Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.13    
    

 
 

CONSENT TO SUBSTITUTION OF PARTY    
    

        This substitution of parties ("Agreement") is effective this 11 day of May, 2005, among The Regents of the University of California ("The Regents"), a California
corporation, having its statewide administrative offices as 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200; Osmotics Corporation ("Osmotics"), a Colorado corporation, having a
principal place of business at 1444 Wazee Street, Suite 210, Denver Colorado 80202; and Osmotics Pharma, Inc. ("Osmotic Pharma") a Colorado corporation, having a principal place of
business at 1444 Wazee Street, Suite 210, Denver Colorado 80202. 

 
 

BACKGROUND    
    

        A.    The
Regents and Osmotics entered into an Exclusive License Agreement effective June, 28, 2000 (UC Control No. 2000-03-0672), entitled Lipids for Epidermal Moisturation
and Repaire of Barrier Function ("Exclusive License Agreement"), wherein Osmotics was granted certain rights. 

        B.    Osmotics
desires that Osmotics Pharma be substituted as Licensee (defined in the Exclusive License Agreement) in place of Osmotics, and The Regents is agreeable to such
substitution. 

        C.    Osmotics
Pharma has read the Exclusive License Agreement and agrees to abide by its terms and conditions. 

        The
parties agree as follows: 

        1.     Osmotics
Pharma assumes all liability and obligations under the Exclusive License Agreement and is bound by all its terms in all respects as if it were the original
Licensee of the Exclusive License Agreement in place of Osmotics. 

        2.     Osmotics
Pharma is substituted for Osmotics, provided that Osmotics Pharma assumes all liability and obligations under the Exclusive License Agreement as if Osmotics
Pharma were the original party named as Licensee as of the effective date of the Exclusive License Agreement. 

        3.     The
Regents releases Osmotics from all liability and obligations under the Exclusive License Agreement arising before or after the effective date of this Agreement. 

        The
parties have executed this Agreement in triplicate originals by their respective authorized officers on the following day and year. 

	OSMOTICS CORPORATION	 	THE REGENTS OF THE

UNIVERSITY OF CALIFORNIA
	
By:	

/s/  FRANCINE E. PORTER      
(Signature)	
 	

By:	

/s/  JOHN SHIH      

	

Name:	

Francine E. Porter
(Please Print)	
 	

Name:	

JOHN SHIH, Ph.D.

	

Title:	

President
	
 	

Title:	

Business Development and Intellectual Property Management Office of Technology Transfer

	

Date:	

5/05/05
	
 	

Date:	

5/11/05

	
OSMOTICS PHARMA, INC.	
 	

 	

 
	

By:	

/s/  STEVEN PORTER      
(Signature)	
 	

 	

 
	

Name:	

Steven Porter
(Please print)	
 	

 	

 
	

Title:	

CEO
	
 	

 	

 
	

Date:	

5/05/05
	
 	

 	

 

QuickLinks

Exhibit 10.13

CONSENT TO SUBSTITUTION OF PARTY

BACKGROUNDEXHIBIT 10.14

 

 

EXCLUSIVE LICENSE AGREEMENT BETWEEN

BRIGHAM YOUNG UNIVERSITY AND OSMOTICS CORPORATION

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  BYU Grant

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Licensee Grant

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Exclusive Use

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Performance Requirements

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  License Fees and Royalties

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  Reports, Records, Penalties and Interest

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  Confidentiality

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  Separate Service Agreement

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  Export Controls and Applicable Laws

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  Patent Marking and Copyright Notice

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
   

  	
  Patent Prosecution and Maintenance

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  Infringement

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
   

  	
  Warranty and Limitation of Remedy

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  Product Liability and General Indemnification

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16

  	
   

  	
  Term and Termination

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17

  	
   

  	
  Dispute Resolution and Mediation

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18

  	
   

  	
  Licensee Assignment

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
   

  	
  Non Use of BYU Name

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20

  	
   

  	
  Publication

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21

  	
   

  	
  Payment, Notices and Other Communications

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22

  	
   

  	
  Miscellaneous Provisions

  	
   

  	
  16

  

 

 

EXCLUSIVE LICENSE AGREEMENT

BRIGHAM YOUNG UNIVERSITY

 

This
Agreement, effective May 1, 2004 is entered into between Brigham Young
University, a Utah non-profit corporation and institution of higher education,
with its principal campus and place of business located at Provo, Utah 84602
(referred to in this Agreement as “BYU”) and Osmotics Corporation, a Colorado
corporation with its principal place of business located at 1444 Wazee Street,
Denver, Colorado, and its subsidiary, Osmotics Pharma, Inc., a Colorado corporation
with its principal place of business located at 1444 Wazee Street, Denver
Colorado, (collectively referred to in this Agreement as “LICENSEE”).

 

RECITALS

 

I               BYU is the sole owner of certain
intellectual property rights known as “Steroid-Derived Antibiotics” and has the
right to grant licenses with respect to these rights.

 

A.            BYU is an institution of higher
education and is not in the business of commercially developing ideas,
inventions, or other types of intellectual property, but it does desire to have
Steroid-Derived Antibiotics available to the public and is willing to grant a
license for this purpose.

 

B.            LICENSEE has represented to BYU that
LICENSEE has the technical and commercial ability, and the technical, financial
and other resources necessary to successfully develop and sell products or
services based upon Steroid-Derived Antibiotics.

 

C.            LICENSEE desires to obtain a license
to Steroid-Derived Antibiotics upon the terms and conditions of this Agreement.

 

In
consideration of the promises and mutual covenants contained in this Agreement
the parties agree as follows:

 

TERMS OF AGREEMENT

 

1              Definitions

 

For
the purposes of this Agreement, the following terms, words and phrases shall
have the meaning ascribed to them in this Section.

 

1.1           “ADJUSTED GROSS SALES” shall
mean LICENSEE’s gross receipts or the fair market monetary equivalent value of
consideration received for LICENSED PRODUCTS or PROCESSES, including IMPROVEMENTS
which are sold, leased, licensed or otherwise transferred by or for LICENSEE,
its AFFILIATES, a SUBLICENSEE or as otherwise authorized by the express written
consent of BYU to a retail outlet, distributor or END USER, including

 

1

 

without
limitation all fees separately billed and specifically identified as
consideration for support, maintenance, service or subscriptions which include
providing upgrades or new versions, less qualifying costs directly attributable
to such sale, lease, license or transfer actually allowed and borne by LICENSEE
or a SUBLICENSEE.  Such qualifying costs
shall be limited to the costs of the following:

 

A.                                   Trade or quantity discounts actually allowed
and taken in such amounts as are customary in the trade;

 

B.                                     Sales, import and export duties and/or use
and excise taxes directly imposed with reference to particular sales;

 

C.                                     Outbound transportation expenses prepaid or
allowed;

 

D.                                    Amounts allowed or credited by reason of
timely rejections or returns; and

 

E.                                      Fees separately billed and specifically
identified as “installation fees,” which are consistent with those normally
charged in the trade.

 

No
deductions shall be made for commissions paid to individuals, whether they be
regularly employed by LICENSEE or by independent sales agents, or for the cost
of collections.  For purposes of
calculating “ADJUSTED GROSS SALES” a LICENSED PRODUCT or PROCESS shall be
considered sold, leased, licensed or transferred when billed, invoiced,
shipped, paid for or transferred, whichever event occurs first.

 

1.2           “AFFILIATE” shall mean any
person or entity owned or controlled directly or indirectly by LICENSEE or a
SUBLICENSEE or any person or other entity controlled by, controlling or under
common control with LICENSEE or a SUBLICENSEE.  The term “control” means possession, direct or
indirect, of the powers to direct or cause the direction of the management and
policies of a person or entity; whether through ownership, voting securities,
beneficial interests, by contract, by agreement, or otherwise.

