-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GTEh4Pz1H3cySNZCw9MWvY2YjzLFzaifaWDc/X/cTXCRV7ljYSGHANc0ZS2Jt/vD tLuy2H1WN3RnIS/joc2U1A== 0000891618-99-001012.txt : 19990319 0000891618-99-001012.hdr.sgml : 19990319 ACCESSION NUMBER: 0000891618-99-001012 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19990318 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLLAGEN AESTHETICS INC CENTRAL INDEX KEY: 0000021686 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 942300486 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-10640 FILM NUMBER: 99568273 BUSINESS ADDRESS: STREET 1: 2500 FABER PL CITY: PALO ALTO STATE: CA ZIP: 94303 BUSINESS PHONE: 4158560200 FORMER COMPANY: FORMER CONFORMED NAME: COLLAGEN CORP /DE DATE OF NAME CHANGE: 19920703 10-K/A 1 AMENDMENT #2 TO FORM 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 2 TO FORM 10-K [X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended June 30, 1996, or [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to _______________ COMMISSION FILE NUMBER: 0-10640 COLLAGEN CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 94-2300486 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2500 Faber Place, Palo Alto, CA 94303 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 856-0200 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 par value Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 month (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the Registrant, based upon the closing price of the Common Stock on September 6, 1996, on the Nasdaq Stock Market, was approximately $128,272,131. Shares of Common Stock held by each officer and director and by each person who owns 5% or more of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. As of September 6, 1996, Registrant had 8,690,110 shares of Common Stock outstanding. 2 The Registrant hereby amends its Annual Report on Form 10-K/A for the fiscal year ended June 30, 1996 to refile Exhibit 10.83 and 10.84 pursuant to a grant of confidential treatment with respect to such Exhibits. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K (a) The following documents are filed as a part of this report: 2. Exhibits
EXHIBIT NUMBER NOTES DESCRIPTION ------- ----- ----------- 3.1 (9) Certificate of Incorporation of Collagen Subsidiary, Inc. 3.2 (9) Certificate of Merger of Collagen Corporation, a California corporation, into Collagen Subsidiary, Inc., a Delaware corporation 3.3 (12) By-Laws, as amended 10.24 (1) Collaborative Research and Distribution Agreement with Zimmer, Inc. dated as of June 26, 1985 10.27 (1) Distribution Agreement between Registrant and Lederle (Japan), Ltd. dated as of June 26, 1985 10.34 (2) Agreement for Sale and Leaseback of Manufacturing Facility between Registrant and Heleasco Seven, Inc. 10.36 (3) Amended and Restated Development and Distribution Agreement with C.R. Bard, Inc., dated as of August 4, 1989 10.38 (4) Agreement for Sale and Leaseback of Manufacturing Facility between Registrant and Heleasco Seven, Inc. dated September 25, 1989 10.39 (4) Agreement for Sale and Leaseback of Manufacturing Facility between Registrant and Heleasco Seven, Inc. dated December 29, 1989 10.40 (4) Amended and Restated Promissory Note of Dale A. Stringfellow, dated September 7, 1990 10.41 (4) Amended and Restated Promissory Note Secured by Deed of Trust by Dale A. Stringfellow, dated September 7, 1990 10.42 (4) 1984 Incentive Stock Option Plan, as amended 10.43 (4) 1985 Employee Stock Purchase Plan, as amended 10.44 (12) 1990 Directors' Stock Option Plan, as amended
3 10.46 (5) Agreement between Registrant and Essex Chemie, A.G. dated November 19, 1990 10.56 (6) Lease Agreement dated June 1, 1992 by and between Registrant and Harbor Investment Partners 10.58 (6) License and Option Agreement dated June 30, 1992 between Registrant and Research Development Foundation 10.60 (7) Amendments dated February 16, 1993 and February 18, 1993 respectively, to the Product Development and Distribution Agreement dated January 18, 1985 by and between Registrant and Zimmer, Inc., originally filed as Exhibit 10.24 to Registrant's Form 10-K for the fiscal year ended June 30, 1985 10.61* (7) Letter Agreement, dated April 26, 1991 and May 21, 1993 by and between Collagen Corporation and A. Neville Pelletier 10.62 (8) 1994 Stock Option Plan 10.63 (9) Renewed Lease for 2500 Faber Place, Palo Alto, California dated December 1, 1992 between Registrant and Leonard Ely, Shirley Ely, Carl Carlsen and Mary L. Carlsen 10.65* (9) Promissory Note of Howard D. Palefsky dated August 3, 1994 10.66 (9) Revised Form of Agreement Regarding Proprietary Information and Inventions between Registrant and all employees or consultants 10.67 (10) Credit Agreement, dated November 15, 1994, by and between the Bank of New York and the Registrant, as amended January 24, 1995 10.67(a) (13) Second Amendment, Third Amendment and Fourth Amendment dated June 30, 1995, September 30, 1995, and December 26, 1995, respectively, to Credit Agreement dated November 15, 1994 by and between the Bank of New York and the Registrant 10.67(b) (14) Fifth Amendment, dated March 29, 1996, to Credit Agreement dated November 15, 1994 by and between the Bank of New York and the Registrant 10.67(c) Sixth Amendment, dated June 28, 1996, to Credit Agreement dated November 15, 1994 by and between the Bank of New York and the Registrant
4 10.68 (10) Letter Agreement, dated October 7, 1994, by and between C.R. Bard. Inc. and the Registrant, amending the Amended and Restated Development and Distribution Agreement dated August 4, 1989 between the Parties originally filed as Exhibit 10.36 to the Registrant's Form 10-K for the fiscal year ended June 30, 1989 10.70* (12) Letter of Acceptance of Employment by and between Gary Petersmeyer and the Registrant, dated December 19, 1994 10.71** (12) License, Supply and Option Agreement, dated March 24, 1995 by and between LipoMatrix, Incorporated and Registrant 10.72** (12) Distributor Agreement dated March 24, 1995 by and between LipoMatrix, Incorporated and Registrant 10.73** (12) Coordination Agreement dated March 24, 1995, by and between LipoMatrix Incorporated and Registrant's wholly owned subsidiary, Collagen International Incorporated 10.74* (12) Promissory Note of Howard D. Palefsky dated June 5, 1995 10.75** (12) Letter Agreement, dated July 10, 1995 by and between C.R. Bard, Inc. and the Registrant, amending the Amended and Restated Development and Distribution Agreement dated August 4, 1989 between the Parties originally filed as Exhibit 10.36 to the Registrant's Form 10-K for the fiscal year ended June 30, 1989 10.76 (11) Stock Purchase Agreement dated August 22, 1995 between the Registrant and certain stockholders of LipoMatrix, Incorporated 10.77* (13) Promissory Note between Howard D. Palefsky and the Registrant dated December 11, 1995 10.78* (15) Bonus Agreement between Howard D. Palefsky and the Registrant dated February 20, 1996 10.79* (15) Promissory Note between Howard D. Palefsky and the Registrant dated February 20, 1996 10.80* (14) Amended and Restated Secured Loan Agreement between Ross R. Erickson and the Registrant dated December 31, 1995 10.81* Letter of Acceptance of Employment by and Pierre Comte and the Registrant dated March 21, 1995 10.82 Loan Agreement between the Registrant and Cohesion Corporation dated May 24, 1996 10.83** Worldwide Medical Product Distribution Agreement between Registrant and Tissue Technologies, Inc. dated June 4, 1996 10.84** Distribution Agreement between Registrant and Biomatrix, Inc. dated June 17, 1996 10.87** Distribution Agreement between Registrant and Lederle (Japan), LTD. dated January 1, 1996 11.1 Statement Regarding Weighted Average Common and Common Equivalent Shares Used in Computation of Per Share Income 21.1 List of Subsidiaries 23.1 Consent of Ernst & Young LLP, Independent Auditors 24.1 Power of Attorney (see page 42) 27.1 Financial Data Schedule (EDGAR version only)
- ------------------ * Constitutes a management contract or compensatory contract, plan or arrangement. ** Confidential treatment has been granted for a portion of this document. Notes to Exhibits: (1) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1985. (2) Incorporated by reference to the same exhibits filed with Registrant's Current Report on Form 8-K dated March 31, 1989. (3) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1989. (4) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1990. (5) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1991. (6) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1992. (7) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1993. (8) Incorporated by reference to Exhibit 4.1 filed with Registrant's Registration statement of Form S-8 (No. 33-80038) which became effective June 9, 1994. (9) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1994 (10) Incorporated by reference to the same exhibits filed with Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1994. (11) Incorporated by reference to exhibit 2.1 filed with Registrant's Current Report on Form 8-K dated September 6, 1995. (12) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1995 (13) Incorporated by reference to the same exhibits filed with Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1995 (14) Incorporated by reference to exhibit 10.76 originally filed with Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1995 (15) Incorporated by reference to the same exhibits filed with Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1996 5 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. COLLAGEN AESTHETICS, INC. (FORMERLY COLLAGEN CORPORATION) /s/ MICHAEL A. BATES -------------------------------- Michael A. Bates Vice President, Finance and Chief Financial Officer Dated: March 15, 1999 6 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gary S. Petersmeyer and Michael A. Bates, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Amendment No. 2 to Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date - ------------------------------------------------------------------------------------------------------------ /s/ GARY S. PETERSMEYER President, Chief Executive Officer, and March 18, 1999 - ----------------------------- Director (Principal Executive Officer) Gary S. Petersmeyer /s/ MICHAEL A. BATES Vice President Finance and Chief Financial March 18, 1999 - ----------------------------- Officer (Principal Financial and Accounting Michael A. Bates Officer) /s/ ANNE L. BAKAR Director March 18, 1999 - ----------------------------- Anne L. Bakar /s/ WILLIAM G. DAVIS Director March 18, 1999 - ----------------------------- William G. Davis - ----------------------------- Director Gerald Lazarus, M.D.
