. Without limiting the generality of the foregoing, Ostex shall make
available to Metrika personnel trained in and knowledgeable of the Bone
Resorption Technology and performance characteristics of the NTx Assay
Technology. Except as otherwise specifically provided in this Agreement, each
party shall bear its own costs and expenses associated with all facilities,
materials, and employee time devoted to this effort. Neither party shall be
obligated to disclose their Confidential Information to the other, except to the
extent necessary for the performance of each party's obligations under this
Agreement.
5.3 DEVELOPMENT OF BUDGET; RESPONSIBILITY FOR CLINICAL TRIALS
AND APPROVALS. The parties shall agree in writing, prior to the execution of
this Agreement, to a budget (the "Budget") for the costs to be incurred
subsequent to the date hereof in connection with the development and
commercialization of the NTx/Digital Response Device. The Budget shall be
subject to revision from time to time by the Product Management Committee. The
parties shall also agree in writing, prior to the execution of this Agreement,
to an allocation of responsibility (the "Allocation") between the parties for
the conduct of clinical trials and obtaining of regulatory approvals. The
Allocation shall provide that each party shall bear its own costs and expenses
associated with its responsibilities under the Allocation, and such costs and
expenses shall not be part of the Budget for purposes of SECTIONS 5.4 and 5.5.2
below.
5.4 METRIKA ROLE. Metrika shall continue to develop the
NTx/Digital Response Device and shall perform the tasks allocated to it by the
Allocation with respect to the conduct of clinical trials and the obtaining of
regulatory approvals for the NTx/Digital Response Device. Metrika shall fund
such activities pursuant to the Budget and this Allocation. Notwithstanding the
foregoing, Metrika will not be obligated to perform its obligations pursuant to
this SECTION 5 to the extent that such obligations would require Metrika to
incur expenses in excess of the Budget and the Allocation.
5.5. OSTEX ROLE.
5.5.1 GENERALLY. Pursuant to SECTIONS 2.1 and
3.1 of this Agreement, Ostex shall (a) provide the license and Critical
Reagents specified therein; (b) cooperate with Metrika to develop the
NTx/Digital Response Device and (c) perform the tasks allocated to it by the
Allocation with respect to the conduct of clinical trials and the obtaining of
regulatory approvals for the NTx/Digital Response Device.
5.5.2 OSTEX FUNDING. In recognition of
development costs incurred by Metrika prior to the Effective Date, Ostex
shall enter into a Stock Purchase Agreement of even date herewith. In addition,
Ostex shall reimburse Metrika for amounts expended by Metrika in connection with
the development of the NTx/Digital Response Device (not including Metrika's
costs and expenses associated with the conduct of clinical trials and obtaining
of regulatory approvals) up to a maximum payment to Metrika of an amount equal
to XXXXXXXXX, which reimbursement shall be made XXXXX each month, commencing May
31, 1997 and on the last day of each month thereafter.
<PAGE>
5.5.3 BUDGET OVERRUNS. If at any time, it
appears that the cost of the development effort for the NTx/Digital
Response Device will exceed the Budget, the parties will meet and use their best
efforts to negotiate, in good faith, an appropriate agreement to allocate any
such excess. Failing agreement, either party may terminate this Agreement
without penalty upon thirty (30) days advance written notice to either party,
subject to provisions relating to the licensing of the terminating party's
technology to the other party set forth in SECTION 11 below.
5.5.4 ACCESS TO CLINICAL DATA. Ostex shall
provide Metrika with full access to all clinical trial data and regulatory
submissions, and make available all urine samples, collected by Ostex that
pertain to the NTx Assay Technology and to the activities of Metrika under this
Agreement, except where disclosure of such information is prohibited by any
contract by which Ostex is bound. It is acknowledged that such information will
be subject to the confidentiality provisions set out in this Agreement, to the
extent applicable, as well as confidentiality provisions necessary to protect
patient privacy; provided, however, that such information may, as necessary and
appropriate, be transmitted to proper regulatory authorities in connection with
the seeking of regulatory product approvals, and may be used in connection with
each party's marketing activities for the NTx/Digital Response Device, subject,
in the case of all such clinical data not developed pursuant to this Agreement,
to the direction and consent of Ostex.
5.5.5. TECHNICAL SUPPORT. Ostex shall assist
Metrika, at either's reasonable request, in the technical training of a
mutually determined number of Metrika's employees, such training to include
provision of information as to the nature, use and proper care of Critical
Reagents. Any such training shall be provided at Ostex's principal place of
business, and Metrika shall be solely responsible for all costs of
transportation, lodging, and other expenses of trainees incidental to such
training. During the term hereof, Ostex shall use its commercially reasonable
efforts to respond to technical questions or problems which may arise from time
to time in connection with the Critical Reagents, WRF Bone Resorption Technology
and Ostex Intellectual Property.
6. ROLE OF THE PARTIES IN MANUFACTURE AND COMMERCIALIZATION OF
THE NTX/DIGITAL RESPONSE DEVICE.
6.1 MANUFACTURING. Metrika shall, on or before the date of FDA
approval, have developed the capacity to manufacture or have manufactured
reasonable commercial quantities of the NTx/Digital Response Devices. Metrika
may have third parties manufacture and package the NTx/Digital Response Devices
provided that such third parties have agreed in writing to be bound by
confidentiality provisions substantially similar to those contained in this
Agreement, and further provided that Metrika shall first furnish Ostex with
evidence demonstrating any such third party's capability to manufacture such
NTx/Digital Response Devices pursuant to GMP and all applicable regulatory
requirements.
<PAGE>
Note: Confidential Treatment Requested.
6.2 COMMERCIALIZATION. Six months prior to the anticipated
First Commercial Sale of NTx/Digital Response Devices under this Agreement, but
in no event longer than 12 months from the Effective Date of this Agreement,
Metrika and Ostex, acting through the Product Management Committee, shall agree
on a marketing plan for said NTx/Digital Response Devices for the following
twelve months (a "Marketing Year"). The parties anticipate that such marketing
plan will cover marketing activities and will require each party to spend,
individually, XXXXXXX of anticipated total Gross Sales of NTx/Digital Response
Devices for such first year (as this number is determined by the Product
Management Committee, and subject to change from time to time in the discretion
of the Product Management Committee) on marketing activities therefor. The
Product Management Committee shall agree on a new marketing plan for each
subsequent Marketing Year during the term of this Agreement; provided that such
marketing plan shall require each party to spend, individually, at least the
XXXXXXX of Gross Profit from Sales of NTx/Digital Response Devices during the
immediately preceding Marketing Year, provided further that if the Product
Management Committee is not able to agree on a marketing plan for any such
subsequent Marketing Year, the marketing plan (including budgetary allocations)
for the immediately preceding Marketing Year shall be repeated with expenditures
equivalent to the dollar expenditures of such preceding Marketing Year. If
either party does not spend the amount so designated pursuant to the marketing
plan for any Marketing Year of this Agreement, the other party shall, in
addition to any other remedy available to it at law, in equity, or under this
Agreement, have the right to add or subtract, as the case may be, such amount
not spent from the amounts due to a party under SECTION 7.5 below. The Product
Management Committee will also establish for each Marketing Year of the term a
designated quantity of NTx/Digital Response Devices to be distributed as
"promotional samples" without customer charge, and without royalty to either
party (but to be included in COGS). For the first Marketing Year, the parties
expect to designate not less than 30% of the anticipated production of
NTx/Digital Response Devices as such "promotional samples" provided that this
percentage may be revised by the Product Management Committee in light of market
conditions and strategy, allocated fifty percent (50%) to each party or as
otherwise agreed.
6.3 SUPPLY OF CRITICAL REAGENTS. Ostex shall, on or before the
date of FDA approval of the NTx/Digital Response Device, have developed the
capacity to manufacture or have manufactured reasonable quantities of, and Ostex
shall use its best commercial efforts to supply the need of Metrika and its
designated manufacturer(s) for, Critical Reagents as necessary to meet the
demand for NTx/Digital Response Devices, in accordance with purchase orders
received by Ostex from Metrika and its designated manufacturer(s), and in
SECTIONS 6.3.1 AND 6.3.2 below.
6.3.1 FORECAST OF DEMAND. Within sixty days of
the start of each calendar quarter, Metrika or its designated
manufacturer(s) shall deliver to Ostex a "rolling" forecast of quantities of
Critical Reagents to be purchased by Metrika and its designated manufacturer(s)
and supplied by Ostex during each month of the following quarter, and each of
the subsequent three quarters (the "Rolling Forecast"). Each Rolling Forecast
shall be considered a purchase order with respect to the forecasted demand for
Critical Reagents over the first three months thereof. The forecasted demand for
the first subsequent quarter shall be relied on by Ostex for purposes of its
manufacturing and supply obligations hereunder, but Metrika and its designated
manufacturer(s) may vary from its initial forecast for such quarter by no more
than twenty-five percent (25%). The forecasted demand for the final two quarters
of each Rolling Forecast shall be used by Ostex for planning purposes, but
Metrika and its designated manufacturer(s) shall not be bound by its initial
forecast(s), nor shall Metrika or its designated manufacturer(s) be liable to
Ostex with respect to any changes thereto.
<PAGE>
6.3.2 ALLOCATION OF PRODUCTION. In the event that
Ostex does not meet the demand for Critical Reagents ordered pursuant to
SECTION 6.3.1, Ostex shall allocate overall production of Critical Reagents
(whether manufactured or purchased, and whether for Ostex's internal
manufacturing or for Sale) such that Metrika and its designated manufacturer(s)
receives the same proportion of the amount of the Critical Reagents it has
ordered (pursuant to SECTION 6.3.1 hereto) as Ostex allocates to its own
manufacture of products utilizing the NTx Assay Technology, or to its otherwise
most favored non-end-user customer, whichever proportion is greater (measured as
a proportion of total units of production), provided that Ostex shall not be
required to sell to Metrika and its designated manufacturer(s) any more than
thirty percent (30%) of its total production of any Critical Reagent during any
quarter.
