Note: Confidential treatment requested. Exhibit omits information that has
been filed separately with the Securities and Exchange Commission.
Dr. Minako Y. Lee
This RESEARCH AGREEMENT is entered into as of the 1st day of September,
1996, by and between OSTEX INTERNATIONAL, INC., a Washington corporation, having
its principal place of business at 2203 Airport Way South, Suite 400, Seattle,
Washington 98134 ("Ostex"), and the UNIVERSITY OF WASHINGTON, having its
principal office at Seattle, Washington 98195 (the "University").
A. Ostex has an ongoing interest in certain research technology
(including inventions, processes, formulae and the like, whether or not
patentable, and property eligible for copyright protection) entitled "Role of
O-CSF in Osteoclast Regulation," as more particularly described in "Exhibit A"
attached hereto (the "Technology").
B. The Technology has been assigned by the University to the Washington
Research Foundation ("WRF") pursuant to Section 3.3 of that certain Technology
Administration Agreement, dated January 1, 1985, between the University and WRF,
as amended (the "UW Agreement"). Pursuant to that certain Exclusive License
Agreement between Ostex and WRF, dated October 20, 1989 (the "Exclusive License
Agreement"), WRF granted Ostex an exclusive, worldwide license to make, have
made, assign, sublicense, lease, develop, enhance, modify, produce, reproduce,
demonstrate, market, promote, sell, distribute, use, exploit and otherwise
commercialize and prepare derivations of the Technology.
C. Ostex and the University entered into a Research Agreement dated
November 1, 1992, pursuant to which Ostex funded the first two years of a
research program to be conducted by the University relating to the Technology
(the "Research Program").
D. It is in the mutual interest of Ostex and the University that the
Research Program be continued pursuant to this Agreement.
E. Ostex is willing to fund the XXXXXXXXXXX of the Research Program at
and through the University of Washington, Department of Biological
Structure, and the University desires to obtain such funding, all subject to and
in accordance with the terms and conditions set forth in this Agreement.
In consideration of the covenants and promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. SCOPE AND SCHEDULE
The Research Program shall be conducted in accordance with the research
proposal attached hereto as "Exhibit A" and incorporated herein by this
reference (the "Research Proposal"), and in accordance with mutually agreeable
written modifications thereof. The Research Program shall be carried out during
the Program Period (as defined below), unless sooner terminated or extended as
2. PROGRAM PERIOD
The Program Period initially will be XXXX in duration; commencing XXXX
and expiring XXXX, provided, however, that the parties may by mutual
agreement reached no less than thirty (30) days prior to expiration XXXXXXX,
extend the Program Period forXXXXXXXXXXXXXXXXXXXXXX to commence XXXX and expire
3. OSTEX'S PRINCIPAL OBLIGATIONS
3.1 During XXXXXXXXX of the Program Period, Ostex shall pay
the University the sum of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX to cover
all direct and indirect costs of the corresponding portion of the Research
Program, as set forth in the budget section of the Research Proposal.
3.2 In the event that the Program Period is extended beyond
XXXXXXX in accordance with Section 2 above, Ostex shall during XXXXXXX pay the
University the sum of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX to cover all
direct and indirect costs of the corresponding portion of the Research Program,
as set forth in the budget section of the Research Proposal.
4. PAYMENT TERMS
4.1 During XXXXXXX of the Program Period, Ostex shall, upon
receipt of invoices from the University, pay the University the amount specified
in Section 3.1 above, in accordance with the following schedule:
PAYMENT DATE PAYMENT AMOUNT
- XXXXXXXXXXXXXXXXXXXXXXXXXXX XXX
- XXXXXXXXXXXXXXXXXXXXXXXXXXX XXX
- XXXXXXXXXXXXXXXXXXXXXXXXXXX XXX
4.2 In the event that the Program Period is extended beyond
XXXXXXX, Ostex shall, upon receipt of invoices from the University, pay the
University during XXXXXXX the amount set forth in Section 3.2 above, in
accordance with the following schedule:
PAYMENT DATE PAYMENT AMOUNT
- XXXXXXXXXXXXXXXXXXXXXXXXX XXX
- XXXXXXXXXXXXXXXXXXXXXXXXX XXX
- XXXXXXXXXXXXXXXXXXXXXXXXX XXX
- XXXXXXXXXXXXXXXXXXXXXXXXX XXX
4.3 The University shall submit its customary statement of
expenses incurred under this Agreement within thirty (30) days after the end of
each six-month interval of the Program Period.
