Development, Manufacturing and Marketing Agreement - Baxter Healthcare Corp. and Steritech Inc.
DEVELOPMENT, MANUFACTURING AND
MARKETING AGREEMENT
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TABLE OF CONTENTS
Page
1. BACKGROUND..........................................................1
2. DEFINITION OF TERMS.................................................1
3. COOPERATIVE DEVELOPMENT WORK........................................7
3.1 Period; Objective............................................7
3.2 Baxter Benchmarks............................................7
3.3 Steritech Benchmarks.........................................7
3.4 Project Committee............................................7
3.5 Management Board.............................................7
3.6 Review of Budget, Benchmarks, etc............................7
3.7 Exchange of Information......................................8
3.8 Expenditures.................................................8
3.9 Payment Schedule.............................................8
3.10 Testing and Regulatory Expenses..............................9
3.10.1 Testing Expenses......................................9
3.10.2 Regulatory Expenses...................................9
3.11 Budget Contingencies.........................................9
3.12 Reconciliation of Expenditures
Following Regulatory Approval...............................10
3.13 Reconciliation of Expenditures
Prior to Regulatory Approval................................10
3.14 Funding Contingency.........................................10
4. MILESTONE PAYMENTS.................................................11
4.1 General.....................................................11
4.2 Funding.....................................................11
5. SUPPLY OF STERITECH COMPOUND AND SYSTEM
MANUFACTURING......................................................11
5.1 Baxter Responsibilities......................................11
5.2 Instrument Production........................................11
5.3 System Specifications........................................11
5.4 Steritech Specifications.....................................11
5.5 Source of Supply.............................................12
5.6 Failure of Steritech to Meet Baxter Requirements.............12
5.7 Upgrades.....................................................12
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TABLE OF CONTENTS
(continued)
Page
6. MARKETING AND DISTRIBUTION RIGHTS: LOSS OR RETENTION
OF EXCLUSIVE DISTRIBUTION RIGHTS...................................12
6.1 Exclusive Right to Market...................................12
6.2 Sales Performance Requirements .............................12
6.3 Meetings Concerning Marketing...............................14
7. REVENUE SHARING ...................................................14
7.1 Revenue Sharing Payments ...................................14
7.2 Exception to Revenue Sharing Payments of 7.1 ...............14
7.3 Adjustments to Revenue Sharing Payments.....................15
8. PATENTS, KNOW-HOW, LICENSE GRANTS .................................15
8.1 Steritech Sole Ownership ...................................15
8.2 Baxter Sole Ownership.......................................15
8.3 Joint Patents...............................................15
8.4 License to Baxter...........................................15
8.5 Notice of Sole Rights.......................................16
8.6 Other Agreements ...........................................16
8.7 Right of First Refusal .....................................16
8.8 Right of First Negotiation .................................16
8.9 Additional Consideration ...................................17
8.10 Sublicenses.................................................17
8.11 Regulatory Files ...........................................17
9. PROSECUTION OF PATENT RIGHTS.......................................18
9.1 Steritech Patents...........................................18
9.2 Baxter Patents .............................................18
9.3 Joint Patents...............................................18
9.4 Prior Art; Review and Comment...............................18
9.5 Election Not to Pay Expenses ...............................18
10. TRADEMARKS.........................................................19
10.1 Baxter Trademarks...........................................19
10.2 Steritech Trademarks .......................................19
11. COMPETITIVE ACTIVITY...............................................19
11.1 Restrictions on Steritech...................................19
11.2 Restriction on Baxter.......................................19
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TABLE OF CONTENTS
(continued)
Page
12. CONFIDENTIAL INFORMATION...........................................19
12.1 Confidentiality Agreement.....................................19
12.2 Use of Consultants............................................19
13. CESSATION OF COOPERATIVE DEVELOPMENT WORK..........................20
13.1 Cessation.....................................................20
13.2 Steritech Continuing Rights...................................20
13.3 Baxter Continuing Rights......................................21
14. REPORTS............................................................21
14.1 Quarterly Sales Reports.......................................21
15. BOOKS AND RECORDS..................................................22
15.1 Records.......................................................22
15.2 Retention.....................................................22
15.3 Interest......................................................22
16. TERM...............................................................23
17. BREACH.............................................................23
17.1 Material Breach...............................................23
17.2 Steritech Rights..............................................23
17.3 Baxter Rights.................................................23
18. REPRESENTATIONS AND INDEMNITIES....................................24
18.1 Steritech Representations.....................................24
18.2 Steritech Indemnification.....................................24
18.3 Baxter Representations........................................24
18.4 Baxter Indemnification........................................25
19. INDEMNIFICATION, LIABILITY, INFRINGEMENT...........................25
19.1 Defense of Third Party Infringement Suits.....................25
19.2 Third Party Patent Expenses...................................25
19.3 Suits for Infringement by Others..............................25
20. GENERAL............................................................26
20.1 Entire Agreement..............................................26
20.2 Relationship of Parties.......................................26
20.3 Senior Baxter Contact.........................................26
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TABLE OF CONTENTS
(continued)
Page
20.4 Senior Steritech Contact...........................................26
20.5 Severability.......................................................26
20.6 Force Majeure......................................................27
20.7 Notices............................................................27
20.8 Binding............................................................27
20.9 Governing Law......................................................28
20.10 Venue..............................................................28
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DEVELOPMENT, MANUFACTURING AND
MARKETING AGREEMENT
THIS AGREEMENT ("Agreement") between BAXTER HEALTHCARE CORPORATION, a
Delaware corporation ("Baxter") with principal offices at One Baxter Parkway,
Deerfield, Illinois 60015, and STERITECH, INC., a California corporation
("Steritech") with principal offices at 2525 Stanwell Drive, Concord,
California 94520, is effective as of the tenth day of December, 1993
("Effective Date").
1. BACKGROUND.
1.1 Steritech has substantial knowledge and expertise in the area
of decontamination of pathogens in blood products using photoactive compounds.
Baxter has substantial knowledge and expertise in the research, development,
manufacture and distribution of healthcare products including those relating to
the collection, preservation, processing, manipulation, storage and treatment
of blood and blood components.
1.2 The parties are interested in the development and
commercialization of products and/or systems which provide a customer with
instrumentation, disposables and photoactive compounds for use in the
inactivation of pathogens in human platelet concentrate.
1.3 Concurrently with the execution and delivery of this
Agreement, Baxter is executing and delivering a Stock Purchase Agreement dated
the date of this Agreement with respect to the purchase of Series C Preferred
Stock of Steritech for a purchase price of $1,000,000.
2. DEFINITION OF TERMS.
The words appearing in capitalized form throughout this Agreement
shall have the meanings assigned to them in this Section 2.
ADDITIONAL COST OF GOODS shall mean that portion of the Cost of Goods
as (defined below) that exceeds the Anticipated Cost of Goods (defined below).
ANTICIPATED COST OF GOODS shall mean [*] for Baxter's Cost of Goods
for the Inactivation Package and [*] for Steritech's Cost of Goods for the
Steritech Compound.
BAXTER shall mean Baxter Healthcare Corporation and its affiliates,
including, but not limited to, divisions and subsidiaries, and also including
its parent company, Baxter
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International Inc. and its affiliates, including, but not limited to, divisions
and subsidiaries. A company shall be considered an affiliate if it is at least
forty percent (40%) owned or controlled by Baxter Healthcare Corporation or
Baxter International Inc.
BAXTER BENCHMARKS shall mean the accomplishments set forth on Schedule
A of this Agreement, to be accomplished by Baxter.
BAXTER KNOW-HOW shall mean unpatented inventions, data, processes,
compositions, techniques and other technical information proprietary to Baxter
relating to the Field and the System including, methods for manufacture or use
of a System or portion thereof.
BAXTER PATENTS shall mean all United States and foreign patent
applications and patents that relate to the Field and have claims reading on a
System or portion thereof or methods for manufacture or use thereof, owned by
Baxter or licensed to Baxter with the right to sublicense and claiming an
invention conceived solely by employees and/or agents and/or licensors of
Baxter both prior to the Effective Date and during the term of this Agreement
pursuant to the Cooperative Development Work, including any continuations,
divisions, reissues, re-examinations and all foreign counterparts thereof.
BAXTER LICENSED KNOW-HOW shall mean all Baxter Know-How in existence
as of the Effective Date or created or acquired during the term of the
Cooperative Development Work, but not after December 31, 1998 unless such
Know-How is used in a System that is sold pursuant to this Agreement or the
parties shall otherwise agree in writing.
BAXTER LICENSED PATENTS shall mean all Baxter Patents in existence as
of the Effective Date of this Agreement or created and reduced to practice or
acquired during the term of the Cooperative Development Work, but not after
December 31, 1998 unless such Patent is used in a System that is sold under
this Agreement or the parties shall otherwise agree in writing.
BENCHMARKS shall mean Steritech Benchmarks and Baxter Benchmarks.
BULK FORM shall mean Steritech Compounds which are not packaged in
single dosage final form.
COOPERATIVE DEVELOPMENT WORK shall mean the Cooperative Development
Work described at Section 3 herein.
COST OF GOODS for any item shall mean the [*], as determined by
generally accepted cost accounting procedures, except that such costs shall
not include [*] or other allocations which are not
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directly related to [*] and shall not include [*].
EUROPE shall mean Austria, the Benelux countries, Denmark, Finland,
France, Germany, Ireland, Italy, Norway, Spain, Sweden, Switzerland, and the
United Kingdom.
FDA shall mean the United States Food and Drug Administration.