6.3.3 EXERCISE OF MANUFACTURING OPTION. In the
event that Ostex does not for any reason, for a period of thirty (30) days,
meet (through internal or third-party manufacture), Metrika's demand for
Critical Reagents which comply with SECTION 3.4 hereof, ordered pursuant to
SECTION 6.3.1 hereof, Metrika shall be entitled, upon fifteen (15) days written
notice, to exercise the option to manufacture such Critical Reagents described
in SECTION 2.2 hereof. Any Metrika exercise of said option shall not relieve
Ostex of its obligations pursuant to this SECTION 6.3, but shall relieve Metrika
of Metrika's obligation to purchase Critical Reagents from Ostex during the
period Metrika manufactures Critical Reagents pursuant to the option.
6.4 PUBLICATIONS. Each party shall, throughout the term of
this Agreement, use its continuing commercially reasonable efforts to develop
documentation and publish scientific articles directly or indirectly supporting
the clinical utility of the NTx/Digital Response Device. Such publications will
be submitted to the other party for review and approval prior to publication,
and shall be subject to the requirements of SECTION 15.2 hereof regarding the
use of trademarks.
6.5 COMMERCIALIZATION AND SALES IN JAPAN. Ostex shall use
commercially reasonable efforts to negotiate with its strategic partner in
Japan, Mochida Pharmaceutical Co., Ltd. ("Mochida"), to arrange for the
marketing and sale of the NTx/Digital Response Device in Japan on terms
acceptable to Mochida and the parties hereto. In the event that such an
arrangement is successful, the parties shall amend this Agreement to add Japan
to the Territory.
7. ROLE OF THE PARTIES IN THE SALES OF THE NTX/DIGITAL RESPONSE
DEVICE.
7.1 The parties' general agreement is that Metrika and Ostex
shall co-promote the NTx/Digital Response Device. Ostex shall act as a, and
Metrika hereby appoints Ostex as its, non-exclusive sales representative for the
purpose of promoting and soliciting orders for the NTx/Digital Response Device
throughout the Territory at such prices and on such terms as are established by
the Product Management Committee. The parties shall share the profits associated
with Sales of the NTx/Digital Response Device in accordance with the terms of
this Agreement.
<PAGE>
7.2 OBLIGATIONS OF OSTEX.
7.2.1 PROMOTION OF SALES. Ostex shall use
commercially reasonable efforts to promote Sales of and to secure and
present to Metrika orders for the NTx/Digital Response Device in the Territory,
in accordance with the directions of the Product Management Committee. Ostex
shall inform and assign all of its sales people in the Territory to represent
the NTx/Digital Response Device, shall provide appropriate training in
conjunction with Metrika, shall use its usual marketing efforts to promote the
NTx/Digital Response Device, may use third-party distributors, approved by the
Product Management Committee, to market the Device, and will inform and involve
Metrika's sales force as reasonably necessary and appropriate to obtain such
orders.
7.2.2 PERFORMANCE GOALS. Ostex shall meet the
performance goals established by the Product Management Committee.
7.2.3 BUSINESS REPORT. Ostex shall provide to
the Product Management Committee on or before the fifteenth calendar day of
each calendar quarter, a written Business Report containing (i) a summary of
marketing and promotional activities related to the NTx/Digital Response Device
undertaken during the prior quarter (ii) an order forecast as described in
SECTION 7.4; and (iii) an identification of any actions required to obtain such
orders. The Product Management Committee will agree on a format and reporting
form for said information and forward such to Ostex at least 30 days prior to
the first reporting date.
7.2.4 REPRESENTATIONS TO CUSTOMERS. Ostex shall
not incur any liability on behalf of Metrika, nor in any way pledge or
purport to pledge Metrika's credit; nor describe or hold itself out as an
employee of Metrika, nor describe itself other than as a representative for
Metrika for the performance of functions specified in, and pursuant to, this
Agreement; nor make any claims, warranties or representations with respect to
the NTx/Digital Response Device except as previously approved in writing by the
Product Management Committee.
7.3 OBLIGATIONS OF METRIKA.
7.3.1 ACTUAL SALES. Metrika shall use
commercially reasonable efforts to accomplish in accordance with the
directions of the Product Management Committee, the actual Sales of the
NTx/Digital Response Device, as well as all support, and other services provided
to customers. Metrika shall assign all of its sales people in the Territory to
represent the NTx/Digital Response Device, shall provide appropriate training in
conjunction with Ostex, shall use its usual marketing efforts to promote the
NTx/Digital Response Device, may use third-party distributors, approved by the
Product Management Committee, to market the Device, and will
<PAGE>
inform and involve Ostex's sales force as reasonably necessary and appropriate
to accomplish Sales of the Device. Metrika reserves the right, in the exercise
of its reasonable discretion at any time and from time to time, to decline the
acceptance of any order transmitted to it by Ostex or through Ostex's efforts.
All credit appraisal of potential customers, approval of credit extended to such
customers and collections pursuant to such credit extensions shall be the sole
responsibility of Metrika. In no event shall Ostex accept any order or otherwise
attempt to bind Metrika for the sale of any NTx/Digital Response Device(s)
unless specifically asked by Metrika, in writing, to do so. All remittances by
the customer shall be made directly to the order of Metrika and transmitted by
the customer directly to Metrika. With respect to international shipments of the
NTx/Digital Response Device, Metrika (or its permitted assigns, contractors or
distributors) shall be responsible for clearing all such goods through customs
and payment of all taxes and/or duties imposed by any governmental authority in
connection therewith.
7.3.2 PERFORMANCE GOALS. Metrika shall meet the
performance goals established by the Product Management Committee.
7.3.3 BUSINESS REPORT. Metrika shall provide to
the Product Management Committee on or before the fifteenth calendar day of
each calendar quarter, a written Business Report containing (i) a summary of
marketing and promotional activities related to the undertaken during the prior
quarter (ii) an order forecast as described in SECTION 7.4; and (iii) an
identification of any actions required to obtain such order.
7.3.4 THIRD-PARTY MANUFACTURING ON BEHALF OF
METRIKA. In the event that Metrika licenses a third party to manufacture
NTx/Digital Response Devices to be supplied to Ostex under this Agreement,
Metrika shall ensure and provide evidence to Ostex demonstrating that such
third-party manufacturer complies with good manufacturing practices (GMP) and
all applicable governmental regulations relating thereto and is either in
compliance with or working toward compliance with the quality standards
established by the International Standards Organization, Rules 9000 et seq. and
amendments or successors thereto ("ISO 9000").
7.3.5 PRODUCT WARRANTY; QUALITY CONTROL.
Metrika warrants to Ostex that all NTx/Digital Response Devices sold by
Metrika hereunder shall (i) comply with the product specifications attached
hereto as ATTACHMENT 7.3.2 when used in accordance with applicable Metrika
instructions, as modified by mutual agreement of the parties, (ii) be free from
defects in material and workmanship, and (iii) comply with all applicable laws,
rules and regulations related to the manufacture and distribution of such
product (to the extent applicable to a manufacturer). Without limiting the
generality of the foregoing, Metrika warrants that all NTx/Digital Response
Devices manufactured and supplied for the United States market under this
Agreement shall be manufactured, tested, documented, packaged, and transported
in compliance with GMP requirements of the FDA including, without limitation, 21
CFR Part 820 and any amendments or successors thereto; and that all NTx/Digital
Response Devices manufactured and supplied under this Agreement, regardless of
intended market, shall be manufactured, tested, documented, packaged and
transported in compliance with appropriate quality assurance requirements agreed
to by the parties. Ostex shall have the right to audit and inspect Metrika
facilities, books, and records, during normal business hours and upon reasonable
notice to Metrika, but only to the extent reasonably necessary to confirm such
compliance, and only in good faith. Metrika further represents that is working
toward compliance with the quality standards established by ISO 9000 and
warrants that it will comply with such standards when legally required to do so.
The Product Management Committee shall consider and determine the terms of any
warranties to be extended to end-users of the NTx/Digital Response Device.
<PAGE>
Note: Confidential Treatment Requested.
7.3.6 CUSTOMS AND TAXES. With respect to
international shipments of any goods purchased, sold, distributed, or
otherwise transferred hereunder, including the Critical Reagents, Metrika shall
be responsible for clearing all such goods through customs and shall pay any and
all taxes and/or duties imposed by any governmental authority in connection
therewith.
7.3.7 DELIVERY. All NTx/Digital Response
Devices purchased by Ostex under this Agreement shall be shipped on such
terms as are established by the Product Management Committee.
7.3.8 INVENTORY. At all times during the
distribution term of this Agreement, Metrika shall keep sufficient
inventory of NTx/Digital Response Devices to carry out reasonable demand for
orders therefor without undue delay.
7.4 FORECAST OF DEMAND. Within thirty days of the start of
each calendar quarter, Ostex shall deliver to Metrika a "rolling" forecast of
the quantities of NTx/Digital Response Devices for which Ostex expects to submit
orders during each month of the following quarter, and each of the subsequent
three quarters (the `Rolling Forecast"). The forecasted demand of each Rolling
Forecast shall be used by Metrika for planning purposes, but Ostex shall not be
bound by its initial forecast(s), nor shall Ostex be liable to Metrika with
respect to any changes thereto.
7.5 COMMISSIONS ON SALES OF NTX/DIGITAL RESPONSE DEVICES.
Metrika shall pay to Ostex an amount equal to XXXXXXX, or, in the event that the
XXXXXXX, Ostex shall pay to Metrika an amount equal to XXXXXXX, on Metrika's
disposition of all NTx/Digital Response Devices. Payments required to be made by
this Section shall be made not later than forty-five (45) calendar days
following the end of each calendar quarter in which the Sales occurred.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX.
7.6 REIMBURSEMENT OF ROYALTIES. Metrika shall include, with
each commission payment under SECTION 7.5 above an additional separate payment
equal to XXXXX of any Royalties which Ostex will be required to pay with respect
to the revenues upon which such commission payment is based.
