Exhibit 10.12D
NOTE: CONFIDENTIAL TREATMENT REQUESTED. EXHIBIT OMITS INFORMATION THAT HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SECOND AMENDMENT
TO
OSTEOMARK-registered trademark- LICENSE AGREEMENT
This Second Amendment to Osteomark-registered trademark- License
Agreement (this "Second Amendment") is effective as of December 24, 1997, by and
between Ostex International, Inc. ("Ostex") and Mochida Pharmaceutical Co., Ltd.
("Mochida").
RECITALS
A. WHEREAS, Ostex and Mochida are parties to that certain Osteomark-TM-
License Agreement, as amended, dated as of August 21, 1992 (the "License
Agreement"), pursuant to which Ostex granted a license to Mochida to
commercialize the urine-based assay to measure bone resorption in Japan.
B. WHEREAS, Section 5.2 of the License Agreement established
"a flexible pricing formula to enable both Ostex and Mochida to remain
profitable while selling Finished Product in the Territory."
C. WHEREAS, circumstances have changed since the License Agreement was
entered into in 1992, to such extent that: first, Mochida's cost of
manufacturing Osteomark microtiter kits is now established, and such cost is
significantly higher than was anticipated in 1992; second, the Japanese
government control of the national health care system has shifted toward
deregulation, thereby disrupting the reimbursement pricing system upon which the
original pricing formula was based; and third, Mochida requires stable
circumstances during the initial stage of the Osteomark product launch to avoid
cost, supply, packaging and quality control problems.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree that the License
Agreement is amended as follows:
AGREEMENT
1. Exchange Rate. Section 4.8 of the License Agreement is
hereby amended to read in its entirety as follows:
4.8 Exchange Rate. All monies due Ostex under this Agreement
shall be paid in United States Dollars. The parties agree
that the prices stated in Yen in this Agreement are based
on an exchange rate of (Y)115:$1. The parties agree that
they will share equally the risk of fluctuations in the
exchange rate. To this end, the prices stated in this
Agreement will be paid in United States Dollars at the
exchange rate determined in accordance with the following
formula:
AER = 115 + (ER - 115)
--------
2
where:
AER = the Agreed Exchange Rate for converting the
stated prices to United States Dollars; and
ER = the Exchange Rate quoted by the Wall Street
Journal on the date on which Ostex prepares the
first draft of the relevant invoice for each
shipment (a copy of the relevant page of the Wall
Street Journal shall be sent to Mochida with the
invoice).
Notwithstanding the foregoing, the transfer price for the
shipment of Critical Reagents to Mochida under Mochida
Order No. MS-970027 shall be converted and paid at the
spot exchange rate quoted by the Wall Street Journal on
December 3, 1997.
2. Manufacture and Pricing of Kit Components. Section 5 of
the License Agreement is hereby replaced in its entirety by the following
new Section 5:
5. Supply of Critical Reagents and Kit Components.
5.1 Supply of Critical Reagents. Ostex shall provide
to Mochida a supply of the Critical Reagents to be assembled into
Finished Products and to be marketed, promoted, sold and distributed by
Mochida in accordance with the terms of this Agreement and the relevant
quality criteria jointly established by Ostex and Mochida (the "Quality
Criteria"). Such Critical Reagents shall be manufactured by Ostex, or
by one or more third-party licensees of Ostex at Ostex's
responsibility, and shall meet the Quality Criteria.
5.2 Manufacture and Supply of Kit Components. Mochida
shall transfer the right and responsibility for the manufacture of all
components of Finished Products, other than Finished Product labeling
and packaging materials, (the "Kit Components") to Ostex by the time to
be agreed upon between the parties but no later than December 31, 2000,
on the terms and conditions set forth below. Mochida will file
applications with and pursue the approval of the applicable Japanese
governmental authorities to obtain registrations to import all Kit
Components by such date. Such Kit Components shall be manufactured by
Ostex, or by one or more third-party licensees of Ostex, and shall meet
the Quality Criteria to be agreed between the parties covering Kit
Components. If or when Mochida requests Ostex to label the Kit
Components, Ostex shall accept such request by Mochida at no additional
cost, fee or expense in the following way: Ostex shall supply Mochida
with specifications for the preparation of labels which can be applied
using Ostex machinery, and Mochida shall supply Ostex with labels in
Japanese to be applied to such Kit Components. In the event that
Mochida finds it difficult to obtain blank label stock meeting Ostex's
specifications, then at Mochida's option, Ostex through its vendor,
will supply such stock to Mochida, or will print such labels using
Mochida's artwork, at Mochida's cost.