 

1.3           “END USER” means any person or
entity to which LICENSED PRODUCTS or LICENSED PROCESSES are sold or licensed
for personal or business use and not for the purpose of licensing or selling to
other persons or entities.

 

1.4           “FIELD OF APPLICATION” means
all fields of application for the first twenty-four (24) months from the effective
date of this Agreement, after which FIELD OF APPLICATION shall include all
applications consisting of Cosmetics Preservation, Human Topical Application, Human
Systemic Treatment, Veterinarian and Agricultural Applications and Food or
Other Non-Cosmetics Preservation for which LICENSEE has conducted research or
has engaged in substantial commercialization efforts including, but not limited
to research or commercialization of applications by strategic partners or
sublicensees.  In the event that LICENSEE
has engaged in substantial discussions with any third party regarding the
Applications which are to go into effect after the first twenty-four (24)
months from the effective date of this Agreement, BYU shall not, upon written
notice from Licensee, engage in any further discussions with said third party
and BYU shall encourage said third party to negotiate an appropriate business
relationship with

 

2

 

LICENSEE.
LICENSEE agrees to provide written progress reports to BYU of such substantial
discussions every six (6) months.

 

1.5           “IMPROVEMENT(S)” means any
invention, idea, trade secret or know-how which includes any portion of, or
utilizes any portion of, the LICENSED TECHNOLOGY, LICENSED PRODUCTS or LICENSED
PROCESSES, or any derivative work which is directly related to, or which
develops, enhances or improves any portion of the LICENSED TECHNOLOGY, LICENSED
PRODUCTS or LICENSED PROCESSES, whether or not patentable, copyrightable, or
otherwise protectable as INTELLECTUAL PROPERTY which is subsequently acquired
or developed by LICENSEE during the term of this Agreement.

 

1.6           “INTELLECTUAL PROPERTY” means
and includes any and all patents, copyrights, semiconductor design rights,
trademarks, trade secrets, know-how, and other proprietary rights, and any and
all applications and registrations therefor.

 

1.7           “LICENSED PROCESS(ES)” means
and includes any process, procedure, technique, method or service the use or
practice of which incorporates or makes use of any part of the LICENSED
TECHNOLOGY or IMPROVEMENTS.

 

1.8           “LICENSED PRODUCT(S)” means
and includes any product, apparatus, or IMPROVEMENTS which are developed, or
enhanced in whole or in part by LICENSEE, the production, manufacture, sale,
lease, license, transfer or use of which incorporates or makes use of any part
of the LICENSED TECHNOLOGY or IMPROVEMENTS.  In the event such a product or apparatus forms
an integral part or component of a larger product, such larger product shall be
considered a “LICENSED PRODUCT,” for purposes of this Agreement.

 

1.9           “LICENSED TECHNOLOGY” means
and includes all of BYU’s technology, INTELLECTUAL PROPERTY, and related
enhancements generated at BYU and known as Steroid-Derived Antibiotics as more
particularly described in Exhibit A, which is attached to this Agreement and by
reference is incorporated and made part of this Agreement.

 

1.10         “LICENSEE” is Osmotics
Corporation and its AFFILIATES and any other person or entity that becomes a
successor in interest to, purchases, merges with, assumes control of, or becomes
an assignee of LICENSEE.

 

1.11         “SUBLICENSEE” is any person or
entity, including value added retailers or other individuals or entities, which
are licensed pursuant to this Agreement by LICENSEE with rights to the LICENSED
TECHNOLOGY to market to END USERS LICENSED PRODUCTS or LICENSED PROCESSES which
are developed, enhanced, improved or manufactured by said person or entity.

 

1.12         “TERRITORY” means the world.

 

2              BYU Grant

 

2.1           Subject to the provisions of Section
2.4, BYU hereby grants LICENSEE an exclusive right and license to utilize the
LICENSED TECHNOLOGY to develop LICENSED

 

3

 

PRODUCTS,
LICENSED PROCESSES, and IMPROVEMENTS, to manufacture, sell, lease and otherwise
transfer LICENSED PRODUCTS and to practice LICENSED PROCESSES within the
TERRITORY and the FIELD OF APPLICATION as authorized in this Agreement until
such time as this Agreement expires or is terminated.  This grant will extend to the manufacture,
sale, lease, transfer or other disposition of LICENSED PRODUCTS or LICENSED
PROCESSES within the TERRITORY and the FIELD OF APPLICATION through an
AFFILIATE or through LICENSEE’s use of any retail outlet or distributor and
shall authorize any END USERS’ use of the LICENSED PRODUCTS and LICENSED
PROCESSES sold or transferred by LICENSEE or its AFFILIATES, retail outlets or
distributors.

 

2.2           The grants provided under this
Agreement shall specifically include the right for LICENSEE to sublicense to
SUBLICENSEES its rights under this Agreement to the LICENSED TECHNOLOGY with
respect to the TERRITORY and the FIELD OF APPLICATION.  All sublicenses granted by LICENSEE shall be
subject to the terms and conditions of this Agreement and any sublicense
agreement shall have an express provision to this effect.  No sublicense shall relieve LICENSEE of any of
its obligations under this Agreement.  Sublicenses
under this Agreement shall be structured to guarantee the payment of royalties
to BYU in an amount at least equal to the amount of royalties which BYU would
have received from LICENSEE had LICENSEE made, sold, leased, or otherwise
transferred the LICENSED PRODUCTS or LICENSED PROCESSES authorized in the
sublicense.  LICENSEE agrees to forward
to BYU a fully executed copy of each sublicense agreement within thirty (30)
days of its execution, and to act as a fiduciary to protect BYU’s interests in
the sublicense and to collect and transmit to BYU all royalties due.

 

2.3           Nothing in this Agreement shall be
considered as granting any rights, express or implied, in BYU’s patents, patent
applications, inventions, methods, technical, confidential or proprietary
information, expertise, know-how, trade secrets or knowledge not specifically licensed
in this Agreement, and all rights not expressly granted by this Agreement to
LICENSEE are expressly reserved by BYU.  The
license granted by this Agreement shall not be construed to confer any rights
upon LICENSEE by implication, estoppel or otherwise as to any existing, new or
derivative technology not specifically licensed by this Agreement.  The reservation of rights described in this
Section is intended to be broadly construed and not to be limited by the definitions
set forth in this Agreement.

 

2.4           Notwithstanding the exclusive license
granted pursuant to this Agreement with respect to the TERRITORY and FIELD OF
APPLICATION, BYU, the Church of Jesus Christ of Latter-day Saints and the
Church Education System reserve the right to make, have made or use the LICENSED
TECHNOLOGY, LICENSED PRODUCTS, LICENSED PROCESSES and IMPROVEMENTS anywhere in
the world for continuing research and non-commercial academic and
ecclesiastical uses without cost.  Moreover,
should BYU, The Church of Jesus Christ of Latter-day Saints or any educational
institution within the Church Education System wish to purchase any LICENSED
PRODUCTS or PROCESSES for their own use and not for resale or competitive
commercialization from LICENSEE or its AFFILIATES, LICENSEE agrees to sell such
LICENSED PRODUCTS or PROCESSES at the manufacturing cost plus 20% or the price
given by LICENSEE to its most favored customers, whichever is less.

 

4

 

2.5           All rights reserved by the United
States Government including an irrevocable, nonexclusive, nontransferable,
royalty-free license on behalf of the United States Government for government
purposes shall remain and shall in no way be affected by this Agreement.

 

3              Licensee Grant

 

3.1           LICENSEE hereby grants, assigns,
transfers and conveys to BYU all of LICENSEE’s right, title and interest in and
to all IMPROVEMENTS, and any INTELLECTUAL PROPERTY therein, of any kind or
description created or developed by LICENSEE or its SUBLICENSEES.  This grant and assignment shall be absolute
and irrevocable, shall survive the termination of this Agreement and is
intended to entitle BYU, the Church of Jesus Christ of Latter-day Saints and the
Church Education System to use said IMPROVEMENTS for their academic and ecclesiastical
purposes as more fully described in Section 2.4 of this Agreement, to entitle
BYU to license the LICENSED TECHNOLOGY and IMPROVEMENTS to third parties
subsequent to termination of this Agreement and to entitle BYU to collect
royalties.

