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EXHIBIT 10.15
AGREEMENT
This Agreement is made as of the 26th day of January, 1996 between Genelabs
technologies, Inc., a California corporation with its principal place of
business at 000 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 ("Genelabs") and
Xx. Xxxxx X. Xxxxxxxx, an individual, whose residence is 00 Xxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000 ("Xxxxxxxx").
RECITALS
X. Xxxxxxxx is a member of the Board of Directors of Genelabs,
Chairman of the Scientific Advisory Board of Genelabs and a
consultant to Genelabs.
B. In his capacity as a consultant to Genelabs, Xxxxxxxx has
identified as a potential commercial opportunity for Genelabs the
use of a compound known as dehydroepiandrosterone ("DHEA") in the
treatment of systemic lupus erythematosus ("SLE"), a disease that
can inflame and damage the connective tissue in various parts of
the human body.
X. Xxxxxxxx has assisted Genelabs in obtaining from Stanford
University a license to certain rights and clinical data relating
to the use of DHEA in the treatment of SLE.
D. Genelabs is in the process of clinical testing and development for
DHEA for the treatment of SLE, and intends to commercialize a
therapeutic product using DHEA for the treatment of SLE.
E. With the approval of a majority of its Board of Directors other
than Xxxxxxxx (who abstained with respect of this matter), Genelabs
has agreed to compensate Xxxxxxxx for his identification of the
application of DHEA to SLE and for his assistance in obtaining the
rights referred to above, as set forth in this Agreement.
NOW, THEREFORE, Genelabs and Xxxxxxxx agree as follows:
1. Fees. In the event that Genelabs or any licensee of Genelabs sells
any product that incorporates DHEA for the treatment of SLE (a
"Product"), Genelabs will pay fees to Xxxxxxxx, subject to the
terms of this Agreement, as follows:
(a) a fee equal to [ * ] of the Net Sales of Products by
Genelabs or any affiliate of Genelabs during the term of
this Agreement; and
(b) a fee equal to the lesser of (i) [ * ] of the Net Sales of
Products by any licensee that is not an affiliate of
Genelabs or (ii) [ * ] of the amounts actually received by
Genelabs with respect to the Net Sales of Products by such
licensee, during the term of this Agreement.
[*] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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The term of this Agreement shall expire upon the seventeenth (17th) annual
anniversary of the first commercial sale of a Product made by Genelabs or a
licensee, after which Genelabs will have no further obligations to Xxxxxxxx
under this Agreement except for payment of any amounts then due hereunder.
For purposes of this Section, an "affiliate" means any corporation or other
business entity that is controlled by Genelabs, where "control" means ownership
of a majority of the equity interests or the power to elect a majority of the
directors or other members of the governing body of the entity.
2. Determination of Net Sales.
(a) Net Sales. As used in this agreement, "Net Sales" or any
Product will mean the aggregate worldwide gross revenues
that are recognized and actually received by Genelabs, its
affiliates or its licensees from or on account of the sale
of Products to independent third parties, less (i)
reasonable credits or allowances, if any, actually granted
on account of, and reasonably allocable to, Products,
based on price adjustments, discounts or rebates to such
independent third parties, (ii) reasonable credits or
allowances, if any, actually granted on account of
recalls, rejection or return of Products previously sold,
(iii) excises, sales taxes, consumption taxes, duties or
other taxes imposed upon and paid with respect to such
sales (excluding income or franchise taxes of any kind)
and (iv) separately itemized transportation and insurance
costs incurred in shipping Products to such independent
third parties.
(b) Exclusions. Net Sales will not include any revenues
received by any licensee of Genelabs with respect to
Products manufactured by such licensee and transferred to
Genelabs for resale of Genelabs but will include revenues
from resale by Genelabs. No transfer of Products solely
for experimental purposes or as samples will be considered
a sale for purposes of determining Net Sales.
(c) Products Sold in Combination. If Genelabs or any of its
affiliates or licensees sells Products together with other
products to independent third parties at a combined price,
then the Net Sales for the Product will be to the average
price for "arms length" sales of Products sold separately
during the fee reporting period in which such sales occur.
3. Reports and Payments. Genelabs will deliver to Xxxxxxxx within 45
days after the end of each calendar quarter a written report
showing its computation of fees due under this Agreement and with
respect to (a) Net Sales made by Genelabs or its affiliates during
such calendar quarter and (b) payments received by Genelabs or its
affiliates from licensees that are not affiliates of Genelabs
during such quarter with respect to Net Sales by such licensees.
4. Inspection of Records. Genelabs will keep, and will require its
affiliates and licensees to keep, complete and accurate books and
records necessary to verify the Net Sales of Products and the
payment of fees hereunder. During the term that fees are payable
under this Agreement and for one year after the date of the last
fee payment, Xxxxxxxx will have the right at his expense to have an
independent auditor inspect such books
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and records at reasonable times and upon reasonable notice, but not
more often than once each calendar year. If such inspection reveals
an underpayment by Genelabs of more than 5% of the fees determined
by such inspection to be due for the period inspected, Genelabs
will pay the reasonable fees and expenses for such auditor for such
inspection. Neither Xxxxxxxx nor the auditor will disclose the Net
Sales of Products to any third party except as may be necessary to
enforce Xxxxxxxx'x rights to receive fees under this Agreement.
5. General.
(a) Governing Law. This Agreement will be governed by and
enforced in accordance with the laws of the State of
California.
(b) Notices. Any notice or report required or permitted to be
given hereunder shall be given in writing and deemed
sufficient if sent by first class mail or hand delivered
to the respective party at the address set forth on the
first page of this Agreement, or any subsequent address
provided by notice hereunder. Any such notice or report
given by mail shall be deemed to have been given when
mailed.
(c) Assignment. This Agreement shall be assignable by Genelabs
to any third party to which Genelabs assigns substantially
all of its rights to make, use and sell Products in the
treatment of SLE, provided that the third party expressly
assumes all of Genelabs' obligations hereunder and
Genelabs remains responsible for all obligations of the
third party hereunder. Genelabs may license any affiliate
or third party to make, use or sell Products, subject to
the payment of fees under this Agreement. The rights to
receive payment hereunder may be assignable by Xxxxxxxx to
the Xxxxxxxx Family Trust.
(d) Arbitration. Any dispute, controversy or claim arising out
of or relating to this Agreement, or the breach thereof,
shall be settled by arbitration in San Mateo County,
California, in accordance with the rules of the American
Arbitration Association then in effect, and the prevailing
party shall be awarded such party's costs and expenses,
including reasonable attorneys' fees. Judgment upon the
award of the arbitrator(s) may be entered in any court
having jurisdiction thereof.
(e) Entire Agreement. This Agreement constitutes the entire
understanding between the parties with respect to the
subject matter hereof and supersedes all previous
negotiations, representations and understandings between
the parties with respect thereto. No waiver or amendment
of any of the provisions hereof shall be effective unless
made in writing and signed by both parties.
(f) Waiver. The waiver by either party of a breach of any
provision of this Agreement by the other party will not be
construed as a waiver of any succeeding breach of the same
or any other provision.
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(g) Severability. Should any part of this Agreement be held
unenforceable, the unenforceable part of this Agreement
shall be replaced with a provision that accomplishes, to
the extent possible, the original purpose of the
unenforceable provision, and the remainder of the
Agreement will remain in effect.
GENELABS: XXXXXXXX:
GENELABS TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxx By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx Xxxx, Ph.D. Xxxxx X. Xxxxxxxx, M.D.
President & CEO
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