7.7 SERIOUS INJURY. Each party shall within twenty-four hours
advise the other by telephone, (with follow-up hard copy, receipt confirmed) of
any adverse effect or malfunction related to the NTx/Digital Response Devices or
the Critical Reagents of which the notifying party gains knowledge during the
term of this Agreement that may have caused or contributed to, or should it
reoccur is likely to cause or contribute to, serious injury, illness, or death.
The notifying party shall include in the notification the name, address, and
telephone number of the person or entity purchasing the product in question, the
name, address, and telephone of the patient (if different), and the lot or
serial number of the NTx/Digital Response Device involved in the incident, as
appropriate.
<PAGE>
7.8 PRODUCT RECALL. If either party believes that a product
recall is necessary or appropriate, it will promptly notify the other, and the
parties will (unless such recall is required by law) discuss whether such recall
is necessary or appropriate, and shall discuss the manner in which any agreed or
required recall shall be conducted. If a recall is not required by law and the
parties cannot agree whether the recall is necessary or appropriate, either
party may elect to conduct the recall in question The parties shall cooperate
with each other in conducting any such recall. All out of pocket costs of a
required or agreed recall shall be shared equally by the parties, unless and to
the extent that such recall is the result of a breach of warranty by one party,
in which case such costs shall be borne by the breaching party. All costs of a
recall to which the parties have not agreed shall be borne by the party that
elects to conduct the recall, provided that if a court of competent jurisdiction
determines that said recall was caused by (i) the fact that any Critical
Reagents or the NTx Assay Technology were in violation of applicable law or the
terms of this contract, Metrika may obtain reimbursement by Ostex of all
reasonable out of pocket costs and expenses of such recall as well as any
attorneys' fees related to such determination, or (ii) the fact that any
NTx/Digital Response Device(s) were otherwise in violation of applicable law or
the terms of this contract, Ostex may obtain reimbursement by Metrika of all
reasonable out of pocket costs and expenses of such recall. Each party shall
maintain complete and accurate records of all products sold by it for such
periods as required by law. Nothing in this Section shall be construed to modify
or limit any legal obligation of either party with respect to any recall.
7.9 CORRECTIVE ACTION. If any government agency with
jurisdiction shall request or order any corrective action with respect to any
Critical Reagent, or NTx/Digital Response Devices, including but not limited to
any recall, customer notice, restriction, change, market action, or modification
of the product in question, and the cause or basis for such corrective action is
primarily attributable to a condition, fact, or action that constitutes a breach
by a party of any of its warranties, representations or covenants contained
herein, then such party shall be liable for and shall reimburse the other party
for all costs incurred as a result of such action, including replacement cost of
any product affected thereby.
8. BOOKS AND RECORDS; AUDITS. Each party to this Agreement shall
maintain accurate books and records with respect to all Critical Reagents and
NTx/Digital Response Devices. Upon the request of the other party, each party
will provide the requesting party or its independent public accountant with
access, but no more than once per calendar year, during regular business hours
and upon reasonable advance prior notice, to all accounting records necessary or
appropriate to verify revenues and expenses. Any adjustment determined
appropriate by such audit shall be due and payable within thirty (30) days
following completion of such audit, together with interest calculated at a rate
equal to the prime lending rate reported in the Wall Street Journal for the last
day of the audited period plus two percent (+2%), or the maximum interest rate
then permitted under applicable laws, whichever rate is lower. All fees for such
audits shall be borne by the requesting party unless the audit shows an under
reporting of amounts due pursuant to SECTION 7.5, or an over reporting of costs
to be reimbursed pursuant to SECTION 5.5.2 or SECTION 7.6, of five percent (5%)
or more, in which case the costs of said audit shall be borne by the party being
audited.
<PAGE>
9. OWNERSHIP OF DISCOVERIES. It is the intent of the parties that the
ownership of any and all Discoveries resulting from this Agreement, regardless
of inventorship, shall: (a) vest solely in Ostex if such rights relate
exclusively to the NTx Assay Technology; (b) vest solely in Metrika if such
rights relate exclusively to the adaptation of the NTx Assay Technology for use
with the Digital Response Device; and (c) in all other cases vest in the party
or parties of the inventor.
10. OBLIGATION NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Recipient
shall not at any time, and shall cause its permitted assigns and sublicensees to
commit not to at any time for a period of seven (7) years following the
termination of this Agreement, disclose or otherwise make known or available to
any person, firm, corporation, or other entity other than Discloser any
Confidential Information received from the Discloser without the express prior
written consent of that Discloser. With respect to Confidential Information
developed under this Agreement and which is not Confidential Information of one
party only, neither party shall disclose or otherwise make such Confidential
Information known or available to any person, firm, corporation, or other entity
without the express prior written consent of the other party, not to be
unreasonably withheld or delayed. Recipient shall utilize reasonable procedures
to safeguard Confidential Information, including releasing Confidential
Information only to those employees and legal representatives to whom disclosure
is necessary or appropriate for the Recipient to undertake its responsibility
pursuant to this Agreement. Notwithstanding the above, Recipient may disclose
Confidential Information of Discloser to (i) its permitted assigns and contract
manufacturers to the extent such disclosure is reasonably necessary for
Recipient to perform its obligations under this Agreement, PROVIDED that such
assigns and contract manufacturers have agreed in writing to be bound by
confidentiality provisions substantially similar to those contained in this
Agreement, and (ii) as required by law or to comply with applicable governmental
regulations or court orders.
10.1 RECIPIENT'S OWN USE OF CONFIDENTIAL INFORMATION.
Recipient shall not make any use, directly or indirectly, of any Confidential
Information of the other party except in the ordinary course of business
pursuant to this Agreement or any other specific, written agreement entered into
between Ostex and Metrika.
10.2 SPECIFIC PERFORMANCE. The parties acknowledge that: (a)
the covenants set forth in this SECTION 10 are essential to the activities
contemplated by this Agreement; (b) but for the agreement of each party to
comply with such covenants, neither party would have entered into such
activities; (c) each party has consulted with or has had the opportunity to
consult with counsel and has been advised in all respects concerning the
reasonableness of such covenants as to time and scope; (d) Discloser may have no
adequate remedy at law if Recipient violates or fails to perform under this
SECTION 10; and (e) Discloser shall have the right, in addition to any other
rights it may have, to seek from a court of competent jurisdiction preliminary
and permanent injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce Recipient's obligations under this SECTION 10
if Recipient fails to perform in accordance herewith.
<PAGE>
Note: Confidential Treatment Requested.
11. TERM AND TERMINATION.
11.1 INITIAL LICENSE TERM, AUTOMATIC RENEWAL. This Agreement
shall be in full force and effect as of the date first written above and, unless
earlier terminated in accordance with this ARTICLE 11, shall remain in effect
for XXXXX (the "Term"). Upon the expiration of the Term and each subsequent
annual anniversary of such date, the Term of this Agreement shall (subject to
SECTION 11.6 below) be automatically continued for a period of one (1)
additional year, unless either Metrika delivers to Ostex, or Ostex delivers to
Metrika, at least ninety (90) days prior to such anniversary date, a written
notice of its intent to disengage.
11.2 TERMINATION BY OSTEX. Ostex shall have the right to
terminate this Agreement (a) upon six (6) months notice if Metrika fails to
complete development of the NTx/Digital Response Device or to satisfy its
obligations pursuant to the Allocation, within the timelines established by the
parties, for any reason other than as a result of Ostex's actions or inaction;
(b) immediately upon notice if Metrika materially breaches or fails to perform
in a timely manner any of its material duties or obligations hereunder, and such
breach shall remain uncured, or the failure to perform shall continue, for at
least sixty (60) days after Ostex has given notice of such breach or failure;
(c) after six (6) months prior written notice of Ostex's reasonable
determination that the commercialization of the NTx/Digital Response Device is
not commercially viable; (d) upon thirty (30) days notice in the event the
parties cannot agree on responsibility for budget overruns, as provided under
SECTION 5.5.2 above, or (e) immediately upon notice on the conditions provided
for by SECTION 14 below. In the event a notice of termination is delivered by
Ostex pursuant to subsections (c) or (d) and, prior to the expiration of the
applicable notice period Metrika notifies Ostex of its election to proceed with
the commercialization of the NTx/Digital Response Device independently, then the
Agreement shall remain in effect for a period of sixty (60) days, during which
time the parties shall negotiate reasonable terms of a license of the NTx Assay
Technology to allow for Metrika's continued commercialization of the Device.
Without limiting the generality of the foregoing, a "material breach" or
"failure to perform" shall include without limitation, any material failure to
remit payments, or material failure to comply with any financial reporting
requirement.
11.3 TERMINATION BY METRIKA. Metrika shall have the right to
terminate this Agreement (a) upon six (6) months notice if Metrika fails to
complete development of the NTx/Digital Response Device, or to satisfy its
obligations pursuant to the Allocation, within the timeline established by the
parties for any reason other than as a result of Metrika's material breach of
its obligations under this Agreement; (b) immediately upon notice if Ostex has
materially breached or failed to perform in a timely manner any of its material
duties or obligations hereunder, and such breach shall remain uncured, or the
failure to perform shall continue, for at least sixty (60) days after Metrika
has given notice of such breach or failure to Ostex; (c) after six (6) months
notice of Metrika's reasonable determination that the commercialization of the
NTx/Digital Response Device is not commercially viable; (d) upon
<PAGE>
thirty (30) days notice in the event the parties cannot agree on responsibility
for budget overruns, as provided under SECTION 5.5.2 above, or (e) immediately
upon notice on the conditions provided for by SECTION 14 below. In the event a
notice of termination is delivered by Metrika pursuant to subsections (c) or (d)
and, prior to the expiration of the applicable notice period Ostex notifies
Metrika of its election to proceed with the commercialization of the NTx/Digital
Response Device independently, then the Agreement shall remain in effect for a
period of sixty (60) days, during which time the parties shall negotiate
reasonable terms of a license of the Digital Response Technology to allow for
Ostex's continued commercialization of the Device. Without limiting the
generality of the foregoing, a "material breach" or "failure to perform" shall
include without limitation, any material failure to remit payments, or failure
to comply with any financial reporting requirement, or material failure to
maintain Ostex's rights pursuant to the WRF/Ostex Exclusive License Agreement.