THE FIELD shall mean the [*] for transfusion in [*]-specific (but not
[*]) inactivation systems.
INACTIVATION PACKAGE shall mean the package containing the psoralen as
well as the delivery system.
INITIAL BUDGET shall mean the budget attached as Schedule B hereto.
INSTRUMENT shall mean the instrument to be developed under the
Cooperative Development Work that will provide illumination as required for
photochemical inactivation and may include associated data tracking systems.
INTERCONTINENTAL shall mean any country not included in the definition
of [*] and [*] and excluding [*].
JOINT PATENTS shall mean all United States and foreign patent
applications and patents claiming an invention conceived jointly by employees
and/or agents of both Steritech and Baxter, including any continuations,
divisions, reissues, re-examinations and all foreign counterparts thereof. A
schedule listing such applications and patents shall be appended to this
Agreement during its term and amended from time to time. Ownership of an
invention shall conclusively be considered "joint" when one or more employees
or agents from Baxter and one or more employees or agents from Steritech must
be indicated as co-inventors under United States patent laws on a patent
application for the invention. As of the Effective Date, no Joint Patents
exist.
MANAGEMENT BOARD shall mean the Management Board created pursuant to
Section 3.5 hereof.
MARKET LAUNCH of the System in a given country is deemed to be the
earlier of (1) the date of first commercial sale following Regulatory Approval
for sale of the System in that particular country or (2) the ninetieth (90th)
day following Regulatory Approval for commercial sale of that System in that
country.
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NET SALES shall mean
(a) in the case the inactivation Package is sold as a
stand-alone item, the amount invoiced by Baxter and Baxter affiliates for sales,
leases, or licenses of Inactivation Packages, less credits or allowances, if
any, for rejections or returns, customary trade discounts actually given, less
customs and duties paid; less separately invoiced and actually incurred taxes
and other governmental charges that are imposed directly on or measured by the
sale, transfer, transportation, delivery or use of an Inactivation Package; and
less freight on shipment from Baxter to end users, and
(b) In the case in which the Inactivation Package is sold
as an integral part of a set with other collection and/or storage items, the
Value Added attributable to the Inactivation Package multiplied by the number of
such sets shipped to third parties by Baxter and Baxter affiliates. The Value
Added shall mean the amount by which the addition of the Inactivation Package to
such set increases the price of such set to ultimate purchasers or users in
comparison to a set that does not contain such inactivation package.
For the purpose of clause (a) of this definition:
(i) Any Inactivation Package [*] products for
whatever reason, including a special promotional offer, or other than a bona
fide arms length transaction exclusively for money, or upon any use of such
Inactivation Package for purposes which do not result in a disposal of such
products in consideration of sales revenue customary of use, such sale or other
disposal or use shall be (unless the parties agree otherwise) deemed to
constitute a sale at the then current average selling price for Inactivation
Packages. (ii) In the case of sales by Baxter to a distributor, the Net Sales
shall be computed on the distributor's invoice price to the ultimate purchaser
or user. In the event that Baxter is not able to determine the price charged by
a distributor to the ultimate purchaser or user, such price shall be the
recommended price which Baxter in its sole discretion recommends the distributor
to charge to its end customers (which may vary from territory to territory).
In computing Net Sales of Inactivation Packages, no deduction from
invoice price or Value Added shall be made with respect to the costs of the
Instruments or with respect to any rental surcharge for Instruments. In the
event that the ultimate purchaser or end user is assessed a charge on a
per-inactivation or other usage basis, the amount of such charge shall be
included in Net Sales.
NORTH AMERICA shall mean the United States and Canada.
PATENT ROYALTY PAYMENT means a patent royalty payment made to a
third party for manufacture, use or sale of a System or portion thereof.
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PREMIUM shall mean the Net Sales price minus Additional Cost of Goods.
PRODUCT MARKET in a given country shall mean the anticipated annual
market (expressed in number of Inactivation Packages) for Baxter systems for
decontamination of platelets in such country as determined by Baxter reasonably
and in good faith at the time of Regulatory Approval in such country, provided
that for each country in North America and Europe such market shall be not less
than the [*] in that country. Baxter shall notify Steritech of such
determination within sixty days after Regulatory Approval in such country.
PROJECT COMMITTEE shall mean a committee consisting of two (2)
representatives from each party whose purpose is to oversee, coordinate and
manage the Cooperative Development Work to ensure that a coordinated plan
exists to take the System from conception through to commercialization. Each
party will nominate one of its representatives on the Project Committee as the
party's "Leader," subject to approval by the other party.
PROOF OF PRINCIPLES shall mean that tests have been conducted
demonstrating to Baxter's scientific satisfaction the inactivation of pathogens
and a reasonable level of preservation of cellular or protein function.
REGULATORY APPROVAL shall mean (1) in the United States, approval from
the FDA for marketing and promotion of the System, or (2) outside of the United
States, an analogous order by a non-U.S. governmental agency which requires
regulatory approval prior to marketing and promotion of a System in such
non-U.S. country.
REVENUE SHARING FORMULA shall mean the relative percentage interest of
Baxter and Steritech as set forth in Section 7 hereof.
REVENUE SHARING PAYMENTS shall mean the payments that Steritech is
entitled to receive pursuant to Section 7.
SPECIFICATIONS FOR STERITECH COMPOUND shall mean the performance,
cost, quality and reliability requirements which the Project Committee and
Management Board agree must be met by a Steritech Compound for such Steritech
Compound to be acceptable for commercial implementation under Section 5.3. The
Project Committee and Management Board shall prepare written specifications for
Steritech Compound. Such specifications shall include a provision that
Steritech Compound be made according to Good Manufacturing Practices in a
facility licensed by the FDA or (if Steritech shall elect to manufacture
Steritech Compound outside the United States) other applicable regulatory
authority.
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STERITECH shall mean Steritech, Inc., a company organized under the
laws of California and its affiliates, including, but not limited to, divisions
and subsidiaries. A company shall be considered an affiliate if it is at least
forty percent (40%) owned or controlled by Steritech.
STERITECH COMPOUND shall mean any and all psoralen compounds,
developed by, licensed to, acquired by or otherwise commercially accessible to
Steritech prior to the Effective Date or in the course of the Cooperative
Development Work but does not include the psoralen compound that at this time
is designated by Steritech as [*].
STERITECH KNOW-HOW shall mean unpatented inventions, data, processes,
compositions, techniques and other technical information relating to the Field
proprietary to Steritech relating to the System, including methods for
manufacture or use of, Steritech Compounds and Systems or portions thereof.
STERITECH LICENSED KNOW-HOW shall mean all Steritech Know-How in
existence as of the Effective Date or created or acquired during the term of
the Cooperative Development Work, but not after December 31, 1998 unless the
parties shall otherwise agree in writing.
STERITECH PATENTS shall mean all United States and foreign patent
applications and patents relating to the Field having claims reading on
Steritech Compounds or compositions or formulations thereof, or otherwise
reading on a System or portion thereof, or methods for manufacture or use of
such System or Steritech Compound owned by or licensed to Steritech and
claiming an invention conceived solely by employees and/or licensors, agents of
Steritech, prior to the Effective Date, or during the term of Cooperative
Development Work, including any continuations, divisions, reissues,
re-examinations and foreign counterparts thereof. Steritech Patents in
existence as of the Effective Date are listed in the Attached Schedule B.
Schedule B shall be amended from time to time to include Steritech Patents as
to applications filed and patents issued during the term of this Agreement and
forthwith provided to Baxter.
STERITECH LICENSED PATENTS shall mean all Steritech Patents in
existence as of the effective date of this Agreement or created and reduced to
practice or acquired during the term of the Cooperative Development Work, but
not after December 31, 1998 unless the parties shall otherwise agree in
writing.
STERITECH MILESTONES shall mean the accomplishments set forth in
Section 4.0 of this Agreement, to be accomplished by Steritech.
SYSTEM shall mean a product developed pursuant to the Cooperative
Development Work for use in the Field, incorporating the [*]
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[*] and also incorporating or employing one or more Steritech Compounds.
SYSTEM SPECIFICATIONS shall mean the performance, cost, quality and
reliability requirements as the Project Committee and Management Board agree
must be met by a System in order for the System to be acceptable for marketing
and distribution hereunder.
3. COOPERATIVE DEVELOPMENT WORK.
3.1 PERIOD; OBJECTIVE. From the Effective Date until the date the
System obtains Regulatory Approval in the United States, Europe (C.E. Mark) and
Japan, Baxter and Steritech shall work together to develop and obtain
Regulatory Approval of a System for use in the Field ("Cooperative Development
Work").
3.2 BAXTER BENCHMARKS. Baxter shall develop the Instrument and
disposables for the System and attempt to achieve the Baxter Benchmarks by the
dates set forth for each Benchmark on Schedule A.
3.3 STERITECH BENCHMARKS. Steritech shall attempt to achieve the
Steritech Benchmarks by the dates set forth for each Benchmark on Schedule C.
3.4 PROJECT COMMITTEE. Steritech and Baxter will appoint a
Project Committee under the definition of such term in Article 2. The Project
Committee will meet at mutually acceptable times to review the Cooperative
Development Work.