5.3 Quantity of Critical Reagents and Kit
Components.
(a) Mochida shall provide to Ostex
at least sixty (60) days
prior to the commencement of each calendar quarter, a quarterly
forecast of commercial demand for Critical Reagents (or, if applicable,
Kit Components) to be imported by Mochida into the Territory during
such quarter. Mochida shall deliver to Ostex at least sixty (60) days
prior to the expected shipment date a purchase order for a specified
quantity of Critical Reagents (or, if applicable, Kit Components).
(b) Ostex shall deliver to Mochida
shipments of Critical
Reagents or Kit Components (once responsibility for manufacturing such
Kit Components has been transferred to Ostex) in quantities reasonably
necessary to satisfy the commercial demand for Finished Products within
the Territory. Ostex and Mochida shall, from time to time as necessary
following the commencement of commercial sales, adjust the terms of
quantity and delivery to correspond to such commercial demand, in
accordance with the quarterly forecasts provided by Mochida pursuant to
Section 5.3(a) above.
NOTE: CONFIDENTIAL TREATMENT REQUESTED
(c) Notwithstanding the foregoing or
any other provision of
this Agreement, it is understood between Ostex and Mochida that, in the
event formats other than the current microtiter format for the
technology are developed or utilized by the parties, and the delivery
of Critical Reagents or Kit Components for such format pursuant to the
transfer prices set forth in this Agreement would be less profitable to
Ostex, the parties agree that they will renegotiate such transfer
prices in good faith. In any event, Ostex shall be under no obligation
to supply Critical Reagents or Kit Components to Mochida for a format
other than the current microtiter format at a price which is less
profitable than the current pricing for the microtiter format.
5.4 Price for Critical Reagents and Kit Components.
Mochida shall pay for each shipment of Critical Reagents or Kit
Components, within sixty (60) days of the date of invoice for such
shipment, the amounts set forth below:
(a) For all Critical Reagents ordered
by Mochida prior to
July 6, 1999 (including Mochida's Order No. MS-970027), Mochida shall
purchase Critical Reagents at a price of (Y)XXXXXXXX per kit, payable
in United States Dollars at the exchange rate set forth in Section 4.8.
For orders received by Ostex on or after July 6, 1999, Mochida will
purchase quantities of Critical Reagents at a price of (Y)XXXXXXX per
kit, payable in United States Dollars at the exchange rate set forth in
Section 4.8. In the event that Kit Component manufacturing rights have
not been transferred to Ostex by December 31, 2000 the parties shall
renegotiate the price for Critical Reagents at that time, provided that
nothing in this section shall limit Ostex's ability to enforce the
provisions of this Agreement regarding such transfer of manufacturing
rights.
(b) On or after the transfer to Ostex
of responsibility for
the manufacture of Kit Components, as an alternative to the pricing of
Critical Reagents set forth in Section 5.4(a) above, Mochida shall pay
to Ostex, for all Kit Components required for each Finished Product,
the price set forth in this Section 5.4(b). Such price shall equal
(Y)XXXXXXX per kit, payable in United States Dollars at the exchange
rate set forth in Section 4.8, subject, in addition to any other
adjustments provided for herein, to annual adjustments from January
1998 proportionate to one-half of the increase in the U.S. Consumer
Price Index (All Urban Consumers) ("CPI"), which adjustment shall occur
upon publication of such index on the publication date most closely
following each anniversary after January 1998. Ostex shall send Mochida
a copy of the publication of such index annually from January, 1998.
(c) In the event that the average
price at which Mochida
sells Finished Product in any calendar year increases more than XX%
over the average price at which Mochida sold Finished Product during
the preceding year, Mochida shall so notify Ostex, and the parties
shall renegotiate in good faith the prices set forth in Section 5.4 (a)
and (b) above to allow for an equitable sharing of such increase.