11.4 TERMINATION FOR TECHNICAL DEFECT.
11.4.1 BY OSTEX. If within ninety (90) days of
the Effective Date, Ostex determines that a material technical deficiency
exists in the Digital Response Technology which is likely to prevent Metrika
from completing development of an NTx/Digital Response Device which meets the
Product Specifications described in ATTACHMENT 7.3.5 within the time period set
out in SECTION 11.2(A) above, Ostex shall provide a notice thereof to Metrika
which describes in detail said purported deficiency and the impact thereof on
the specifications and/or time frame for development. Upon receipt of such
notice, Metrika shall conduct a thorough review of the subject matter of said
notice, provide to Ostex a detailed report of how Metrika plans to resolve the
issues raised and to meet the relevant specifications and/or time frame, and
meet with Ostex to review said report. If Metrika fails to provide said report
within fifteen (15) business days following receipt of such notice, or Ostex
does not approve such report, Ostex may within ten business days following the
final due date of such report, terminate this Agreement upon ten (10) days
written notice without liability of any sort, PROVIDED, that if Metrika elects
within such ten (10) day notice period to proceed with the commercialization of
the NTx/Digital Response Device independently, then the Agreement shall remain
in effect for a period of sixty (60) days, during which time the parties shall
negotiate reasonable terms of a license of the NTx Assay Technology to allow for
Metrika's continued commercialization of the Device.
11.4.2 BY METRIKA. If within ninety (90) days
of the Effective Date, Metrika determines that a material technical
deficiency exists in the NTx Assay Technology or Critical Reagents which is
likely to prevent Metrika from completing development of an NTx/Digital Response
Device which meets the Product Specifications described in ATTACHMENT 7.3.5
within the time period set out in SECTION 11.2(A) above, Metrika shall provide a
notice thereof to Ostex which describes in detail said purported deficiency and
the impact thereof on the specifications and/or time frame for development. Upon
receipt of such notice, Ostex shall conduct a thorough review of the subject
matter of said notice, provide to Metrika a detailed report of how Ostex plans
to resolve the issues raised and to meet the relevant specifications and/or time
frame, and meet with Metrika to review said report. If Ostex fails to provide
said report within fifteen (15) business days following receipt of such notice,
or if Metrika does not approve such report, Metrika may within ten business days
following the final due date of such
<PAGE>
report, terminate this Agreement upon ten (20) days written notice without
liability of any sort, PROVIDED, that if Ostex elects within such ten (10) day
notice period to proceed with the commercialization of the NTx/Digital Response
Device independently, then the Agreement shall remain in effect for a period of
sixty (60) days, during which time the parties shall negotiate the terms of a
license of the Digital Response Technology to allow for Ostex's continued
commercialization of the Device.
11.5 BANKRUPTCY OF A PARTY.
11.5.1 OSTEX BANKRUPTCY. All rights and licenses
granted under or pursuant to this Agreement by Ostex to Metrika are, and
shall otherwise be deemed to be, for purpose of Section 365(n) of Title 11, U.S.
Code (the "Bankruptcy Code"), licenses of rights to "intellectual property" as
defined under Section 101(60) of the Bankruptcy Code. The parties agree that
Metrika, as a licensee of such rights under this Agreement, shall retain and may
fully exercise all of its rights and elections under the Bankruptcy Code.
11.5.2 METRIKA BANKRUPTCY. All rights and
licenses granted under or pursuant to this Agreement by Metrika to Ostex
are, and shall otherwise be deemed to be, for purpose of Section 365(n) of Title
11, U.S. Code (the "Bankruptcy Code"), licenses of rights to "intellectual
property" as defined under Section 101(60) of the Bankruptcy Code. The parties
agree that Ostex, as a licensee of such rights under this Agreement, shall
retain and may fully exercise all of its rights and elections under the
Bankruptcy Code.
11.6 MAXIMUM TERM. Notwithstanding any provision of this
Agreement to the contrary, the license granted with respect to the Ostex Patent
Rights under SECTION 2 above shall terminate upon expiration of the last
remaining Ostex Patent Right covering the NTx/Digital Response Device. Upon such
expiration, Metrika shall be deemed to have a perpetual, royalty free license to
manufacture, make, have manufactured or made, use, market, sell, and distribute
NTx/Digital Response Devices within the Territory for any application.
11.7 RIGHTS AND DUTIES UPON TERMINATION.
11.7.1 PAYMENTS. Upon termination of this
Agreement, each party shall pay to the other all payments that are due and
have accrued and are outstanding as of the date of termination.
11.7.2 RETURN OF MATERIALS. Except to the extent
such information is retained by a party pursuant to a license under SECTION
11.2, 11.3 or 11.4 above, within thirty (30) days following termination of this
Agreement, each party having possession of or control over any Confidential
Information of the other party shall return to such other party all written and
otherwise recorded or stored matter containing such Confidential Information,
including all original matter and all copies thereof; provided, however, that
each party's legal department or outside counsel may retain one copy of the
Confidential Information in its confidentially maintained files, solely for the
purpose of identifying information to be protected pursuant to any applicable
non-disclosure obligation.
<PAGE>
11.7.3 NTX/DIGITAL RESPONSE DEVICES REMAINING.
Upon termination of this Agreement, Metrika shall have the right to sell
NTx/Digital Response Devices then remaining in its possession or to be
manufactured using Critical Reagents then held in inventory, within a reasonable
time after termination hereof; provided, however, that all such Sales shall be
subject to the royalty provisions of this Agreement, notwithstanding
termination. Alternatively, Metrika may return Critical Reagents remaining in
inventory and in good condition to Ostex for a refund of the original transfer
price (or for credit toward any amounts due).
11.7.4 SURVIVAL OF TERMS. Notwithstanding any
other provision herein to the contrary, SECTIONS 3.4, 7.3.5, 7.7-7.8, 8-12,
15.4, 15.5, and 16-27 of this Agreement shall survive any termination or
expiration hereof.
11.7.5 EFFECT OF DISPUTED BREACH. In the event
of any disputed breach under this Agreement, running of the time period in
which a party must cure a breach of this Agreement shall be suspended as to the
matter of the dispute pending an arbitration decision that a breach has in fact
occurred; PROVIDED that during such suspension, one hundred fifty percent (150%)
of any amount in dispute shall be placed into an interest-bearing escrow
account, and upon resolution of the dispute, the substantially prevailing party
shall be entitled to be paid (1) the disputed amount, plus (2) interest thereon
during the suspension at the rate of ten percent (10%) per annum, plus (3) its
attorneys' fees relating to the dispute.
12. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
12.1 BY OSTEX. Ostex represents and warrants to Metrika
as follows:
12.1.1 ORGANIZATION AND AUTHORITY. As of the
Effective Date of the Agreement, Ostex is a corporation duly organized,
validly existing and in good standing under the laws of the State of Washington,
USA, has all requisite corporate power and authority to carry on its business
and perform its obligations hereunder, and is duly qualified to do business in
any of those jurisdictions in the United States of America where failure to
qualify could have a material adverse effect on its ability to perform its
obligations hereunder. The execution and delivery of this Agreement by Ostex,
and the performance of the obligations of Ostex contemplated hereby, have been
duly and validly authorized by all necessary legal action on its part, and this
Agreement is legal, valid and binding against Ostex in accordance with its
terms. Except as have been or will be obtained by Ostex, no permit, consent,
approval or authorization of, or declaration to or filing with, any person,
party or governmental or regulatory authority of the United States is required
in connection with the delivery, consummation and/or performance by Ostex of
this Agreement.
12.1.2 OSTEX PATENT RIGHTS AND OSTEX KNOW-HOW.
As of the Effective Date of the Agreement, and except as described in
ATTACHMENT 12.1.2 to this Agreement, (a) Ostex has sole and exclusive rights to
the Ostex Patent Rights and all rights necessary to license and convey Ostex
Intellectual Property Rights to Metrika to the extent required hereunder; (b)
the Ostex Patent Rights, to the best knowledge of Ostex are valid and
enforceable, and do not infringe on the proprietary rights of any third party;
(c) Ostex is not aware of any "prior art" or other claim which would invalidate
any part or all of the Ostex Patent Rights, or any claim that
<PAGE>
Ostex does not have all rights to use and permit Metrika to use the Ostex
Know-How for all purposes permitted by this Agreement; (d) Ostex is not aware of
any unexpired patent or pending patent application of a party not a party to
this agreement which has claims which cover any part of the Ostex Know-How or
Ostex Patent Rights; (e) Ostex has taken all necessary actions to maintain all
Ostex Patent Rights in full force and effect, and (f) Ostex agrees to maintain
the WRF/Ostex Exclusive License Agreement in full force and effect throughout
the term of this Agreement.
12.1.3 NO DEFAULT. The execution, delivery and
performance of this Agreement by Ostex does not and shall not conflict
with, result in a breach of, or constitute a default under (with or without the
giving of notice, or the passage of time, or both), any agreement or instrument
to which Ostex is a party or by which it is bound.
12.1.4 OSTEX'S DISCLAIMER OF OTHER
WARRANTIES. Ostex disclaims all
implied warranties, including without limitation any warranty of
merchantability or fitness for a particular purpose.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, OSTEX MAKES NO REPRESENTATIONS
AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING NO
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12.2 BY METRIKA. Metrika represents and warrants to Ostex
as follows:
12.2.1 ORGANIZATION AND AUTHORITY. As of the
Effective Date of the Agreement, Metrika is duly organized, validly
existing and in good standing under the laws of California, USA and has all
requisite power and authority to carry on its business and the performance of
its obligations hereunder, and is duly qualified to do business in any of those
jurisdictions where failure to qualify could have a material adverse effect on
its ability to perform its obligations hereunder. The execution and delivery of
this Agreement by Metrika, and the performance of the obligations contemplated
hereby, have been duly and validly authorized by all necessary legal action on
its part, and this Agreement is legal, valid and binding against Metrika in
accordance with its terms. Except as have been or will be obtained by Metrika,
no permit, consent, approval or authorization of, or declaration to or filing
with, any person, party or governmental or regulatory authority having
jurisdiction is required in connection with the delivery, consummation and/or
performance of this Agreement.