7 COLLAGEN CORPORATION AMENDMENT NO. 2 TO FORM 10-K ANNUAL REPORT FOR THE YEAR ENDED JUNE 30, 1996 INDEX TO EXHIBITS
EXHIBIT NUMBER NOTES DESCRIPTION - ------- ----- ----------- 3.1 (9) Certificate of Incorporation of Collagen Subsidiary, Inc. 3.2 (9) Certificate of Merger of Collagen Corporation, a California corporation, into Collagen Subsidiary, Inc., a Delaware corporation 3.3 (12) By-Laws, as amended 10.24 (1) Collaborative Research and Distribution Agreement with Zimmer, Inc. dated as of June 26, 1985 10.27 (1) Distribution Agreement between Registrant and Lederle (Japan), Ltd. dated as of June 26, 1985 10.34 (2) Agreement for Sale and Leaseback of Manufacturing Facility between Registrant and Heleasco Seven, Inc. 10.36 (3) Amended and Restated Development and Distribution Agreement with C.R. Bard, Inc., dated as of August 4, 1989 10.38 (4) Agreement for Sale and Leaseback of Manufacturing Facility between Registrant and Heleasco Seven, Inc. dated September 25, 1989 10.39 (4) Agreement for Sale and Leaseback of Manufacturing Facility between Registrant and Heleasco Seven, Inc. dated December 29, 1989 10.40 (4) Amended and Restated Promissory Note of Dale A. Stringfellow, dated September 7, 1990 10.41 (4) Amended and Restated Promissory Note Secured by Deed of Trust by Dale A. Stringfellow, dated September 7, 1990 10.42 (4) 1984 Incentive Stock Option Plan, as amended 10.43 (4) 1985 Employee Stock Purchase Plan, as amended 10.44 (12) 1990 Directors' Stock Option Plan, as amended
8
EXHIBIT NUMBER NOTES DESCRIPTION - ------- ----- ----------- 10.46 (5) Agreement between Registrant and Essex Chemie, A.G. dated November 19, 1990 10.56 (6) Lease Agreement dated June 1, 1992 by and between Registrant and Harbor Investment Partners 10.58 (6) License and Option Agreement dated June 30, 1992 between Registrant and Research Development Foundation 10.60 (7) Amendments dated February 16, 1993 and February 18, 1993 respectively, to the Product Development and Distribution Agreement dated January 18, 1985 by and between Registrant and Zimmer, Inc., originally filed as Exhibit 10.24 to Registrant's Form 10-K for the fiscal year ended June 30, 1985 10.61* (7) Letter Agreement, dated April 26, 1991 and May 21, 1993 by and between Collagen Corporation and A. Neville Pelletier 10.62 (8) 1994 Stock Option Plan 10.63 (9) Renewed Lease for 2500 Faber Place, Palo Alto, California dated December 1, 1992 between Registrant and Leonard Ely, Shirley Ely, Carl Carlsen and Mary L. Carlsen 10.65* (9) Promissory Note of Howard D. Palefsky dated August 3, 1994 10.66 (9) Revised Form of Agreement Regarding Proprietary Information and Inventions between Registrant and all employees or consultants 10.67 (10) Credit Agreement, dated November 15, 1994, by and between the Bank of New York and the Registrant, as amended January 24, 1995 10.67(a) (13) Second Amendment, Third Amendment and Fourth Amendment dated June 30, 1995, September 30, 1995, and December 26, 1995, respectively, to Credit Agreement dated November 15, 1994 by and between the Bank of New York and the Registrant 10.67(b) (14) Fifth Amendment, dated March 29, 1996, to Credit Agreement dated November 15, 1994 by and between the Bank of New York and the Registrant 10.67(c) Sixth Amendment, dated June 28, 1996, to Credit Agreement dated November 15, 1994 by and between the Bank of New York and the Registrant
9
EXHIBIT NUMBER NOTES DESCRIPTION - ------- ----- ----------- 10.68 (10) Letter Agreement, dated October 7, 1994, by and between C.R. Bard. Inc. and the Registrant, amending the Amended and Restated Development and Distribution Agreement dated August 4, 1989 between the Parties originally filed as Exhibit 10.36 to the Registrant's Form 10-K for the fiscal year ended June 30, 1989 10.70* (12) Letter of Acceptance of Employment by and between Gary Petersmeyer and the Registrant, dated December 19, 1994 10.71** (12) License, Supply and Option Agreement, dated March 24, 1995 by and between LipoMatrix, Incorporated and Registrant 10.72** (12) Distributor Agreement dated March 24, 1995 by and between LipoMatrix, Incorporated and Registrant 10.73** (12) Coordination Agreement dated March 24, 1995, by and between LipoMatrix Incorporated and Registrant's wholly owned subsidiary, Collagen International Incorporated 10.74* (12) Promissory Note of Howard D. Palefsky dated June 5, 1995 10.75** (12) Letter Agreement, dated July 10, 1995 by and between C.R. Bard, Inc. and the Registrant, amending the Amended and Restated Development and Distribution Agreement dated August 4, 1989 between the Parties originally filed as Exhibit 10.36 to the Registrant's Form 10-K for the fiscal year ended June 30, 1989 10.76 (11) Stock Purchase Agreement dated August 22, 1995 between the Registrant and certain stockholders of LipoMatrix, Incorporated 10.77* (13) Promissory Note between Howard D. Palefsky and the Registrant dated December 11, 1995 10.78* (15) Bonus Agreement between Howard D. Palefsky and the Registrant dated February 20, 1996 10.79* (15) Promissory Note between Howard D. Palefsky and the Registrant dated February 20, 1996 10.80* (14) Amended and Restated Secured Loan Agreement between Ross R. Erickson and the Registrant dated December 31, 1995 10.81* Letter of Acceptance of Employment by and Pierre Comte and the Registrant dated March 21, 1995 10.82 Loan Agreement between the Registrant and Cohesion Corporation dated May 24, 1996 10.83** Worldwide Medical Product Distribution Agreement between Registrant and Tissue Technologies, Inc. dated June 4, 1996 10.84** Distribution Agreement between Registrant and Biomatrix, Inc. dated June 17, 1996 10.87** Distribution Agreement between Registrant and Lederle (Japan), LTD. dated January 1, 1996 11.1 Statement Regarding Weighted Average Common and Common Equivalent Shares Used in Computation of Per Share Income 21.1 List of Subsidiaries 23.1 Consent of Ernst & Young LLP, Independent Auditors 24.1 Power of Attorney (see page 42) 27.1 Financial Data Schedule (EDGAR version only)
- ------------------ * Constitutes a management contract or compensatory contract, plan or arrangement. ** Confidential treatment has been granted for a portion of this document. Notes to Exhibits: (1) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1985. (2) Incorporated by reference to the same exhibits filed with Registrant's Current Report on Form 8-K dated March 31, 1989. (3) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1989. (4) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1990. (5) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1991. (6) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1992. (7) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1993. (8) Incorporated by reference to Exhibit 4.1 filed with Registrant's Registration statement of Form S-8 (No. 33-80038) which became effective June 9, 1994. (9) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1994 (10) Incorporated by reference to the same exhibits filed with Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1994. (11) Incorporated by reference to exhibit 2.1 filed with Registrant's Current Report on Form 8-K dated September 6, 1995. (12) Incorporated by reference to the same exhibits filed with Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1995 (13) Incorporated by reference to the same exhibits filed with Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1995 (14) Incorporated by reference to exhibit 10.76 originally filed with Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1995 (15) Incorporated by reference to the same exhibits filed with Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1996 EX-10.83 2 WORLDWIDE MEDICAL PRODUCT DISTRIBUTION AGREEMENT 1 EXHIBIT 10.83 WORLDWIDE MEDICAL PRODUCT DISTRIBUTION AGREEMENT This Worldwide Medical Product Distribution Agreement (the "Agreement") is effective as of May 31, 1996, between Collagen Corporation, a Delaware corporation with an address at 2500 Faber Place, Palo Alto, California 94303 ("Distributor") and Tissue Technologies, Inc., a corporation organized under the laws of California, with its principal place of business at 1370 Green Street, San Francisco, California 94109 (the "Supplier"). WHEREAS, Supplier is engaged in the development of products comprised of E-PTFE tubes for soft tissue augmentation and management of facial wrinkles; WHEREAS, Distributor is engaged in the marketing and sale of medical products for soft tissue augmentation and management of facial wrinkles; WHEREAS, Distributor wishes to be appointed Supplier's exclusive distributor of the Products in the Territory (as such terms are hereinafter defined), and Supplier wishes to appoint Distributor as its sole exclusive distributor; WHEREAS, Distributor wishes to purchase Product(s) from Supplier, and Supplier wishes to sell Product(s) to Distributor for exclusive marketing and sale of the Product(s) in the Territory on the terms and subject to the conditions set forth herein. NOW THEREFORE, in consideration of the premises and of the mutual covenants of the parties hereto, the parties agree: 1. DEFINITIONS 1.1 "First Commercial Sale" shall mean the first transfer of title to a Product by Distributor to a third party, excluding Distributor's subsidiaries or affiliates, for monetary consideration. 1.2 "Government Agency" shall include all local, national, and supranational bodies with the legal authority to establish rules, regulations, standards and guidelines (or to issue certificates of compliance with these), covering the design, manufacturing, and marketing of the Products in the Territory. This will include without limitation the United States Food and Drug Administration. 1.3 "Initial Period" shall mean the term beginning as of the First Commercial Sale of Product(s) and ending on *** . - -------------------- ***Confidential treatment requested -1- 2 1.4 "Intellectual Property Rights" shall include all patents, copyrights, and other proprietary rights or applications therefor, including Supplier's rights under the Exclusive License Agreement between Supplier and The Regents of the University of California ("The Regents") dated December 1, 1993 appended hereto as Exhibit A, which the Supplier may at any time during the term of this Agreement own, license, adopt, use, or register with respect to the Products. 1.5 "Net Sales" means the amounts actually received from the sale of Products by Distributor or its subdistributor for cash or other forms of monetary consideration, in accordance with Generally Accepted Accounting Principles, less the following deductions: (a) allowances, rejections, returns, and volume discounts, (b) freight , transport packaging, insurance charges associated with transportation, and (c) taxes, tariff, or import/export duties. 1.6 "Product(s)" means any and all of those products described in Schedule A, and identified by a separate Product Specification (as hereinafter defined). 1.7 "Product Specification" shall mean any document that defines the manufacturing requirement of a Product, including but not limited to packaging configuration, labeling, material components, and information relating to material composition and release tests that may be certified pursuant to a Certificate of Analysis. Each Product Specification shall be incorporated into this Agreement as an Appendix to Schedule A. 1.8 "Territory" means any and all of the countries, or parts thereof, referred to in Schedule B. 2. APPOINTMENT OF THE DISTRIBUTOR 2.1 Supplier hereby appoints the Distributor, and the Distributor hereby accepts this appointment, as Supplier's sole and exclusive (subject to Section 5.9, Minimum Purchase) authorized distributor, with the right to grant subdistributorships, for the promotion, marketing, distribution and sale of Products in the Territory. As a result, Supplier will not sell Products in the Territory, other than through Distributor. 3. MILESTONE PAYMENTS 3.1 So long as the Supplier is not in breach of any material provision of this Agreement, and upon the occurrence of the following events, the Distributor shall make the following milestones payments to the Supplier: (a) *** upon the execution of this Agreement; (b) *** within *** days of Supplier's notice to the Distributor of the issuance of a United States patent claiming Supplier's soft tissue augmentation device; and (c) *** upon *** of the Effective Date. - -------------------- ***Confidential treatment requested -2- 3 4. PRICE, FORECASTS, PURCHASE ORDER, DELIVERY, ACCEPTANCE, TRANSFER OF TITLE, FEES AND PAYMENT 4.1 Prices. Subject to the provisions of this Agreement, the Supplier shall sell Products to the Distributor at the unit prices set forth in Schedule A. The Purchase Price constitutes payment for the manufacturing cost of the Products and royalties due Supplier for Distributor's exclusive distribution right. Nothing herein shall obligate the Distributor to pay any additional past or future royalties to any third party, unless expressly included in this Agreement. The unit price set forth in Schedule A includes the cost of the Product, all expenses relating to packaging and labeling of the Products, all freight insurance premiums, and all freight charges to the mutually agreed upon delivery site(s) listed in Schedule D. 4.2 Forecasts. The Distributor shall provide non-binding, rolling twelve (12) month forecasts of Distributor's anticipated requirements of Products, updated *** , throughout the term of this Agreement. Such twelve (12) month forecast shall be based on Distributor's fiscal year cycle, beginning on July 1st and ending on June 30th. 4.3 Purchase Orders. (a) Purchase orders shall be submitted by the Distributor in writing. During the Initial Period, purchase orders in any given year must meet the minimum purchase requirements set forth in Schedule C. In the event that the Supplier is unable to fulfill the terms of any purchase order, the Supplier shall so inform the Distributor in writing within five (5) business days of the Supplier's receipt of such purchase order. Any orders in the ordinary course of business, consistent with normal ordering practices, that are rejected or unfullfilled by Supplier shall be deducted from the minimum purchase requirement, in any given year, as set forth in Schedule C. Purchase orders shall be deemed accepted and binding by the Supplier unless the Supplier rejects any purchase order in writing by return facsimile within five (5) business days of the Supplier's receipt of such purchase order. (b) Distributor, may at its option, either reschedule delivery of any Products or cancel any order or portion thereof, upon written notice to Supplier. A "reschedule" is defined as changing all or any portion of those Products scheduled for shipment on any ship date by moving the ship date later in time. Distributor shall have a right to cancel or reschedule any order for later shipment provided such request is received by Supplier at least thirty (30) days in advance of the original ship date. - -------------------- ***Confidential treatment requested -3- 4 4.4 Delivery. Products shall be sold to the Distributor F.O.B. delivery site(s) listed in Schedule D. Supplier shall deliver an invoice to Distributor for each unit of Product sold to Distributor pursuant to Distributor's purchase order. Distributor agrees to conform its purchase orders to the minimum quantity of Products shipped to a particular delivery site as set forth in Schedule D. 4.5 Acceptance. The Distributor shall within ten (10) business days inspect each shipment of Products after delivery. In the event the Distributor determines that any shipment, or part thereof, is incomplete, damaged or defective, the Distributor shall so inform the Supplier in writing within such ten (10) business days. All Products shall be deemed accepted by the Distributor unless any such delivery, or part thereof, is rejected in writing by return facsimile within such ten (10) business days period. 