3.5 MANAGEMENT BOARD. Steritech and Baxter will appoint a six (6)
person Management Board consisting of two (2) senior executives designated by
each company and each company's Leader from the Project Committee. The purpose
of the Management Board will be to facilitate the overall relationship of the
parties under this Agreement. System Specifications recommended by the Project
Committee shall not be deemed finalized until they are unanimously approved by
the Management Board. The Management Board shall meet from time to time as
appropriate, but no less frequently than two (2) times during each calendar
year, which meetings shall be in June and December, alternating between the
offices of the parties, unless the parties shall agree otherwise. The
Management Board shall review expenditures at least once during each calendar
year. All decisions of the Management Board shall be made by unanimous vote,
with Baxter and Steritech each having one vote regardless of the number of
representatives attending any meeting, in good faith, and considering the
interests of both parties.
3.6 REVIEW OF BUDGET, BENCHMARKS, ETC. The Benchmarks, budget and
a timetable will be reviewed by the Project Committee and Management Board from
time to time during the Cooperative Development Work with the intent that the
parties move
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expeditiously and effectively toward commercialization of the System. The
Initial Budget is attached hereto as Schedule D and is deemed approved by the
Management Board. No revision shall be made to the budget without unanimous
approval of the Management Board.
3.7 EXCHANGE OF INFORMATION. During the term of the Cooperative
Development Work, the parties shall exchange all information developed pursuant
to the Cooperative Development Work including the exchange of Baxter Know-How
and Steritech Know-How relating to the Field. The exchange shall occur
pursuant to Section 12.
3.8 EXPENDITURES. It is a principal goal of the parties that
Baxter and Steritech make approximately the same financial contribution to the
Cooperative Development Work.
3.8.1 Each party shall maintain detailed records which
accurately identify costs and expenses incurred and paid in connection with the
Cooperative Development Work. Each party shall submit this information to the
Management Board as of the 15th day of November or May for the prior six (6)
months along with an estimate of expenses to be incurred during the current six
months. Expenses internally generated because tasks are performed by a party's
own staff will be accounted for based upon actual employee salaries and fringe
benefits and variable expenses and directly applicable overhead allocations,
however, for Baxter expenses will include, to the extent applicable, any
internal corporate charge-backs. Only the reported actual cash outlays and
expenses which are previously unanimously approved by the Management Board as
part of the budget established and approved under Section 3.6 shall be
considered as actual cash outlays and expenses incurred by the parties in
connection with the Cooperative Development Work.
3.8.2 Each party will be responsible for all costs with
respect to participation of its own staff on the Management Board and the
Project Committee during the Cooperative Development Work, including travel
expenses for meetings and participation on the Management Board or Project
Committee. The goal of equality in expenditures shall be disregarded with
respect to these costs, and these costs shall not be subject to cost sharing.
3.9 PAYMENT SCHEDULE.
3.9.1 On December 13, 1993, Baxter will make a payment of [*]
to Steritech in consideration of the rights given under this Agreement to Baxter
to Steritech Patents and Steritech Know-How. Additionally, on December 13,
1993, Baxter will also make to Steritech a research and development payment for
future developments in the amount of [*].
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3.9.2 Baxter will make development payments to Steritech,
except as provided in Section 3.9.3, to Steritech on the first business day
for the indicated months for each of the following years:
January July
1994 [*]
1995 [*] [*]
1996 [*] [*]
1997 [*] [*]
3.9.3 With respect to the payments under Section 3.9.2, at
any time there are delays in achievement of any Benchmark that justify a
deferral of funding of amounts that were budgeted for prepayment of outside
contract expenses for the next six month period (see Schedule E attached),
Baxter may defer such payment with respect to such outside expenses (but not
with respect to Steritech budgeted internal expenses) until such Benchmark is
reached or the Management Board determines that progress is otherwise
satisfactory.
3.9.4 Unless otherwise agreed between the parties, all
development payments under Section 3.9 and all Steritech Milestone payments
under Article 4.0 hereof shall be paid on or before the due date by wire
transfer to the bank account of Steritech specified in writing by Steritech to
Baxter.
3.10 TESTING AND REGULATORY EXPENSES.
3.10.1 TESTING EXPENSES. Expenses incurred in connection
with any testing whose primary function is marketing of the System, rather than
for developing or obtaining Regulatory Approval of the System, shall be borne
solely by Baxter and shall not be considered expenses subject to cost sharing.
3.10.2 REGULATORY EXPENSES. The Management Board shall
determine the countries in which Regulatory Approval will be sought and the
timing of seeking such Regulatory Approval. All expenses incurred to obtain
Regulatory Approval will be paid by the parties pursuant to the Cooperative
Development Work budget.
3.11 BUDGET CONTINGENCIES. If a Benchmark is not completed
within the budget for such Benchmark, upon the recommendation of the Project
Committee, and subject to the approval of the Management Board, the Management
Board shall set a new budget for completion of such Benchmark. Unless the
Management Committee shall determine otherwise, Steritech and Baxter will each
fund one-half of the amount needed to complete such Benchmark. Steritech shall
not be obligated to fund more than [*] dollars in the aggregate under this
Agreement. To the extent that budget
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over-runs could obligate Steritech to spend more than [*] dollars, the
Management Committee can modify the time lines and budget items to allow Baxter,
if it desires, to fund budget over-runs that would obligate Steritech to spend
more than [*] dollars. To the extent Baxter pays more than Steritech in budget
over-runs, Baxter can recoup 50% of the difference ("Excess Payment") plus its
cost of debt capital plus [*] per annum (collectively not to exceed [*]) for the
Excess Payment from the Revenue Sharing Payments due Steritech.
3.12 RECONCILIATION OF EXPENDITURES FOLLOWING REGULATORY
APPROVAL. Within sixty (60) days following Regulatory Approval in the United
States, the Management Board will determine whether the actual cash outlays and
expenses incurred by Steritech and Baxter and approved by the Management Board
up to such Regulatory Approval are equal. If they are not equal, the party
incurring fewer expenses shall make a cash payment to the other party equal to
one-half (1/2) the difference between the parties' expenses up to such
Regulatory Approval, except to the extent that the Management Board shall
previously have determined that particular expenses shall be borne in a
different ratio. The payment shall be made in cash within sixty (60) days
following the determination by the Management Board.
3.13 RECONCILIATION OF EXPENDITURES PRIOR TO REGULATORY APPROVAL.
If the parties jointly decide that they will both cease Cooperative Development
Work prior to Regulatory Approval in the United States, then within sixty (60)
days following the joint decision, the Management Board will determine whether
the actual cash outlays and expenses incurred by Steritech and Baxter and
approved by the Management Board up to the date of such decision for the System
are equal. If they are not equal, the party incurring fewer expenses shall
make a cash payment to the other party equal to one-half (1/2) the difference
between the parties' expenses up to that date, except to the extent that the
Management Board shall previously have determined that particular expenses
shall be borne in a different ratio. The payment shall be made in cash within
sixty (60) days following the determination by the Management Board.
3.14 FUNDING CONTINGENCY. Subject to the rights of Baxter under
Section 13 and Section 17 hereof, if Steritech anticipates that for any reason
it will be unable to reasonably provide its share of the development funding
for any period, and shall provide to Baxter ninety (90) days written notice of
such anticipated funding shortfall, Baxter may, at its sole discretion, provide
to Steritech amounts sufficient to bridge such funding shortfall. To the
extent such payment shortfall is not otherwise reconciled as provided in this
Agreement, Baxter will be entitled to recoup such amounts plus Baxter's cost of
debt capital plus [*] percent per annum (collectively not to exceed [*]) by
deducting Revenue Sharing Payments otherwise due to Steritech in each calendar
quarter until such amounts and interest have been recouped.
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4. MILESTONE PAYMENTS.
4.1 GENERAL. In furtherance of the research and development
efforts conducted by Steritech with respect to the System, Baxter shall make
the payments to Steritech specified below. These payments are to be used
solely for the development of the System.
4.2 FUNDING. Baxter shall make the following payments to
Steritech during the term of the Agreement:
[*] Milestone and budget agreement (Previously paid)
[*] On December 13, 1993
[*] Upon IND toxicology initiation (Milestone A)
[*] Upon initiation of Phase I Clinical Trials (Milestone B)
[*] Upon initiation of Phase II Clinical Trials (Milestone C)
These payments shall not be subject to cost sharing.
Baxter shall pay Steritech [*] on December 13, 1993 to fund the
achievement of Milestone A, as set forth above. Thereafter, Baxter shall make
payments to Steritech to fund the achievement of additional research steps: [*]
toward the achievement of Milestone B, payable upon completion of Milestone A,
[*] toward the achievement of Milestone C, payable upon completion of Milestone
B, and [*] toward the achievement of additional research efforts upon completion
of Milestone C.
5. SUPPLY OF STERITECH COMPOUND AND SYSTEM MANUFACTURING.
5.1 BAXTER RESPONSIBILITIES. Subject to this Section 5, all
aspects of and costs related to scale-up, production, marketing and
distribution of the System, but not including the compound, shall be the
responsibility of Baxter.
5.2 INSTRUMENT PRODUCTION. Baxter shall, at its own expense,
tool and scale up the production model of the Instrument. Baxter shall be
responsible for production and manufacture of the Instrument and associated
software of the System.
5.3 SYSTEM SPECIFICATIONS. Baxter's manufacture of each System
shall be in accordance with Systems Specifications as finally approved in
writing by the Project Committee and Management Board. Any change in Systems
Specifications must be approved in writing by the Management Board.
5.4 STERITECH SPECIFICATIONS. Steritech shall supply Steritech
Compounds in Bulk Form to Baxter to be used as a component of a System and
Baxter shall obtain Steritech Compounds to meet its requirements of photoactive
compounds for use in the
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Field from Steritech. Steritech Compounds shall meet the Specifications for
Steritech Compounds as finally approved in writing by the Project Committee and
Management Board. Any change in specifications for Steritech Compounds must be
approved in writing by the Management Board.