5. PRINCIPAL INVESTIGATOR
For purposes of this Agreement, and pursuant to University policy, Dr.
Minako Y. Lee is designated the principal investigator of the Research Program
("Principal Investigator"). The Principal Investigator shall be responsible for
the direction and content of the Research Program, including budgeting and
budget revisions necessary to accomplish the objectives of the Research Program.
Should the Principal Investigator leave the employ of the University or
otherwise become unavailable to fulfill her obligations as Principal
Investigator during the Program Period, the University may nominate a
replacement for the position of Principal Investigator. If such replacement is
not acceptable to Ostex, the Research Program and budget contained in the
Research Proposal may be modified to reflect a reduced scope of work, or, at the
option of Ostex, may be terminated upon sixty (60) days' notice, unless
arrangements acceptable to Ostex can be made to subcontract with the departed
Principal Investigator, or the institution at which she is then employed, to
continue the work described in the Research Proposal.
Neither party shall furnish to the other any confidential or
proprietary information of any third party in connection with this Agreement.
Any such information which one party wishes to furnish to the other shall be the
subject of a separate confidentiality agreement between the parties.
7. DATA REPORTS AND FACILITIES
7.1 The University shall, in accordance with established
University practice, keep complete, accurate, and authentic accounts, notes,
data, and records of the work performed under this Agreement and shall provide
Ostex with reports within thirty (30) days following the end of each six-month
interval of the Program Period. The University shall furthermore submit to Ostex
a written and comprehensive final report within ninety (90) days after
termination of the Research Program.
7.2 At the discretion and convenience of the Principal
Investigator during the course of the Research Program, Ostex's representatives
and others designated by Ostex may be present as observers while various tests,
inspections and other aspects of the Research Program are being conducted.
Ostex's representatives may consult informally with the Principal Investigator
regarding the Research Program both personally and by telephone. The University
acknowledges and agrees that the Principal Investigator may serve as a
consultant to Ostex during the term of this Agreement.
7.3 From its own resources and those provided under this
Agreement, the University agrees to make available laboratory facilities and
equipment for the Research Program.
8. INVENTION RIGHTS
8.1 The University acknowledges and agrees that: (i) all
Technology made, developed or conceived on or before the date of this Agreement
has been assigned to WRF pursuant to Section 3.3 of the UW Agreement, and no
commitments have been made with respect to such Technology pursuant to Section
3.2 of the UW Agreement; (ii) all Technology made, developed or conceived after
the date of this Agreement will be submitted to WRF pursuant to Section 3.1 of
the UW Agreement; (iii) no commitment will be made pursuant to Section 3.1 of
the UW Agreement with respect to Technology made, developed or conceived after
the date of this Agreement unless Ostex agrees to such commitment in writing;
and (iv) the University shall not terminate, amend, waive or enforce the UW
Agreement, or any rights or obligations thereunder, in any manner that could
adversely affect Ostex's rights under this Agreement unless Ostex agrees in
writing to such termination, amendment, waiver or enforcement.
8.2 The University shall have no right, title or interest in
any Technology made, developed or conceived by employees or consultants of Ostex
entirely without the use of University facilities.
The University will not be restricted hereunder from publishing the
results of research conducted under this Agreement within a reasonable period of
time following their availability. The University will provide a copy of all
manuscripts to Ostex prior to their presentation or submission for publication.
In order to protect fully the rights of the University and of Ostex, any
contemplated publication or other dissemination containing details of an
invention, whether or not patentable, will be withheld until a patent
application is filed or other appropriate steps to protect commercial value have
been completed. Such withholding shall be kept to a minimum and will not exceed
six (6) months, except by mutual agreement between Ostex and the University.
The University and Ostex each agree to indemnify and hold the other
party harmless from damage to persons or property resulting from any act or
omission on the part of itself, its employees, its agents, or its officers.