4.6 Transfer of Title. Title to and ownership of Products shall pass to the Distributor upon acceptance by the Distributor, and the Distributor shall thereafter be responsible for any damage or loss of such Products. Supplier shall bear all risk of loss of, or damage to, all units of Products up to the time the Products are accepted by Distributor. 4.7 Fees. The Distributor shall be responsible for payment of customs and other duties and any taxes in the Territory and for obtaining any import and export licenses that may be required by proper authorities in the Territory. 4.8 Payments. Payment for Products shall be made in United States dollars. During the Initial Period, Distributor shall pay Supplier within *** after receipt of an invoice, and acceptance of the Products by the Distributor. Subsequent to the Initial Period, Distributor shall pay Supplier in arrears, within *** after Distributor's quarter end close. The calculation for such payments are described in Schedule A. 5. GENERAL OBLIGATIONS OF THE DISTRIBUTOR 5.1 Inventory Levels. The Distributor shall maintain an inventory of Products reasonably sufficient to meet *** of anticipated sales of the Products in the Territory. The Distributor shall store the Products under secure conditions and in compliance with all pharmaceutical or medical device laws applicable to storage of the Products. 5.2 Independent Agent. The Distributor shall conduct its business in the purchase and resale of Products as a principal for its own account and at its own expense and risk. The Distributor, its agents and employees are not the legal representatives, employees or agents of Supplier for any purpose and have no right or authority to incur any expenses on behalf of Supplier or to assume or create, in writing or otherwise, any obligations of any kind, express or implied, in the name of or on behalf of Supplier. Nothing contained in this Agreement shall create the relationship of partners, joint ventures, employer and employee, principal and agent, or any similar relationship, between Supplier and the Distributor. - -------------------- ***Confidential treatment requested -4- 5 5.3 Regulatory Approvals and Compliance. (a) Excluding the United States, Distributor shall obtain and own all regulatory approvals, certificates, registrations, licenses, and permits related to the Products unless prohibited by local law. In the event that necessary approvals, certificates, registrations, licenses, and permits required to sell and distribute the Products in the Territory are required by local law to be owned by, or held in the name of Supplier, Supplier agrees that it shall provide reasonable assistance to Distributor in order to obtain any and all applicable regulatory approvals required by Government Agencies under the laws and/or regulations of any jurisdiction in order to market the Products within the Territory, including but not limited to, meeting relevant standards and guidelines, preclinical, clinical, and safety approvals required by Government Agencies. Regulatory approvals, certificates, registrations, licenses, and permits filed during the term of this Agreement, excluding U.S. filings, and in the name of Supplier shall be assigned to Distributor upon termination of this Agreement. Distributor shall promptly inform Supplier of any changes in regulatory or compliance status that might significantly affect the marketing of the Products in the Territory; (b) the Distributor agrees not to sell or distribute the Products in any country within the Territory until such time as all product licenses and approvals required by the laws of such country have been obtained; (c) the Distributor shall comply with any recalls for the Products issued by Supplier or applicable Government Agencies; (d) the Distributor shall maintain a record of any customer complaints or comments and promptly forward information relating to such complaints or comments to Supplier; the Distributor shall also disclose to Supplier promptly via facsimile any Medical Device Report ("MDR") related to the Products subject to the Code of Federal Regulations, 21 CFR Part 803, and/or subject to the Medical Device Vigilance System of the European Commission Guidelines, MED DEV 03/93, rev 2. 5.4 Sales Effort. The Distributor shall employ an appropriate number of sales personnel, maintain a suitable organization, and use its commercially reasonable efforts to actively market and sell the Products in the Territory. 5.5 Marketing Effort. The Distributor shall use its commercially reasonable efforts to promote the Products to persons engaged in all appropriate medical specialties, including but not limited to plastic surgery, dermatology, ENT (ear, nose, and throat), aesthetic and cosmetic medicine and other related areas of the medical profession. 5.6 Liability Insurance. The Distributor shall, if required by local law, obtain, and pay premiums and all costs associated with liability insurance in an amount sufficient to satisfy local laws and commercial practices. 5.7 License Fees and Taxes. The Distributor shall pay all license fees, taxes and other fees including, but not limited to, sales, use, service use, occupation, service occupation, personal property and excise taxes, assessments or taxes which may be assessed or levied by any national, state or local government, and any departments and subdivisions thereof, against the Distributor for the distribution and sale of the Products which are ordered by the Distributor and are under the Distributor's control. 5.8 Import/Export Licenses. The Distributor shall, at its own expense, pay all import and export licenses and permits, pay customs charges and duty fees, and take all other actions required to accomplish the export and import of the Products purchased by the -5- 6 Distributor; the Distributor understands that Supplier is subject to regulation by agencies of the U.S. Government (including without limitation the U.S. Department of Commerce) which prohibit export or diversion of certain technical products to certain countries; the Distributor warrants that it will comply in all respects with the export and re-export restrictions set forth in the export license for every Product purchased under this Agreement. 5.9 Minimum Purchase Requirement. (a) During the Initial Period and subject to Section 4.3(a), the Distributor agrees to purchase the number of units of Product(s) represented by the United States dollar amount set forth for each time period in Schedule C. In the event that (i) the Distributor fails to satisfy such minimum purchase requirement during the Initial Period, (ii) the Supplier provides written notice of such failure to the Distributor, and (iii) the Distributor fails to cure such condition within ninety (90) day of its receipt of such notice, the Supplier shall have the option to either (i) revert Distributor's exclusive distribution right to a non-exclusive distribution right, or (ii) terminate this Agreement. (b) For each twelve-month period after the Initial Period and until the termination of this Agreement, to maintain Supplier's exclusive appointment of Distributor, the Distributor agrees to purchase the number of units of Product(s) represented by the United States dollar amount set forth for each time period in Schedule C. In the event that (i) the Distributor fails to satisfy such minimum purchase requirement for any twelve-month period subsequent to the Initial Period, (ii) the Supplier provides written notice of such failure to the Distributor, and (iii) the Distributor fails to cure such condition within ninety (90) day of its receipt of such notice, the Distributor shall be deemed to be a nonexclusive distributor of the Products and the Supplier shall be entitled to appoint another nonexclusive distributor for the Territory. If Distributor's rights become non-exclusive, then all minimum purchase requirements shall become null and void. (c) Within the United States or the European Economic Area, if in any given period (i) the Supplier is unable to meet all applicable regulatory requirements by Government Agencies of a particular country relating to Supplier's obligations under this Agreement, and therefore Distributor is unable to obtain regulatory approval in such particular country, or (ii) the Supplier and Distributor fail to agree upon Product Specifications within *** after receiving all applicable regulatory approvals required by Government Agencies in a particular country, and Distributor's supply of Product(s) is interrupted, then Distributor's minimum purchase requirement for such interrupted period shall be reduced by *** for so long as Supplier is unable to meet Distributor's supply requirement. 5.10 Financial Audit. Payments made by Distributor to Supplier, excluding payments made pursuant to an invoice for delivery of Product(s) during the Initial Period, shall be subject to reasonable audit by Supplier upon sixty (60) days prior written notice, and at Supplier's expense, not more often than once in any twelve month period. Supplier's audit shall be limited to sales reports, order entry, and shipping records on Product(s). If such audit discloses an error between reported numbers and actual numbers by 5% or more, then Distributor shall pay Supplier's audit expenses. 6. GENERAL OBLIGATIONS OF SUPPLIER 6.1 Fulfillment of Purchase Orders. Following receipt and acceptance of a purchase order from the Distributor for Products, Supplier shall use all commercially reasonable endeavors to fulfill such purchase order without undue delay (subject, however, to normal - -------------------- ***Confidential treatment requested -6- 7 manufacturing lead times) and to deliver the Products in accordance with the Distributor's instructions. 6.2 Initial Product Delivery. Supplier shall use its commercially reasonable efforts to manufacture and deliver at least *** units of Products by *** . 6.3 Manufacturing Compliance. Supplier shall manufacture and deliver Products which meet the Product Specifications, including packaging and labeling in multiple languages as needed, mutually agreed upon by the parties and which conform at all times to applicable regulations. Supplier shall have the primary responsibility for manufacturing compliance of the Products in the Territory as required by Government Agency rules and regulations, including but not limited to, recalls of Products. Supplier shall provide at least ninety (90) days written notice to the Distributor regarding any proposed changes, modifications, deletions or additions to be made to the Product(s) and shall consult with the Distributor prior (i) to discontinuing the manufacture, supply or sale of any type of Product, (ii) to making changes in materials or design, or (iii) to adding improvements to any Product. Supplier agrees that prior to implementing any manufacturing changes, it will have received notice from Distributor that such changes have been approved by all relevant Government Agencies. 6.4 Certification, Audits, and Second Supply. The Supplier shall use its commercially reasonable efforts to qualify its manufacturing contractor(s) as ISO certified facilities by *** , and shall obtain the permission of its manufacturing contractor(s) to allow the Distributor to audit the facilities of such manufacturing contractor(s). The Supplier shall use its commercially reasonable efforts to establish (or contract for) a second Product manufacturing capability promptly upon the first sale of a commercial lot of Product. 6.5 Regulatory Assistance. Supplier agrees that it shall provide reasonable assistance to Distributor in order to obtain any and all applicable regulatory approvals required by Government Agencies under the laws and/or regulations of any jurisdiction in order to market the Products within the Territory, including but not limited to, meeting relevant standards and guidelines, preclinical, clinical, and safety approvals required by Government Agencies. Supplier shall promptly inform Distributor of any changes in regulatory or compliance status that might significantly affect the marketing of the Products in the Territory. 6.6 Regulatory Compliance. Upon receipt of a notification by Distributor, relating to an MDR, the Supplier shall notify the Food and Drug Administration within five (5) business days in compliance with 21 CFR Part 803, and/or in accordance with the Medical Device Vigilance System of the European Commission Guidelines, MED DEV 03/93, rev 2. 6.7 Marketing Assistance. Supplier shall, at its own expense, from time to time and at the request of the Distributor, provide the Distributor with information, including but not limited to clinical protocol and data results, and assistance reasonably related to the marketing of Products in the Territory. Supplier shall, at its own expense, make the mutually agreed upon quantities, not to exceed *** units per year, of its promotional materials and demonstration products (not for human use), including in multiple languages as needed, available to the Distributor, for Distributor's use in promoting the Products in the Territory. Supplier's mutual agreement to make the quantities of demonstration product shall not be unreasonably withheld. 