Exhibit
10.12


 


LICENSE AGREEMENT


 


This
Agreement, effective as of August 4, 1999 (the “Effective Date”), is by
and between:


 


Hospital
for Joint Diseases Orthopaedic Institute (hereinafter “HJD”), a corporation
organized and existing under the laws of the State of New York and having a
place of business at 301 East 17th Street, New York, New York  10003


 


AND


 


Orthogen
Corporation (hereinafter “Orthogen”), a corporation organized and existing
under the laws of the State of New Jersey having its principal office at 530
Morris Avenue, Suite 204, Springfield, New Jersey 07081.


 


RECITALS


 


WHEREAS,
Drs. John Ricci and Harold Alexander, formerly of HJD and Dr. Sally
Frenkel, currently of HJD (hereinafter “the HID Scientists”), and Dr. Charles
Naiman of Orthogen, have made certain inventions relating to the control of
cell and tissue growth on surfaces, all as more particularly described in
pending U.S. patent applications and counterpart foreign patent applications
co-owned by HJD and Orthogen, identified in annexed Appendix I and forming an
integral part hereof (hereinafter “the Inventions”);


 


WHEREAS,
subject to the terms and conditions hereinafter set forth, HJD is willing to
grant to Orthogen and Orthogen is willing to accept from HJD the License (as
hereinafter defined);


 


NOW,
THEREFORE, in consideration of the mutual promises and agreements contained
herein, the parties hereto hereby agree as follows:


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


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1.             Definitions.


 


a.                                       “Calendar Year” shall mean any
consecutive period of twelve months commencing on the first day of January of
any year.


 


b.                                      “Corporation Entity” shall mean
any company or other legal entity controlling, controlled by or under common
control of Orthogen.  For purposes of
this definition the term “control” shall mean: (i) in the case of a
corporate entity, the direct or indirect ownership of at least a majority of
the stock or participating shares entitled to vote for the election of
directors, (ii) in the case of a partnership, the power customarily held
by a general partner to direct the management and policies of such partnership,
or (iii) in the case of a joint venture, whether in corporate, partnership
or other legal form, a more than nominal economic interest.


 


c.                                       “Date of First Commercial Sale”
shall have the meaning set forth in Section 4.b. hereof.


 


d.                                      “Field” shall mean the control of
tissue or cell growth on synthetic substrates.


 


e.                                       “License” shall mean the exclusive
worldwide license to practice the Research Technology for the development,
manufacture, use and sale of the Licensed Products (as hereinafter defined) in
the Field.


 


f.                                         “Licensed Products” shall mean
implants or cell growth systems, or any product or process to control cell
growth on synthetic substrates, as covered by a claim of any unexpired
HJD/Orthogen Joint Patent (as hereinafter defined) which has not been
disclaimed or held invalid by a court of competent jurisdiction from which no
appeal can be taken.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


2

















 


g.                                      “Licensed Service” shall mean any
service delivered, performed or provided by Orthogen or Corporation Entity
which utilizes Licensed Products.


 


h.                                      “Net Sales” shall mean the total
amount invoiced in connection with sales of the Licensed Products or Services
to any person or entity that is not a Corporation Entity or a sublicensee of
Orthogen or a Corporation Entity under the License, after deduction of all the
following to the extent applicable to such sales;


 


i)                                         [***];


 


ii)                                      [***];


 


iii)                                   [***];


 


iv)                                  [***]; and


 


v)                                     [***].


 


i.                                          “HJD Know-How” shall mean the
Inventions.


 


j.                                          “HJD/Orthogen Joint Patents” shall
mean all United States and foreign patents and patent applications, and any
divisions, continuations, in whole or in part, reissues, renewals and
extensions thereof, and pending applications therefore which claim Inventions
and which are identified on annexed Appendix I.


 


k.                                       “Research Technology” shall mean
HJD rights in the Invention and all HJD/Orthogen Joint Patents and Know-How.


 


2.             Effective Date.


 


This
Agreement shall be effective as of the Effective Date and shall remain in full
force and effect until it expires or is terminated in accordance with Section 11
hereof.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


3

















 


3.             Patents and Patent Applications.


 


a.                                       All costs and fees incurred in
connection with all patent prosecution proceedings with respect to the
HJD/Orthogen Joint Patents shall be borne solely by Orthogen.