5.5 SOURCE OF SUPPLY. In the event Baxter recommends that
Steritech change Steritech's source of raw materials or Steritech Compound
because of actual or anticipated irregularity of supply, or failure to meet
specifications and a viable alternative source of supply is available,
Steritech will support Baxter in Steritech's obtaining such alternate source to
the extent commercially reasonable.
5.6 FAILURE OF STERITECH TO MEET BAXTER REQUIREMENTS. In the event
that Steritech cannot meet Baxter's requirements for Steritech Compound, Baxter
shall be free to obtain Steritech Compound from a third party. Steritech
agrees to provide to the third party that Baxter selects with the necessary
information and Steritech Know-How to allow the third party to make the
Steritech Compound. The monies Baxter expends in obtaining Steritech Compound
from a third party shall be reimbursed to Baxter and therefore treated as an
Additional Cost of Goods to Baxter.
5.7 UPGRADES. During the term of this Agreement, Steritech will
cooperate with Baxter in making adjustments to the System to meet changing
market needs, provided such activities do not require material expense on the
part of Steritech, such as initiation of new toxicology or clinical trials.
6. MARKETING AND DISTRIBUTION RIGHTS: LOSS OR RETENTION OF EXCLUSIVE
DISTRIBUTION RIGHTS.
6.1 EXCLUSIVE RIGHT TO MARKET. Baxter shall have the exclusive
right to and shall market and distribute the System directly through its
distributors throughout the world pursuant to the terms of this Agreement.
6.2 SALES PERFORMANCE REQUIREMENTS.
6.2.1 For the purpose of determining whether Baxter may
retain exclusive distribution rights to each System in a country, Baxter's sales
performance shall be evaluated annually over a twelve (12) month period on a
country-by-country basis commencing with the twelve (12) month period beginning
on the first day of the first calendar quarter following the third anniversary
of the Market Launch of a System in a Country ("Evaluation Period").
6.2.2 In order to retain exclusive distribution rights
to the System in a given country, the number of Inactivation Packages sold by
Baxter in that country during the
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Evaluation Period must represent for the first year of the Evaluation Period [*]
of the Product Market, for the second year of the Evaluation Period [*] of the
Product Market and for every year after the second year of the Evaluation Period
[*] of the Product Market, except for countries that fall within the definition
of Intercontinental where Baxter's obligations shall be only [*] of Product
Market for the first year of the Evaluation Period, [*] of Product Market
for the second year of the Evaluation Period, and [*] of Product Market for
every year thereafter. These percentages assume that during such period there
are not competitive systems in the country that represent at least [*], [*] for
an Intercontinental country, of the Product Market. If there are competitive
systems in such country and the competitive system(s) represent at least [*] for
[*] or [*] for an Intercontinental country, of the anticipated share of the
Product Market then Baxter is obligated only to sell an amount that is equal to
the [*] . If more than one competitive system exists in a country then
Baxter's obligations are reduced by the [*].
6.2.3 Within ninety (90) days following each Evaluation Period,
Baxter shall provide Steritech with a written report in sufficient detail to
facilitate Steritech's evaluation of whether Baxter's sales comply with the
performance criteria in Section 6.2.2. Baxter shall permit an independent
certified public accountant designated by Steritech and approved by Baxter to
audit Baxter's records solely for the purpose of verifying the accuracy of
Baxter's reports, provided such accountant agrees to execute a confidentiality
agreement reasonably satisfactory to Baxter. The cost of such audit shall be
the sole expense of Steritech unless Baxter's report differs from the
accountant's report in Baxter's favor by ten percent (10%) or more, in which
case, Baxter shall pay the entire expense of such audit.
6.2.4 If Baxter fails to meet the criteria set forth in Section 6.2.2 in a
particular country, on ninety (90) days written notice to Baxter, Steritech may
convert Baxter's exclusive distribution rights with respect to that System in
that country to non-exclusive distribution rights for that System in that
country. In such event, Baxter hereby grants Steritech a non-exclusive license
bearing a royalty of [*] of Steritech's Net Sales, under Baxter Patents and
Know-How to make, have made and use, and sell Systems in the Field in such
country terminating upon expiration of the last to expire of the Baxter Patents.
Upon Steritech's request, Baxter shall, if it has the present capability,
manufacture or have manufactured and sell Systems and/or components thereof to
Steritech at a price equal to [*] of Baxter's actual fully loaded cost of goods.
Steritech shall not have the right to distribute Systems through a third party
manufacturer or distributor of blood packs or automated blood collection systems
unless specific approval from Baxter is obtained.
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6.2.5 FAILURE TO MARKET. In addition to the rights set forth in
Section 6.2.3 above, in the event that, following Regulatory Approval in a
country, Baxter shall not undertake, or shall cease, active marketing and
distribution of the System in a country for a period of 12 months Steritech may
by notice to Baxter market and distribute, on a non-exclusive basis, Systems in
that country and Steritech shall have a royalty-free license with respect to
Baxter's Patents and Know-How to make, have made and use, and sell Systems in
such country. Steritech shall not have the right to distribute Systems through
a third party manufacturer or distributor of blood packs or automated blood
collection systems unless specific approval from Baxter is obtained.
6.2.6 Notwithstanding the provisions of Sections 6.2.1 through
6.2.6, the parties agree that Steritech's right to convert Baxter's rights
shall be suspended if any failure of Baxter to meet the criteria set forth in
Section 6.2.2-6 during any Evaluation Period results from recall or withdrawal
of government approval or a delay in manufacturing or sales beyond the
reasonable control and occurring without the fault of Baxter, as a result of
which it would be commercially infeasible for any entity to achieve the
requirements of Section 6.2.2-6. This right shall be suspended only for the
duration of the event that precluded Baxter from meeting the Section 6.2.2-6
criteria.
6.3 MEETINGS CONCERNING MARKETING. During those periods when
Baxter is the exclusive distributor of the System in a Region, the parties will
meet from time to time to discuss marketing strategies in order to optimize
customer acceptance and effective promotion of the System. All final decisions
regarding System marketing, distribution and pricing shall be made by Baxter.
However, Baxter will consult with Steritech prior to any pricing decision that
will cause the Premium to be less than [*].
7. REVENUE SHARING.
7.1 REVENUE SHARING PAYMENTS. In consideration of the Cooperative
Development Work to be undertaken and other obligations set forth herein, the
parties agree to share Net Sales, as follows: Subject to the provisions of
Sections 7.2, 13, and 17, no later than forty-five (45) days after the first and
all subsequent calendar quarters following the Market Launch of the System,
Baxter shall pay to Steritech a sum equal to [*] of the Premium during such
calendar quarter ("Revenue Sharing Payments"). The Revenue Sharing Payments due
and payable hereunder shall be computed for each calendar quarter in the
currency in which the sale was made, but shall be definitively discharged by
payment to Steritech at Concord, California in U.S. dollars converted from such
currency using the closing spot exchange rate between the two currencies quoted
in the Wall Street Journal (or, if not available, such other mutually agreeable
financial publication of international circulation) in effect on the last
business day of the calendar quarter to which the payment relates.
7.2 EXCEPTION TO REVENUE SHARING PAYMENTS OF 7.1. If the Premium
for the Inactivation Package is [*], then Steritech shall receive as its sole
Revenue
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Sharing Payment [*] for each Inactivation Package sold at that Premium. If the
Premium for the Inactivation Package is [*], then Steritech shall receive [*] of
the Premium for each Inactivation Package sold at that Premium. In no event
shall Steritech receive less than [*] per Inactivation Package sold or more than
[*] for each Inactivation Package sold, unless the United States consumer price
index (CPI) in any year exceeds the 1993 CPI by [*] or more in which case the
[*] figure shall increase [*] for each [*] above the 1993 CPI.
7.3 ADJUSTMENTS TO REVENUE SHARING PAYMENTS. To the extent that
Baxter's or Steritech's Cost of Goods exceeds the Anticipated Cost of Goods,
the Additional Cost of Goods per Inactivation Package will be provided to the
appropriate party and deducted from Net Sales to determine the Premium.
8. PATENTS, KNOW-HOW, LICENSE GRANTS.
8.1 STERITECH SOLE OWNERSHIP. Steritech shall own all Steritech
Patents and Steritech Know-How.
8.2 BAXTER SOLE OWNERSHIP. Baxter shall own all Baxter Patents
and Baxter Know-How.
8.3 JOINT PATENTS. Steritech and Baxter shall jointly own all Joint
Patents, provided that either party that shall exploit a Joint Patent outside
the Field shall pay to the other party a reasonable royalty of [*] of Net Sales
unless the Management Committee sets a different royalty rate with respect to
such exploitation. Joint Patents within the Field may be exploited by either
party only through the development, manufacture and sale of Systems under and
in accordance with the terms of this Agreement.
8.4 LICENSE TO BAXTER. Subject to the terms and conditions of this
Agreement, for Systems whose manufacture, use or sale is covered by a claim of a
Steritech Licensed Patent, or which use Steritech Licensed Know-How, Steritech
hereby grants Baxter an exclusive, paid-up, royalty free (except as provided
herein) license under Steritech Licensed Patents and Steritech Licensed Know-How
to make, have made, and use, sell or have sold such Systems, solely with
Inactivation Packages pursuant to this Agreement worldwide, solely for use in
the Field. Notwithstanding the foregoing, for any period or country where such
-marketing rights become nonexclusive pursuant to the Agreement, such license
shall automatically become nonexclusive for such period or in that country.