6.8 Prelaunch Assistance. The Supplier will, at its own expense, provide such Distributor training, marketing, and clinical support as reasonably requested by the Distributor in order for Distributor to effectively launch the marketing and sales of Products in any country of the Territory. If such training, marketing and clinical support requires Supplier to travel outside - -------------------- ***Confidential treatment requested -7- 8 the Northern California Bay Area, then Distributor shall only pay Supplier's travel and out-of pocket expenses provided that Supplier provides reasonable documentation for such expenses. Such time commitment shall not exceed 35 hours, exclusive of travel time, over the twelve month period after the Effective Date. 6.9 Postlaunch Assistance. The parties anticipate that the Distributor and Drs. Robert Schindler and Corey Maas, founders of the Supplier, will enter into consulting arrangements separately for Supplier's attendance at major national and regional trade shows and educational forums where similar or competitive products are displayed and to present the Products fairly at such shows and workshops. 7. INTELLECTUAL PROPERTY 7.1 Grant of License. (a) The Supplier hereby grants to the Distributor the sole and exclusive, worldwide, fully-paid up license, with the right to sublicense, under the Supplier's Intellectual Property Rights and subject to the rights granted by The Regents, to use such Intellectual Property Rights solely in connection with the sale and other distribution of Products in the Territory. (b) Distributor shall have a first right of refusal to distribute any biocompatible product owned by Supplier for use in soft tissue augmentation and management of facial wrinkles. The Distributor and Supplier agree to negotiate in good faith the terms of such distribution right, including but not limited to any manufacturing obligations, and shall cooperate in the finalization of a definitive agreement within *** after Distributor's notice of acceptance of such distribution right. 7.2 Assistance. The Distributor shall promptly notify the Supplier (i) of any claims or objections that the Distributor's use of the Intellectual Property Rights in connection with the marketing or sale of the Products may or will infringe any third party patent, copyright, trademarks, trade names, or other proprietary rights, and (ii) of any and all third party infringements, imitations, illegal use, or misuse of the Intellectual Property Rights which come to its attention. 7.3 Patent Issuance Fee. In the event and solely upon the occurrence of the issuance of a United States patent claiming Supplier's soft tissue augmentation device described in Schedule A, the Distributor shall pay Supplier the total sum of *** which represents payment for the license fees set forth in Section 4.1 of the Exclusive License Agreement, dated December 1, 1993, between The Regents and the Supplier. Supplier acknowledges that it is solely responsible for paying The Regents any and all license fees pursuant to Section 4.1 of the Exclusive License Agreement. 7.4 University of California. Subsequent to the first quarter in which the Distributor makes sales of the Product, and each quarter thereafter in which the Distributor makes sales of the Products, the Supplier will make the royalty payments due to The Regents pursuant to Section 5 of the Exclusive License Agreement, dated December 1, 1993, between The Regents and the Supplier. Distributor shall pay Supplier the royalty payments due to The Regents pursuant to Section 5 of the Exclusive License Agreement, dated December 1, 1993, between The Regents and the Supplier. If the Distributor's rights become non-exclusive, then royalty payments will be limited to those in Section 5.1 of the Exclusive License Agreement and will not include the minimums in Section 5.5. - -------------------- ***Confidential treatment requested -8- 9 7.5 Trademarks. Nothing in this Agreement will be construed as conferring any right to use in advertising, pubilicity, or other promotional activites any name, trade name, trademark, or other designation of either party hereto by the other (including contraction, abbreviation or simulation of any of the foregoing). Distributor shall solely own and maintain, at its expense, any and all trademarks used in its distribution of the Products in the Territory. Supplier shall not register any such trademark(s) of Distributor in any country of the Territory for its own or third party use. 8. CONFIDENTIAL INFORMATION 8.1 "Confidential Information" shall mean any confidential, secret, or proprietary information relating to the scientific and/or business affairs of either party, regardless of whether such information is specifically designated as confidential, and regardless of whether such information is in written, oral, electronic, or other form. Such Confidential Information may include, but is not limited to, trade secrets, know-how, inventions, technical data or development activities, product and marketing plans, customer and supplier information, and legal and regulatory activities. Each party shall treat as confidential all Confidential Information provided by the other party, shall not use such Confidential Information except as expressly set forth herein or otherwise authorized in writing, shall implement reasonable procedures to prohibit the disclosure, unauthorized duplication, misuse or removal of the Confidential Information and shall not disclose such Confidential Information to any third party. Without limiting the foregoing, each of the parties shall use at least the same procedures and degree of care to prevent the disclosure of Confidential Information as it uses to prevent the disclosure of its own confidential information of like importance, and shall in any event use no less than reasonable procedures and a reasonable degree of care. 8.2 Exceptions. Notwithstanding the above, neither party shall have liability to the other with regard to any Confidential Information that: (a) was generally known and available in the public domain at the time it was disclosed, or becomes generally known and available in the public domain through no fault of the receiver; (b) was known to the receiver at the time of disclosure as shown by the files of the receiver in existence at the time of disclosure; (c) is disclosed with the prior written approval of the discloser; (d) was independently developed by the receiver without any use of the Confidential Information and by employees or other agents of the receiver who have not been exposed to the Confidential Information, provided that the receiver can demonstrate such independent development by documented evidence prepared contemporaneously with such independent development; (e) becomes known to the receiver from a source other than the discloser without breach of this Agreement by the receiver and in a manner which is otherwise not in violation of the discloser's rights; (f) is disclosed pursuant to the order or requirement of a court, administrative agency, or other governmental body; provided, that the receiver shall provide reasonable advance written notice thereof to enable the discloser to seek a protective order or otherwise prevent such disclosure, by asserting the confidential nature of the information sought. -9- 10 8.3 The provisions of this Section 8 shall be in full force and effect for five (5) years after the termination of this Agreement. 9. INDEMNIFICATION AND REPRESENTATION 9.1 Indemnification by the Distributor.The Distributor shall indemnify, defend, and hold the Supplier harmless from and against any and all third party claims relating to and/or arising out of the marketing, distribution and sale of the Products, where and to the extent the damages are alleged to have been caused by the fault of the Distributor, its employees or agents. 9.2 Indemnification by the Supplier. The Supplier shall indemnify, defend, and hold the Distributor harmless from and against any and all third party claims relating to and/or arising out of (i) the manufacture of Products, including but not limited to any product, manufacturing, or labelling defect in the Product, (ii) infringement of third party patent, copyright, trademarks, trade names, or other proprietary rights, and (iii) any failure by Supplier to act in accordance with applicable laws and regulations in the Territory in connection with the Products. 9.3 Representation by the Supplier. The Supplier hereby represents that the Exclusive License Agreement between The Regents and the Supplier, dated December 1, 1993 is in full force and effect, and that the Supplier has the rights to grant Distributor the exclusive distribution rights under such Exclusive License Agreement. The Supplier shall meet any and all obligations under the Exclusive License Agreement to ensure that the License Agreement does not terminate or become non-exclusive. 10. LIMITED WARRANTY AND LIMITATION OF LIABILITY 10.1 Supplier warrants that each Product sold to Distributor hereunder will (i) be free from defects in materials and workmanship, (ii) be in compliance with ISO 9001 standards by *** , (iii) be manufactured, packaged, and labeled in accordance with the then prevailing Product Specifications, and (iv) have a remaining shelf-life at the date of shipment of at least twenty-four (24) months (the "Warranty Period"). If Distributor provides notice to Supplier during the Warranty Period that a Product breaches this warranty, Distributor shall, if requested by Supplier, return such Product to Supplier, or if not so requested, dispose of such Product in accordance with Supplier's instructions. The sole and exclusive remedy in the event of any breach of the foregoing warranty is either (i) for the Distributor to so return or dispose of the defective Products to Supplier (delivery or postage prepaid by Supplier) for replacement in accordance with its standard warranty procedures, or (ii) for a refund of the price paid by the Distributor for the defective Product if the Supplier is unable to replace such defective Products within a reasonable time period or at a commercially reasonable cost. This warranty does not extend to any damage or failure which results from alteration, accident, theft, misuse, abuse, abnormal use, or improper storage or maintenance by Distributor. THE DISTRIBUTOR ACKNOWLEDGES THAT SUPPLIER'S OBLIGATIONS AND LIABILITIES IN RESPECT OF THE PRODUCTS AND THE DISTRIBUTOR'S APPOINTMENT ARE EXHAUSTIVELY DEFINED IN THIS AGREEMENT. THE DISTRIBUTOR AGREES THAT THE EXPRESS OBLIGATIONS AND WARRANTIES MADE BY SUPPLIER UNDER THIS AGREEMENT SHALL BE IN LIEU OF AND TO THE EXCLUSION (TO THE FULLEST EXTENT PERMITTED BY LAW) OF ANY OTHER - -------------------- ***Confidential treatment requested -10- 11 WARRANTY, CONDITION, TERM OR UNDERTAKING OF ANY KIND, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE RELATING TO ANYTHING SUPPLIED UNDER OR IN CONNECTION WITH THIS AGREEMENT INCLUDING (WITHOUT LIMITATION) AS TO CONDITION, MERCHANTABILITY, AND QUALITY. 10.2 Supplier accepts liability without limit for death or personal injury to the extent that it results from the negligence, breach of warranty, or intentional conduct of Supplier and its employees and that it is caused by any Product being defective and unsafe within the meaning of the applicable laws of the Territory. 10.3 EXCLUSION OF CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, SUPPLIER SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE TO THE DISTRIBUTOR, ITS SALES REPRESENTATIVES, SUBDISTRIBUTORS OR DEALERS, OR ANY OTHER THIRD PARTY INCLUDING ANY PURCHASER OF THE PRODUCTS HEREUNDER, FOR ANY CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSS, DAMAGES, COST OR EXPENSE OF ANY KIND WHATSOEVER AND HOWSOEVER CAUSED INCLUDING, WITHOUT LIMITATION, FOR ANY LOSS OF PRODUCTION, LOSS OF PROFIT OR CONTRACTS AND LOSS OF GOODWILL ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREUNDER, EVEN IF SUPPLIER HAS BEEN ADVISED OF THEIR POSSIBILITY. 11. DURATION AND TERMINATION 11.1 This Agreement shall become effective on the date first above written and shall continue in effect, subject to termination under Sections 11.2 and 11.3 below, until the earlier of the tenth anniversary of the Effective Date, or the last to expire of any patents claiming the Products. 11.2 Supplier may terminate this Agreement at any time upon written notice in the event that: (a) the Distributor defaults in punctual payments in full of the sums due under this Agreement or under any purchase orders, and such default is not remedied within sixty (60) days after the Distributor has been served with a written notice requiring such remedy; or (b) the Distributor commits a breach of any material provision of this Agreement, and such breach is not cured within sixty (60) days after the Distributor has been served by Supplier with a written notice requiring such cure; or (c) the Distributor becomes insolvent, institutes proceedings in bankruptcy or, under similar insolvency laws, for reorganization, receivership, or dissolution. 11.3 Distributor may terminate this Agreement at any time upon written notice in the event that: (a) the Supplier commits a breach of any material provision of this Agreement, and such breach is not cured within sixty (60) days after the Supplier has been served by Distributor with a written notice requiring such cure; or (b) the Supplier becomes insolvent, institutes proceedings in bankruptcy or, under similar insolvency laws, for reorganization, receivership, or dissolution; or -11- 12 (c) the Supplier is unable to obtain a license to any third party patent that prevents the sale or distribution of the Products in the Territory. 12. CONSEQUENCES OF TERMINATION In the event that this Agreement is terminated, the following consequences shall follow: 12.1 All the Distributor's rights under this Agreement shall cease and no payment whatsoever shall be due to the Distributor for loss of goodwill, anticipated profits or otherwise as a result of such proper termination. The Distributor hereby waives any claim to receive any compensation as a consequence of the proper termination of this Agreement. Supplier is relieved from any obligation to make any further shipments hereunder, and may cancel all of the Distributor's unshipped orders for Products, irrespective of previous written acceptance by Supplier. 