 


b.                                      If at any time during the term of
this Agreement Orthogen decides that it is undesirable, as to one or more
countries, to prosecute or maintain any patents or patent applications within
the HJD/Orthogen Joint Patents, it shall give prompt written notice thereof to
HJD, and upon receipt of such notice Orthogen shall be released from its
obligations to bear all of the expenses to be incurred thereafter as to such
countries in conjunction with such patent(s) or patent application(s) and
such patent(s) or application(s) shall be deleted from the Research
Technology and HJD shall be free to grant non-exclusive rights in and to the
Research Technology in such countries to third parties, without further notice
or obligation to Orthogen, and Orthogen shall have non-exclusive rights to
exploit the Research Technology in such countries.


 


4.             Grant of License.


 


a.                                       Subject to the terms and conditions
hereinafter set forth, HJD hereby grants to Orthogen and Orthogen hereby
accepts from HJD the License.


 


b.                                      The License granted to Orthogen in
Section 4.a. hereto shall commence upon the Effective Date and shall
remain in force on a country-by-country basis, if not previously terminated
under the terms of this Agreement, for fifteen (15) years from the Date of
First Commercial Sale in such country or until the expiration date of the last
to expire of the HJD/Orthogen Joint Patents whichever shall be later.  Orthogen shall inform HJD in writing of the
Date of First Commercial Sale 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


4

















 


with respect to each Licensed Product and/or Service in each country as
soon as practicable after the making of each such first commercial sale.


 


c.                                       Orthogen shall be entitled to
grant sublicenses under the License on terms and conditions in compliance and
not inconsistent with the terms and conditions of this Agreement (i) to a
Corporation Entity or (ii) to other third parties for consideration and in
an arms-length transaction.  All
sublicenses shall only be granted by Orthogen under a written agreement, a copy
of which shall be provided by Orthogen to HJD as soon as practicable after the
signing thereof. Each sublicense granted by Orthogen hereunder shall be subject
and subordinate to the terms and conditions of this License Agreement and shall
contain (inter-alia) the following provisions:


 


(1)           the sublicense shall expire
automatically on the termination of the License;


 


 


(2)           the sublicense shall not be
assignable, in whole or in part;


 


(3)           the sublicensee shall not grant
further sublicenses; and


 


(4)                                  the sublicense agreement
shall include the text of Section 9 of this Agreement and shall state that
HJD is an intended third party beneficiary of such sublicense agreement for the
purpose of enforcing such indemnification and insurance provisions.


 


5.             Payments for License.


 


a.                                       In consideration for the grant and
during the term of the License with respect to each Licensed Product or
Service, Orthogen shall pay to HJD:


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


5

















 


i)                                         For a dental Licensed Product, a
royalty of [***]% of the Net Sales of Orthogen, or any sublicensee of Orthogen
(not being a Corporation Entity).


 


ii)                                      For a medical Licensed Product, a royalty
of [***]% of the Net Sales of Orthogen, or any sublicensee of Orthogen (not
being a Corporation Entity).


 


iii)                                   For a Licensed Service, a royalty
of [***]% of the Net Sales of Orthogen.


 


iv)                                  [***]% of any monetary
consideration, not based on Net Sales, received by Orthogen from a sublicensee
of Orthogen (not being a Corporation Entity) under the terms of, or as a
consideration for the grant of, a sublicense of any rights or for grant of an
option to acquire such a sublicense.


 


b.                                      In the event that a patent license
from a third party is necessary for the manufacture or sale of a Licensed
Product, Orthogen shall be entitled to deduct from royalties which would
otherwise be due HJD under Section 5.a. hereof, the amount of royalties
which Orthogen must pay to such third party for such license. In no event,
however, shall this deduction exceed [***] of the royalties otherwise due under
this Agreement.


 


c.                                       For the purpose of computing the
royalties due to HJD hereunder, the year shall be divided into two parts ending
on June 30 and December 31. 
Not later than [***] ([***]) days after each December and June in
each Calendar Year during the term of the License, Orthogen shall submit to HJD
a full and detailed report of royalties or payments due HJD under the terms of
this Agreement for the


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


6

















 


preceding half year (hereinafter “the Half-Year Report”), setting forth
the Net Sales and/or lump sum payments and all other payments or consideration
from sublicensees upon which such royalties are computed and including at least


 


i)                                         the quantity of Licensed Products
or Services used, sold, transferred or otherwise disposed of;


 


ii)                                      the selling price of each Licensed
Product or Service;


 


iii)                                   the deductions permitted under
subsection 1.h. hereof to arrive at Net Sales; and


 


iv)                                  the royalty computations and
subject of payment.