Any notice to be given hereunder shall be in writing and shall be
deemed received by the addressee on the day delivered if delivered by courier on
a business day, or on the fifth business day following mailing if sent by
first-class, certified or registered U.S. mail, postage prepaid, to the
if to the University: Director, Grant and Contract Services
3935 University Way, N.E., JM-24
Seattle, Washington 98195
if to Ostex: Ostex International, Inc.
2203 Airport Way South, Suite 301
Seattle, Washington 98134
12.1 This Agreement shall terminate upon the expiration of the
Program Period as defined in Section 2 above; provided, however, that this
Agreement may be terminated by either party prior to expiration of the Program
Period upon sixty (60) days' prior written notice, if such party determines, in
its discretion, that the Research Program is no longer feasible or desirable
academically, technically, or commercially. Upon receipt or delivery of such
notice of termination, the University shall exert its best efforts to limit or
terminate any outstanding financial commitments for which Ostex is responsible
hereunder, and Ostex shall reimburse the University, to the extent not
previously reimbursed, for all costs incurred by the University for the Research
Program, including, without limitation, all obligations not cancelable. The
University shall furnish, within sixty (60) days of the effective date of
termination, a final report of all costs incurred and all funds received and
shall reimburse Ostex for payments which may have been advanced in excess of
total costs incurred, with no further obligations to Ostex.
12.2 Notwithstanding paragraph 12.1 above, in the event that
either party shall be in default of any of its obligations under this Agreement
and shall fail to cure such default within thirty (30) days after receiving
written notice thereof, the party not in default shall have the option of
terminating this Agreement by giving written notice of termination to the
defaulting party, which shall be effective thirty (30) days after delivery.
12.3 Termination of this Agreement shall not affect the rights
and obligations of the parties accrued prior to termination, or the rights and
obligations set forth in Section 8 above.
13. WARRANTS AND COVENANTS BY UNIVERSITY
13.1 The University hereby warrants that it has the right and
authority to enter into this Agreement and that the representatives whose
signatures appear hereunder are duly authorized by the University to enter into
this Agreement on behalf of the University.
13.2 The University covenants that it will not knowingly enter
into any agreement with any industrial or commercial funding source other than
Ostex if such agreement would be inconsistent with the University's obligations
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington.
15. ARBITRATION AND JURISDICTION
15.1 At the request of either party, any controversy, claim,
or dispute arising out of or relating to any provision of this Agreement shall
be settled by arbitration to be conducted in Seattle, Washington. Such
arbitration shall be conducted in accordance with the rules applied by the
American Arbitration Association. Judgment upon any award rendered through
arbitration may be entered into any court of competent jurisdiction.
15.2 Ostex and the University agree to submit to
jurisdiction in Seattle, Washington.
16. SUCCESSORS AND ASSIGNS
This Agreement, including the indemnification provisions hereof, shall
be binding upon and inure to the benefit of the parties hereto, their respective
successors, assigns, and legal representatives. Ostex may assign this Agreement
to any successor to all or substantially all of its business and assets. This
Agreement shall not otherwise be assignable by either party without the prior
written consent of the other.
17. NO ORAL MODIFICATION
No change, modification, extension, termination or waiver of this
Agreement, or any provision herein contained, shall be valid unless made in
writing and signed by duly authorized representatives of the parties hereto.
Sections 8 and 9 of this Agreement shall survive any expiration or
other termination of this Agreement.
19. USE OF NAMES
Neither party will use the name of the other party or its employees in
any advertisement, press release or publicity with respect to the Technology
without the prior written approval of the other party. The University shall have
the right to acknowledge Ostex's support of the research performed under this
Agreement in scientific publications and other scientific communications.
EFFECTIVE as of the day and year first set forth above.
By /S/ DANALD A. ALLEN By /S/ JOHN M. BRENNEMAN
Donald W. Allen, Director, John M. Brenneman, Director of Finance
Grant and Contract Services
Date of signature Date of signature
Continuation of Research proposal:
Role of O-CSF in Osteoclast Regulation
OSTEX International Inc.
2203 Airport Way, S., Suite 301
Seattle, WA. 98l34
Tel: (206) 292-8082
Fax: (206) 292-8625
Minako Y. Lee, ,M.D.
Research Associate Professor
Department of Biological Structure
University of Washington
Seattle, WA. 98195
Tel: (206) 685-1514
Lee, Minako Y.