12.2 Supplier shall repurchase at the Distributor's cost any remaining inventory of the Distributor, except that if this Agreement is terminated during the Initial Period, then Supplier shall only repurchase at the Distributor's cost any remaining inventory above the minimum number of units of Products set forth in Schedule C. Such repurchase shall occur within thirty (30) days after the termination date. In the event Supplier fails to repurchase such Products, Distributor shall have the right and option to (i) continue to sell its existing inventory of such Products for a reasonable period following termination or expiration, or (ii) deduct any repurchase cost of such Products from any outstanding invoices due and payable pursuant to Section 12.3. 12.3 All charges for Products unpaid at the date of termination shall forthwith become due and payable within thirty (30) days after the termination date. 12.4 The Distributor shall return to Supplier all promotional/sales materials within ninety (90) days. Both parties shall return to the other party all Confidential Information in written, recorded, or other tangible form within ninety (90) days. 12.5 Pursuant to Section 5.3(a), Supplier shall assist with the transfer of and/or assignment to Distributor any regulatory approvals, certificates, registrations, licenses, and permits filed and maintained during the term of this Agreement in the name of Supplier. 13. MISCELLANEOUS PROVISIONS 13.1 Governing Law. The construction, validity and performance of this Agreement and any disputes arising hereunder be governed by the laws of the State of California, exclusive of that body of law relating to choice of law, and by the Uniform Commercial Code, as enacted in the State of California. Any and all disputes, controversies or differences arising hereunder in connection herewith shall be conducted in the English language. 13.2 Notices. Any notice or report pursuant to this Agreement shall be deemed duly given upon receipt if it is in writing and is sent by prepaid registered air mail or express courier addressed to the party at the address set forth at the beginning of this agreement, or to such other address as shall be furnished in writing. 13.3 Failure to Enforce. The failure of either party to enforce at any time the provisions hereof shall not be construed to be a waiver of such provisions nor of the right of such party thereafter to enforce each and every such provision. -12- 13 13.4 Arbitration. The parties agree to submit any dispute they are unable to resolve between them to binding arbitration by a single arbitrator in Santa Clara, California, in accordance with the rules of the American Arbitration Association. 13.5 Force Majeure. Neither party shall be liable to the other party for any delay or omission in the performance of any obligation under this Agreement where the delay or omission is due to any cause or condition beyond the reasonable control of the party obliged to perform, including, but not limited to, strikes or other labor difficulties, acts of God, earthquakes, acts of government (including but not limited to the refusal to issue necessary import or export licenses), war, riots, embargoes, or inability to obtain supplies ("Force Majeure"). If Force Majeure prevents or delays the performance by a party of any obligation under this Agreement, then the party claiming Force Majeure shall promptly notify the other party thereof in writing. In the event that Force Majeure shall continue for a period greater than ninety (90) days, either party may terminate the Agreement. 13.6 Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the matters herein contained, supersedes all prior understandings between the parties with respect to the distribution of the Products, and may from time to time be changed, but only by an instrument in writing signed by both parties. 13.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. COLLAGEN CORPORATION TISSUE TECHNOLOGIES, INC. By: /s/ David Foster By: /s/ Jesse Kramer ---------------- ---------------- Name: David Foster Name: Jesse Kramer ------------ ------------ Title: Vice President and Chief Financial Officer Title: President ------------------------------------------ --------- -13- 14 SCHEDULE A Description of Products and Prices 1.0 Description of Products The Supplier's existing biocompatible tubular E-PTFE product(s) for soft tissue augmentation and management of facial wrinkles, as well as any and all additional and/or improved biocompatible implant product(s) for soft tissue augmentation and management of facial wrinkles made by the Supplier, or by third parties to the Supplier's benefit, during the term of this Agreement. Such product(s), as well as any and all additional and/or improved biocompatible product(s) shall be limited to any product covered by the claims of a patent application or issued patent included in the Intellectual Property Rights. A single unit ("unit(s)") of the first such tubular E-PTFE product shall consist *** , packaged and labeled in a sterile and FDA-approved manner. Future Products will be defined and mutually agreed upon prior to regulatory approval in any given country. 2.0 Purchase Price 2.1 During the Initial Period the Supplier shall sell units of the Product(s) to the Distributor at the agreed upon price of *** . 2.2 Subsequent to the Initial Period, the purchase price for Product(s) shall be based and calculated as *** .
Year Percentage of net sales to Distributor Percentage of net sales to Supplier - ------------------------------------------------------------------------------------- 4 *** % *** % 5 *** % *** % 6 *** % *** % 7 *** % *** % 8 *** % *** % 9 *** % *** % 10 *** % *** %
- -------------------- ***Confidential treatment requested -14- 15 SCHEDULE B Territory 1.0 Territory. 1.1 The United States of America 1.2 The European Economic Area 1.3 All other countries of the world. -15- 16 SCHEDULE C 1.0 Minimum Purchases In accordance with Sections 4.3 and 5.9 of the Worldwide Medical Product Distribution Agreement, Distributor agrees to the minimum purchase requirements set forth below. 1.1 For the Initial Period:
Year Minimum Purchases in US dollars Minimum Purchases in units (***/unit) - -------------------------------------------------------------------------------------------------- 1 $500,000 *** 2 $750,000 *** 3 $1,250,000 ***
1.2 Subsequent to the Initial Period:
Year Minimum Purchases in US dollars Purchase increase from prior year - --------------------------------------------------------------------------------------------------- 4 $1,437,500 *** % 5 $1,653,125 *** % 6 *** *** % 7 *** *** % 8 *** *** % 9 *** *** % 10 *** *** %
- -------------------- ***Confidential treatment requested -16- 17 SCHEDULE D 1.0 Delivery Sites 1.1 Supplier shall ship Products to Distributor, in accordance with Distributor's instructions included with any purchase order, to the following destinations: (a) Within the United States to: Collagen Corporation 48490 Milmont Drive Fremont, CA 94538 The minimum quantity to be shipped to this destination is: *** units (b) For CE marked products to: Collagen Corporation 48490 Milmont Drive Fremont, CA 94538 OR Other designated site in the European Economic Area (EEA). The minimum quantity to be shipped to these destinations is: *** units (c) For non-CE marked products to all other countries of the world to: A designated site, to be determined, in one or more country other than the United States or EEA. The minimum quantity to be shipped to this destination is: *** units -17- 18 EXHIBIT A University of California License Agreement -18- 19 EXCLUSIVE LICENSE AGREEMENT between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA and TISSUE TECHNOLOGIES, INC. for PERMANENT SOFT TISSUE AUGMENTATION SYSTEM U.C. CASE NO. 93-057-1 20 TABLE OF CONTENTS BACKGROUND................................................................. 1 1. DEFINITIONS........................................................... 2 2. LIFE OF PATENT EXCLUSIVE GRANT........................................ 4 3. SUBLICENSES........................................................... 4 4. LICENSE ISSUE FEE..................................................... 5 5. ROYALTIES............................................................. 6 6. DUE DILIGENCE......................................................... 9 7. PROGRESS AND ROYALTY REPORTS.......................................... 14 8. BOOKS AND RECORDS..................................................... 15 9. LIFE OF THE AGREEMENT................................................. 16 10. TERMINATION BY THE REGENTS............................................ 16 11. TERMINATION BY LICENSEE............................................... 17 12. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION........................................................... 17 13. USE OF NAMES, TRADEMARKS, AND CONFIDENTIALITY......................... 18 14. LIMITED WARRANTY...................................................... 19 15. PATENT PROSECUTION AND MAINTENANCE.................................... 20 16. PATENT MARKING........................................................ 22 17. PATENT INFRINGEMENT................................................... 22 18. INDEMNIFICATION....................................................... 24 19. NOTICES............................................................... 25 20. ASSIGNABILITY......................................................... 26
21 21. LATE PAYMENTS.......................................................... 26 22. WAIVER................................................................. 27 23. FAILURE TO PERFORM..................................................... 27 24. GOVERNING LAWS......................................................... 27 25. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION............................ 27 26. EXPORT CONTROL LAWS.................................................... 28 27. FORCE MAJEURE.......................................................... 28 28. CONFIDENTIAL INFORMATION............................................... 28 29. MISCELLANEOUS.......................................................... 29
22 UC Case No. 93-057-1 EXCLUSIVE LICENSE AGREEMENT for PERMANENT SOFT TISSUE AUGMENTATION SYSTEM THIS LICENSE AGREEMENT, the "Agreement", is made and is effective December 1, 1993, by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation having its statewide administrative offices at 300 Lakeside Drive, 22nd Floor, Oakland, California 94612-3550, hereinafter referred to as "The Regents", and TISSUE TECHNOLOGIES, INC. a California corporation having a principal place of business at 1372 Green Street, San Francisco, California 94109, hereinafter referred to as the "Licensee." BACKGROUND Certain inventions, generally characterized as Permanent Soft Tissue Augmentation System, hereinafter collectively referred to as the "Invention," were made in the course of research at the University of California, San Francisco by Drs. Robert Schindler and Corey Maas and are covered by Regents' Patent Rights as defined below. The Licensee entered into a Letter of Intent (U.C. Control No. 93-30-0385) with 1 23 The Regents, effective June 14, 1993 and terminating on December 31, 1993, for the purpose of declaring the mutual intention of the parties to negotiate with each other for an exclusive license on the Invention. The Licensee is a "small business firm" as defined in 15 U.S.C. 632. The Licensee is desirous of obtaining certain rights from The Regents for the commercial development, manufacture, use, and sale of the Invention, and The Regents is willing to grant such rights. The Regents is desirous that the Invention be developed and utilized to the fullest extent so that the benefits can be enjoyed by the general public. Both parties recognize and agree that royalties due hereunder will be paid on both pending patent applications and issued patents. Both parties agree as follows: 1. DEFINITIONS 1.1 "Regents' Patent Rights" means patent rights to any subject matter claimed in or covered by any of the following: pending U.S. Patent Application serial no. 08/090,518, entitled Soft Tissue Augmentation Apparatus, filed July 12, 1993, by Drs. Robert Schindler and Corey Maas and assigned to The Regents; and continuing applications thereof including divisions and substitutions but including continuation-in-part applications only to the extent that the claim was supported in the original disclosure; any patents issuing on said application or continuing applications including reissues; and any corresponding foreign applications or patents. 1.2 "Regents' Proprietary Rights" means information related to the Invention, 2 24 including data, drawings and sketches, designs, test results, Data as defined in Article 28, Confidential Information, and information of a like nature, whether patentable or not, developed by Drs. Robert Schindler and Corey Maas of the University of California San Francisco. 1.3 "Licensed Product" means any material that is either covered by Regents' Patent Rights or Regents' Proprietary Rights or whose manufacture, use, or sale would constitute, but for the license granted to the Licensee pursuant to this Agreement, an infringement of any pending or issued claim within Regents' Patent Rights. 1.4 "Licensed Method" means any method that is covered by Regents' Patent Rights or Regents' Proprietary Rights or whose use or practice would constitute, but for the license granted to the Licensee pursuant to this Agreement, an infringement of any claim within Regents' Patent Rights. 1.5 "Net Sales" means the total of the gross invoice prices of Licensed Products less the sum of the following actual and customary deductions where applicable: cash, trade, or quantity discounts; sales, use, tariff, import/export duties, or other excise taxes imposed upon particular sales; transportation charges and allowances or credits to customers because of rejections or returns. 1.6 "Affiliate" means any corporation or other business entity in which Licensee owns or controls, directly or indirectly, at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors; provided, however, that in any country where the local law shall not permit foreign equity participation of at least 50%, then an "Affiliate" shall include any company in which Licensee shall own or control, directly or indirectly, the maximum percentage of such outstanding stock or voting rights permitted by local law. 3 25 1.7 "Joint Venture" means any entity established pursuant to an agreement between a third party (or parties) and Licensee to carry out a business enterprise. 2. LIFE OF PATENT EXCLUSIVE GRANT 2.1 Subject to the limitations set forth in this Agreement, The Regents hereby grants to Licensee a (worldwide) license under Regents' Patent Rights and Regents' Proprietary Rights to make, have made, use, and sell Licensed Products and to practice the Licensed Method. 