 

3.2           In the event that any of LICENSEE’s
rights with respect to any IMPROVEMENTS as detailed in Section 3.1 are not
fully assignable or otherwise transferable to BYU for any reason whatsoever, in
accordance with the provisions of this Section 3, LICENSEE shall, and hereby does,
grant BYU a non-exclusive, irrevocable, perpetual, worldwide license in and to
all such IMPROVEMENTS and all INTELLECTUAL PROPERTY therein.

 

3.3           In furtherance of LICENSEE’s obligations
under Section 3.1 and Section 3.2, LICENSEE shall take all actions, and shall
execute and deliver to BYU, or file with appropriate government agencies, all
documents and other materials, as reasonably requested by BYU, in order to
permit BYU (or any third party assignee designated by BYU) to perfect and
protect its ownership or license of all rights, title and interests in and to
all IMPROVEMENTS and INTELLECTUAL PROPERTY therein.

 

3.4           LICENSEE agrees to disclose to BYU
all information reasonably requested by BYU with respect to any IMPROVEMENTS
and INTELLECTUAL PROPERTY therein and to provide and assign to BYU all
documents and data, in whatever form, reasonably necessary for BYU to use such
IMPROVEMENTS and INTELLECTUAL PROPERTY in the manner contemplated in this
Section 3. 

 

4              Exclusive Use

 

4.1           Licensee shall use only the LICENSED
TECHNOLOGY and IMPROVEMENTS subject of this License Agreement for the purpose
of marketing or commercializing Steroid-Derived Antibiotics or related
technology, and LICENSEE shall be expressly prohibited from using, selling or
commercializing any other alternative functionally inferior or equivalent technology
which is not subject of this Agreement for such purpose without the express
written consent of BYU, which shall not be unreasonably withheld, and being
subject to the provisions of Section 4.2 of this Agreement.

 

4.2           In the event LICENSEE believes that
its use or substitution of any alternative functionally inferior or equivalent
technology not subject of this Agreement would be in its best

 

5

 

business
interests, it may request the written consent of BYU to use such substitute
technology, provided that the royalty provisions of this Agreement shall extend
to LICENSEE’S use of the same in performing any functions substantially
equivalent to the LICENSED TECHNOLOGY and IMPROVEMENTS subject of this License
Agreement.

 

4.3           The restrictions described in this
Section 4 “Exclusive Use” shall not apply to LICENSEE’S use of any other
technology or intellectual property which interfaces with, or operates in
conjunction with or independently from, the LICENSED TECHNOLOGY and IMPROVEMENTS,
but which does not perform a function substantially equivalent to the LICENSED
TECHNOLOGY or IMPROVEMENTS.

 

4.4           After termination of this Agreement
due to the breach or default of LICENSEE, LICENSEE and its officers, directors
and key technical employees shall not for a period of three (3) years
thereafter use, develop, market or commercialize, directly or indirectly, any
alternative product which utilizes a functionally equivalent technology or a
technology derived from the technology subject of this Agreement. 

 

5              Performance Requirements

 

5.1           LICENSEE shall, during the term of
this Agreement, use its best level of effort to bring one or more LICENSED
PRODUCTS or LICENSED PROCESSES to market in order to maximize the ADJUSTED
GROSS SALES through a thorough, vigorous and diligent commercial program.

 

5.2           LICENSEE shall submit an
Investigational New Drug Application to the U.S. Food and Drug Administration
within twenty four (24) months from the effective date of this Agreement.

 

5.3           LICENSEE shall have available and
offer at least one LICENSED PRODUCT for sale or license by January 1, 2008, and
such offer for sale or license shall be accompanied by advertising and/or other
marketing efforts consistent with LICENSEE’s new product introductions for
products of the same nature and which are substantially similar to the LICENSED
PRODUCTS or PROCESSES.

 

5.4           LICENSEE’s failure to perform in
accordance with this Section of the Agreement to the reasonable satisfaction of
BYU may be considered by BYU to be a material breach of this Agreement and as
such may entitle BYU to exercise its termination rights in accordance with Section
16 below. 

 

6              License Fees and Royalties

 

In
consideration of the license granted under this Agreement, LICENSEE shall pay
to BYU, in the manner designated below until the Agreement shall be terminated,
as follows:

 

6.1           License Issue Fees: A license issue
fee in the amount of Fifty Thousand Dollars ($50,000) shall be paid upon the
execution of this Agreement.  This
license issue fee shall be non-refundable and may not be credited toward the
payment of any royalties or other consideration required by this Agreement.

 

6

 

6.2           Annual Maintenance Fee: A fee in the
amount of Fifty Thousand Dollars ($50,000). shall be paid each year on the
anniversary of the effective date of this agreement until commercial sales of
LICENSED PRODUCTS or LICENSED PROCESSES have commenced.

 

6.3           Research & Development Support.  LICENSEE agrees to pay to BYU an annual sum of
Ninety Thousand Dollars ($90,000) paid quarterly to support Dr. Savage’s
research and development related to the compounds that are the subject of this
License Agreement.  The first payment of
Twenty-Two Thousand Five Hundred Dollars ($22,500) shall be due on May 1, 2004,
with additional payments due on August lst, November 1st
and February lst.  In the
event that Dr. Savage is no longer affiliated with BYU or is no longer
conducting research related to the compounds that are the subject of this
License Agreement, then LICENSEE’s obligation to provide this monetary support
shall terminate as of the quarter following such triggering event.

 

6.4           Earned Royalties: Earned royalties
shall be paid quarterly in the amount equal to five percent (5.0%) of the
ADJUSTED GROSS SALES anywhere in the TERRITORY and FIELD OF APPLICATION of the
LICENSED PRODUCTS, LICENSED PROCESSES or IMPROVEMENTS subject of this Agreement
used, leased, licensed, sold or otherwise transferred to an END USER by or for
LICENSEE, its AFFILIATES or pursuant to any SUBLICENSEE agreement.

 

6.5           Minimum Royalties: An annual minimum
royalty amount shall be paid for each calendar year as specified in Table 1
below.  Year 1 shall be the first full
calendar year following any governmental regulatory approval for a
pharmaceutical use of the LICENSED TECHNOLOGY.  In the event that LICENSEE’s earned royalty
payments to BYU during any particular calendar year fall below the applicable
sum indicated in Table 1, then LICENSEE shall pay a minimum royalty to BYU with
its last report of the year in the amount indicated in Table 1 less any earned
royalties paid for that calendar year.  Earned
royalties paid for any given calendar year shall only be credited against
minimum royalties payable for that same calendar year, and shall not be carried
over to any subsequent year.

 

Table 1

 

	
  Calendar
  Year

  	
   

  	
  Minimum
  Royalty

  
	
   

  	
   

  	
   

  
	
  Year
  1

  	
   

  	
  $100,000

  
	
  Year
  2

  	
   

  	
  $200,000

  
	
  Year
  3 and each year thereafter

  	
   

  	
  $300,000

  

 

6.6           Any royalty amount due to BYU arising
out of this Agreement shall accrue at the time of use, sale, lease, license or
transfer of a LICENSED PRODUCT or LICENSED PROCESS and shall be deemed to be
held in trust for the benefit of BYU until actual payment of such amounts is
made pursuant to this Agreement.