Budget Request for XXXX X XXXXXXXXXXXXXXXXXX
DETAILED BUDGET FOR THE FIRST 12 MONTHS
Name Role % Salary Fringe Total
M. Y. Lee P.I 40% XXX XXX XXX
Y Igarashi Senior Fellow 30% XXX XXX XXX
L. Ferguson Res Tech I 100% XXX XXX XXX
Q. Dang Hourly XXX XXX XXX
Subtotal personnel: XXX
Microcentrifuge XXXX, Tissue homogenizer XXXX XXX
Others XXXX, equipment repair, service: XXX
publication: XXX, photocopies, postage: XXXX XXX
Housing in XXXXXXXXXXXXXXX XXX
Subtotal for supplies: XXX
Total direct costs: XXX xxxxxx Indirect Costs: xxxxxx
xxxxxx xxxxxx Indirect Costs: xxxxxx
Total direct costs for the next XXXX period xxxxxx Indirect Costs: xxxxxx
Total direct and indirect for next XXXX period: XXXX
Salaries xxxxxx xxxxxx
Fringe xxxxxx xxxxxx
Total xxxxxx xxxxxx
Equipment xxxxxx xxxxxx
Supplies xxxxxx xxxxxx
Total xxxxxx xxxxxx
We are requesting salaries for personnel who will be working on the
proposed project at a % effort as indicated. Dr. Lee will spend xxx of her time
as P.I. A proposed salary is commensurate with her experience and academic
level. Dr. Igarashi, Ph.D. in biochemisty, is an associate professor in
Biochemistry at Dokkyo University School of Medicine, Japan. He came to our
laboratory in April 95 as a visiting scholar to work for 2 years. He is a well
experienced biochemist in protein purification and molecular biology, and his
contribution is very helpful to our program. He will work with us on
XXXXXXXXXXXX. He needs 30% of his salary support in next year. Ms. Ferguson will
provide technical assistance in XXXXX involved in the proposal. Mr. Dang will
Fringe benefit is calculated at 22% for PI, 25% for the fellow, and 30% for the
research technologist, according to the institutional regulation. Annual
inflation rate is calculated at 4%.
Indirect cost rate is as per current agreement between University of Washington
and OSTEX International Inc.
Research Proposal: Role of O-CSF in Osteoclast Regulation
A) SPECIFIC AIMS
One half page redacted
B) BACKGROUND AND SIGNIFICANCE:
responsible for bone resorption. It is now well established that
Ostoeclasts are derived from a hematopoietic stem cell population and
multinucleated functional osteoclasts are formed by the fusion of mononuclear
precursor cells (1,2). Although it has been clearly shown that osteotropic
hormones such as 1,25 dihydroxyvitamin D3 (vitamin D3) or parathyroid hormone
(PTH) play important roles in the process of functional osteoclast formation
(3), mechanisms of immature osteoclast development in the bone marrow is still
poorly understood. Nonetheless, recent studies have gradually revealed that more
and more complex mechanisms are involved in differentiation of immature
osteoclasts from the heterogenous hematopoietic cell population. Involvement of
not only various interleukins, colony stimulating factors (CSF), growth factors,
and/or hormones but also soluble receptors of cytokines (4) and marrow stromal
cell elements have been suggested to play roles at various stages of osteoclast
The remaining page unsder background and significance is redacted
C) PROGRESS REPORT/ PRELIMINARY STUDIES
Following studies have been conducted in collaboration with laboratories of
Dr. David Eyre, Department of Orthopedics, Dr. William Osborne, Department of
Pediatrics, both at the University of Washington, and Dr. Stephen Apone, Ostex
Two pages redacted
Two and one half pages redacted
M.Y.Lee, P.E.Woods, J.L.Lottsfeldt, N.Ramesh, W.R.A.Osborne, D.R.Eyre: Isolation
and molecular characterization of a murine osteoclast colony stimulating factor
(O-CSF). J Bone Mineral Research 8: S144, 1993.
T.H.Lee, K.L.Fevold, Y.Muguruma, J.L.Lottsfeldt, M.Y.Lee. Relative roles of
osteoclast colony-stimulating factor and macrophage colony stimulating factor in
the course of osteoclast development. Exp Hematol 22:66-73, 1994.