12.2.2 METRIKA PATENT RIGHTS AND METRIKA
KNOW-HOW. As of the Effective Date of the Agreement, and except as
described in ATTACHMENT 12.2.2 to this Agreement, (a) Metrika has sole and
exclusive rights to the Metrika Patent Rights and all rights necessary to
license and convey Metrika Know-How to Ostex to the extent required hereunder;
(b) the Metrika Patent Rights, to the best knowledge of Metrika are valid and
enforceable, and do not infringe on the proprietary rights of any third party;
(c) Metrika is not aware of any "prior
<PAGE>
art" or other claim which would invalidate any part or all of the Metrika Patent
Rights; or any claim that Metrika does not have all rights to use and permit
Ostex to use the Metrika Know-How for all purposes permitted by this Agreement;
(d) Metrika is not aware of any unexpired patent or pending patent application
of a party not a party to this Agreement which has claims which cover any part
of the Metrika Know-How or Metrika Patent Rights; and (e) Metrika has taken all
necessary actions to maintain all Metrika Patent Rights in full force and
effect.
12.2.3 NO DEFAULT. The execution, delivery and
performance of this Agreement by Metrika does not and shall not conflict
with, result in a breach of, or constitute a default under (with or without the
giving of notice, or the passage of time, or both), any agreement or instrument
to which Metrika is a party or by which it is bound.
12.2.4 METRIKA'S DISCLAIMER OF OTHER
WARRANTIES. Metrika disclaims all implied warranties, including without
limitation any warranty of merchantability or fitness for a particular purpose.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, METRIKA MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING NO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE
12.3 U.S. FOREIGN CORRUPT PRACTICES ACT. Each party shall
indemnify, defend and hold the other party, its subsidiaries and Affiliates, and
the directors, officers, employees and agents of any of them, harmless from and
against all and any claims, proceedings, losses, fines, expenses (including
without limitation reasonable attorneys fees and expenses) and penalties
incurred by said party arising out of any Prohibited Practice committed by said
party or any of its officers, directors, shareholders, employees, or agents.
For purposes of this SECTION 12, the following shall be deemed a
"Prohibited Practice": the offer, payment, promise to pay, or authorization of
the paying of any money, or the offer, giving, promise to give or authorization
of the giving of anything of value to any officer or employee of any government
or any department, agency or instrumentality thereof, or any person acting in an
official capacity for or on behalf of any such government, department, agency or
instrumentality, or any political party or official thereof, or any candidate
for political office, or any intermediary for any such persons or party, in each
case for purposes of (a) influencing any act or decision of any such persons or
party in their or its official capacity, or (b) inducing any such person or
party to do or omit to do any act in violation of the lawful duty of such person
or party, or (c) inducing any such person or party to use their or its influence
with any government or instrumentality thereof to affect or influence any act or
decision of any such government or instrumentality, in each case (a), (b) and
(c) in order to assist the applicable party hereto in obtaining or retaining
business for, or with, or directing business to, any person or entity in
violation of the U.S. Foreign Corrupt Practices Act.
12.4 GOVERNMENTAL COMPLIANCE. Each party shall obtain and
maintain all required licenses, permits, certificates and authorizations needed
to perform its obligations under this Agreement, including without limitation
those required for said party's appointment as sublicensee, for the
effectiveness of this Agreement in all jurisdictions where said party operates,
for the import and for the export of the NTx/Digital Response Devices, and for
the marketing, distribution and Sale of the NTx/Digital Response Devices.
Metrika will hold and solely own all regulatory approvals for the NTx/Digital
Response Device.
<PAGE>
13. THIRD-PARTY INFRINGEMENT.
13.1 NOTICE OF THIRD-PARTY INFRINGEMENT. If, during the term
of this Agreement, either party becomes aware that one or more third parties are
infringing or are threatening to infringe the Ostex Patent Rights or the Metrika
Patent Rights, said party (the "Notifying Party") shall immediately report such
information to the Product Management Committee and shall provide in such report
all details in said party's knowledge or possession concerning the kind and
character of the infringement and any other pertinent information that said
party may have. At such time as the Product Management Committee shall be
satisfied that there exists a reasonable likelihood of infringement of any of
such Patent Rights implicated by the NTx/Digital Response Device by the
manufacture, use or sale of diagnostic devices based upon the detection of
collagen metabolites as measurements of bone resorption (an "Infringement"), the
Product Management Committee shall take such steps, including notification, to
place the putative infringer on notice of the claims of the party owning or
controlling the infringed patents (the "Aggrieved Party"). The form of the
notification and the manner and nature of any communications between the Product
Management Committee and the alleged infringer shall be determined by the
Product Management Committee.
13.2 RIGHT TO SUE. If, sixty (60) days after receipt of notice
of a perceived third-party Infringement, such third-party Infringement continues
and the Product Management Committee has not decided that the parties will
commence legal action or presented to the Aggrieved Party a plan acceptable to
the Aggrieved Party to enjoin or otherwise to resolve such Infringement, then
the Aggrieved Party shall be entitled, at its own expense and for its own
benefit, to commence an action, and in such event the Aggrieved Party shall be
entitled to retain all of the benefits of such action. In the event that the
Product Management Committee does decide to initiate such action on behalf of
the parties, the parties shall jointly pursue such action and shall share the
cost of such action, including legal cost and any damages awarded therein. Each
party shall assist the other party and reasonably cooperate in any such action
at said party's request.
14. DEFENSE OF THIRD-PARTY CLAIMS.
14.1 METRIKA DEFENSE OF THIRD-PARTY CLAIMS AND INDEMNITY.
Except for matters disclosed on Attachment 12.2.2 hereto, to the extent that any
claim, suit, or other legal proceeding is threatened or commenced against Ostex
or WRF that is founded, in whole or in part, on an allegation that the Digital
Response Device necessarily infringes any trade secret, patent, or copyright
belonging to a third party, Ostex will give Metrika prompt written notice of
such legal proceeding and Metrika may elect to assume sole control of the
defense to or settlement of such dispute. Ostex shall cooperate fully with
Metrika in any defense, settlement
<PAGE>
or compromise made by Metrika. Ostex shall not enter into any settlement
agreement or other voluntary resolution of any such claim, suit, or other legal
proceeding without obtaining Metrika's prior written consent thereto. If Ostex
has complied fully with the procedures set forth in this SECTION 14.1, Metrika
will indemnify and hold Ostex harmless from and against any loss, cost, damage,
or other expenses incurred by Ostex as a result of such claim, suit or legal
proceeding. If a final injunction is obtained against Ostex's use of the
NTx/Digital Response Devices, or if in the opinion of Metrika the subject
NTx/Digital Response Devices are likely to become the subject of a successful
claim of infringement, Metrika may, at its option and expense, (i) procure for
Ostex the right to continue its performance under this Agreement, (ii) replace
or modify the NTx/Digital Response Devices so that they become non-infringing,
or (iii) if neither (i) or (ii) are reasonably available, terminate this
Agreement without further obligation or liability. This indemnification
provision shall be null and void and Metrika shall have no liability to the
extent that any claim is based on any use of the NTx Assay Technology, Critical
Reagents or Ostex Intellectual Property or if the NTx/Digital Response Devices
has been modified or tampered with in any way without the express written
consent of Metrika, or if Ostex has any interest in the claim, suit or other
legal proceeding, or any license to any right so asserted.
14.2 OSTEX DEFENSE OF THIRD-PARTY CLAIMS AND INDEMNITY. Except
for matters disclosed on Attachment 12.1.2 hereto, to the extent that any claim,
suit, or other legal proceeding is threatened or commenced against Metrika that
is founded, in whole or in part, on an allegation that the NTx Assay Technology,
Critical Reagents or Ostex Intellectual Property as used in the NTx/Digital
Response Device necessarily infringes any trade secret, patent, or copyright
belonging to a third party, Metrika will give Ostex prompt written notice of
such legal proceeding and Ostex may elect to assume sole control of the defense
to or settlement of such dispute. Metrika shall cooperate fully with Ostex in
any defense, settlement or compromise made by Ostex. Metrika shall not enter
into any settlement agreement or other voluntary resolution of any such claim,
suit, or other legal proceeding without obtaining Ostex's prior written consent
thereto. If Metrika has complied fully with the procedures set forth in this
SECTION 14.2, Ostex will indemnify and hold Metrika harmless from and against
any loss, cost, damage, or other expenses incurred by Metrika as a result of
such claim, suit or legal proceeding. If a final injunction is obtained against
Metrika's use of the NTx Assay Technology, Critical Reagents or Ostex
Intellectual Property as used in the NTx/Digital Response Devices, or if in the
opinion of Ostex the NTx Assay Technology, Critical Reagents or Ostex
Intellectual Property are likely to become the subject of a successful claim of
infringement, Ostex may, at its option and expense, (i) procure for Metrika the
right to continue distributing and/or using the NTx Assay Technology, Critical
Reagents or Ostex Intellectual Property in the NTx/Digital Response Device, (ii)
replace or modify the NTx Assay Technology, Critical Reagents or Ostex
Intellectual Property so that it (they) becomes non-infringing, or (iii) if
neither (i) or (ii) are reasonably available, accept return of the NTx Assay
Technology, Critical Reagents or Ostex Intellectual Property used in the
NTx/Digital Response Devices held by Metrika and its distributors in inventory,
and terminate this Agreement without further obligation or liability. This
indemnification provision shall be null and void and Ostex shall have no
liability to the extent that NTx Assay Technology, Critical Reagents or Ostex
Intellectual Property have been modified or tampered with in any way without the
express written consent of Ostex, or if Metrika has any interest in the claim,
suit or other legal proceeding, or any license to any right so asserted.