 


If
no royalties or other payments are due, a statement shall be sent to HJD
stating such fact.  Payment of the full
amount of any royalties or other payments due to HJD for the preceding half
year shall accompany each Half-Year Report on royalties and payments. Orthogen
shall keep for a period of at least six (6) years after the date of entry,
full, accurate and compete books and records consistent with sound business and
accounting practices and in such form and in such detail as to enable the
determination of the amounts due to HJD from Orthogen pursuant to the terms of
this Agreement.


 


d.                                      Within [***] ([***]) days after
the end of each Fiscal Year, commencing on the Date of First Commercial Sale
Orthogen shall furnish HID with a report (hereinafter “the Annual Report”),
certified by an independent certified public accountant, relating to the
royalties and other payments due to HID pursuant to this Agreement in respect
of the Calendar Year covered by such Annual Report 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


7

















 


and containing the same details as those specified in Section 5.c.
above in respect of the Half-Year Report.


 


e.                                       On reasonable notice and during
regular business hours, HJD or the authorized representative of HJD shall each
have the right to inspect the books of accounts, records and other relevant
documentation of Orthogen or of Corporation Entity and the sublicensees of
Orthogen or of Corporation Entity insofar as they relate to the production,
marketing and sale of the Licensed Products and Services, in order to ascertain
or verify the amount of royalties and other payments due to HJD hereunder, and
the accuracy of the information provided to HJD in the aforementioned reports.


 


f.                                         Beginning on January 1, 2002
and continuing thereafter until this Agreement shall terminate or expire,
Orthogen agrees that if the total royalties paid to HJD under subsection 5.a.
hereof for dental products do not amount to [***] dollars ($[***]) in 2002,
[***] dollars ($[***]) in 2003 and [***] dollars ($[***]) each year thereafter,
Orthogen will pay to HJD within [***] ([***]) days after the end of each such
Calendar Year, as additional royalty, the difference between the amount of the
total royalties paid to HJD by Orthogen for dental products in such Calendar
Year and the appropriate annual minimum amount, failing which HJD shall have
the right solely at its election, upon written notice to Orthogen, to terminate
this Agreement with regard to dental products for cause.


 


g.                                      Beginning on January 1, 2005
and continuing thereafter until this Agreement shall terminate or expire,
Orthogen agrees that if the total royalties paid to HJD under subsection 5.a.
hereof for medical products do not amount to [***] dollars 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


8

















 


($[***]) in 2005, [***] dollars ($[***]) in 2006 and [***] dollars
($[***]) each year thereafter, Orthogen will pay to HJD within [***] ([***])
days after the end of each such Calendar Year, as additional royalty, the
difference between the amount of the total royalties paid to HJD by Orthogen
for medical products in such Calendar Year and the appropriate annual minimum
amount, failing which HJD shall have the right solely at its election, upon
written notice to Orthogen, to terminate this Agreement with regard to medical
products for cause.


 


6.             Method of Payment.


 


a.                                       Royalties due to HJD hereunder
shall be paid to HJD in United States dollars. Any such royalties on or other
payments relating to transactions in a foreign currency shall be converted into
United States dollars based on the closing buying rate of the Morgan Guaranty
Trust Company of New York applicable to transactions under exchange regulations
for the particular currency on the last business day of the accounting period
for which such royalty or other payment is due.


 


b.                                      Orthogen shall be responsible for
payment to HJD of all royalties due on sale, transfer or disposition of
Licensed Products or Services by Corporation Entity or by the sublicensees of
Orthogen or of Corporation Entity.


 


7.             Development and
Commercialization.


 


a.                                       Orthogen undertakes to use
reasonable diligence to carry out a development plan, including but not limited
to, the performance of all efficacy, pharmaceutical, safety, toxicological and
clinical tests, trials and studies and all other activities necessary in order
to obtain the approval of the FDA for the production, use and 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


9

















 


sale of the Licensed Products and Services.  Orthogen further undertakes to exercise due
diligence and to employ its reasonable diligence to obtain or to cause its
sublicensees to obtain, the appropriate approvals of the health authorities for
the production, use and sale of the Licensed Products, in each of the other
countries of the world in which Orthogen or its sublicensees intend to produce,
use, and/or sell Licensed Products.