Stephen Apone, Karen Fevold, Minako Lee, David Eyre: A rapid method for
quantifying osteoclast activity in vitro. J Bone Mineral Research 9:S178, 1994.
Y.Hayase, M.Y.Lee: Osteoclast progenitors develop from primitive hematopoietic
stem cells. Exp Hematol 22:(8), 755, 1994.
Y.Mugururna, M.Y.Lee: Osteoclast progenitors express c-Kit, but their
differentiation appears independent of stem cell factor. Abstract submitted to
the annual meeting for the American Society of Hematology, 1995.
L.E.Purton, M.Y.Lee,B.Torok-Storb. Normal human peripheral blood mononuclear
cells mobilized with granulocyte colony-stimulating factor contain osteoclast
progenitors. Abstract submitted to the annual meeting for the American Society
of Hematology, 1995.
D) Research plan:
Four pages redacted
Aim 1 XXXXXXXXXXXXXXXXXXXX
Aim 2 XXXXXXXXXXXXXXXXXXXX
Aim 3 XXXXXXXXXXXXXXXXXXXX
1. SudaT. et al., Modulation of osteoclast differentiation. Endocrine
2. Nijweide,PJ. and GroothR. Ontogeny of the osteoclast. In Biology and
Physiology of the Osteoclast. Rifkin, BR and Gay CV eds. p82-97. CRC press,
Boca Raton, Florida 1992
3. Chambers,TJ. Regulation of osteoclast development and function. ibd.
4. Tamura, T. et al., Soluble interleukin-6 receptor triggers osteoclast
formation by interleukin 6. Proc. Natl Acad. Sci. 90:11924-1928, 1993
5. Lee, MY., Eyre, DR., Osborne, WRA. Isolation of a murine osteoclast
colony stimulating factor. Proc. Natl. Acad. Sci. 88:8500-8504,1991
6. Lee, MY.,
Lottsfeldt, JL. Fevold, KL. Identification and characterization of osteoclast
progenitors by clonal analysis of hematopoietic cells. Blood 80:1710-1716, 1992
7. Metcalf,D. Hematopoietic regulators. Redundancy or Subtlety? Blood
8. Kaushansky, K., Lin,N. and Adamson,J: Interleukin 1 stimulates
fibroblasts to synthesize granulocyte-macrophage and granulocyte colony
stimulating factors. Mechanisms for the hematopoietic response to inflammation.
J Clin Invest 81: 92-97, 1988
9. Thomson, B.M., Saklatvala, J. and Chambers,
T.J: Osteoblasts mediate interleukin 1 stimulation of bone resorption by rat
osteoclasts. J Exp Med 164: 104-112, 1986
10. Lee,TH., Fevold,KL., Muguruma,Y.,
Lottsfeldt,JL., Lee,MY. Relative roles of osteoclast colony-stimulating factor
and macrophage colony-stimulating, factor in the course of osteoclast
development. Exp Hematol 22:66-73. 1994
11. de-la-Mata,J., et al., Interleukin-6
enhances hypercalcemia and bone resorption mediated by parathyroid
hormone-related protein in vivo. J.Clin Invest. 95:2846-2852, 1995
12. KodamaH., et al., Congenital osteoclast deficiency in osteopetrotic
(op/op) mice is cured by injections of macrophage colony-stimulating
factor. J. Exp. Med. 173:269-272, 1991
13. Jilka,R., et al., Increased osteoclast development after
estrogen loss: mediation by interleukin-6. Science 257:88-91, 1992
14.Horowits,MC. Cytokines and estrogen in bone: Anti-osteoporotic effects.
Science 260:626-627, 1993
15. Rifkin,DB and Moscatelli, D. Recent developments in the
cell biology of basic fibroblast growth factor. J.Cell Biol 109: 1-6, 1989
16.Apone,S., Fevold,K., Lee,M., Eyre,D. A rapid method for quantifying
osteoclastactivity in vitro. J Bone Min Res 9:S178, 1994
17. Muguruma,Y. and Lee, MY.Osteoclast progenitors express c-Kit, but
their differentiation appears independent of SCF. (submitted) 15
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