Except as set forth in Section 5.6, and 17.3, such license shall exclude the
right to make and have made Steritech Compounds. As to Steritech Compounds,
such license shall be limited to the Steritech Compound that is selected by the
Management Board to proceed with clinical trials and that is incorporated in the
System that receives Regulatory Approval, provided that if for technical or
other reasons the Management Board substitutes another Steritech Compound in
such process, such license shall cover such substituted Steritech Compound.
Notwithstanding anything in this Section or elsewhere
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in this Agreement, Baxter shall not have any license or distribution rights in
or to any Steritech Patent or Steritech Know-How to the extent relating to (a)
the inactivation of Bacteria, viruses, parasites or other pathogens through use
of compounds other than psoralens, or (b) the [*] inactivation system
development at Steritech as further described on Schedule hereto, (c) synthetic
media, or (d) use outside the Field.
8.5 NOTICE OF SOLE RIGHTS. After the Effective Date of this
Agreement, a party asserting sole ownership of any patent rights or know-how in
the Field developed pursuant to the Cooperative Development Work shall provide
reasonable notice to the Management Board of its intention to seek patent
protection or to assert proprietary interest in such know-how. The Management
Board shall have the right to a reasonable opportunity to review and comment on
such assertions prior to patent applications being filed.
8.6 OTHER AGREEMENTS. Steritech shall not terminate, alter or
amend the terms of the following agreements in a manner that would limit
Steritech's or Baxter's rights under this Agreement without the prior written
approval of Baxter: the Technology Transfer Agreement and the License Agreement
between Steritech and HRI Research, Inc. each dated December 13, 1991.
Baxter shall respond within thirty (30) days of receipt of written
proposed changes to such agreements. Baxter's approval of proposed changes
shall not be unreasonably withheld.
8.7 RIGHT OF FIRST REFUSAL. Steritech hereby grants Baxter a
right of first refusal with respect to a development, manufacturing and
marketing agreement for any technology Steritech, its employees, or agents may
develop during the term of the Cooperative Development Work relating to [*].
Steritech and Baxter shall negotiate in good faith for an exclusive license to
any such Technology. If the parties fail to reach agreement with respect to any
such Technology, Steritech may solicit other offers and engage in negotiations
with third parties with respect to that specific Technology. However, prior to
concluding any such Agreement with any third party, Steritech must offer Baxter
the option to accept the proposed Agreement with respect to the Technology on
the terms agreed to with the third party. If not accepted in forty-five (45)
days of such offer in writing by Baxter, Steritech will be free to enter into an
agreement with the third party on such terms. This right of first refusal shall
expire if Baxter breaches this Agreement and does not cure the breach pursuant
to Section 17 or if Baxter unilaterally ceases development work pursuant to
Section 13. 1.
8.8 RIGHT OF FIRST NEGOTIATION. In the event that Steritech,
during the term of the Cooperative Development Work, determines to pursue a
corporate partnership arrangement for the development, manufacturing and
distribution of a system (other than a system based on [*] for [*]
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[*], Steritech will notify Baxter in writing. Baxter will promptly notify
Steritech (in no event later than 30 days after Steritech's notice) whether
Baxter intends to enter negotiations for such an agreement. If so, Baxter will
have the exclusive right, for a period of 120 days from the date of Steritech's
notice, to negotiate with Steritech for the right to fund development of, and to
manufacture and distribute such system.
In the event that Baxter and Steritech do not enter into a definitive
written agreement within such period, Baxter will provide to Steritech prior to
the end of such period a precise definitive written statement of terms on which
Baxter is willing to enter such an agreement (the "Baxter Terms"). The Baxter
Terms shall include up-front payments, development funding, revenue sharing and
any other material terms. Steritech may thereafter negotiate with third
parties for the development, manufacturing and marketing of the system.
Steritech may not, however, enter into such an agreement with any third party
on terms ("Third Party Terms") which, taken as a whole, are more favorable to
the third party than the Baxter Terms unless Steritech shall have first
presented to Baxter such Third Party Terms, or the form of definitive agreement
with the third party incorporating the Third Party Terms, and Baxter shall not
have given to Steritech Baxter's unqualified commitment in writing to such
Third Party Terms or definitive agreement, as the case may be, within thirty
days thereafter. Third Party Terms shall not be considered more favorable than
the Baxter Terms if they afford an equal or lower net present value (based on
reasonable projections) or materially lesser rights to the third party than the
Baxter Terms. This right of first negotiation shall expire if Baxter breaches
this Agreement and does not cure the breach pursuant to Section 17 or
unilaterally ceases the development work pursuant to Section 13. 1.
8.9 ADDITIONAL CONSIDERATION. In consideration of the Rights of
First Refusal and Negotiation, Baxter will pay Steritech [*] upon
Steritech providing Baxter with Proof of Principles of a red blood cell
inactivation system on or after January 1, 1995. Should the parties not enter
into a development, manufacturing, and marketing agreement with respect to such
red blood cell inactivation system, Steritech will refund the [*]
payment to Baxter within 120 days after written request by Baxter.
8.10 SUBLICENSES. Neither Baxter nor Steritech shall not have the
right to grant to any third party sublicenses to the licenses granted above.
8.11 REGULATORY FILES. Baxter and Steritech shall each have full
access to all materials filed and correspondence with the FDA and other
regulatory agencies in connection with the Cooperative Development Work and the
System, and shall be entitled to use and rely on such materials with respect to
any regulatory approvals for a product sought by either, whether or not such
product relates to this Agreement.
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9. PROSECUTION OF PATENT RIGHTS.
9.1 STERITECH PATENTS. Steritech shall have the right but no
obligation to timely prepare, file, prosecute and maintain, under its exclusive
control and at its expense, Steritech Patents.
9.2 BAXTER PATENTS. Baxter shall have the right but no obligation
to timely prepare, file, prosecute and maintain, under its exclusive control
and at its expense, Baxter Patents.
9.3 JOINT PATENTS. Steritech and Baxter shall employ mutually
acceptable counsel for the purpose of timely preparing, filing, prosecuting and
maintaining Joint Patents. Whenever possible, the parties shall file
internationally under the Patent Cooperation Treaty and/or the European Patent
Convention in order to minimize expenses. The reasonable expenses of
preparing, filing, prosecuting and maintaining corresponding Joint Patents in
the countries of the United States, Australia, Canada, the United Kingdom,
Germany, Belgium, France, Italy, Netherlands, and Japan, and all other
countries that are agreeable to Baxter and Steritech, as evidenced in writing
shall be borne equally. Unless such other countries are agreed to by the
parties in writing, such other country filings shall not be made. Baxter shall
pay such patent expenses and will deduct Steritech's share of such expenses
from Revenue Sharing Payments otherwise due Steritech.
9.4 PRIOR ART; REVIEW AND COMMENT. Each party shall cooperate
with the other to ensure that all prior art that is pertinent to the
examination of a Joint Patent is brought to the attention of the other party.
The parties to this Agreement shall have the right to review and comment on
substantive documents prepared in connection with the preparation, filing,
prosecution and maintenance of the Joint Patents prior to the filing of such
papers; however, such review and comment shall be performed expeditiously so as
not to negatively affect patent rights.
9.5 ELECTION NOT TO PAY EXPENSES. If either party elects for any
reason not to pay its share of the reasonable expenses for a particular Joint
Patent, then, at the option of the other party:
(a) the joint ownership of that nonpaying party under this
Agreement with respect to that particular patent application or patent shall
immediately terminate and the paying party shall exclusively own that
particular patent or patent application, without affecting the nonpaying
party's rights under another patent applications and patents; or
(b) the application or patent shall be allowed to lapse.
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In the event the paying party elects option (a) above, the nonpaying
party hereby agrees to execute documents necessary to transfer its interest in
such patent or patent application to the paying party.
10. TRADEMARKS
10.1 BAXTER TRADEMARKS. Steritech shall make no use of any Baxter
trademark without the prior written approval of Baxter.
10.2 STERITECH TRADEMARKS. Baxter shall include the Steritech name
and mark in a prominent manner on and on packaging, literature and promotional
material and advertising for the System unless Baxter makes a good faith
determination that the Steritech name cannot be used due to third party rights.
Baxter shall, to the extent practical, provide to Steritech for review copies
of all proposed uses of the Steritech name and mark and references to
Steritech. At Steritech's reasonable request, Baxter shall refer to the
Steritech Compounds by the Steritech trademark that Steritech indicates is
appropriate. Baxter shall include on material bearing such trademarks an
acknowledgement that such trademarks are the property of Steritech. If
necessary in any market to maintain Steritech's rights in the Steritech
trademarks, Baxter shall enter into a registered user agreement regulating its
use of the Steritech trademarks. Except as provided in this Section, no rights
to Steritech trademarks are hereby granted to Baxter.
11. COMPETITIVE ACTIVITY.
11.1 RESTRICTIONS ON STERITECH. During the period when Baxter has
exclusive rights to market a System in a country, Steritech shall not sell,
transfer or otherwise make available to any third party in that country the
Steritech Compounds for use in the Field.
11.2 RESTRICTION ON BAXTER. Except as provided in Section 13.4.5
hereof, during the term of this Agreement, Baxter shall not manufacture,
distribute or sell any systems that use chemicals or chemical agents for the
inactivation of pathogens in platelet concentrates other than the System.
12. CONFIDENTIAL INFORMATION.
12.1 CONFIDENTIALITY AGREEMENT. The use and disclosure of
information designated by either party as confidential shall be governed by the
attached Schedule F Confidentiality Agreement. The Schedule F Confidentiality
Agreement shall survive termination of this Agreement.