 


b.                                      Provided that applicable laws, rules and
regulations require that the performance of the tests, trials, studies and
other activities specified in subsection a. above shall be carried out in
accordance with FDA Good Laboratory Practices and in a manner acceptable to the
relevant health authorities, Orthogen shall carry out such tests, trials,
studies and other activities in accordance with FDA Good Laboratory Practices
and in a manner acceptable to the relevant health authorities. Furthermore, the
Licensed Products and Services shall be produced in accordance with FDA Good
Manufacturing Practice (“GMP”) procedures in a facility which has been
certified by the FDA as complying with GMP, provided that applicable laws, rules and
regulations so require.


 


c.                                       Orthogen undertakes to begin the
regular commercial production, use, and sale of the Licensed Products and Services
in good faith and as soon as is practicable in accordance with the development
plan and to continue diligently thereafter to commercialize the Licensed
Products and Services.


 


d.                                      If Orthogen shall not
commercialize the Licensed Products or Services within a reasonable time frame,
unless such delay is necessitated by FDA or other regulatory agencies, HJD
shall notify Orthogen in writing of Orthogen’s failure to


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


10














 


commercialize and shall allow Orthogen sixty (60) days to cure its
failure to commercialize.  Orthogen’s
failure to cure such delay to HJD’s reasonable satisfaction within such 60-day
period shall be a material breach of this Agreement.


 


8.             Infringement of HJD/Orthogen
Joint Patents.


 


a.                                       In the event a party to this
Agreement acquires information that a third party is infringing one or more of
the HJD/Orthogen Joint Patents, the party acquiring such information shall
promptly notify the other party to the Agreement in writing of such
infringement.


 


b.                                      In the event of an infringement of
an HJD/Orthogen Joint Patent, Orthogen shall be privileged but not required to
bring suit against the infringer.  Should
Orthogen elect to bring suit against an infringer and HJD is joined as a party
plaintiff in any such suit, HJD shall have the right to approve the counsel
selected by Orthogen to represent Orthogen and HJD.  The expenses of such suit or suits that
Orthogen elects to bring, including any expenses of HJD incurred in conjunction
with the prosecution of such suit or the settlement thereof, shall be paid for
entirely by Orthogen and Orthogen shall hold HJD free, clear and harmless from
and against any and all costs of such litigation, including attorneys’
fees.  Orthogen shall not compromise or
settle such litigation without the prior written consent of HID which shall not
be unreasonably withheld.


 


c.                                       In the event Orthogen exercises
the right to sue herein conferred, it shall have the right to first reimburse
itself out of any sums recovered in such suit or in settlement thereof for all
costs and expenses of every kind and character, 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


11

















 


including reasonable attorneys’ fees, necessarily involved in the
prosecution of any such suit, and if after such reimbursement, any funds shall
remain from said recovery, Orthogen shall promptly pay to HJD an amount equal
to [***] percent ([***]%) of such remainder and Orthogen shall be entitled to
receive and retain the balance of the remainder of such recovery.


 


d.                                      If Orthogen does not bring suit
against said infringer pursuant to Section 8.b. herein, or has not
commenced negotiations with said infringer for discontinuance of said
infringement, within [***] ([***]) days after receipt of such notice, HJD shall
have the right, but shall not be obligated, to bring suit for such
infringement. Should HJD elect to bring suit against an infringer and Orthogen
is joined as a party plaintiff in any such suit, Orthogen shall have the right
to approve the counsel selected by HJD to represent HJD and Orthogen, and HJD
shall hold Orthogen free, clear and harmless from and against any and all costs
and expenses of such litigation, including attorneys’ fees.  If Orthogen has commenced negotiations with an
alleged infringer of the HJD/Orthogen Joint Patent for discontinuance of such
infringement within such [***]-day period, Orthogen shall have an additional
[***] ([***]) days from the termination of such initial [***]-day period to
conclude its negotiations before HJD may bring suit for such infringement.  In the event HJD brings suit for infringement
of any HJD/Orthogen Joint Patent, HJD shall have the right to first reimburse
itself out of any sums recovered in such suit or settlement thereof for all costs
and expenses of every kind and character, including reasonable attorneys’ fees
necessarily involved in the prosecution of such suit, and if after such
reimbursement, any funds shall 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


12

















 


remain from said recovery, HJD shall promptly pay to Orthogen an amount
equal to [***] percent ([***]%) of such remainder and HJD shall be entitled to
receive and retain the balance of the remainder of such recovery.