2.2 Except as otherwise provided herein, the license granted in section 2.1 shall be exclusive for the life of the Agreement. 2.3 The Regents expressly reserves the right to use the Invention and associated technology for educational and research purposes. 3. SUBLICENSES 3.1 The Regents also grants to Licensee the right to issue sublicenses to third parties to make, have made, use and sell Licensed Products and to practice the Licensed Method provided Licensee has current exclusive rights thereto under this Agreement. To the extent applicable, such sublicenses shall include all of the rights of and obligations due to The Regents that are contained in this Agreement. 3.2 Licensee shall provide The Regents with a copy of each sublicense issued hereunder; collect and guarantee payment of all royalties due The Regents from sublicensees; and summarize and deliver all reports due The Regents from sublicensees. 3.3 Upon termination of this Agreement for any reason, The Regents, at its sole 4 26 APPENDIX A discretion, shall determine whether any or all sublicenses shall be canceled or assigned to The Regents. 4. LICENSE ISSUE FEE 4.1 Licensee agrees to pay to The Regents a License Issue Fee of [ *** ] according to the following schedule: - [ *** ] to be paid within [ *** ] after the execution date of this Agreement - [ *** ] to be paid upon submission of Product Market Approval (PMA) or 510K data to the U.S. Food and Drug Administration (FDA), but no later than [ *** ] - [ *** ] to be paid on [ *** ] and - [ *** ] to be paid upon FDA marketing approval, but no later than [ *** ] 4.2 This license issue fee is non-refundable, non-cancellable, and not an advance against royalties. *** Confidential treatment requested 5 27 5. ROYALTIES 5.1 Licensee shall also pay to The Regents an earned royalty of [ *** ] of the Net Sales of Licensed Products. In the event the last patent application under this Agreement is abandoned and no patent in Regents' Patent Rights has issued, Licensee shall pay to The Regents an earned royalty of [ *** ] in the first full year of commercial sales of Licensed Products covered by Regent's Proprietary Rights following such abandonment, [ *** ] in the second full year of such commercial sales following such abandonment, [ *** ] in the third full year of such commercial sales following such abandonment, [ *** ] in the fourth year of such commercial sales following such abandonment, and no earned royalty in subsequent years. 5.2 For sales of Licensed Products to an Affiliate or Joint Venture from Licensee at a reduced price from that customarily charged to an unrelated third party, the royalty paid to The Regents shall be based on the Net Sales of Licensed Products of the Affiliate or Joint Venture to the Affiliate's or Joint Venture's customers. Where Licensee transfers Licensed Products for end-use to itself or an Affiliate or Joint Venture, such transfer shall be considered a sale at list price, and The Regents shall be entitled to receive a royalty thereon in accordance with this Article 5, (ROYALTIES). Each reference to Licensee herein shall be meant to include its Affiliates and Joint Ventures. 5.3 Paragraphs 1.1, 1.2, 1.3, and 1.4 define Regents' Patent Rights, Licensed Products, and Licensed Methods so that royalties shall be payable on products and methods covered by both pending patent applications and issued patents as well as on products and methods covered by Regents' Proprietary Rights. Earned royalties shall accrue in each country for the ***Confidential treatment requested 6 28 duration of Regents' Patent Rights in that country and shall be payable to The Regents when Licensed Products are invoiced, or if not invoiced, when delivered to a third party. In the event the last patent application under this Agreement in that country is abandoned and no patent in Regents' Patent Rights has issued for that country then Licensee shall pay to The Regents an earned royalty based on sales of Licensed Products covered by The Regents' Proprietary Rights in that country as provided in paragraph 5.1. 5.4 Royalties accruing to The Regents shall be paid to The Regents [ *** ] on or before the following dates [ *** ]: [ *** ] [ *** ] [ *** ] [ *** ] Each such payment will be for royalties which accrued within the Licensee's most recently completed [ *** ]. 5.5 Licensee shall pay to The Regents a minimum annual royalty of [ *** ] and [ *** ] thereafter, beginning with the calendar year [ *** ]. This minimum annual royalty shall be paid to The Regents by [ *** ] of each year and shall be credited against the earned royalty (if any) due and owing for the calendar year in which the minimum payment was made. 5.6 Notwithstanding the minimum royalties stated in paragraph 5.5 (Minimum Royalties), in the event the last patent application under this Agreement is abandoned and no patent in Regents' Patent Rights has issued, Licensee shall pay to The Regents a minimum annual royalty *** confidential treatment requested 7 29 equal to [ *** ] of the minimum royalty stipulated for that year in paragraph 5.5 for the first year of commercial sales following such abandonment, [ *** ] of the minimum royalty stipulated for that year in paragraph 5.5 for the second full year of such commercial sales following such abandonment, [ *** ] of the minimum royalty stipulated for that year in paragraph 5.5 for the third full year of such commercial sales following such abandonment, [ *** ] of the minimum royalty stipulated for that year in paragraph 5.5 for the fourth year of such commercial sales following such abandonment, and no minimum annual royalty in subsequent years. 5.7 All monies due The Regents shall be payable in United States funds collectible at par in San Francisco, California. When Licensed Products are sold for monies other than United States dollars, the earned royalties will first be determined in the foreign currency of the country in which such Licensed Products were sold and then converted into equivalent United States funds. The exchange rate will be that rate quoted in the Wall Street Journal on the last business day of the reporting period. 5.8 Royalties earned with respect to sales occurring in any country outside the United States shall not be reduced by any taxes, fees, or other charges imposed by the government of such country on the remittance of royalty income. The Licensee shall also be responsible for all bank transfer charges. Notwithstanding this, all payments made by the Licensee in fulfillment of The Regents' tax liability in any particular country shall be credited against Earned Royalties, royalties, or fees due The Regents for that country. 5.9 If at any time legal restrictions prevent the prompt remittance of part or all royalties by the Licensee with respect to any country where a Licensed Product is sold, the *** confidential treatment requested 8 30 Licensee shall pay such royalties to The Regents from the Licensee's United States source of funds. 5.10 In the event that any patent or any claim thereof included within the Regents' Patent Rights shall be held invalid in a final decision by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, all obligation to pay royalties based on such patent or claim or any claim patentably indistinct therefrom shall cease as of the date of such final decision. The Licensee shall not, however, be relieved from paying any royalties that accrued before such decision or that are based on another patent or claim not involved in such decision or that are based on the Regents' Proprietary Rights. 6. DUE DILIGENCE 6.1 The Licensee, upon execution of this Agreement, shall diligently proceed with the development, manufacture, and sale of Licensed Products and shall earnestly and diligently endeavor to market the same within a reasonable time after execution of this Agreement and in quantities sufficient to meet the market demands therefor. 6.2 The Licensee shall be entitled to exercise prudent and reasonable business judgment in meeting its due diligence obligations hereunder. 6.3 The Licensee shall endeavor to obtain all necessary governmental approvals for the manufacture, use, and sale of Licensed Products. 6.4 If the Licensee is unable to perform any of the following: 6.4.1 initiate a pilot animal study for the device by [ *** ]; or 6.4.2 complete the pilot animal study for the device and, if it is necessary for *** confidential treatment requested 9 31 government approval, initiate a full animal study for the device by December 31, 1994; or 6.4.3 submit a 510K covering Licensed Products to the United States FDA by [ *** ]; or 6.4.4 initiate human trials on the device and complete the full animal study on the device by [ *** ]; or 6.4.5 market Licensed Products in the United States within [ *** ] of receiving approval of such Licensed Product's 510K or PMA from the U.S. FDA; or 6.4.6 reasonably fill the market demand for Licensed Products following commencement of marketing at any time during the exclusive period of this Agreement; then The Regents shall have the right and option either to terminate this Agreement or to reduce the Licensee's exclusive license to a nonexclusive license. This right, if exercised by The Regents, supersedes the rights granted in Article 2 (GRANT). 6.5 In addition to the obligations set forth above, the Licensee shall spend an aggregate of not less than [ *** ] for the development and commercialization of Licensed Products during the first 3 years of this Agreement according to the following schedule: 1994 [ *** ] 1995 [ *** ] 1996 [ *** ] *** confidential treatment requested 10 32 6.6 Either party to this Agreement may refer a dispute arising under this Article 6 (DUE DILIGENCE) to arbitration. Such referral to arbitration shall be made by so notifying the other party in writing in accordance with the provisions of Article 19 hereto (NOTICES), stating the nature of the dispute to be resolved. Any such arbitration shall be controlled by the provisions of this Article 6. 6.7 Within fifteen (15) business days following such notice, three arbitrators shall be selected by the following process: 6.7.1 Each Party shall designate one individual, not an employee, director, or shareholder of the Party or sublicensee of the Party, to serve as an arbitrator. 6.7.2 These arbitrators shall select a third individual who shall be an attorney experienced in arbitration proceedings to serve as the third arbitrator and to preside in resolution of the dispute. The third arbitrator shall not be an employee, director, or shareholder of either Party or sublicensee of either Party. 6.8 Within five (5) business days after selection, the arbitrators shall meet with the Parties at which time the Parties shall each present in writing the issue to be resolved and a proposed ruling on it. Such writing shall be served on the other Party in advance and shall be limited to no more than twenty (20) pages. 6.9 The following general provisions shall apply to the arbitration proceeding: 6.9.1 No later than thirty (30) days after the appointment of the third arbitrator, the arbitrators shall set a date for a hearing to resolve the issue identified by the Parties. The hearing shall take place no later than one hundred twenty (120) 11 33 days from the original notice to arbitrate. 6.9.2 The arbitrators shall permit the taking of no more than one (1) deposition by each Party, and shall permit, subject to the provisions of a mutually agreeable protective order, the production of only those documents immediately and directly bearing on the issue or issues subject to arbitration and only to the extent necessary for the convenience and use of the arbitrators, and shall not require or permit any other discovery by any means, including, but not limited to, depositions, interrogatories, or production of documents. 6.9.3 No later than ten (10) business days prior to the hearing, each Party may submit a single written brief or memorandum in support of its position which may be no more than twenty (20) pages. Each Party shall be entitled to no more than three (3) hours of hearing to present testimony or documentary evidence. Such time limitation shall include any direct, cross, or rebuttal testimony, but such time limitation shall only be charged against the Party conducting such direct, cross, or rebuttal testimony. It shall be the responsibility of the arbitrators to determine whether each Party has had the three (3) hours to which it is entitled or may, upon good cause shown, have additional time to present its case. 6.9.4 Each Party shall have the right to be represented by counsel. The arbitrators shall have sole discretion with regard to the admissability of evidence. Admissibility will be decided by two-thirds vote. 12 34 6.9.5 Within fifteen (15) days of the conclusion of the hearing, each Party must submit a proposed finding to the arbitrators. 6.10 The arbitrators shall rule on the disputed issue within thirty (30) days following the completion of the testimony of both Parties. Such ruling shall encompass in its entirety the proposed findings of one of the Parties on the disputed issue. The issue shall be resolved upon two-thirds vote of the arbitrators. 6.11 Arbitration shall take place in the location of choice of the party who has not requested arbitration. All hearing costs for a hearing shall be shared equally between the Parties. 6.12 The arbitrators shall be paid reasonable fees plus expenses, which fees and expenses shall be shared equally by the Parties. 6.13 The decision of the arbitrators shall be enforceable but not appealable in any court of competent jurisdiction. 6.14 To exercise either the right to terminate this Agreement or to reduce the license to a nonexclusive license for lack of diligence, The Regents must give the Licensee written notice of the deficiency. The Licensee thereafter has sixty (60) days to cure the deficiency or to request arbitration. If The Regents has not received a written request for arbitration or satisfactory tangible evidence that the deficiency has been cured by the end of the sixty (60)-day period, then The Regents may, at its option, either terminate this Agreement or reduce the Licensee's exclusive license to a nonexclusive license by giving written notice to the Licensee. These notices shall be subject to Article 19 (NOTICES). 13 35 7. PROGRESS AND ROYALTY REPORTS 7.1 [ *** ] and [ *** ] thereafter, the Licensee shall submit to The Regents a progress report covering the Licensee's activities related to the development and testing of all Licensed Products and the obtaining of the governmental approvals necessary for marketing. These progress reports shall be made for each Licensed Product until the first commercial sale of that Licensed Product occurs in the United States. 