5.5 Delivery. Ostex shall deliver each shipment of
Critical Reagents and Kit Components F.A.S. carrier (as defined in, or
otherwise in accordance with INCOTERMS, in effect at the time of each
shipment), in accordance with instructions issued in writing by Mochida
with respect to each shipment.
5.6 Risk of Loss. The risk of loss with regard to
each shipment of Critical Reagents and Kit Components shall pass to
Mochida upon delivery thereof to the carrier in accordance with Section
5.5 above.
5.7 Acceptance. Ostex warrants that Critical Reagents
and Kit Components supplied by Ostex shall meet the Quality Criteria.
Mochida shall inspect shipments of Critical Reagents within sixty (60)
days after receipt of Critical Reagents and Kit Components within
thirty (30) days after receipt of Kit Components, by Mochida at its
factory in Japan, and shall notify Ostex of the results of such
inspection within such periods. If Mochida notifies Ostex of any
defects in quality within such periods, Ostex shall promptly supply
Mochida, free of charge, with Critical Reagents or Kit Components in
such amount as to replenish or make good such defects in quality. In
the event that there is a shortage in quantity, Ostex will, at its own
expense, correct such shortage as soon as possible. In no event shall
this Section 5.7 affect the risk of loss specified in Section 5.6
above. For example, without limiting the generality of the foregoing,
in the event that a shipment of Critical Reagents or Kit Components is
damaged in shipment, Mochida shall bear the loss and damage, and at its
discretion shall obtain insurance money covering such loss and damages
for its own sake. In this case, if Mochida places with Ostex an
additional order to fill the insufficiency of Critical Reagents or Kit
Components lost or damaged, Ostex shall be responsible for supplying
Mochida with such Critical Reagents or Kit Components as promptly as
possible. Pricing for such an additional order for Critical Reagents or
Kit Components shall be governed by Schedule 5.7 attached hereto,
subject to adjustment from time to time by reasonable agreement of the
parties. Both parties shall review this Section 5.7 to determine the
practical conditions for the inspection period and acceptance period
regarding the shipment of Critical Reagents and Kit Components before
first shipment of such materials. Notwithstanding the foregoing, if,
after Critical Reagents or Kit Components have been accepted by
Mochida, a defect is discovered in the Critical Reagents or the Kit
Components which was not reasonably capable of discovery by Mochida
during the inspection period, Ostex agrees it will work with Mochida in
good faith to resolve such defects in an equitable manner. Further, the
parties specifically agree that if or when such defects were caused in
the process of the manufacture by Ostex, Ostex shall replenish or make
good such defects in the quality at its cost and responsibility.
5.8 [This Section Intentionally Deleted]
3. Indemnification. Section 15 of the License
Agreement is hereby amended to read in
its entirety as follows:
Mochida shall defend, indemnify, save and hold harmless Ostex
and its directors, officers, employees, and agents from all
losses, claims, suits, damages, costs, fees and expenses,
including without limitation attorneys' fees (hereinafter
collectively referred to as the "Loss"), resulting from or
arising out of the importation of Critical Reagents or the
manufacturing, marketing, sale, or distribution of Finished
Product by Mochida, including without limitation any damages,
losses or liabilities whatsoever with respect to death or
injury to any person or damage to any property. Ostex shall
promptly notify Mochida of any Loss for which indemnification
is sought hereunder.
Further, in the event that the manufacture of Kit Components
is transferred to Ostex pursuant to Section 5.2, Ostex shall
defend, indemnify, save and hold harmless Mochida and its
directors, officers, employees, and agents from any and all
Loss resulting from or arising solely out of the manufacturing
process of Kit Components by Ostex or its licensees, including
without limitation any damages, losses, or liabilities
whatsoever with respect to death or injury to any person or
damage to any property. Mochida shall promptly notify Ostex of
any Loss for which indemnification is sought hereunder.
The foregoing indemnification by Ostex shall apply mutatis
mutandis as to any and all Loss incurred to Mochida resulting
from or arising from the manufacturing process of Critical
Reagents by Ostex or its licensees.