 


e.                                       Each party shall always have the
right to be represented by counsel of its own selection in any suit for
infringement of the HJD/Orthogen Joint Patents instituted by the other party to
this Agreement under the terms hereof. 
The expense of such counsel shall be borne by the party initiating such
infringement suit.


 


f.                                         Orthogen agrees to cooperate fully
with HJD at the request of HJD, including, by giving testimony and producing
documents lawfully requested in the prosecution of any suit by HJD for
infringement of the HJD/Orthogen Joint Patents; provided, HJD shall pay all
reasonable expenses (including attorneys’ fees) incurred by Orthogen in
connection with such cooperation.  HJD
shall cooperate with Orthogen at the request of Orthogen, including by giving
testimony and producing documents lawfully requested, in the prosecution of any
suit by Orthogen for infringement of the HJD/Orthogen Joint Patents; provided,
that Orthogen shall pay all reasonable expenses (including attorneys’ fees)
incurred by HJD in connection with such cooperation.


 


9.             Liability and Indemnification.


 


a.                                       Orthogen shall indemnify, defend
and hold harmless HJD and its trustees, officers, medical and professional
staff, employees, students and agents and their respective successors, heirs
and assigns (the “Indemnitees”), against any liability, damage, loss or expense
(including reasonable attorneys’ fees and expenses of litigation) incurred by
or imposed upon the Indemnitees or any one of them in 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


13

















 


connection with any claims, suits, actions, demands or judgments (i) arising
out of the design, production, manufacture, sale, use in commerce or in human
clinical trials, lease, or promotion by Orthogen or by a licenses, Corporation
Entity or agent of Orthogen of any Licensed Product, process or service
relating to, or developed pursuant to, this Agreement or (ii) arising out
of any other activities to be carried out pursuant to this Agreement.


 


b.                                      With respect to an Indemnitee,
Orthogen’s indemnification under subsection a.(i) of this Section 9
shall apply to any liability, damage, loss or expense whether or not it is
attributable to the negligent activities of such Indemnitee.  Orthogen’s indemnification obligation under
subsection a.(ii) of this Section 9 shall not apply to any liability,
damage, loss or expense to the extent that it is attributable to the negligent
activities of any such Indemnitee.


 


c.                                       Orthogen agrees, at its own
expense, to provide attorneys reasonably acceptable to HJD to defend against
any actions brought or filed against any Indemnitee with respect to the subject
of indemnity to which such Indemnitee is entitled hereunder, whether or not
such actions are rightfully brought.


 


10.           Security for Indemnification.


 


a.                                       At such time as any Licensed
Product, process or service relating to, or developed pursuant to, this
Agreement is being commercially distributed or sold (other than for the purpose
of obtaining regulatory approvals) by Orthogen or by a licensee, Corporation
Entity or agent of Orthogen, Orthogen shall at its sole costs and expense, procure
and maintain policies of comprehensive general liability insurance in amounts
not less than $[***] per incident and $[***] annual 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


14

















 


aggregate for dental products and not less than $[***] per incident and
$[***] annual aggregate for medical products. 
Such policies shall name the Indemnitees as additional insureds.  Such comprehensive general liability
insurance shall provide (i) product liability coverage and (ii) broad
form contractual liability coverage for Orthogen’s indemnification under Section 9
of this Agreement.  If Orthogen elects to
self-insure all or part of the limits described above (including deductibles or
retentions which are in excess of $[***] annual aggregate) such self-insurance
program must be acceptable to HJD.


 


The
minimum amounts of insurance coverage required under this Section 10 shall
not be construed to create a limit of Orthogen’s liability with respect to its
indemnification under Section 9 of this Agreement.


 


b.                                      Orthogen shall provide HJD with
written evidence of such insurance upon request of HJD.  Orthogen shall provide HJD with written
noticed at least sixty (60) days prior to the cancellation, non-renewal or
material change in such insurance; if Orthogen does not obtain replacement insurance
providing comparable coverage within such sixty (60) day period, HJD shall have
the right to terminate this Agreement effective at the end of such sixty (60)
day period without notice or any additional waiting periods.