<PAGE>
14.3 SHARED DEFENSE OF THIRD-PARTY CLAIMS. With respect to any
claim, suit or other legal proceeding threatened or commenced against Metrika or
Ostex that is founded, in whole or in part, on an allegation that the
NTx/Digital Response Device infringes any trade secret, patent or copyright
belonging to a third party, which claim, suit or other legal proceeding is not
covered by the provisions of SECTION 14.1 or 14.2 above, the parties agree to
share control of the defense or settlement of such claim and shall share equally
all costs and liabilities resulting from such claim, suit or other legal
proceeding.
15. USE OF TRADEMARKS AND TRADE NAMES.
15.1 RESTRICTED RIGHTS TO USE. No provision of this Agreement
shall be interpreted or construed as conferring upon either party any right to
use in labeling, advertising, marketing, publicizing or otherwise promoting
NTx/Digital Response Devices, any name, trade name, trademark, or other
designation (or derivation thereof) of the other party hereto or WRF or the
University of Washington, except as expressly provided under this SECTION 15.
15.2 USE OF NAMES AND MARKS IN LABELING. As a part of the
marketing plan prepared pursuant to SECTION 6.2 hereof, the parties shall agree
upon appropriate trademark(s) to be used in connection with NTx/Digital Response
Devices marketed, promoted, sold, and/or distributed under this Agreement. In
the absence of such agreement, the parties agree that Metrika shall affix to the
outer packaging of, and shall include on the package insert for, any NTx/Digital
Response Devices marketed, promoted, sold, and/or distributed by Metrika under
this Agreement, and in addition to its own trademarks and names, one or more
labels displaying with equal prominence to said Metrika trademarks or names, the
statement "An OsteomarkAE Assay" or such other trademark or statement as Ostex
shall reasonably request. Ostex shall also have the right to review and approve
all claims relating to the intended use of NTx/Digital Response Devices
contained in package inserts and other promotional materials, which approval
shall not be unreasonably withheld. Each party hereby grants to the other party
a non-transferable, non-exclusive license, concurrent with the term of this
Agreement, to use such statement and/or trademark accordingly and in
substantially the same manner as used by its owner; provided, however, that each
such use of such statement and/or trademark be accompanied by a printed notice
identifying the owner as the owner thereof. Neither party shall use any
trademark of the other party with respect to products not covered by this
Agreement. In the event that particular NTx/Digital Response Devices do not meet
the specifications or quality standards required under SECTIONS 3.4 or 7.3.4
above, Ostex may cause Metrika to remove all trademarks from such NTx/Digital
Response Devices and shall have the right to cancel the foregoing grant of
license to use such trademarks, unless the other party promptly meets such
specifications or quality standards. Each party shall have the right to receive
and approve the use of its marks in any proposed product literature, advertising
material or material for publication. In all such materials unless otherwise
specifically agreed in advance in writing, the immunoassay performed by the
NTx/Digital Response Devices shall be identified as "An OsteomarkAE Assay."
<PAGE>
15.3 TRADEMARK REGISTRATION. Ostex and Metrika shall each be
responsible for the registration, maintenance and enforcement of their
respective names, trade names, and trademarks; provided, however, that each
party shall aid the other in the enforcement of that party's rights by
monitoring for, and notifying said party of, any unauthorized use of any of said
party's trademarks. Each party shall from time to time, and in any event upon
the issuance of additional registrations, modify its use of trademarks to
incorporate proper notice of registration and other claims of right, in
accordance with the laws and customs of the various countries in which it
operates pursuant to this Agreement.
15.4 OSTEX REPRESENTATIONS AND WARRANTIES. Ostex represents
and warrants, as of the date of this Agreement, that: (a) Ostex is the owner and
registrant of the trademarks issued registrations as indicated by ATTACHMENT
15.4; (b) Ostex is named as applicant in those applications indicated by
ATTACHMENT 15.4 as pending; and (c) to the best of its knowledge, none of the
Ostex trademarks infringes upon the trademark, trade name, or other proprietary
rights of a third party. In the event that any action or proceeding is initiated
against Ostex, Metrika, or any other licensee or distributor of either party in
any country alleging that the trademark "Osteomark" infringes the trademark
rights of the third party initiating such action or proceeding, Metrika may
continue to market NTx/Digital Response Devices within such country without the
trademark "Osteomark" affixed thereto (but with such other trademark as Ostex
may reasonably specify) pending resolution of the dispute as to trademark
rights.
15.5 METRIKA REPRESENTATIONS AND WARRANTIES. Metrika
represents and warrants, as of the date of this Agreement, that: (a) Metrika is
the owner and registrant of the trademarks issued registrations as indicated by
ATTACHMENT 15.5; (b) Metrika is named as applicant in those applications
indicated by ATTACHMENT 15.5 as pending; and (c) to the best of its knowledge,
none of the Metrika trademarks infringes upon the trademark, trade name, or
other proprietary rights of an third party. In the event that any action or
proceeding is initiated against Metrika, Ostex, or any other licensee or
distributor of Metrika in any country alleging that any Metrika trademark
infringes the trademark rights of the third party initiating such action or
proceeding, Ostex may continue to market NTx/Digital Response Devices within
such country without said Metrika trademark affixed thereto (but with such other
trademark as Metrika may reasonably specify) pending resolution of the dispute
as to trademark rights.
16. ASSIGNMENT AND SUBLICENSE.
16.1 BY METRIKA. Except as specifically permitted by this
Agreement, Metrika shall not assign, sublicense, delegate, or in any other
manner transfer any of its rights, privileges, obligations or duties under this
Agreement to any third party without the prior written consent of Ostex, which
consent may be withheld in Ostex's sole and absolute discretion, provided that
this provision shall not apply to any merger, consolidation, or sale of
substantially all of the assets of Metrika, or any third-party acquisition of a
majority of the business interests or voting shares of Metrika, provided that
the surviving party shall within a reasonable period following the final closing
of such transaction, expressly agree in writing to be bound by this agreement.
Any attempt by Metrika to assign, sublicense, delegate or otherwise transfer any
right, privilege, obligation or duty under this Agreement other than in
accordance with this SECTION 16 shall be void and shall, at the option of Ostex,
be cause for immediate termination of this Agreement and all licenses granted
hereunder.
<PAGE>
16.2 BY OSTEX. Except as specifically permitted by this
Agreement, Ostex shall not assign, sublicense, delegate, or in any other manner
transfer any of its rights, privileges, obligations or duties under this
Agreement to any third party without the prior written consent of Metrika, which
consent may be withheld in Metrika's sole and absolute discretion, provided that
this provision shall not apply to any merger, consolidation, or sale of
substantially all of the assets of Ostex, or any third-party acquisition of a
majority of the business interests or voting shares of Ostex, provided that the
surviving party shall within a reasonable period following the final closing of
such transaction, expressly agree in writing to be bound by this agreement.
Any attempt by Ostex to assign, sublicense, delegate or otherwise transfer any
right, privilege, obligation or duty under this Agreement other than in
accordance with this SECTION 16 shall be void and shall, at the option of
Metrika, be cause for immediate termination of this Agreement and all licenses
granted hereunder.
17. ARBITRATION.
17.1 AGREEMENT TO SETTLE DISPUTES BY ARBITRATION. At the
request through notice of either Ostex or Metrika, any controversy or claim
arising between the parties and related to or arising out of the construction,
interpretation, or enforcement of any term or condition of this Agreement or any
transaction hereunder (including the decision to enter into this Agreement),
which controversy or claim cannot first be settled amicably between the parties
(including without limitation through utilization of third-party mediation
agreed to by both parties), shall be submitted to arbitration. Such arbitration
shall be conducted in Seattle, Washington, if initiated by Metrika, or in San
Francisco, California, if initiated by Ostex, and in either case shall be
conducted in accordance with the applicable Rules of the American Arbitration
Association in effect on the date of such controversy or claim.
17.2 APPOINTMENT OF ARBITRATORS. Within thirty (30) days after
the delivery pursuant to SECTION 17.1 above of a notice of request for
arbitration, Metrika and Ostex shall each appoint one independent person as an
arbitrator to hear and determine the dispute. The two persons so chosen shall by
agreement select a third, impartial arbitrator, which selection shall be final
and conclusive upon both parties. Each arbitrator shall be experienced in
international and domestic manufacturing and distribution of products similar to
NTx/Digital Response Devices. If either party fails to designate its arbitrator
within sixty (60) days after the notice of arbitration is received, then the
arbitrator designated by the one party shall act as the sole arbitrator and
shall be deemed to be the single, mutually approved arbitrator to resolve the
dispute.
17.3 ARBITRATORS' POWERS. The arbitrators shall have all the
powers of a State or Federal Court located at the site of the arbitration,
including the power to order specific enforcement of this Agreement and to order
the production of relevant and non-privileged documents by one party for
inspection and duplication by the other party prior to the arbitration hearing;
provided, however, that the arbitrators shall be bound by this Agreement with
regard to the restriction on consequential, incidental, and punitive damages as
set forth in this Agreement.
<PAGE>
17.4 DISCOVERY. The arbitrators prior to the hearing shall
grant discovery pursuant to the intendment of the Federal Rules of Civil
Procedure, and as the arbitrators determine to be appropriate under the
circumstances.
17.5 PROTECTIVE ORDER. In the event of arbitration and at the
request of either Ostex or Metrika, in order to protect Confidential Information
and any other matter that either party would normally not reveal to third
parties, the arbitrators shall enter a protective order in such form as the
parties shall stipulate or as the arbitrators shall determine is suitable. Among
other things, the protective order shall stipulate that the arbitrators
themselves shall receive any information designated by either party as
"confidential" solely for purposes of assessing the facts and law for purposes
of the arbitration, and shall not otherwise use or disclose such matter. At the
request of either party, the protective order shall be entered as an award of
the arbitration panel and shall enable either party to obtain the assistance of
a court of competent jurisdiction to enter equitable decrees or other relief to
enforce the provisions of the order as if it had been entered by that court.