12.2 USE OF CONSULTANTS. The parties contemplate that from time to
time during the term Of this Agreement third party technical consultants may be
employed by either party in connection with the development of Steritech
Compounds or Systems. The parties agree that information designated as
confidential may be disclosed to such
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consultants provided that the other party is given reasonable notice of the
circumstances and nature of the intended disclosure and that the disclosure is
limited to information necessary to enable the technical consultant to provide
technical consulting services. The consultant will be required to sign an
agreement with both Steritech and Baxter setting forth the consultant's
obligations with respect to confidential information.
13. CESSATION OF COOPERATIVE DEVELOPMENT WORK.
13.1 CESSATION. After January 1, 1995, either party may
unilaterally cease all participation in all Cooperative Development Work upon
ninety (90) days written notice of its intent. At any time thereafter, the
party who did not unilaterally cease participation in the Cooperative
Development Work shall have the right to proceed with the independent
development of the System at its own expense. Should a party so proceed, the
following terms and conditions shall apply.
13.2 STERITECH CONTINUING RIGHTS. In the event that Baxter chooses
to exercise its rights pursuant to Section 13.1 above, and Steritech proceeds
independently of Baxter to develop, manufacture or sell the System, then:
13.2.1 For Systems whose manufacture, use or sale is covered
by a claim of a Baxter Patent or uses Baxter Know-How, Baxter hereby grants
Steritech a worldwide non-exclusive license under the Baxter Patents and
Know-How to make, have made and use, sell or have sold such Systems in the
Field, terminating upon expiration of the last to expire of the Baxter Patents.
The license shall bear a [*] Royalty to Baxter on Steritech's Net Sales of
Systems in each country where a valid Baxter Patent subsists and would
be infringed but for a license, otherwise the license shall be royalty free.
Only a single Patent Royalty shall be paid by Steritech and Baxter on the sale
of each System. Royalty Payments shall be made within sixty (60) days of the
end of each calendar quarter.
13.2.2 For a period of two (2) years following the Notice
Period or until twelve (12) months following the date on which Steritech enters
into a contract with a third party for manufacture of Systems, whichever occurs
earlier, upon Steritech's request, Baxter shall manufacture or have manufactured
and sell Systems and/or components thereof to Steritech, to the extent Baxter
has at the time the present capability including manufacturing capability, at a
price equal to [*] of Baxter's actual fully loaded cost of goods. This
provision applies only to Systems which Baxter had received Regulatory
Approval or Systems or components the development of which had been
substantially completed prior to the Notice Period.
13.2.3 Except for the Royalty provided for in Section 13.2.1,
Baxter shall have no share in Net Sales from Steritech's sales of Systems made
pursuant to this Section 13.2.
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13.2.4 Should Baxter's decision to exercise its rights under
13.1 not be based on either: (i) Baxter's good faith determination that the
Steritech Compound does not comply with the specifications for Steritech
Compound, or (ii) Baxter's good faith determination that the marketplace no
longer will support an Inactivation Package, then Baxter shall pay Steritech a
one time payment of [*] at the time it unilaterally ceases to participate in
the Cooperative Development Work.
13.3 BAXTER CONTINUING RIGHTS. In the event that Steritech chooses to
exercise its rights under Section 13.1 above, and Baxter proceeds independently
of Steritech to develop, manufacture or sell the Systems, then:
13.3.1 The license grant under the Steritech Patents, and
Steritech Know-How shall become a worldwide non-exclusive license grant to
Baxter, terminating upon expiration of the last to expire of the Steritech
Patents. This license shall bear a [*] Royalty to Steritech on Baxter's Net
Sales of Systems in each country where a valid Steritech Patent subsists and
would be infringed but for a license, otherwise the license shall be Royalty
free. Only a single Patent Royalty shall be paid by Baxter to Steritech on the
sale of each System. Royalty Payments shall be made within sixty (60) days of
the end of each calendar quarter.
13.3.2 Baxter will retain all distribution rights on an
exclusive basis.
13.3.3 For a period of two (2) years following the Notice
Period or until twelve (12) months following the date on which Baxter enters
into a contract with a third party for manufacture of Steritech Compound,
whichever occurs earlier, upon Baxter's request, Steritech shall manufacture or
have manufactured and sell Steritech Compound thereof to Baxter, to the extent
Steritech has at the time the present capability including manufacturing
capability, at a price equal to [*] of Steritech's actual fully loaded cost of
goods.
13.3.4 Except for the Royalty provided for in Section
13.3.1, Steritech shall have no share in Net Sales from Baxter's sale of
Systems.
14. REPORTS.
14.1 QUARTERLY SALES REPORTS. Each quarterly payment made to Steritech
under Section 7 shall be accompanied by a full and accurate accounting of all
Net Sales of Products by Baxter and Baxter for the calendar year. Each such
report shall include at least the following information as to each country and
Region:
14.1.1 The number of Inactivation Packages sold to third
parties by Baxter and Baxter affiliates;
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14.1.2 The Net Sales, with a breakdown between Net Sales
falling within clause (a) and clause (b) of the definition of such term of
Section 2 hereof;
14.1.3 Additional Cost of Goods (if applicable) together
with substantiation and breakdown thereof;
14.1.4 Baxter's computation of the Revenue Sharing Payment
due to Steritech; and
14.1.5 Price lists for Inactivation Packages, and for
disposable sets with and without Inactivation Packages, as then in effect.
Each report shall include the certification of the Controller of Baxter
attesting to the fact that the report is an accurate and complete accounting of
all information required hereunder.
14.1.6 Any deductions from Revenue Sharing Payments.
15. BOOKS AND RECORDS.
15.1 RECORDS. Baxter and each of its affiliates shall keep full
and accurate books of account containing all particulars that may be necessary
for the purpose of calculating all amounts owing to Steritech. Books of
account maintained by Baxter and each of its affiliates shall be kept at the
principal place of business of Baxter. All such reports and data shall be open
for inspection on a confidential basis at all reasonable times and Steritech
may conduct at its own expense, once every year during normal business hours
through an independent certified public accountant designated by Steritech and
reasonably acceptable to Baxter, an examination of the accounts contemplated
above. If any audit conducted on behalf of Steritech shall show that Baxter or
any of its affiliates underpaid the royalties due to Steritech under the
licenses herein as to the period subject of the audit, then Baxter shall
immediately pay to Steritech any such deficiency with interest thereon in
accordance with Section 15.3. If the underpayment shall exceed ten percent
(10%) of the amount owed for any calendar year, Baxter shall also reimburse
Steritech for costs related to such audit.
15.2 RETENTION. Books and records required to be maintained by
Baxter and its affiliates hereunder shall be retained for at least two (2)
years from the date of the royalty payment to which they pertain.
15.3 INTEREST. All payments due hereunder from Baxter that are not
paid to Steritech when due and payable hereunder shall bear interest at an
annual rate equal to 4% above the U.S. dollar reference rate ("prime rate")
charged from time to time by Bank of America N.T. & S.A. from the date due
until paid or at such lower rate as shall be the maximum rate permitted by law.
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16. TERM. The term of this Agreement shall be for an initial period of
fifteen (15) years commencing with the Effective Date unless terminated
earlier pursuant to Section 13.1 or 17.1. Thereafter, the parties shall make
good faith efforts to negotiate a renewal hereafter for additional successive
periods of three (3) years unless either party provides the other with written
notice of termination no later than twelve (12) months prior to the conclusion
of the initial term or any subsequent renewal term.
17. BREACH.
17.1 MATERIAL BREACH. Either party may terminate this Agreement
for any material breach by the other party sixty (60) days after providing the
other party with written details of the breach if the breach remains uncured at
the end of the sixty (60) day notice period. Notwithstanding the preceding
sentence, Baxter acknowledges that the ability of Steritech to carry on the
Cooperative Development work will be substantially adversely affected in the
event that Baxter does not make payment when due of development payments under
Section 3 hereof or Milestone payments under Section 4 hereof. Accordingly, in
the event of the failure to make any of such payments that are due and owing a
forty-five (45) day notice period shall apply in lieu of such sixty (60) day
notice period in the preceding sentence. To the extent Steritech is in breach
for failing to fund its development efforts under this Agreement, Steritech
will have one hundred eighty (180) days to cure such breach. If the breach
remains uncured after one hundred and eighty (180) days. Baxter can terminate
the Agreement pursuant to the procedure set forth above in this Section.
17.2 STERITECH RIGHTS. In the event of termination by Steritech as
provided in Section 17.1, without limiting any other rights or remedies, Baxter
shall immediately upon such termination pay to Steritech the amount of [*] after
the date of termination pursuant to Section 3.9 (as the same may have been
revised pursuant to budget modifications previously approved by the Management
Board) and the amount of [*], in each case whether or not then earned, and any
other amounts owing from Baxter to Steritech hereunder. In addition, Steritech
shall be entitled to all the rights in Section 13.2.1 through Section 13.2.4 on
an exclusive basis, subject to the terms of such sections.
17.3 BAXTER RIGHTS. In the event of termination by Baxter as
provided in Section 17.1, without limiting any other rights or remedies,
Steritech shall immediately upon such termination pay to Baxter any amounts
then owing from Steritech to Baxter hereunder. Additionally, Steritech shall
return to Baxter any monies paid by Baxter under Section 3.9 that have not been
expended pursuant to Cooperative Development Work as of the date of breach. In
addition, Baxter shall be entitled to all rights in Section 13.3.1 through
13.3.4 on an exclusive basis.