 


c.                                       Orthogen shall maintain such
comprehensive general liability insurance beyond the expiration or termination
of this Agreement during (i) the period that any product, process or
service, relating to, or developed pursuant to, this Agreement is being
commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Orthogen or by a sublicensee, Corporation Entity or 


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


15

















 


agent of Orthogen and (ii) a reasonable period after the period
referred to in (c)(i) above which in no event shall be less than fifteen
(15) years.


 


11.           Expiry and Termination.


 


a.                                       Unless earlier terminated pursuant
to this Section 10 or Section 5.e., hereof, this Agreement shall
expire upon the expiration of the period of the License in all countries as set
forth in Section 4.b. above.


 


b.                                      At any time prior to expiration of
this Agreement, either party may terminate this Agreement forthwith for cause,
as “cause” is described below, by giving written notice to the other
party.  Cause for termination by one
party of this Agreement shall be deemed to exist if the other party materially
breaches or defaults in the performance or observance of any of the provisions
of this Agreement and such breach or default is not cured within sixty (60)
days or, in the case of failure to pay any amounts due hereunder, thirty (30)
days (unless otherwise specified herein) after the giving of notice by the
other party specifying such breach or default, or if either HJD or Orthogen
discontinues its business or becomes insolvent or bankrupt.


 


d.                                      Upon termination of this Agreement
for any reason and prior to expiration as set forth in Section 10.a.
hereof, all rights in and to the Research Technology previously held by HJD
shall revert to HJD.


 


e.                                       Termination of this Agreement
shall not relieve either party of any obligation to the other party incurred
prior to such termination.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


16

















 


f.                                         Sections 9, 10, 11 and 15 hereof
shall survive and remain in full force and effect after any termination,
cancellation or expiration of this Agreement.


 


12.           Representations and Warranties by
Orthogen.


 


Orthogen
hereby represents and warrants to HJD as follow:


 


a.                                       Orthogen is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey.  Orthogen has been granted
all requisite power and authority to carry on its business and to own and
operate its properties and assets.  The
execution, delivery and performance of this Agreement have been duly authorized
by the Board of Directors of Orthogen.


 


b.                                      There is no pending or, to
Orthogen’s knowledge, threatened litigation involving Orthogen which would have
any effect on this Agreement or on Orthogen’s ability to perform its
obligations hereunder; and


 


c.                                       There is no indenture, contract,
or agreement to which Orthogen is a party or by which Orthogen is bound which
prohibits or would prohibit the execution and delivery by Orthogen of this
Agreement or the performance or observance by Orthogen of any term or condition
of this Agreement.


 


13.           Representations and Warranties by
HJD.


 


HJD
hereby represents and warrants to Orthogen as follows:


 


a.                                       HJD is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York.  HJD has been granted all
requisite power and authority to carry on its business and to own and operate
its properties and assets. The execution, delivery and performance of this
Agreement have been duly authorized by the Board of Trustees of HJD.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


17














 


b.                                      There is no pending or, to HJD’s
knowledge, threatened litigation involving HJD which would have any effect on
this Agreement or on HJD’s ability to perform its obligations hereunder; and


 


c.                                       There is no indenture, contract,
or agreement to which HJD is a party or by which HJD is bound which prohibits
or would prohibit the execution and delivery by HJD of this Agreement or the
performance or observance by HJD of any term or condition of this Agreement.


 


14.                                 No Assignment.


 


Neither
Orthogen nor HJD shall have the right to assign, delegate or transfer at any
time to any party, in whole or in part, any or all of the rights, duties and
interest herein granted without first obtaining the written consent of the
other to such assignment.


 


15.                                 Use of Name.


 


Without
the prior written consent of the other party, neither Orthogen nor HJD shall
use the name of the other party or any adaptation thereof or of any staff
member, employee or student of the other party:


 


a.                                       in any product labeling,
advertising, promotional or sales literature;


 


b.                                      in connection with any public or
private offering or in conjunction with any application for regulatory
approval, unless disclosure is otherwise required by law, in which case either
party may make factual statements concerning the Agreement or file copies of
the Agreement after providing the other party with an opportunity to comment
and reasonable time within which to do so on such statement in draft.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


18

















 


Except
as provided herein, neither HJD nor Orthogen will issue public announcements
about this Agreement without prior written approval of the other party.