 

7

 

7              Reports, Records, Penalties and
Interest

 

7.1           LICENSEE shall keep, and shall
require all SUBLICENSEES, AFFILIATES, and any other party responsible by the
terms of this Agreement to make payments to BYU to keep, at their own expense,
accurate books of account, using generally accepted accounting principles and
practices, detailing all data necessary to calculate and easily audit any
payments due to BYU under this Agreement.  These books of account shall be kept at
LICENSEE’s, AFFILIATE’s or SUBLICENSEE’s principal place of business.  These books and supporting data shall be open
at all reasonable times, upon ten (10) calendar days written notice, throughout
the term of this Agreement and for a period of five (5) years following the end
of the calendar year to which they pertain, to inspection by BYU or its agents
for the purpose of verifying LICENSEE’s reports, royalty statements or other
compliance with this Agreement.  In the
event that any such inspection reveals any underpayment of royalties by
LICENSEE, LICENSEE shall promptly rectify any such underpayment, reimburse BYU
for the cost of such inspection if such inspection reveals a deficiency in any
quarterly payment due to BYU hereunder in the amount of one percent (1%) or
more of the amount payable to BYU, and shall pay the penalty and interest

amounts
specified in Section 7.4 below.

 

7.2           LICENSEE, within thirty (30) days
after the last day of each full calendar quarter subsequent to the effective
date of this Agreement, shall deliver to BYU an accurate written report
summarizing in sufficient detail to allow BYU to verify all payment amounts,
the data used during the preceding three-month period under this Agreement to
calculate the payments due to BYU during the applicable accounting period.  These records and reports shall include at least
the following information for the accounting period:

 

A.                                   Calculation of ADJUSTED GROSS SALES, itemized
as to the number and the identity of the LICENSED PRODUCTS or PROCESSES sold.

 

B.                                     All qualifying deductible costs claimed as
offsets as applicable.

 

C.                                     Calculation of earned royalties and total
royalties due broken down by applicable category.

 

D.                                    Minimum royalty amounts due in excess of
earned royalty amounts. (Fourth quarter report only.)

 

E.                                      Names and address of all AFFILIATES and
SUBLICENSEES and full reports from them complying with the reporting
requirements of Section 7.2 A-D.

 

7.3           With each such report submitted,
LICENSEE shall pay to BYU all fees, royalties and all other amounts due,
payable and arising pursuant to this Agreement.  If no amounts shall be due, LICENSEE shall so
report.  All amounts paid to BYU pursuant
to this Agreement shall be in United States Dollars unless otherwise agreed in
writing between the parties, and the amount of all royalties to be paid to BYU
shall be determined on the basis of the relevant currency exchange rate
published by the Wall Street Journal on the last
business day of the calendar quarter to which such royalties relate.

 

8

 

7.4           A penalty will be assessed in an
amount equal to three percent (3%) of any payment due to BYU arising out of
this Agreement if the payment is made more than thirty (30) days late.  Interest will accrue from the thirtieth day
after the payment was due at a rate of eighteen percent (18%) per annum or the
highest rate permitted by law, whichever is lower, and the interest payment
shall be due and payable every thirty (30) days thereafter.  Any unpaid interest or penalty shall be
compounded monthly at the applicable interest rate.

 

7.5           In the event LICENSEE engages an
independent auditor or employs an internal auditor for the purpose of verifying
the accuracy of its books of account, LICENSEE shall cause said auditor to
verify the accuracy of the quarterly reports required in Section 8 of this
Agreement, and LICENSEE shall provide to BYU a copy of the report and any
documentation generated in the verification process on or before ninety (90)
days after the verification process is completed.

 

8              Confidentiality

 

8.1           LICENSEE agrees, that as LICENSEE
receives material provided by BYU which is marked as confidential, or is
verbally so designated and confirmed in writing by BYU within thirty (30) days
of the receipt of the materials by LICENSEE, or which LICENSEE would at the time
of disclosure reasonably understand under the circumstances to be considered by
BYU to be confidential, LICENSEE shall take reasonable precautions to protect
such material and to preserve its confidential, proprietary or trade secret
status during the term of this Agreement and for a period of five (5) years
after termination of this Agreement.

 

8.2           In determining whether or not
information is confidential, the burden of proof shall be upon LICENSEE to
establish by competent proof and by preponderance of the evidence that such
information to be non-confidential was:

 

A.                                   Already known to LICENSEE at the time of
disclosure by BYU, or

 

B.                                     Generally available to the public or
otherwise part of the public domain at the time of its disclosure to LICENSEE,
or

 

C.                                     Became generally available to the public or
otherwise part of the public domain after its disclosure and other than through
any act or omission of LICENSEE in breach of this Agreement, or

 

D.                                    Subsequently, lawfully disclosed to LICENSEE
by a third party.

 

8.3           LICENSEE may disclose BYU’s
confidential information only to the extent it is authorized in writing to do
so by BYU and such disclosure is reasonably necessary to further the objectives
of this Agreement.

 

8.4           All of LICENSEE’s and SUBLICENSEE’s
employees and independent contractors with access to BYU’s confidential
information shall be bound in writing, copies of which shall be retained by
LICENSEE and submitted to BYU upon request of BYU, to make no unauthorized use
or disclosure of the confidential information.  The form of the writing to be signed is described
on attached Exhibit B, which is incorporated by reference into this Agreement.

 

9

 

8.5           LICENSEE agrees that a breach of its
obligation to protect BYU’s confidential information shall cause immediate and
irreparable harm to BYU which cannot be adequately compensated by monetary
damages.  Accordingly, any breach or
threatened breach of confidentiality shall entitle BYU to preliminary and
permanent injunctive relief in addition to such remedies as may be otherwise
available to BYU.

 

9              Separate Service Agreement

 

If
BYU shall agree to supply technical and engineering services required to
effectively transfer to LICENSEE the LICENSED TECHNOLOGY licensed herein,
LICENSEE shall reimburse BYU for its expenses incurred in furnishing such
technical and engineering services pursuant to the terms and conditions of a
separate written agreement.

 

10           Export Controls and Applicable Laws

 

10.1         It is understood that the LICENSED
TECHNOLOGY may be subject to United States laws and regulations controlling the
export of technical data, computer software, laboratory prototypes and other
commodities (including the Arms Export Control Act, as amended, and the Export
Administration Act of 1979), and LICENSEE’s obligations under this Agreement
may be contingent upon compliance with applicable United States export laws and
regulations.  The transfer of certain
technical data and commodities may require a license from the cognizant agent of
the United States Government and/or written assurances by LICENSEE that
LICENSEE shall not export data or commodities to certain foreign countries
without prior approval of such agency.  BYU
neither represents that a license shall not be required nor that, if required,
it shall be issued.  LICENSEE shall
observe and obey all export laws in countries in which it shall do business.

 

10.2         In the exercise of its rights, and the
performance of its obligations under this Agreement, LICENSEE shall comply with
all applicable laws, regulations and governmental orders.  LICENSEE shall obtain, and shall maintain in
full force and effect throughout the continuance of this Agreement, all
licenses, permits, authorizations and approvals required under all applicable laws,
regulations and governmental orders of the TERRITORY, and shall make all
filings, notifications and reports to all relevant governmental agencies, which
are necessary or appropriate in order for the performance by LICENSEE of all of
its obligations under this Agreement.  In
the event that the issuance of any such license, permit, authorization or
approval is conditioned upon any modification or amendment to this Agreement
that is unacceptable to BYU, BYU shall have the right to terminate this
Agreement without any further obligations whatsoever hereunder to LICENSEE.

 

11           Patent Marking and Copyright Notice

 

If
applicable, LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United
States with all applicable United States patent numbers and copyright notices.  All LICENSED PRODUCTS shipped to or sold in
other countries shall be marked in such a manner as to conform with the patent
and/or copyright laws and practice of the country of manufacture or sale.