*[Confidential Treatment Requested]
23
<PAGE> 29
18. REPRESENTATIONS IN INDEMNITIES
18.1 STERITECH REPRESENTATIONS. Steritech represents and warrants
that as of the Effective Date:
(a) It has granted no prior license or assignment of
rights under the Steritech Patents in the Field.
(b) There are no foreign or United States administrative,
judicial or Patent and Trademark Office proceedings contesting the inventorship
or ownership of any Steritech Patent;
(c) Neither the execution and delivery of this Agreement,
nor the performance of the obligations of Steritech hereunder shall result in a
violation, breach or event of default (or any event or condition which with
notice or the passage of time or both would constitute an event of default) of
or with respect to any agreement, mortgage, indenture or order of any court of
competent jurisdiction binding upon Steritech or upon the property of
Steritech;
(d) It is party to no contract materially adverse to the
obligations undertaken and rights granted in this Agreement;
(e) The execution of this Agreement and delivery to
Baxter does not conflict with the terms of any agreement to which Steritech is
bound.
(f) The Technology Transfer Agreement and the License
Agreement between Steritech and HRI Research, Inc. each dated December 13, 1991
are in full force and effect and are binding and enforceable in accordance with
their terms.
(g) That Steritech has advised Baxter of any knowledge of
any third party patent or know-how that might be infringed by the Steritech
Compound; and
(h) Steritech is unaware of any technology not licensed
to Baxter hereunder, that it believes would be necessary to optimally use the
Steritech Compound.
18.2 STERITECH INDEMNIFICATION. Steritech shall indemnify Baxter
for any losses sustained or expenses incurred by Baxter as a result of a breach
by Steritech of any of the foregoing representations and warranties.
18.3 BAXTER REPRESENTATIONS. Baxter represents and warrants to
Steritech that as of the Effective Date:
(a) neither the execution and deliver of this Agreement,
nor the performance of the obligations of Baxter hereunder shall result in a
violation, breach or
24
<PAGE> 30
event of default (or any event or condition which with notice or the passage Of
time or both would constitute an event of default) of or with respect to any
agreement, mortgage, indenture, or order of any court of competent jurisdiction
being upon Baxter or upon the property of Baxter.
(b) it is party to no contract materially adverse to the
obligations undertaken in this Agreement.
(c) Baxter has no current agreements with other parties
for systems for the photo-inactivation of pathogens in platelet concentrates.
18.4 BAXTER INDEMNIFICATION. Baxter shall indemnify Steritech for
losses sustained or expenses incurred by Steritech as a result of a breach by
Baxter of either of the foregoing representations and warranties.
19. INDEMNIFICATION, LIABILITY, INFRINGEMENT.
19.1 DEFENSE OF THIRD PARTY INFRINGEMENT SUITS. In the event that
a third party shall sue either party alleging that the manufacture, use or sale
of the System, or any part thereof, infringes a patent of such third party,
then the party sued shall promptly notify the other party in writing. The
party sued shall have the option to control the defense of such suit. The
parties shall provide reasonable cooperation in the defense of such suit and
furnish all evidence in their control. All attorney's fees as well as any
judgments, settlements, or damages payable with respect to such suit shall be
deducted from the Net Sales and paid to the party incurring the expenses.
Neither party shall enter into any settlement that materially affects the other
party's rights or interests without such other party's prior written consent,
which consent shall not be unreasonably withheld.
19.2 THIRD PARTY PATENT EXPENSES. If the Management Board shall
approve the payment to a third-party of Patent Royalty Payments with respect to
the sale or use of the System or any portion thereof, then Baxter and Steritech
shall bear the Patent Royalty Payment under such license equally, and Baxter
may deduct Steritech's share of such Patent Royalty Payment from Revenue
Sharing Payments due to Steritech.
19.3 SUITS FOR INFRINGEMENT BY OTHERS. In the event Baxter or
Steritech becomes aware of any actual or threatened infringement the Steritech
Licensed Patents or the Steritech Licensed Know-How, that party shall promptly
notify the other and the parties shall discuss the most appropriate action to
take. If the infringing product competes with a System in the Field, Baxter
shall have the first right to bring, at its own expense, an infringement action
against the third party infringer. If Baxter does not bring such action within
six (6) months from date of notification, then Steritech may bring such action
at its own expense. The party not conducting such suit shall assist the other
party without expense to the party requesting assistance. The award in such
suit shall first be
25
<PAGE> 31
used to pay the expenses of such suit and any balance shall be divided between
the parties in proportion to the Revenue Sharing Payment.
In the event the accused product is not in competition with a System
in the Field, then
(a) Steritech alone may, in its sole discretion and at
its expense, initiate and conduct an infringement action relating to alleged
infringement of Steritech Patents or Steritech Know-How and keep any settlement
or award which may be obtained.
(b) Baxter alone may, in its sole discretion and at its
expense, initiate and conduct an infringement action relating to alleged
infringement of Baxter Patents or Baxter Know-How and keep any settlement or
award which may be obtained.
20. GENERAL
20.1 ENTIRE AGREEMENT. The following three agreements contain the
entire agreement between the parties relating to the subject matter hereof and
all prior understandings, representations and warranties between the parties
are superseded; provided, however, that the confidential disclosure letter
agreement dated March 17, 1993 shall continue to govern the disclosures made
thereunder. (1) This Agreement, (2) the attached Schedule F Confidentiality
Agreement of even date, and (3) the Stock Purchase Agreement of even date.
None of the terms of this Agreement shall be deemed to be waived or amended by
either party unless such a waiver or amendment specifically references this
Agreement and is in writing signed by the party to be bound.
20.2 RELATIONSHIP OF PARTIES. Baxter acknowledges that it is not
an agent of Steritech and has no authority to speak for, represent, or obligate
Steritech in any way. Steritech acknowledges that it is not an agent of Baxter
and has no authority to speak for, represent, or obligate Baxter in any way.
This Agreement does not and shall not be deemed to create any relationship of a
joint venture or a partnership.
20.3 SENIOR BAXTER CONTACT. The senior Baxter contact of the
purpose of administering this Agreement is the President of the Fenwal Division
of Baxter Healthcare Corporation, One Baxter Parkway, Deerfield, Illinois
60015. At present, Mr. Roberto Perez occupies this position.
20.4 SENIOR STERITECH CONTACT. The senior Steritech contact for
the purpose of administering this Agreement is the President of Steritech at
the address first above written. At present, Mr. Stephen T. Isaacs occupies
this position.
20.5 SEVERABILITY. The parties do not intend to violate any public
policy or statutory or common law. However, if any sentence, paragraph, clause
or combination of this Agreement is in violation of any law or is found to be
otherwise unenforceable by
26
<PAGE> 32
a court from which there is no appeal, or no appeal is taken, such sentence,
paragraph, clause, or combination of the same shall be deleted and the
remainder of this Agreement shall remain binding, provided that such deletion
does not alter the basic structure of this Agreement. In such event, the
parties shall renegotiate this Agreement in good faith, but should such
negotiations not result in a new agreement within ninety (90) days of the
initiation of such negotiations, then this Agreement may be terminated by
either party by thirty (30) days notice to the other.
20.6 FORCE MAJEURE. Any party shall be excused from the
performance of its obligations under this Agreement and shall not be liable for
damages to the other if such performance is prevented by circumstances beyond
its effective control. Such excuse from performance shall continue so long as
the condition responsible for such excuse continues and for a thirty (30) day
period thereafter. For the purposes of this Agreement, circumstances beyond
the control of a party which excuse that party from performance shall include,
but shall not be limited to, acts of God, acts, regulations or laws of any
government including currency controls, war, civil commotion, commandeer,
destruction of facility or materials by fire, earthquake, storm or other
casualty, labor disturbances, judgment or injunction of any court, epidemic,
and failure of public utilities or common carrier.
20.7 NOTICES. All notices and demands required or permitted to be
given or made pursuant to this Agreement shall be in writing and shall be
effective when personally given or made or when placed in an envelope and
deposited in the United States mail postage prepaid, addressed as follows:
IF TO BAXTER: IF TO STERITECH, IN CARE OF:
General Counsel President and Chief Executive Officer
Baxter Healthcare Corporation Steritech, Inc.
One Baxter Parkway 2525 Stanwell Drive
Deerfield, Illinois 60015 Concord, California 94520
WITH A COPY TO: WITH A COPY TO:
President, Fenwal Division Cooley, Godward, Castro, Huddleson & Tatum
Baxter Healthcare Corporation 1 Maritime Plaza, 20th Floor
One Baxter Parkway San Francisco, CA 94111
Deerfield, Illinois 60015 Attn: Howard Ervin
or to such other address as to which either party may notify the other.
20.8 BINDING. This Agreement shall be binding upon and inure to
the benefit of the parties, their successors and assigns. This Agreement shall
be assignable: (i) by
27
<PAGE> 33
either party without the consent of the other to any Affiliate of the party (an
Affiliate being defined as any entity in which the party or its parent owns or
controls directly or indirectly, 40% or more of the voting securities); (ii) by
either party with the written consent of the other; or (iii) by either party
without the consent of the other to the purchase of substantially all the
assets of its business to which this Agreement relates. Any attempted
assignment which does not comply with the terms of this Section shall be void.
20.9 GOVERNING LAW. This Agreement is deemed to have been executed
in and shall be governed by and construed according to the laws of the State of
Illinois.
20.10 VENUE. In the event that Baxter files suit against Steritech,
it shall do so in, and hereby agrees to submit to, the jurisdiction of a court
in U.S. District Court, N.D. California. In the event that Steritech files
suit against Baxter, it shall do so in, and hereby agrees to submit to, the
jurisdiction of the U.S. District Court N.D. Illinois.