7.2 The progress reports submitted under section 7.1 should include, but not be limited to, the following topics: - summary of work completed including results of clinical trials - key scientific discoveries - summary of work in progress - current schedule of anticipated events or milestones - market plans for introduction of Licensed Products, and - a summary of resources (dollar value) spent in the reporting period 7.3 The Licensee shall have a continuing responsibility to keep The Regents informed of the large/small entity status (as defined by the United States Patent and Trademark Office) of itself and its sublicensees and Affiliates. 7.4 The Licensee also agrees to report to The Regents in its immediately subsequent progress and royalty report the date of first commercial sale of a Licensed Product in each country. 7.5 After the first commercial sale of a Licensed Product anywhere in the world, the Licensee will make [ *** ] royalty reports to The Regents on or before [ *** ] *** confidential treatment requested 14 36 Each such royalty report will cover the Licensee's most recently completed [ * * * ] and will show: (a) the gross sales and Net Sales of Licensed Products sold by the Licensee during the most recently completed calendar quarter, (b) the number of each type of Licensed Product sold, (c) the royalties, in U.S. dollars, payable hereunder with respect to such sales, (d) the method used to calculate the royalty, and (e) the exchange rates used. 7.6 If no sales of Licensed Products have been made during any reporting period, a statement to this effect shall be required. 8. BOOKS AND RECORDS 8.1 The Licensee shall keep books and records accurately showing all Licensed Products manufactured, used, and/or sold under the terms of this Agreement. Such books and records shall be preserved for at least five (5) years from the date of the royalty payment to which they pertain and shall be open to inspection by representatives or agents of The Regents at reasonable times. 8.2 The fees and expenses of The Regents' representatives performing such an examination shall be borne by The Regents. However, if an error in royalties of more than five percent (5%) of the total royalties due for any year is discovered, then the fees and expenses of these representatives shall be borne by the Licensee. * * * Confidential treatment requested 15 37 9. LIFE OF THE AGREEMENT 9.1 Unless otherwise terminated by operation of law or by acts of the parties in accordance with the terms of this Agreement, this Agreement shall be in force from the effective date recited on page one and shall remain in effect for the life of the last-to-expire patent licensed under this Agreement, or for twenty (20) years from the effective date of this Agreement if no patent issues, or until the last patent application licensed under this Agreement is abandoned and no patent in Regents' Patent Rights ever issues. 9.2 Any termination of this Agreement shall not affect the rights and obligations set forth in the following Articles: Article 8 Books and Records Article 12 Disposition of Licensed Products on Hand Upon Termination Article 13 Use of Names, Trademarks, and Confidentiality Article 18 Indemnification Article 23 Failure to Perform Article 28 Confidential Information 10. TERMINATION BY THE REGENTS 10.1 If the Licensee should violate or fail to perform any term or covenant of this Agreement, then The Regents may give written notice of such default (Notice of Default) to the Licensee. If the Licensee should fail to repair such default within sixty (60) days of the effective date of such notice, The Regents shall have the right to terminate this Agreement and the licenses herein by a second written notice (Notice of Termination) to the Licensee. If a Notice of 16 38 Termination is sent to the Licensee, this Agreement shall automatically terminate on the effective date of such notice. Such termination shall not relieve the Licensee of its obligation to pay any royalty or license fees owing at the time of such termination and shall not impair any accrued right of The Regents. These notices shall be subject to Article 19 (Notices). 11. TERMINATION BY LICENSEE 11.1 The Licensee shall have the right at any time to terminate this Agreement in whole or as to any portion of Regents' Patent Rights by giving notice in writing to The Regents. Such notice of termination shall be subject to Article 19 (Notices), and termination of this Agreement shall be effective ninety (90) days from the effective date of such notice. 11.2 Any termination pursuant to the above paragraph shall not relieve the Licensee of any obligation of liability accrued hereunder prior to such termination or rescind anything done by the Licensee or any payments made to The Regents hereunder prior to the time such termination becomes effective, and such termination shall not affect in any manner any rights of The Regents arising under this Agreement prior to such termination. Any unpaid part of the License Issue Fee of paragraph 4.1 becomes due and payable at the time of termination by Licensee. 12. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION 12.1 Upon termination of this Agreement, the Licensee shall have the privilege of disposing of all previously made or partially made Licensed Products, but no more, within a period of one hundred and twenty (120) days provided, however, that the sale of such Licensed Products 17 39 shall be subject to the terms of this Agreement including, but not limited to, the payment of royalties at the rate and at the time provided herein and the rendering of reports thereon. 13. USE OF NAMES, TRADEMARKS, AND CONFIDENTIALITY 13.1 Nothing contained in this Agreement shall be construed as conferring any right to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of either party hereto (including contraction, abbreviation, or simulation of any of the foregoing). Unless required by law, the use by the Licensee of the name "The Regents of the University of California" or the use by the Licensee of the name of any campus of the University of California is expressly prohibited. 13.2 Neither The Regents nor Licensee shall be free to release the terms and conditions of this Agreement to third parties unless required by law without the written consent of the other. 13.3 Notwithstanding paragraph 13.2, it is understood that The Regents shall be free to release to the inventors and senior administrative officials employed by The Regents the terms and conditions of this Agreement upon their request. If such release is made, The Regents shall request that such terms and conditions not be disclosed to others. It is further understood that should a third party inquire whether a license to Regents' Patent Rights is available, The Regents may disclose the existence of this Agreement and the Extent of the grant in Article 2 (GRANTS) to such third party, but shall not disclose the name of the Licensee except where The Regents is required to release such information under either the California Public Records Act or other applicable law. 18 40 13.4 Notwithstanding the requirements for confidentiality contained within this Article 13, The Regents hereby authorizes the Licensee to include in any NDA for a Licensed Product a list of patents included within Regents' Patent Rights identifying The Regents as patent owner. 14. LIMITED WARRANTY 14.1 The Regents warrants to the Licensee that it has the lawful right to grant this license. 14.2 This license and the associated Invention are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESSED OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY THAT THE LICENSED PRODUCTS OR LICENSED METHODS WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT. 14.3 IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTION OR LICENSED PRODUCTS. 14.4 Nothing in this Agreement shall be construed as: (14.4.1) a warranty or representation by The Regents as to the validity or scope of any Regents' Patent Rights; or (14.4.2) a warranty or representation that anything made, used, sold, or otherwise disposed of under any license granted in this Agreement is 19 41 or will be free from infringement of patents of third parties; or (14.4.3) an obligation to bring or prosecute actions or suits against third parties for patent infringement except as provided in Article 17 (PATENT INFRINGEMENT); or (14.4.4) conferring by implication, estoppel, or otherwise any license or rights under any patents of The Regents other than Regents' Patent Rights as defined herein, regardless of whether such patents are dominant or subordinate to Regent's Patent Rights; or (14.4.5) an obligation to furnish any know-how not provided in Regents' Patent Rights. 15. PATENT PROSECUTION AND MAINTENANCE 15.1 Provided that Licensee has paid billings and rebillings as provided for in paragraph 15.4, The Regents shall diligently prosecute and maintain the United States patents comprising Regents' Patent Rights using counsel of its choice. The Regents' counsel will take instructions only from The Regents. The Regents shall provide the Licensee with copies of all relevant documentation so that the Licensee may be informed and apprised of the continuing prosecution. The Licensee agrees to keep this documentation confidential. 15.2 The Regents shall use all reasonable efforts to amend any patent application to include claims reasonably requested by the Licensee to protect the products contemplated to be sold under this Agreement. 15.3 Licensee shall apply for an extension of the term of any patent included within 20 42 Regents' Patent Rights if appropriate under the Drug Price Competition and Patent Term Restoration Act of 1984 and/or European, Japanese, and other foreign counterparts of this law. The Licensee shall prepare all such documents, and The Regents agrees to execute such documents and to take such additional action as the Licensee may reasonably request in connection therewith. 15.4 The costs of preparing, filing, prosecuting, and maintaining all United States patent applications and/or patents contemplated by this Agreement shall be borne by Licensee. This includes patent prosecution costs for this Invention incurred by The Regents prior to the execution of this Agreement. Such prior costs (approximately $8,611.71 as of September 30, 1993) will be due within thirty (30) days of the execution of this Agreement. Current and future costs for patent prosecution and maintenance will be billed to the Licensee by The Regents as incurred and shall be payable within thirty (30) days of the billing date. 15.5 The Licensee shall have the right to request The Regents to obtain patent protection on the Invention in foreign countries if available and if it so desires. The Licensee must notify The Regents within seven (7) months of the filing of the corresponding United States application of its decision to obtain foreign patents. This notice concerning foreign filing shall be in writing, must identify the countries desired, and reaffirm Licensee's obligation to underwrite the costs thereof. The absence of such a notice from the Licensee to The Regents shall be considered an election not to secure foreign rights. 15.6 The preparation, filing, and prosecuting of all foreign patent applications filed at the Licensee's request, as well as the maintenance of all resulting patents, shall be at the sole expense of the Licensee. Such patents shall be held in the name of the Regents and shall be obtained using counsel of The Regents' choice. 21 43 15.7 The Licensee's obligation to underwrite and to pay patent prosecution costs shall continue for so long as this Agreement remains in effect provided, however, that the Licensee may terminate its obligations with respect to any given patent application or patent upon three (3) months written notice to The Regents. The Regents will use its best efforts to curtail patent costs when such a notice is received from the Licensee. Those costs which cannot be curtailed will be due and owing when rebilled. The Regents may continue prosecution and/or maintenance of such application(s) or patent(s) at its sole discretion and expense provided, however, that the Licensee shall have no further right or licenses thereunder. 15.8 The Regents shall have the right to file, prosecute, or maintain patent applications at its own expense in any country in which the Licensee has not elected to file, prosecute, or maintain patent rights in accordance with this Article 15, and such applications and resultant patents shall not be subject to this Agreement. 16. PATENT MARKING 16.1 The Licensee agrees to mark all Licensed Products made, used, or sold under the terms of this Agreement, or their containers, in accordance with the applicable patent marking laws. 17. PATENT INFRINGEMENT 17.1 In the event that the Licensee shall learn of the substantial infringement of any patent or patent extension licensed under this Agreement, the Licensee shall call The Regents' attention thereto in writing and shall provide The Regents with reasonable evidence of such 22 44 infringement. Both parties to this Agreement agree that during the period and in a jurisdiction where the Licensee has exclusive rights under this Agreement, neither will notify a third party of the infringement of any of Regents' Patent Rights without first obtaining consent of the other party, which consent shall not be unreasonably denied. Both parties shall use their best efforts in cooperation with each other to terminate such infringement without litigation. 17.2 The Licensee may request that The Regents take legal action against the infringement of Regents' Patent Rights. Such request shall be made in writing and shall include reasonable evidence of such infringement and damages to the Licensee. If the infringing activity has not been abated within ninety (90) days following the effective date of such request, The Regents shall have the right to: a) commence suit on its own account or b) refuse to participate in such suit, and The Regents shall give notice of its election in writing to the Licensee by the end of the one-hundredth (100th) day after receiving notice of such request from the Licensee. The Licensee may thereafter bring suit for patent infringement if and only if The Regents elects not to commence suit and if the infringement occurred during the period and in a jurisdiction where the Licensee had exclusive rights under this Agreement. However, in the event the Licensee elects to bring suit in accordance with this paragraph, The Regents may thereafter join such suit at its own expense. 