 

10

 

12           Patent Prosecution and Maintenance

 

12.1         BYU shall use its best efforts to apply
for, seek prompt issuance of, and maintain during the term of this Agreement
any patent and/or copyright rights to properly patentable or copyrightable
INTELLECTUAL PROPERTY set forth in Exhibit A or to any residuals, derivatives,
enhancements and modifications thereto.  BYU
shall diligently prosecute, file, perfect and maintain all such patent or
copyright rights, patents or applications utilizing legal counsel of its
choice.  BYU shall consult with LICENSEE
in selecting foreign countries in which to file patent applications and in the
selection and use of legal counsel.  LICENSEE
shall cooperate with BYU in such prosecution, filing and maintenance.

 

12.2         LICENSEE shall reimburse BYU for all
fees and costs relating to the filing, prosecution, perfection and maintenance
of the patent rights, both domestic and foreign which have accrued upon the
effective date of this Agreement within sixty (60) days from the proceeds being
available to LICENSEE arising out of the execution of LICENSEE’S first sublicense
or strategic partner agreement, but in no event later than May 1, 2006.
LICENSEE agrees to reimburse BYU for on-going patenting expenses incurred after
the effective date of this Agreement within thirty (30) days from receipt of an
invoice.

 

12.3         LICENSEE SHALL HAVE NO CLAIM OR
DAMAGES AGAINST BYU, ITS PERSONNEL, TRUSTEES OR STUDENTS FOR FAILURE TO PERFORM
ITS OBLIGATIONS PURSUANT TO SECTION 13 OF THIS AGREEMENT AND SHALL NOT CONSIDER
BYU’S FAILURE TO SO PERFORM A BREACH OF THIS AGREEMENT.

 

13           Infringement

 

13.1         LICENSEE shall inform BYU promptly in
writing of any alleged infringement or misuse of the INTELLECTUAL PROPERTY
subject of this Agreement by a third party and of any available evidence of
such infringement or misuse.

 

13.2         During the term of this Agreement, BYU
shall have the right, but shall not be obligated, to prosecute at its own
expense any infringements or misuse of the LICENSED TECHNOLOGY, and, in
furtherance of such right, LICENSEE agrees that BYU may require LICENSEE to
participate as a party plaintiff in any such suit, without expense to LICENSEE.
 The total cost of any such infringement
action commenced solely by BYU shall be paid by BYU and BYU shall be entitled
to retain any recovery or damages arising from the infringement or misuse.

 

13.3         If within sixty (60) days after having
been notified of any alleged misuse or infringement, BYU does not intend on
prosecuting an infringement action, BYU shall notify LICENSEE of its intention
not to bring suit.  In such event only,
LICENSEE shall have the right, at its own expense, to prosecute a suit to
remedy the infringement or misuse of the INTELLECTUAL PROPERTY subject of this
Agreement.  LICENSEE may, for such
purposes, use the name of BYU as party plaintiff.  However, the right to bring an infringement
action shall remain only for so long as this Agreement remains in effect.  No settlement, consent judgment or other
voluntary final disposition of the suit may be entered into without the express
written 

 

11

 

consent
of BYU, which consent shall not be unreasonably withheld.  LICENSEE shall indemnify BYU against any order
or settlement for costs or reasonable attorneys’ fees that may be made against
BYU in such proceedings prosecuted by LICENSEE.

 

13.4         In the event that LICENSEE shall undertake
the enforcement of INTELLECTUAL PROPERTY subject of this Agreement by
litigation, LICENSEE may withhold up to 50% of any royalty payments otherwise
due BYU and apply the same toward reimbursement of a cumulative maximum of
fifty percent (50%) of its reasonable and paid outside attorneys fees, court
costs and expert witness fees.  Any
recovery of damages by LICENSEE from such suit shall be applied first to
satisfaction of any unreimbursed litigation expenses and legal fees of LICENSEE
relating to the suit and next toward reimbursement of BYU for any royalties
withheld.  The balance remaining from any
such recovery shall be divided between LICENSEE and BYU so that BYU receives
its proportionate (5.0%) interest under the terms of this AGREEMENT.

 

13.5         In the event that a declaratory
judgment or other action alleging unlawful infringement of any intellectual
property rights of a third party is brought against LICENSEE, BYU, at its sole option,
shall have the right within thirty (30) days after the commencement of such
action to intervene and assume the sole defense of the action at its own
expense.  Should BYU elect not to defend,
LICENSEE shall have the right to defend the suit at its sole expense.

 

13.6         If a third party is successful in
prevailing against LICENSEE in an adjudicated lawsuit demonstrating that the
LICENSED TECHNOLOGY, as delivered to LICENSEE by BYU, unlawfully infringed upon
such third party’s intellectual property rights, LICENSEE shall be entitled to
terminate this Agreement or to offset against future earned royalties the full
amount of LICENSEE’S court costs, attorney fees and damages awarded.

 

13.7         In any infringement suit, the other
party shall, at the request and expense of the party initiating the suit,
cooperate in all respects and, to the extent possible, make its employees reasonably
available to testify when requested and make available relevant records,
papers, information, samples, specimens, and the like.

 

14           Warranty and Limitation of Remedy

 

14.1         BYU represents and warrants that to the
best of its knowledge it is the owner of the entire right, title, and interest
in and to and has the sole right to grant licenses under this Agreement to the
LICENSED TECHNOLOGY as described on Exhibit A.  BYU makes no warranty or representation with
respect to the application of the LICENSED TECHNOLOGY to any particular
purpose.

 

14.2         BYU makes no representation that the
manufacture, use, lease, or sale of the LICENSED TECHNOLOGY will not infringe a
copyright or patent granted to others, other than to state that it knows of no
such copyright, patent or other proprietary interests which would be so
infringed.

 

14.3         Each party represents and warrants to
the other that it has all of the requisite power and authority to enter into
this Agreement and to perform each and every term, provision and obligation of
this Agreement, and that neither the execution nor delivery of this Agreement
will 

 

12

 

conflict
with or result in a breach of the terms, provisions or obligations of, or
constitute a default pursuant to, any other agreement or instrument under which
such party is obligated.

 

14.4         ALL WARRANTIES MADE IN THIS
AGREEMENT ARE EXCLUSIVE AND, TO THE EXTENT PERMITTED BY LAW, ARE IN LIEU OF ALL
OTHER WARRANTIES EXPRESS AND IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR ANY
OTHER WARRANTY WHETHER EXPRESS OR IMPLIED.

 

14.5         BYU will not be liable for any loss of
profits or for any claim or demand against LICENSEE by any other party.  BYU’s liability, if any, for any damages to
LICENSEE shall not exceed in any event the total earned royalties which have
been paid by LICENSEE to BYU during the term of this Agreement.  IN NO EVENT WILL BYU BE LIABLE FOR INCIDENTAL
OR CONSEQUENTIAL DAMAGES EVEN IF BYU HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.  No action, regardless
of form, arising out of the transaction subject of this Agreement may be
brought against BYU more than one year after the cause of action is discovered.

 

15           Product Liability and General
Indemnification

 

15.1         BYU does not warrant the effectiveness
or operation of any of the LICENSED PRODUCTS or LICENSED PROCESSES, and the
parties to this Agreement agree and understand that BYU shall have no liability
to an END USER.  LICENSEE, therefore,
agrees to hold BYU harmless and indemnify BYU, its trustees, officers,
employees and agents from and against any and all litigation, claims, damages
or actions (including reasonable attorneys’ fees) that may be instituted
against BYU arising out of LICENSEE’S marketing, distribution, sale, production,
manufacture, lease, consumption or advertisement of the LICENSED TECHNOLOGY,
LICENSED PRODUCTS or LICENSED PROCESSES or arising from any obligation of
LICENSEE under this Agreement, including, but not limited to, claims resulting from
any alleged type of defect in the LICENSED TECHNOLOGY, LICENSED PRODUCTS or
LICENSED PROCESSES or damages allegedly caused by any breach of contract by LICENSEE,
its AFFILIATES or SUBLICENSEES, or the use or misuse of the LICENSED TECHNOLOGY,
LICENSED PRODUCTS or LICENSED PROCESSES, notwithstanding any third-party
allegation that their claims, injuries or damages were proximately caused in
part or wholly by BYU’s negligence.  In
the event BYU is sued as a party defendant or otherwise pursuant to claims
identified in this Section as being subject to indemnification, LICENSEE agrees
to defend BYU at LICENSEE’S sole expense in such action.  Should any award or decree be made against
BYU, it shall be the obligation of LICENSEE to (a) appeal the decision and pay if
the appeal is lost or (b) pay such award or make any settlement as may be
warranted before or after the decision on appeal.  BYU may, at its own option, conduct its own
defense in such actions and all expenses and attorneys’ fees for such defense
shall be paid by LICENSEE.