17.6 EFFECT OF DECISION. The decision of the arbitrators shall
state the reason for the award and shall be final, binding and conclusive upon
the parties. The parties shall comply with such decision in good faith as if it
were a final decision of a court. Judgment upon the award shall be entered in
any court of competent jurisdiction. Any award made in connection with any
arbitration shall be made in U.S. Dollars.
17.7 RIGHTS OF THIRD PARTIES. Notwithstanding the agreement to
arbitrate any dispute between Ostex and Metrika, in the event that a controversy
or claim between Ostex and Metrika involves an adjudication of the rights of a
third party, and that third party does not agree to submit to arbitration and
would under Rule 19(a) of the Federal Rules of Civil Procedure, if feasible, be
joined as an indispensable party, then the dispute shall be brought to, and
determined by, a court of the competent jurisdiction.
17.8 INTERIM RELIEF. Upon the application of either party to
this Agreement, and whether or not an arbitration, mediation or attempt to
settle amicably has yet been initiated, all courts having jurisdiction over one
or more of the parties are authorized to: (i) issue and enforce in any lawful
manner such temporary restraining orders, preliminary injunctions and other
interim measures of relief as may be necessary to prevent harm to a party's
interests or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (ii) enter and enforce
in any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interests or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement.
18. ATTACHMENTS. The Attachments listed below are incorporated
by reference into this Agreement and shall for all purposes be deemed part
hereof:
Attachment 3.4 Ostex Critical Reagent Specifications
Attachment 7.3.5 Product Specifications - NTx/Digital Response Device
<PAGE>
Attachment 12.1.2 Ostex Patent Rights and Know-How - Exceptions to Warranty
Attachment 12.2.2 Metrika Patent Rights and Know-How - Exceptions to Warranty
Attachment 15.4 Ostex Trademark Filings
Attachment 15.5 Metrika Trademark Filings
19. PUBLICITY. No party shall announce or publicize this Agreement or
any terms thereof without the advance written consent of the others (which
approval shall not be unreasonably withheld), provided that either party may
disclose the existence of this Agreement and such terms of this Agreement as may
be required by law or by regulations of any governmental agency.
20. RESPONSIBILITY FOR CLAIMS. In order to distribute between
themselves the responsibility for the handling and expense of claims
arising out of the manufacture, distribution, Sale or use of NTx/Digital
Response Devices, the parties agree as follows:
20.1 OSTEX LIABILITY. Ostex shall be liable for and shall
indemnify and hold Metrika harmless against any liability or damages from any
claims, suits, proceedings, demands, recoveries or expenses in connection with
(i) any Critical Reagents or NTx Assay Technology licensed or sold by Ostex to
Metrika or its designated manufacturers pursuant to this Agreement arising out
of, based on, or caused by product claims or selling efforts whether written or
oral, made or alleged to be made, by Ostex in its advertising, publicity,
promotion, or Sale of the Critical Reagents or NTx Assay Technology where such
product claims or selling efforts were not approved by Metrika, including
without limitation expenses of total or partial product recalls as described in
SECTION 7.8 hereof, or (ii) any breach by Ostex of any of its representations or
warranties contained herein or (iii) any of its negligent or intentionally
wrongful acts or omissions. Metrika shall promptly notify Ostex of any such
demand or claim which comes to its attention.
20.2 METRIKA LIABILITY. Metrika shall be liable for and shall
indemnify and hold Ostex harmless against any liability or damages from any
claims, suits, proceedings, demands, recoveries or expenses in connection with
(i) any NTx/Digital Response Device sold by Metrika to Ostex pursuant to this
Agreement arising out of, based on, or caused by product claims or selling
efforts whether written or oral, made or alleged to be made, by Metrika in its
advertising, publicity, promotion, or Sale of the NTx/Digital Response Devices
where such product claims or selling efforts were not approved by Ostex,
including without limitation expenses of total or partial product recalls as
described in SECTION 7.8 hereof, or (ii) any breach by Metrika of any of its
representations or warranties contained herein or (iii) any of its negligent or
willful acts or omissions. Ostex shall promptly notify Metrika of any such
demand or claim which comes to its attention.
20.3 CONSEQUENTIAL, INCIDENTAL, AND PUNITIVE DAMAGES.
Notwithstanding any other provision of this Agreement, neither party shall be
liable to the other party for any special, consequential, incidental or punitive
damages that may arise out of this Agreement (including but not limited to
damages for loss of sales, potential sales, profits or business), other than
pursuant to its obligations under SECTIONS 20.1 and 20.2 above to indemnify the
other party where such other party has incurred liability to a third-party
claimant for special, incidental, consequential or punitive damages, regardless
of whether such other party has been informed of the possibility that such
damages may occur.
<PAGE>
21. NOTICE. Any notice given in regard to this Agreement
shall be given in writing and shall be delivered personally, or shall be
sent by first class mail or registered certified mail, postage, and charges
prepaid, to:
if to Ostex:
Ostex International, Inc.
2203 Airport Way South
Suite 400
Seattle, Washington 98134
Attention: President
Copy to: Cairncross & Hempelmann, P.S.
701 Fifth Avenue, 70th Floor
Seattle, Washington 98101-7016
Attn: W. Frank Taylor
if to Metrika:
Metrika Laboratories, Inc.
510 Oakmead Parkway
Sunnyvale, California 94086
Attention: CEO
Copy to: Wilson, Sonsini, Goodrich and Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Attn: Kenneth A. Clark
Any notice so given shall be effective upon the date of actual receipt by the
addressee as evidenced by return receipt or other written confirmation. Either
party may by advance notice given pursuant to this SECTION 21 designate a
substitute address for receipt of future notices.
22. GOVERNING LAW. All claims or controversies asserted by Ostex
against Metrika shall be construed and enforced in accordance with the laws of
California. Any judicial action by Ostex relating to the relationship between
the parties pursuant to this Agreement, or goods purchased or licensed hereunder
(together with any counterclaims asserted by Metrika), shall be brought and
tried in the State or Federal Courts located in California. All claims or
controversies asserted by Metrika against Ostex or WRF shall be construed and
enforced in accordance with the laws of the State of Washington. Any judicial
action by Metrika relating to the relationship between the parties pursuant to
this Agreement, or goods purchased or licensed hereunder (together with any
counterclaims asserted by Ostex or WRF), shall be brought and tried in the State
or Federal Courts located in the State of Washington. Notwithstanding the
foregoing, interpretation and enforcement of the provisions of SECTION 17 shall
be governed by and construed in accordance with the Federal Arbitration Act.
<PAGE>
23. INTEGRATION. It is the desire and intent of the parties to provide
certainty as to their future rights and undertakings herein. The parties in this
Agreement have incorporated all representations, warranties, covenants,
commitments and understandings on which they have relied in entering into this
Agreement, and, neither party makes any covenant or other commitment to the
other concerning its future action. Accordingly, this Agreement (i) constitutes
the entire agreement and understanding between the parties and there are no
promises, representations, conditions, provisions or terms related thereto other
than those forth in this Agreement, and (ii) supersedes all previous
undertakings, agreements and representation between the parties, written or
oral, with respect to the subject matter hereof, including the Development
Agreement. No modification of, addition to, or waiver of any provisions of this
Agreement shall be binding upon either party hereto unless the same shall be in
writing duly executed by a duly authorized representative of both parties
hereto.
24. MODIFICATION. No modification to this Agreement shall be
enforceable unless made in writing and signed by an authorized
representative of each party.
25. SEVERABILITY. In the event that any provision of this Agreement is
determined to be invalid or unenforceable for any reason, such provision shall
be deemed inoperative only to the extent that it violates or conflicts with law
or public policy and shall be deemed modified to the extent necessary to conform
thereto, and all other provisions hereof shall remain in full force and effect.
26. WAIVER. No express or implied waiver by either party of any right
or remedy with respect to a default by the other party under any provision of
this Agreement shall be deemed, interpreted or construed as a waiver of any
right or remedy with respect to any other default under the same or any other
provision hereof.
27. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties' respective successors
and assigns, subject to the restrictions on assignment set forth in SECTION 16
above.
28. NON-EXCLUSIVE RELATIONSHIP. The parties agree that any license
contained herein is on a non-exclusive basis, and that each party is free to
enter into marketing, licensing or development agreements or relationships with
third parties for the development and commercialization of a device similar to
the NTx/Digital Response Device, provided that nothing contained herein shall
permit either party to take such actions in violation of either party's Patent
Rights or in violation of the confidentiality provisions set forth herein.
<PAGE>
29. STANDSTILL PROVISION. Other than as provided for in this Agreement,
during the Term of this Agreement, Metrika shall not make any offer for, and
shall not actually acquire any legal or beneficial interest in the common stock
or other securities of Ostex without the prior written consent of Ostex's Board
of Directors; and Ostex shall not make any offer for, and shall not actually
acquire any legal or beneficial interest in the common stock or other securities
of Metrika, other than with respect to such interests already held by Ostex or
its Affiliates prior to the date hereof, without the prior written consent of
Metrika's Board of Directors. The parties each agree that any violation of this
provision would cause irreparable harm to the other party. The parties each
agree that the other party shall be entitled to all equitable remedies available
to it to prevent violation of this provision, as well as all other legal
remedies, and if successful in any claim, may recover from the violating party
all reasonable costs and attorneys fees expended by it in seeking such remedy.
30. INDEPENDENT CONTRACTOR. The relationship of Metrika and Ostex
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to (i) give either party the
power to direct or control the day-to-day activities of the other, (ii)
constitute the parties as partners, joint venturers, co-owners or otherwise as
participates in a joint or common undertaking, or (iii) allow a party to create
or assume any obligation on behalf of the other party for any purpose
whatsoever.
IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement the day and year last written below.
DATED AND EFFECTIVE as of the date first written above.
OSTEX INTERNATIONAL, INC.
By /S/ JEFFREY J. MILLER
------------------------------------
Jeffrey J. Miller, Ph.D.,
Senior Vice President, Corporate Development
METRIKA LABORATORIES, INC.