The indemnification by Mochida provided herein shall not apply
if or when such Loss is based on, or caused by, willful
misconduct or negligence of Ostex, its licensees or vendors
(including their directors, officers or employees). Further,
the indemnification by Ostex provided herein shall not apply
if or when such Loss is based on willful misconduct or
negligence of Mochida, its directors, officer or employees.
4. Full Force and Effect. This Second Amendment is made pursuant to the
License Agreement and shall constitute an integral part thereof. All capitalized
terms that are used in this Second Amendment and are not otherwise defined
herein are intended to have the meanings assigned to such terms in the License
Agreement. Except as specifically amended in this Second Amendment, the License
Agreement shall remain in full force and effect in accordance with its terms.
DATED as of the date first written above.
OSTEX INTERNATIONAL, INC. MOCHIDA PHARMACEUTICAL CO., LTD.
By: /S/ THOMAS A. BOLOGNA By: EI MOCHIDA
-------------------------------- -------------------------
Name: Thomas A. Bologna Name: Ei Mochida Ph.D.
Its: President & C.E.O. Its: Chairman
NOTE: CONFIDENTIAL TREATMENT REQUESTED
OSTEX INTERNATIONAL, INC.
SECOND AMENDMENT TO
OSTEOMARK LICENSE AGREEMENT
SCHEDULE 5.7
KIT COMPONENT PRICE LIST
OSTEOMARK, COMPONENT SET, UNLABELED
PRICE
ITEM DESCRIPTION QTY UM in YEN
- -------------------------------------------------------------------------------------------------
1028 PLATE SEALERS 1 PD XXXXXXX
6036 ANTI. COATED MICROTITER PL., 1PK 1 EA XXXXXXX
6037 1 NM BCE CALIBRATOR,0.5ML FILLED 1 EA XXXXXXX
6038 30 NM BCE CALIBR., 0.5ML FILLED 1 EA XXXXXXX
6039 100NM BCE CALIBRATOR,0.5ML FILL 1 EA XXXXXXX
6040 300 NM BCE CALIBRATOR,0.5ML FILL 1 EA XXXXXXX
6041 1000NM BCE CALIBRATOR,0.5 ML FILL 1 EA XXXXXXX
6042 3000NM BCE CALIBRATOR,0.5ML FILL 1 EA XXXXXXX
6043 ANTIBODY-CONJUGTE,0.5ML, FILLED 1 EA XXXXXXX
6044 CONJUGATE DILUENT, 30ML, FILLED 1 EA XXXXXXX
6045 BUFFERED SUBSTRATE, 30ML, FILLED 1 EA XXXXXXX
6026 CHROMOGEN REAGENT, 0.9ML FILLED 1 EA XXXXXXX
6046 30X WASH CONCENTRATE,125ML, FILLED 1 EA XXXXXXX
6028 STOPPING REAGENT, 25ML FILLED 1 EA XXXXXXX
6047 LEVEL 1 URINE CONTROL,0.5ML,FILLED 1 EA XXXXXXX
6048 LEVEL 2 URINE CONTROL,0.5ML,FILLED 1 EA XXXXXXX
Total XXXXXXX
CRITICAL REAGENT COMPONENT PRICE LIST
OSTEOMARK, CRITICAL REAGENT COMPONENT SET
PRICE2 PRICE3
ITEM DESCRIPTION QTY1 UM in Yen in Yen
- ------------------------------------------------------------------------------------------------------------------
2027 300 pmol/mL NTx in PBS TBD ML XXXXXXX XXXXXXX
2007 NTx Concentrate TBD NM XXXXXXX XXXXXXX
2023 1H11 - HRP Conjugate Concentrate TBD MG XXXXXXX XXXXXXX
Total XXXXXXX XXXXXXX
- ---------------------------
1 Prices shown are sufficient for manufacture of 1 kit of Finished Product.
Units shipped will depend on quantity of finished product ordered and the titre
of NTx per lot.
2 Price for orders received by Ostex before July 6, 1999
3 Price for orders received by Ostex on or after July 6, 1999 to December 31,
2000