 

15.2         LICENSEE shall immediately notify BYU
of any litigation in which it, its officers or its directors, agents or
employees may be involved if there is a reasonable possibility that this Agreement
or BYU will be affected and afford BYU reasonable cooperation should BYU elect to
make its own defense.

 

13

 

16           Term and Termination

 

16.1         Subject to earlier termination in
accordance with this Section, this Agreement shall commence on the effective
date of this Agreement and remain in force until the expiration of the last
valid claim of any patent included in the LICENSED TECHNOLOGY.

 

16.2         The Agreement may be terminated
immediately by written notice to LICENSEE by BYU at its election in the event
of the occurrence of any one of the following circumstances:

 

A.                                   In the event LICENSEE is placed in the hands
of a receiver or makes a general assignment for the benefit of creditors; or

 

B.                                     In the event that all or substantially all of
the assets of LICENSEE or its successor-in-interest are seized or attached in
conjunction with any action brought against it by a third party creditor.

 

16.3         This Agreement may be terminated
effective upon thirty (30) days written notice from BYU and the failure of
LICENSEE to cure any breach or default prior to the expiration of the thirty-day
notice period in any of the following circumstances:

 

A.                                   In the event LICENSEE becomes insolvent or
shall cease to carry on its business in the normal course; or

 

B.                                     In the event there is a transfer or sale of
LICENSEE’S business purporting to transfer or assign this Agreement and/or the
LICENSED TECHNOLOGY without the prior express written consent of BYU; or

 

C.                                     Disclosure of confidential information in
violation of the confidentiality provisions of this agreement; or

 

D.                                    In the event that BYU reasonably determines,
in good faith, that LICENSEE does not have the financial ability to
substantially perform the material terms of this Agreement.

 

16.4         In the case of breach or default arising
from LICENSEE’S failure to pay BYU royalties or other costs or expenses
pursuant to the Agreement when due and payable, failure to complete the
performance requirements of Section 5 of this Agreement, or from any other
material breach or default of this Agreement other than those described in
Section 16.2 and Section 16.3, BYU shall have the right to terminate this
Agreement upon sixty (60) days notice to LICENSEE.  Termination shall become effective upon the
failure of LICENSEE to cure such breach or default within such notice period.

 

16.5         Upon termination of this Agreement for
any reason, the parties shall not be released from any obligation that has
matured prior to the effective date of the termination.  LICENSEE may, however, after the effective date
of such termination, sell all LICENSED PRODUCTS and complete LICENSED PROCESSES
in its inventory or in process as of the time of such

 

14

 

termination,
provided that LICENSEE shall pay to BYU the royalties and other consideration
due on such products as required by this Agreement and shall submit the reports
as required.

 

16.6         Upon the termination of this Agreement,
any SUBLICENSEE which has not breached in any material way its sublicense
agreement may be granted the right to receive a license directly from BYU, at
BYU’s sole discretion, granting license rights to the LICENSED TECHNOLOGY.

 

16.7         Upon the termination of this Agreement,
LICENSEE shall immediately cease using the LICENSED TECHNOLOGY and return to
BYU all equipment, enhancements and all other materials, documents and
information as may have been provided by BYU pursuant to this Agreement, which
contain information which is confidential or proprietary to BYU and shall grant
back to BYU all of LICENSEE’S right, title and interest to all IMPROVEMENTS,
with applicable documentation, made by LICENSEE in relation to the LICENSED
TECHNOLOGY.

 

16.8         Nothing herein shall be construed to
limit BYU’s legal or equitable remedies in the event of a default by LICENSEE
and/or subsequent termination of this Agreement by BYU.

 

17           Dispute Resolution and Mediation

 

17.1         With respect to any and all claims,
disputes or controversies arising out of the performance of or in connection
with this Agreement, the parties agree to attempt in good faith to resolve
those claims, disputes or controversies by negotiations between the parties.  In the event either party believes the
negotiation discussions are likely not to result in settlement, the parties
must, in good faith, participate in mediation sessions with a professional
mediator to be mutually selected by the parties and the expense of which is to
be paid fifty percent (50%) by each party.  In the event, after one or more mediation
sessions, either party believes the

mediation
process is not likely to resolve the dispute by mutual agreement, such party
may seek any legal or equitable remedy available through a court of competent
jurisdiction.

 

17.2         Nothing in this Section shall be
construed to waive any rights of timely performance of any obligation existing
under this Agreement.

 

18           Licensee Assignment

 

Neither
this Agreement nor the LICENSED TECHNOLOGY is assignable by LICENSEE without
the express written consent of BYU, which shall not be unreasonably withheld.  Any attempt to make such an assignment without
BYU’s written consent may be voided at the election of BYU.  LICENSEE agrees that in the event BYU elects
to void an unauthorized assignment that BYU will have suffered immediate and
irreparable damage and shall be entitled to immediate injunctive relief.  In the event BYU does not elect to void an
unauthorized assignment, LICENSEE agrees that the assignee will be treated in
all respects as a LICENSEE for purposes of this Agreement.  Nothing in this section may be construed to
preclude BYU from initiating an independent action against the assignee of the
unauthorized assignment or to otherwise pursue other legal or equitable
remedies against LICENSEE, the assignee or both.

 

15

 

19           Non Use of BYU Name

 

LICENSEE
shall not use the name of Brigham Young University nor of any of its employees,
nor any adaptation thereof, in any advertisement, promotion or sales literature
without the express prior written consent from BYU in each case, except that
LICENSEE may state that it is licensed by BYU.

 

20           Publication

 

BYU
shall have the right to publish any academic paper, article or learned treatise
and make public disclosure at professional meetings or seminars regarding any
portion of the LICENSED TECHNOLOGY which has been or may be invented, conceived
or developed by BYU.

 

21           Payment, Notices and Other
Communications

 

Any
payment, notice or other communication pursuant to this Agreement shall be
sufficiently made or given on the date of mailing if sent by certified
first-class mail, postage prepaid, addressed to the receiving party at its
address designated below or such address as shall be designated by written
notice given to the other party.

 

BYU:                                                                    Technology Transfer Office

3760 HBLL

Brigham Young University

Provo, Utah 84602-6844

(801)422-6266

 

LICENSEE:                                     Osmotics Corporation

Osmotics Pharma, Inc.

1444 Wazee Street

Suite 210

Denver, CO 80202

(303) 534-1800

Attention: Chief Executive Officer & Chief Financial Officer

 

22           Miscellaneous Provisions

 

22.1         Independence of Parties.  BYU and LICENSEE are independent parties
engaged in independent business and neither party nor any respective agent or
employee of either party shall be regarded as an agent or an employee of the
other.  Nothing in this Agreement shall
be construed as reserving to either party the right to control the other in the
conduct of its business, nor shall either party have the authority to make any
promise, guarantee, warranty or reservation which will create any obligation or
liability whether express or implied on behalf of the other.

 

16

 

22.2         Attorneys’ Fees.  In the event a legal proceeding is commenced
in a court of competent jurisdiction to construe or enforce any provision of
this Agreement, the prevailing party, in addition to all other amounts to which
such party may be entitled, shall be entitled to recover from the
non-prevailing party its reasonable attorneys’ fees, expert witness fees and
costs incurred in connection with the proceeding.