By /S/ MICHAEL P. ALLEN
------------------------------------
Michael P. Allen
President & Chief Executive Officer
<PAGE>
NOTE: CONFIDENTIAL TREATMENT REQUESTED.
ATTACHMENT 3.4
OSTEX CRITICAL REAGENT SPECIFICATIONS
OSTEX INTERNATIONAL, INC.
TITLE Lot No. Doc No. Rev. Page
Ion Exchange 1H11 2020 B 16 of 16
Purified
- -----------------------------------------------------------------------
7.0 Quality Control Testing
7.1 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- -----------------------------------------------------------------------
Test Acceptance Pass/ Initials/
Parameter Method Criteria Results Fail Date
- -----------------------------------------------------------------------
7.2 XXXXX 0004 XXXXX _____ ____ ____
7.3 XXXXX 0006 XXXXX _____ ____ ____
7.4 XXXXX XXX XXXXX _____ ____ ____
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXX results
- -------------------------------------------------------------------------
Record reviewed by_________________________ ___________________
Quality Control Date
Record reviewed by_________________________ ___________________
Quality Assurance Date
Released _________________________________ Not Released _________
<PAGE>
Note: Confidential Treatment Requested.
<TABLE>
<CAPTION>
OSTEX INTERNATIONAL, INC.
TITLE Lot No. Doc No. Rev. Page
NTx Concentrate 2007 G 23 of 24
- -----------------------------------------------------------------------
-------ATTACHMENT 3-------
QC DATA SHEET
<S> <C> <C> <C> <C> <C> <C>
Volume NTx nromal NTx Total Protein Protein Specific Activity
(ml) BCE step 3.1 nanamol (ml) step 8.3 Total mg - (nmol/ml)/
(ml) protein (mg/ml mg/mlprotein
nmol/ml BCE Vol (ml))
---- ------ -------- ----- -------- ----------
7.3.4 XXXX Step 7.3.3
7.10 XXXX Step 7.9
7.22 XXXX Step 7.20
7.28 XXXX Step 7.27
</TABLE>
Total Nanomole yield = (total nmoles step 7.3.4) x 100=___________%
-----------------------------
(total nmoles step 7.28)
QC materials used
Osteomark kit PN 9006 or 9006 LN _____, clibrator diluent PN 2022 LN____ PBS PN
2003 LN ___. Gold 300 pmol.ml NTx in PBS from PN 4010 LN 336C04
(A) Assay 1 dilution 1_______ (D) Assay 2, Dilution 1______________ (B) Assay 1
dilution 2_______ (E) Assay 2, Dilution 2______________ (C) Avg. of (A) and
(B)_______ (F) Avg. of (D) and (E) ______________ (G) Percent difference of (C)
and (F) ____ (if(C)is greater than
20%, repeat steps 8.1.3 to 8.1.5)
(H) Average (A),(B), (D) and (E)____ (Record (H) in the table above) Note:
Percent difference between x and y =100 (absolute value (x-y)/(average(x,y))
Number of aloquots: _________
Volume of alquots: __________
Total volume to inventory:________
Total nanomoles BCE to Inventory: _________
<PAGE>
NOTE: CONFIDENTIAL TREATMENT REQUESTED.
ATTACHMENT 7.3.5
Product Specifications - NTx/Digital Response Device
Metrika Laboratories, Inc.
- ------------------------------------------------------------------------------
INTRODUCTION
Metrika is developing a rapid, single-use diagnostic product for the Ntx marker
with digital results display. This document serves as the design goals of the
product described. It descibes the intended use of the product, general
attributes, and target performance specifications. It is further understood that
these are product goals and there is no guarantee they can be met. Metrika will
use its commercially reasonable efforts to meet these goals. If any goals are
not met the parties agree to meet to discuss any shortfalls.
PERFORMANCE
In general, the device must provide rapid and accurate clinical results. The
actual performance specification requirements will depend on the assay and its
intended use. The performance requirements below apply to Ntx where indicated.
1.0 TIME TO RESULT
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
2.0 SAMPLE TYPES
XXXXXXX
2.1 SAMPLE STORAGE
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
3.0 SAMPLE VOLUME
The device must provide a valid result independent of sample volume
over the specified volume range.
3.1 MINIMUM SAMPLE VOLUME
Minimum sample volume is define as the smallest sample volume
required to provide a valid result. XXXXXXXXXXXXXXXXXXXXXXXXXXX.
3.2 MAXIMUM SAMPLE VOLUME
The maximum sample volume is defined as the largest sample
volume that can be applied while providing a valid result. XXXXXXXXXXXXXXXXXX.
4.0 DEVICE ORIENTATION
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
<PAGE>
Note: Confidential Treatment Requested.
Metrika Laboratories, Inc.
- -------------------------------------------------------------------------------
5.0 CALIBRATION
There shall be no calibration required by the user. Each device will be
factory calibrated. The calibration must be valid unktil the labeled expiration
date.
6.0 STABILITY
6.1 SHELF LIFE
Shelf life states from when the product is packaged at the
factory and ends on the expiration date. XXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
6.2 OPEN PACKAGE LIFE
XXXXXXXXXXXXXXXXXXXXXXXX. Open package life is the time in
which the device must be used after its environmental seal (package) has been
opened. This minimum open package life will most likely be dependent on
humidity. Accordingly, the labeled open package life must be consistent with the
worse case conditions.
7.0 ENVIRONMENT
7.1 OPERATING CONDITIONS
The product will typically be used in a well lit temperature
regulated indoor environment such as laboratories and domestic homes. XXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
7.1.1 TEMPERATURE
The temperature equilibrated product must operate
over the temperature range of XXXXXXXXXXXXXX with a temperature change no
greater than XXXXX while the assay is in process (consider the situation of the
user holding the device in hand while running the assay). The goal is for an
operating temerature range of XXXXXXXXX.
<PAGE>
Note: Confidential Treatment Requested.
7.1.2 HUMIDITY
The product must operate over a relative humidity
range of XXXX.
7.1.3 AMBIENT LIGHT
The device must not be adversely affected by embient
light. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX.
<PAGE>
Metrika Laboratories, Inc.
- ------------------------------------------------------------------------------
7.2 STORAGE CONDITIONS
The packaged product will typically be storred in stores, in
laboratories, or in home environments free from extremes.
7.2.1 TEMPERATURE
The product must must maintain its shelf lafe
stability claims when stored in its package as specified in paragraph 6.1.
7.2.2 HUMIDITY
The product must maintain its shelf life stablitiy
claims when stored in its in its package as specified
in paragraph 6.1.
8.0 ACCURACY (MAXIMUM ALLOWABLE BIAS FROM REFERENCE)
8.1 Ntx XXX
8.2 Creatinine: XXX
9.0 PRECISION (TOTAL CLINICAL)
9.1 Ntx
Target: XXXXXXX
Acceptance XXXXXXX
9.2 Creatinine
XXXXXXX
10.0 ASSAY RANGE
10.1 Ntx
XXXXXXX
10.2 Creatinine
XXXXXXX
11.0 INTERFACING SUBSTANCES
11.1 Ntx
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
11.2 Creatinine
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
<PAGE>
Note: Confidential Treatment Requested.
Metrika Laboratories, Inc.
- -------------------------------------------------------------------------------
12.0 RELIABILITY
12.1 Error Conditions
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
12.2 Misuse
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
12.3 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
<PAGE>
NOTE: CONFIDENTIAL TREATMENT REQUESTED.
ATTACHMENT 12.1.2
OSTEX PATENT RIGHTS AND KNOW-HOW - EXCEPTIONS TO WARRANTY
U.S. Patent No.XXXXXXXXXXX
U.S. Patent No. XXXXXXXXXX
<PAGE>
NOTE: CONFIDENTIAL TREATMENT REQUESTED.
ATTACHMENT 12.2.2
METRIKA PATENT RIGHTS AND KNOW-HOW - EXCEPTIONS TO WARRANTY
XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXX
<PAGE>
ATTACHMENT 15.4
OSTEX TRADEMARK FILINGS
Below are listed countries in which trademark registrations have issued and
countries in which applications are pending, all as of the date of this
Agreement.
1. Trademark registrations for "OSTEOMARK" have issued in the following
countries (in one or more classes):
Argentina Australia Austria Benelux
Bulgaria Canada China Columbia
Denmark Finland France Germany
Hong Kong Ireland Israel Italy
Japan Mexico New Zealand Norway
Panama Peru Poland Portugal
Saudi Arabia South Africa South Korea Spain
Sweden Switzerland Taiwan Turkey
United Kingdom United States
2. Trademark applications for "OSTEOMARK" are pending in the following
countries (in one or more classes)1:
Brazil Chile CTM (Europe) Czech Republic
Greece Hungary India Indonisa
Japan Malaysia Oman Pakistan
Philippines Qatar Romania Russian Federation
Singapore Slovak Republic Venezuela
3. Trademark registrations have issued in the United States for mark
"OSTEX," with and without logo.
- --------
1 A country will be listed under both (1) and (2), where multiple applications
(either two or three) were filed in that country corresponding to multiple
classes of goods and/or services, and registration has issued on one or perhaps
two, but not all, applications filed.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000932631
<NAME> OSTEX INTERNATIONAL, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,941
<SECURITIES> 12,237
<RECEIVABLES> 1,295
<ALLOWANCES> 10
<INVENTORY> 144
<CURRENT-ASSETS> 15,617
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<CURRENT-LIABILITIES> 1,403
<BONDS> 372
0
0
<COMMON> 127
<OTHER-SE> 17,508
<TOTAL-LIABILITY-AND-EQUITY> 19,410
<SALES> 2,658
<TOTAL-REVENUES> 3,108
<CGS> 640
<TOTAL-COSTS> 640
<OTHER-EXPENSES> 9,210
<LOSS-PROVISION> 21
<INTEREST-EXPENSE> 618
<INCOME-PRETAX> (6,124)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,124)
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</TABLE>