 


16.                                 Miscellaneous.


 


a.                                       In carrying out this Agreement the
parties shall comply with all local, state and federal laws and regulations
including but not limited to, the provisions of Title 35 United States Code
§200 et  seq. and 15 CFR §368 et  seq.


 


b.                                      If any provision of this Agreement
is determined to be invalid or void, the remaining provisions shall remain in
effect.


 


c.                                       This Agreement shall be deemed to
have been made in the State of New York and shall be governed and interpreted
in all respects under the laws of the State of New York.


 


d.                                      Any dispute arising under this
Agreement shall be resolved in an action in the courts of New York State or the
federal courts located in New York State, and the parties hereby consent to
personal jurisdiction of such courts in any action.


 


e.                                       All payments or notices required
or permitted to be given under this Agreement shall be given in writing and
shall be effective when either personally delivered or deposited, postage
prepaid, in the United States registered or certified mail, addressed as
follows:


 


To HJD:                                                                                                                                                    John N.
Kastanis


President and CEO


Hospital for Joint Diseases


301 East 17th Street


New York, NY 10003


 


and to:                                                                                                                                                           Isaac T.
Kohlberg


Vice Provost, New York
University


c/o NYU School of Medicine


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


19

















 


550 First Avenue


New York, NY 10016


 


To Orthogen:                                                                                                                        Orthogen
Corporation


530 Morris Avenue


Suite 204


Springfield, NJ 07081


 


Attention:                                         Harold
Alexander


President


 


or
such other address or addresses as either party may hereafter specify by
written notice to the other.  Such
notices and communications shall be deemed effective on the date of delivery or
fourteen (14) days after having been sent by registered or certified mail,
whichever is earlier.


 


f.                                         This Agreement (and the annexed
Appendices) constitute the entire Agreement between the parties and no
variation, modification or waiver of any of the terms or conditions hereof
shall be deemed valid unless made in writing and signed by both parties
hereto.  This Agreement supersedes any
and all prior agreements or understandings, whether oral or written, between
Orthogen and HJD.


 


g.                                      No waiver by either party of any
non-performance or violation by the other party of any of the covenants,
obligations or agreements of such other party hereunder shall be deemed to be a
waiver of any subsequent violation or non-performance of the same or any other
covenant, agreement or obligation, nor shall forbearance by any party be deemed
to be a waiver by such party of its rights or remedies with respect to such
violation or non-performance.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


20

















 


h.                                      The descriptive headings contained
in this Agreement are included for convenience and reference only and shall not
be held to expand, modify or aid in the interpretation, construction or meaning
of this Agreement.


 


i.                                          It is not the intent of the
parties to create a partnership or joint venture or to assume partnership
responsibility or liability.  The
obligations of the parties shall be limited to those set out herein and such
obligations shall be several and not joint.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date and year first above written.


 


	
   

  	
   

  	
  HOSPITAL
  FOR JOINT DISEASES

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ John N. Kastanis

  
	
   

  	
   

  	
  John
  N. Kastanis

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:
  

  	
  President
  and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  8/12/99

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ORTHOGEN
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Harold Alexander

  
	
   

  	
   

  	
  Harold
  Alexander, Ph.D.

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:
  

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  August 4, 1999

  



 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


21

















 


APPENDIX I


 


HJD/Orthogen
Joint Patents


 


United
States


 


	
  Serial
  No.

  	
   

  	
  Filed

  	
   

  	
  Title

  	
   

  	
  Status

  
	
  09/187,584
  

  	
   

  	
  11/06/98

  	
   

  	
  Implantation
  of Surgical Implants with Calcium Sulfate

  	
   

  	
  Pending

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  08/996,244
  

  	
   

  	
  12/22/97
  

  	
   

  	
  Control
  of Cell Growth and Textured Substrates 

  	
   

  	
  Pending
  

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  cip
  of 08/639,712 (now abandoned)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  con
  of 08/390,805 (now abandoned)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  con
  of 08/146,790 (now abandoned)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Foreign


 


	
  Country

  	
   

  	
  App. No.

  	
   

  	
  Title

  	
   

  	
  Status

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canada

  	
   

  	
  2,175,660

  	
   

  	
  Control
  of Cell Growth

  	
   

  	
  Request
  examination before 11/02/01

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Europe

  	
   

  	
  95
  90 17 92.2

  	
   

  	
  Control
  of Cell Growth

  	
   

  	
  Pending

  



 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 


22