 

22.3         Waiver.  No waiver by either party, whether express or
implied, of any provisions of this Agreement or of any breach or default of
either party, shall constitute a continuing waiver of such provision or a
waiver of any other provisions of this Agreement.

 

22.4         Governing Law.  This Agreement shall be interpreted and
construed in accordance with the laws of the State of Utah.  Venue for any legal disputes shall be in Utah
County, Utah.

 

22.5         Partial Invalidity.  Should any Section or any part of a Section of
this Agreement be held unenforceable or in conflict with the law of any
jurisdiction, the validity of the remaining Sections and Subsections shall not
be affected by the invalidity of any other part of the Agreement.

 

22.6         Force Majeure.  Neither party to this Agreement shall be in
default because of a delay or failure to perform which is not the result of the
defaulting party’s intentional or negligent acts or omissions, but results from
causes beyond the reasonable control of such party such as acts of God,
terrorism, civil disobedience and war.

 

22.7         Entire Agreement.  This Agreement constitutes the entire Agreement
and understanding between the parties and supersedes all prior agreements and
understandings with respect to the LICENSED TECHNOLOGY, whether written or
oral.  No modification or claimed waiver
of any of the provisions of this Agreement shall be valid unless in writing and
signed by authorized representatives of the party against whom such
modification or waiver was sought to be enforced.

 

22.8         Full and Fair Meaning.  This Agreement shall be interpreted in
accordance with its fair meaning and shall not be interpreted for or against
any party on the ground that such party drafted or caused to be drafted this
Agreement or any part thereof.

 

22.9         Binding Effect.  This License Agreement shall be binding upon
and shall inure to the benefit of the successors, assigns and legal
representatives of the parties.

 

22.10       Headings.  The paragraph and subparagraph headings
contained in this Agreement are for convenience and reference only.  They are not intended to define, limit, or
expand the scope of the provisions of this Agreement.

 

17

 

IN
WITNESS WHEREOF, the parties have entered into this Agreement and it is
effective this 15th day of April, 2004.

 

	
  BRIGHAM
  YOUNG UNIVERSITY

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Gary R. Hooper

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Gary
  R. Hooper

  	
   

  	
   

  	
  15 April 2004

  
	
   

  	
  Associate
  Academic Vice President

  	
   

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  OSMOTICS
  CORPORATION

  	
   

  	
   

  	
   

  
	
  &
  OSMOTICS PHARMA, INC.

  	
   

  	
   

  	
   

  

 
 	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Steven S. Porter

  	
   

  	
   

  	
   

  	
  4/28/05

  
	
  By:

  	
  Steven
  S. Porter

  	
   

  	
   

  	
  Date

  
	
   

  	
  CEO
  & Chairman

  	
   

  	
   

  	
   

  
						

 

 

TT-5069

April 15, 2004

 

18

 

EXHIBIT A

LICENSED TECHNOLOGY

 

The
LICENSED TECHNOLOGY includes U.S. patents and patent applications listed below
and any patents issuing therefrom, any foreign counterparts thereof, as well as
all continuations, continuations-in-part, divisions and renewals thereof, all
patents which may be granted thereon, and all reissues, reexaminations and
extensions; and trade secrets; and know-how which trade secrets and know-how
are in existence upon the effective date of the Agreement.

 

	
  Title

  	
   

  	
  DateFiled

  	
   

  	
  Application#

  	
   

  	
  Date
  Issued

  	
   

  	
  Patent#

  	
   

  	
  Country

  	
   

  	
  Docket#

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  1/19/1999

  	
   

  	
  09/234,008

  	
   

  	
  2/26/2002

  	
   

  	
  6,350,738

  	
   

  	
  CIP

  	
   

  	
  07913-004001

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  1/19/1999

  	
   

  	
  98909028.7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EPO

  	
   

  	
  07913-003EP1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  8/15/2000

  	
   

  	
  60/225,467

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Provisional

  	
   

  	
  07913/006001

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  6/25/2001

  	
   

  	
  0008737

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Mexico

  	
   

  	
  07913-003MX1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  8/10/2001

  	
   

  	
  09/927,926

  	
   

  	
  11/26/2002

  	
   

  	
  6,486,148

  	
   

  	
  Divisional

  	
   

  	
  07913-004002

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  8/15/2001

  	
   

  	
  09/930,316

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  CIP

  	
   

  	
  07913-006001

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  1/19/2000

  	
   

  	
  US00/01314

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  PCT

  	
   

  	
  07913-004
  WO1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
   

  	
   

  	
  759333

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Australia

  	
   

  	
  07913-003AU1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  9/6/2000

  	
   

  	
  98813861.1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  China

  	
   

  	
  07913-003CN1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
   

  	
   

  	
  2000125277

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Brazil

  	
   

  	
  07913-003BR1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  3/6/1998

  	
   

  	
  2000125277

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Russia

  	
   

  	
  07913-003RU1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  8/1/2001

  	
   

  	
  27319/00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Australia

  	
   

  	
  07913-004AU1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  7/19/2001

  	
   

  	
  2000-593625

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Japan

  	
   

  	
  07913-004JP1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
   

  	
   

  	
  2000-534218

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Japan

  	
   

  	
  07913-003JP1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  3/6/1998

  	
   

  	
  PCT/US98/04489

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  PCT

  	
   

  	
  07913-003WO1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  8/15/2001

  	
   

  	
  PCT/US01/25532

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  PCT

  	
   

  	
  07913-006WO1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  8/11/2003

  	
   

  	
  W-20002018

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Indonesia

  	
   

  	
  07913-003ID1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  8/15/2001

  	
   

  	
  01964034.1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Europe

  	
   

  	
  07913-006EP1

  
	
  Steroid
  Derived Antibiotics

  	
   

  	
  8/15/2001

  	
   

  	
  2002-519479

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Japan

  	
   

  	
  07913-006JP1

  

 

TT-5069

 

19

 

EXHIBIT B

NON-DISCLOSURE OF CONFIDENTIAL INFORMATION AGREEMENT

 

This
Agreement is entered into between____________________________, a________________corporation
with its principal place of business located at________________________________________________________________(referred
to in this Agreement as “LICENSEE”) and______________________________________,
an employee or contractor of LICENSEE (referred to in this Agreement as
“DISCLOSEE”).

 

LICENSEE
and DISCLOSEE agree that they are voluntarily entering into this Agreement for
the express benefit of Brigham Young University, a Utah nonprofit corporation
and educational institution with its principal campus and place of business
located at Provo, Utah 84602 (referred to in this Agreement as “BYU”) and
further agree to abide by the terms of this Agreement as follows:

 

RECITALS

 

1.             BYU is the sole owner of certain
INTELLECTUAL PROPERTY rights known as ________________________________________________________ and
has entered into an Exclusive License Agreement (referred to in this Agreement
as the “License Agreement”) with LICENSEE to allow for its development and
commercialization.

 

2.             DISCLOSEE is an employee or
contractor employed by or doing work for hire for LICENSEE.

 

3.             Pursuant to the License Agreement,
LICENSEE will receive material and information from BYU which is confidential
or proprietary to BYU and LICENSEE has agreed with BYU to take reasonable
precautions to preserve the confidential or proprietary status of this material
and information during the term of the License Agreement and for a period of
five (5) years after termination of the License Agreement.

 

4.             LICENSEE has also agreed with BYU
that all of its employees and independent contractors with access to BYU’s
confidential or proprietary information will be bound in writing to make no
unauthorized use or disclosure of the confidential information.  The purpose of this Agreement is to affect
compliance with LICENSEE’S obligation to protect BYU’s confidential

information.