IN WITNESS WHEREOF, this Agreement is signed by duly authorized
representatives of each party as of the Effective Date.
STERITECH, INC. BAXTER HEALTHCARE CORPORATION
By: STEPHEN T. ISAACS By: TIMOTHY B. ANDERSON
-------------------- --------------------
STEPHEN T. ISAACS TIMOTHY B. ANDERSON
Title: President Title: President Biotech
Date: December 11, 1993 Date: December 13, 1993
----------------- -----------------
28
<PAGE> 34
SCHEDULE A
BAXTER BENCHMARKS
[*]
o Provide [*] studies that are modified to be suitable for [*]
o Technical Exchange of Information between Steritech and Baxter Nivelles.
o [*] engineering team in place.
o [*] survey in place.
o [*] from Steritech to Nivelles completed.
[*]
o [*] studies to define adequacy of [*] initiated.
o Define priority of [*].
o Provide [*] for backup [*] that are modified to be suitable for [*]
[*]
o Finalize design for [*] (based on marketing input/BB survey results).
o Finalize design for [*] (based on marketing input/BB survey results).
o [*] completed, [*] delivered.
[*]
o Provide [*] of the presumed [*].
[*]
o Provide [*] for validation studies of [*].
o Provide [*] for validation studies of [*].
o [*] to begin on [*].
[*]
o Provide [*] to Steritech for [*].
o Provide [*].
[*]
o Provide complete data on [*]; provide relevant [*].
[*]
o Provide required number of [*].
[*]
o Finalize marketing and promotional/sales materials for [*].
*[Confidential Treatment Requested]
<PAGE> 35
SCHEDULE B
Steritech Patents: United States
--------------------------------
No. Pat. /App No. Date Title
1 [*] [*] DEVICE AND METHOD FOR
PHOTOINACTIVATION
2 [*] [*] ACTIVATION COMPOUNDS
AND METHODS OF SYNTHESIS
OF ACTIVATION COMPOUNDS
3 [*] [*] COMPOUNDS FOR THE
[*] IN BLOOD
4 [*] [*] METHODS FOR RENDERING
AMPLIFIED NUCLEIC ACID
SUBSEQUENTLY UNAMPLIFIABLE
5 [*] [*] DEVICE AND METHOD
FOR PHOTOACTIVATION
6 [*] [*] DEVICE AND METHOD FOR
PHOTOACTIVATION
7 [*] [*] DECONTAMINATING BLOOD
COMPONENTS
8 [*] [*] DEVICE AND METHOD FOR
PHOTOACTIVATlON
9 [*] [*] METHOD FOR INHIBITING
TEMPLATE DEPENDENT
ENZYMATIC SYNTHESIS
10 [*] [*] PHOTOCHEMICAL
DECONTAMINATION
TREATMENT OF WHOLE
BLOOD OR BLOOD COMPONENTS
*[Confidential Treatment Requested]
1
<PAGE> 36
Foreign
--------
1 [*] [*] DECONTAMINATING BLOOD
COMPONENTS
2 [*] [*] ACTIVATION COMPOUNDS
AND METHODS FOR NUCLEIC
ACID STERILIZATION
3 [*] [*] ACTIVATION COMPOUNDS
AND METHODS FOR NUCLEIC
ACID STERILIZATION
4 [*] [*] ACTIVATION COMPOUNDS
AND METHODS OF NUCLEIC
ACID STERILIZATION
5 [*] [*] ACTIVATION COMPOUNDS
AND METHODS FOR NUCLEIC
ACID STERILIZATION
*[Confidential Treatment Requested]
<PAGE> 37
SCHEDULE C
STERITECH BENCHMARKS
1. [*] PROGRAM INITIATED
(requires [*])
DATE: [*]
2. INITIATION OF [*]
(requires [*])
DATE: [*]
3. INITIATION OF [*]
(requires successful completion of [*])
DATE: [*]
4. [*]
(Requires successful completion of [*]).
DATE: [*]
*[Confidential Treatment Requested]
<PAGE> 38
SCHEDULE D
BAXTER/STERITECH JOINT PROGRAM BUDGET
1993 1994 1995 1996 1997 TOTAL
STERITECH [*] [*] [*] [*] [*] [*]
BAXTER [*] [*] [*] [*] [*] [*]
OUTSIDE [*] [*] [*] [*] [*] [*]
TOTAL [*] [*] [*] [*] [*] [*]
STERITECH BAXTER
[*] [*]
[*] [*]
[*]
[*]
[*]
* (US DOLLARS IN THOUSANDS)
*[Confidential Treatment Requested]
<PAGE> 39
SCHEDULE E
----------
DEFERRABLE OUTSIDE CONTRACT EXPENSES*
Six Month Period Total Contract Expense Maximum Deferrable Amt. (50%)
---------------- ---------------------- ----------------------------
7/1/94 - 12/31/94 [*] [*]
1/1/95 - 6/30/95 [*] [*]
7/1/95 - 12/31/95 [*] [*]
1/1/96 - 6/30/95 [*] [*]
7/1/96 - 12/31/96 [*] [*]
1/1/97 - 6/30/97 [*] [*]
7/1/97 - 12/31/97 [*] [*]
*Limited to the extent of deferral of prepayment of outside contract
expenses per contract section 3.9.3.
*[Confidential Treatment Requested]
<PAGE> 40
Schedule F
----------
CONFIDENTIALITY AGREEMENT
THIS AGREEMENT, made on the Effective Date of the Development,
Manufacturing and Marketing Agreement ("Agreement") between Baxter and
Steritech to which this document is appended, is between Steritech, Inc.
("STERITECH"), having a principal place of business at 2525 Stanwell Drive,
Concord, California and Baxter Healthcare Corporation ("BAXTER"), a corporation
having a principal place of business at One Baxter Parkway, Deerfield, Illinois
60015, to assure the protection and preservation of Proprietary Information to
be disclosed or made available to each other in connection with the Agreement.
WHEREAS, the parties have entered into a development, manufacturing
and marketing collaboration pursuant to the Agreement;
WHEREAS, the parties desire to assure the confidential status of the
information which may be disclosed to each other during the Agreement;
NOW THEREFORE, in reliance upon and in consideration of the following
undertakings, the parties agree as follows:
1. All information disclosed to the other party shall be deemed
to be "Proprietary Information." In particular, Proprietary Information shall
be deemed to include any information, process, technique, algorithm, program,
design, drawing, formula or test data relating to any research project, work in
progress, future development, engineering, manufacturing, marketing, servicing,
financing or personnel matter relating to the disclosing party, its present or
future products, sales, suppliers, clients, customers, employees, investors, or
business. Any Proprietary Information outside the scope of the Agreement shall
be identified by the disclosing party in writing and marked "Confidential" or
if such Proprietary Information is disclosed orally, within 30 days after such
disclosure the Proprietary Information shall be reduced to writing and marked
"Confidential" by the disclosing party and such writing forwarded to the
receiving party.
2. The term "Proprietary Information" shall not be deemed to
include information which: (i) is now, or hereafter becomes, through no act or
failure to act on the part of the receiving party, generally known or
available; (ii) is known by the receiving party at the time of receiving such
information as evidenced by its records, (iii) is furnished to the receiving
party by a third party who the receiving party believes has a right to disclose
such information; (iv) is independently developed by the receiving party
without any breach of this Confidentiality Agreement; and (v) is the subject of
a written permission to disclose provided by the disclosing party.
<PAGE> 41
3. Each party shall maintain in trust and confidence and not
disclose to any third party or use for any unauthorized purpose any Proprietary
Information received from the other party. However, each party may disclose
Proprietary Information to its affiliates who are bound by this Agreement
(affiliates include: any company owning 40% or more of a party, or a subsidiary
of the party, or a subsidiary of a party owning 40% or more of the party).
Each party may use such Proprietary Information only to the extent required
under the Agreement.
4. The responsibilities of the parties with respect to the
Proprietary Information are limited to using the same degree of care used to
protect their own Proprietary Information from unauthorized use or disclosure.
Both parties shall advise their employees or agents who might have access to
such Proprietary Information of the confidential nature thereof.
5. This Confidentiality Agreement shall continue in full force
and effect for so long as the parties continue to exchange Proprietary
Information under the Agreement. The termination of the Agreement shall not
relieve either party of the obligations imposed by this Confidentiality
Agreement with respect to Proprietary Information disclosed prior to the
effective date of such termination, which obligations shall survive the
termination of the Agreement for a period of two (2) years from the date of
disclosure.
6. Each party hereby acknowledges and agrees that in the event of
any breach of this Confidentiality Agreement by the other party, including,
without limitation, the actual or threatened disclosure of a disclosing party's
Proprietary Information without the prior express written consent of the
disclosing party, the disclosing party will suffer an irreparable injury, such
that no remedy at law will afford it adequate protection against, or
appropriate compensation for, such injury. Accordingly, each party hereby
agrees that the other party shall be entitled to any injunctive relief as may
be granted by a court of competent jurisdiction.
AGREED TO: AGREED TO:
STERITECH, INC. BAXTER HEALTHCARE
CORPORATION
By: STEPHEN T. ISAACS By: TIMOTHY B. ANDERSON
------------------------ -----------------------
STEPHEN T. ISAACS TIMOTHY B. ANDERSON
Title: President Title: President Biotech
Date: December 11, 1993 Date: December 13, 1993
------------------------ ----------------------
2