 

1.             Definitions

 

1.1           “LICENSED TECHNOLOGY” means and
includes all of BYU’s technology and INTELLECTUAL PROPERTY referred to in this
Agreement as_________________________and related enhancements generated at BYU
or improvements developed by LICENSEE as specifically identified on Exhibit A
to the License Agreement which exhibit is incorporated by reference and made a
part of this Agreement.

 

20

 

1.2           “CONFIDENTIAL INFORMATION” shall mean
and include all material and information provided by BYU to LICENSEE which is
marked as confidential, or is verbally so designated and confirmed in writing
by BYU within thirty (30) days of receipt of the materials or information by
LICENSEE, or which LICENSEE would at the time of disclosure reasonably
understand under the circumstances to be considered by BYU to be confidential,
proprietary or to constitute a trade secret.

 

2.             Disclosure and Acknowledgment

 

2.1           The parties acknowledge that, from
time to time during the term of the License Agreement between BYU and LICENSEE,
it may be necessary for CONFIDENTIAL INFORMATION to be disclosed by BYU to
LICENSEE and from BYU or LICENSEE to DISCLOSEE.  The parties acknowledge the provisions of this
Agreement are necessary to protect the confidentiality, value, and secrecy of
BYU’s CONFIDENTIAL INFORMATION concerning the LICENSED TECHNOLOGY and to
protect BYU’s patent and ownership rights to the LICENSED TECHNOLOGY.

 

2.2           Nothing in this Agreement shall be
construed as conferring upon DISCLOSEE by implication, estoppel, or otherwise
any right, title or interest in, or any license under, any LICENSED TECHNOLOGY,
INTELLECTUAL PROPERTY, patent or trade secret now or subsequently owned by BYU.

 

2.3           DISCLOSEE agrees to take all
precautions reasonably necessary to maintain the confidential nature of the
CONFIDENTIAL INFORMATION disclosed to him or her by BYU or LICENSEE or
otherwise obtained by him or her in connection with any dealings with BYU or LICENSEE.

 

3.             Use of CONFIDENTIAL INFORMATION

 

DISCLOSEE
agrees as follows:

 

3.1           Not to use the CONFIDENTIAL
INFORMATION on his or her own behalf or on the behalf of others and to hold in
trust for BYU the CONFIDENTIAL INFORMATION and any related information, test
data, and benefits which arise during the course of employment or work for hire
with LICENSEE.

 

3.2           Not to copy, duplicate or in any way
record any CONFIDENTIAL INFORMATION disclosed to him or her under the terms of
this Agreement.

 

3.3           That all ideas, developments,
inventions, or improvements relating to the CONFIDENTIAL INFORMATION which are
discovered by DISCLOSEE or which DISCLOSEE and others conceive during the term
of this Agreement shall be promptly disclosed to LICENSEE and to BYU.

 

3.4           That all such ideas, developments or
inventions shall be the sole property of BYU and LICENSEE subject to the terms
of the License Agreement and to irrevocably assign, transfer and set over to
BYU and LICENSEE all rights, title and interest in and to all such ideas,

 

21

 

developments
or inventions, regardless of whether they may or may not be patentable, as
directed by the License Agreement.

 

3.5           To execute, acknowledge and deliver
any and all documents, instruments and papers and to do any and all other
things that may be deemed to be reasonably necessary by BYU and/or LICENSEE to
carry out the provisions of Section 3 of this Agreement.

 

3.6           To render all reasonable assistance
to BYU and LICENSEE in preparing copyrights or patent applications and in
protecting the rights of BYU and/or LICENSEE and/or their designees in and to
any matter which BYU and/or LICENSEE desire to protect under any patent or
copyright laws of this or any other country.

 

3.7           In the event that BYU and/or LICENSEE
is unable, after reasonable effort, to secure DISCLOSEE’s signature on any
document or documents needed to apply for or prosecute any patent, copyright or
other right or protection relating to any idea or invention, whether because of
DISCLOSEE’s physical or mental incapacity or for any other reason whatever, DISCLOSEE
hereby irrevocably designates and appoints BYU and its duly authorized officers
and agents as attorney-in-fact to act in DISCLOSEE’s behalf and stead to
execute and file any required documents, and to do all other lawfully permitted
acts to further prosecution and issuance of patents, copyrights or other
similar protections with the same legal force and effect as if executed by
DISCLOSEE.

 

4.             Term and Termination

 

4.1           DISCLOSEE’s obligation of confidence,
non-disclosure and non-use pursuant to this Agreement shall be effective for a
period of the term of the License Agreement and for a period of five (5) years
after termination of the License Agreement provided, however, that DISCLOSEE
shall have no obligation of confidence, non-disclosure or non-use with respect
to information:

 

4.1.1        Already known to DISCLOSEE at the time
of the disclosure by BYU to LICENSEE; or

 

4.1.2        Was generally available to the public or
otherwise part of the public domain at the time of disclosure from BYU to
LICENSEE; or

 

4.1.3        Became generally available to the public
or otherwise part of the public domain after its disclosure and other than
through any act or omission of LICENSEE or DISCLOSEE in breach of the License
Agreement or of this Agreement; or

 

4.1.4        Was subsequently and lawfully disclosed
to LICENSEE or DISCLOSEE by a third party.

 

4.1.5        Notwithstanding the above subpart of
Section 4 of this Agreement, information shall not be considered to be
generally known to the public or in the trade if, in order to acquire such
information from publicly available sources, DISCLOSEE used CONFIDENTIAL INFORMATION
to guide him or her in reviewing such sources or to select therefrom a series
of

 

22

 

unconnected
items which may be fit together to match the CONFIDENTIAL INFORMATION first
learned from BYU and/or LICENSEE.

 

4.2           Upon termination of the License
Agreement or at the conclusion of DISCLOSEE’s employment relationship with
LICENSEE, or at any time upon receiving written request from BYU or LICENSEE,
DISCLOSEE shall return all CONFIDENTIAL INFORMATION as well as any and all
blueprints, drawings, diagrams, manuals, memoranda, notes, records, books,
files, software, data, instruments, paper or any other documents or things
pertaining to the CONFIDENTIAL INFORMATION and any copies, summaries or
compilation of such.

 

5.             Miscellaneous

 

5.1           In the event DISCLOSEE is in breach
of any of its obligations pursuant to this Agreement, both BYU and LICENSEE
shall have the right and standing, in addition to any other remedies available
to them at law or in equity, to preliminary injunctive relief to enforce the obligation
of confidence hereunder until such time as a final adjudication by a court of competent
jurisdiction is secured.

 

5.2           In the event a suit is commenced to
enforce any obligations of this Agreement, the prevailing party, in addition to
any other amounts or remedies to which it may be entitled, shall be paid by the
non-prevailing party a reasonable sum for attorneys fees and reasonable costs related
to the dispute resolution.

 

5.3           This Agreement is subject to and
shall be interpreted under the laws of the State of Utah and the venue for any
dispute resolution shall be in the State of Utah, County of Utah in the State
District Court to which jurisdiction the parties to this Agreement irrevocably
consent.

 

5.4           The parties to this Agreement agree
that this Agreement is made and entered into for the benefit of BYU and that
BYU is a third party beneficiary to this Agreement and has standing to enforce
the terms of this Agreement and to avail itself of all other equitable and
legal remedies allowable by law as if it were a direct party to this Agreement.

 

5.6           This Agreement is divisible and
separable so that if any provision or provisions shall be held invalid, such
holding shall not impair the remaining provisions.

 

5.5           This Agreement constitutes the entire
agreement and understanding between the parties and supersedes all prior
agreements and understandings with respect to the subject matter, whether
written or oral.

 

23

 

IN
WITNESS WHEREOF, the parties have entered into this Agreement and it is effective
as of the________________day of_____________________, 200___.

 

 

	
  LICENSEE:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DISCLOSEE:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
					

 

 

TT-5069

April 15, 2004

 

24

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]