17.3 Such legal action as is decided upon shall be at the expense of the party on account of whom suit is brought and all recoveries recovered thereby shall belong to such party provided, however, that legal action brought jointly by The Regents and the Licensee and fully 23 45 participated in by both shall be at the joint expense of the parties and all recoveries shall be shared jointly by them in proportion to the share of expense paid by each party. 17.4 Each party agrees to cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party on account of whom suit is brought. Such litigation shall be controlled by the party bringing the suit except that The Regents may be represented by counsel of its choice pursuant to The Regents' determination in any suit brought by the Licensee. 18. INDEMNIFICATION 18.1 The Licensee agrees to indemnify, hold harmless, and defend The Regents, their officers, employees, and agents; the sponsors of the research that led to the Invention; and the inventors of the patents and patent applications in Regents' Patent Rights and their employers against any and all claims, suits, losses, damage, costs, fees, and expenses resulting from or arising out of exercise of this license or any sublicense. This indemnification will include, but will not be limited to, any product liability. 18.2 The Licensee, at its sole cost and expense, shall insure its activities in connection with the work under this Agreement, and before Licensee conducts any non-financial commercialization activities concerning the Licensed Products outside of development and trials performed at the University of California by employees of the University of California, Licensee shall obtain, keep in force, and maintain Comprehensive or Commercial Form General Liability Insurance (contractual liability included) or an equivalent program of self-insurance with limits as follows: 24 46 (a) Each Occurrence [ *** ] (b) Products/Completed Operations Aggregate [ *** ] (c) Personal and Advertising Injury [ *** ] (d) General Aggregate (commercial form only) [ *** ] It should be expressly understood, however, that the coverages and limits referred to under the above shall not in any way limit the liability of Licensee. Licensee shall furnish The Regents with certificates of insurance evidencing compliance with all requirements. Such certificates shall: (18.2.1) Provide a thirty (30)-day advance written notice to the University of any modification. (18.2.2) Indicate that The Regents has been endorsed as an additional insured under the coverages referred to under the above. (18.2.3) Include a provision that the coverages will be primary and will not participate with nor will be excess over any valid and collectible insurance or program of self-insurance carried or maintained by The Regents. 18.3 The Regents shall promptly notify Licensee in writing of any claim or suit brought against The Regents in respect of which The Regents intends to invoke the provisions of this Article 18. Licensee will keep The Regents informed on a current basis of its defense of any claims pursuant to this Article 18. 19. NOTICES 19.1 Any notice or payment required to be given to either party shall be deemed to have been properly given and to be effective (a) on the date of delivery if delivered in person or (b) five (5) days after mailing if mailed by first-class certified mail, postage paid, to the respective *** confidential treatment is requested 25 47 addresses given below or to such other address as it shall designate by written notice given to the other party. In the case of the Licensee: TISSUE TECHNOLOGIES INC. 1372 Green Street San Francisco, CA 94109 Attention: Jesse Kramer In the case of The Regents: THE REGENTS OF THE UNIVERSITY OF CALIFORNIA 1320 Harbor Bay Parkway, Suite 150 Alameda, California 94502 Attention: Director, Office of Technology Transfer Referring to: UC Case No. 93-057-1 20. ASSIGNABILITY 20.1 This Agreement is binding upon and shall inure to the benefit of The Regents, its successors, and assigns, but shall be personal to the Licensee and assignable to the Licensee only with the written consent of The Regents, which consent shall not be reasonably withheld. 21. LATE PAYMENTS 21.1 In the event royalty payments or fees or patent cost reimbursements are not received by The Regents when due, the Licensee shall pay to The Regents interest charges at a rate of [ *** ] per annum. Such interest shall be calculated from the date payment was due until actually received by The Regents. *** confidential treatment requested 26 48 22. WAIVER 22.1 It is agreed that no waiver by either party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default. 23. FAILURE TO PERFORM 23.1 In the event of a failure of performance due under the terms of this Agreement and if it becomes necessary for either party to undertake legal action against the other on account thereof, then the prevailing party shall be entitled to reasonable attorney's fees in addition to costs and necessary disbursements. 24. GOVERNING LAWS 24.1 THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any patent or patent application shall be governed by the applicable laws of the country of such patent or patent application. 25. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION 25.1 If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, the Licensee shall assume all legal obligations to do so. 27 49 26. EXPORT CONTROL LAWS 26.1 The Licensee shall observe all applicable United States and foreign laws with respect to the transfer of Licensed Products and related technical data to foreign countries, including without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations. 27. FORCE MAJEURE 27.1 The parties to this Agreement shall be excused from any performance required hereunder if such performance is rendered impossible or unfeasible due to any catastrophes or other major events beyond their reasonable control, including without limitation, war, riot, and insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes, lock-outs, or other serious labor disputes; and floods, fires, explosions, or other natural disasters. When such events have abated, the parties' respective obligations hereunder shall resume. 28. CONFIDENTIAL INFORMATION 28.1 With regard to confidential information ("Data"), which can be oral or written or both, and can include, but not be limited to, technical information, patent applications, and prosecution documents received from The Regents regarding this Invention, the Licensee agrees not to use the Data except for the sole purpose of performing under the terms of this Agreement; to safeguard Data against disclosure to others with the same degree of care as it exercises with its own data of a similar nature; and not to disclose Data to others (except to its employees, agents, or consultants who are bound to Licensee by a like obligation of confidentiality) without the express 28 50 written permission of The Regents except that Licensee shall not be prevented from using or disclosing any of the Data: (28.1.1) which Licensee can demonstrate by written records was previously known to it; (28.1.2) which is now, or becomes in the future, public knowledge other than through acts or omissions of Licensee; or (28.1.3) which is lawfully obtained by Licensee from sources independent of The Regents. The secrecy obligations of Licensee with respect to Data shall continue for a period ending five (5) years from the termination of this Agreement. 29. MISCELLANEOUS 29.1 The headings of the several sections are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. 29.2 This Agreement will not be binding upon the parties until it has been signed below on behalf of each party; in which event, it shall be effective as of the date recited on page one. 29.3 No amendment or modification hereof shall be valid or binding upon the parties unless made in writing and signed on behalf of each party. 29.4 This Agreement embodies the entire understanding of the parties and shall supersede all previous communications, representations, or understandings, either oral or written, 29 51 between the parties relating to the subject matter hereof. The Letter of Intent effective June 14, 1993, UC Control No. 93-30-0385 is hereby terminated. 29.5 In case any of the provisions contained in this Agreement shall be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid or illegal or unenforceable provisions had never been contained herein. IN WITNESS WHEREOF, both The Regents and the Licensee have executed this Agreement in duplicate originals by their respective officers hereunto duly authorized, on the day and year hereinafter written. TISSUE TECHNOLOGIES INC.: THE REGENTS OF THE UNIVERSITY OF CALIFORNIA: By: /s/ Jesse Kramer By: /s/ William T. Davis ------------------------- -------------------------------- Name: Jesse Kramer Name: William T. Davis ----------------------- ------------------------------ Title: President Associate Director ---------------------- Office of Technology Transfer Date: 3/21/94 Date: 3/31/94 ----------------------- ------------------------------ 30 EX-10.84 3 DISTRIBUTION AGREEMENT DATED JUNE 17, 1996 1 EXHIBIT 10.84 INTERNATIONAL DISTRIBUTION AGREEMENT THIS AGREEMENT is made as of the 14th day of June 1996 by and between BIOMATRIX, INC., a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 65 Railroad Avenue, Ridgefield, New Jersey 07657, U.S.A. ("Biomatrix") and COLLAGEN CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 2500 Faber Place, Palo Alto, California 94303, U.S.A. (the "Distributor"). WHEREAS, Biomatrix is engaged in the development and manufacture of the Agreement Product (as hereinafter defined); WHEREAS, the Distributor desires to enter into a distribution agreement and be appointed the exclusive distributor (even to Biomatrix) of the Agreement Product and any Improved Agreement Product(s) in the Territory (as such terms are hereinafter defined), and Biomatrix is willing to so appoint the Distributor on the terms and subject to the conditions set forth herein; and WHEREAS, the Distributor desires to purchase from Biomatrix, and Biomatrix desires to sell to the Distributor, the Distributor's orders of the Agreement Product and any Improved Agreement Product(s) in the Territory on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the premises and of the mutual covenants of the parties hereto, it is hereby agreed as follows: 1. DEFINITIONS AND INTERPRETATION. 1.1. In this Agreement, the following words and expressions shall have the following meanings: "Affiliate" shall mean, with respect to any party, any Person which, directly or indirectly, is controlled by, controls or is under common control with such party. For purposes of this definition, the term "control" (including with correlative meanings, the terms "controlled by" and "under common control with") shall mean, with respect to any Person, the direct or indirect ownership of more than fifty percent (50%) of the voting or income interest in such Person or the possession otherwise, directly or indirectly, of the power to direct the management or policies of such Person. 2 -2- "Agreement Product" shall mean the one product made of hylan B and called by Biomatrix Hylaform(R), the specifications for which are set forth on Exhibit A, for use in the correction of wrinkles and depressed scars. "Agreement Product Specifications" shall mean the specifications for the Agreement Product set forth in Exhibit A, as such specifications may be modified or supplemented by Biomatrix from time to time in accordance with Product License Approvals or to reflect any Improved Agreement Product(s). "Agreement Year" shall mean, with respect to a country or Region, as applicable, in the Territory, the twelve (12) month period commencing on the date of first commercial sale of the Agreement Product in such country or Region, as applicable, and each separate successive twelve (12) month period thereafter. "Contract Quarter" shall mean, for sales of Agreement Product in a country or Region, as applicable in the Territory, the period commencing with the Distributor's first commercial sale of the Agreement Product in such country or Region, as applicable, and ending on the first to occur of March 31, June 30, September 30 and December 31, as applicable, and each three (3) month period thereafter throughout the term of this Agreement. "Dermal Tissue Augmentation Products" shall mean biomaterial(s) that are [ *** ]. "Dollars" and "$" shall mean the lawful currency of the United States of America. "Effective Date" shall mean June 17, 1996. "EU Countries" shall mean, collectively, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom. "European Territory" shall mean, collectively, the EU Countries, Switzerland, Norway, Liechtenstein and Iceland. "Formula Price" shall mean an amount equal to [ *** ] of the Agreement Product by Distributor or an Affiliate of Distributor, calculated on a [ *** ] basis, provided that if the [ *** ] the Agreement Product in a Region [ *** ], then the Formula Price for such Region shall mean an amount equal to [ *** ] of the Agreement Product on a [ *** ] basis by Distributor or an Affiliate of Distributor in such Region. [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 3 -3- [ *** ] the Formula Price shall mean an amount equal to [ *** ] by Distributor or an Affiliate of Distributor, [ *** ], for or an [ *** ,] including without limitation [ *** .] "Improved Agreement Product(s)" shall mean (i) any modification of the Agreement Product (made entirely from hylan B) regarding the formulation of hylan B in the Agreement Product, that is changes of concentration of the polymer or other changes in the Agreement Product Specifications, whether or not requiring new regulatory approval in the EU Countries or in the United States, and (ii) any modifications or changes related to the packaging of the Agreement Product, including the syringe used, mode of application or dosage. "Incremental Royalties" shall mean that term as defined in Section 8.2. "Initial Term" shall mean that term as defined in Section 3.2. "Launch" shall mean, with respect to a country in the Territory, the commencement by Distributor of sales of the Agreement Product in commercial quantities for use in such country. Such Launch shall be made with respect to each country in the Territory in accordance with the dates set forth on Exhibit B. "Minimum Price" shall mean an amount equal to [ *** ] for each Treatment Syringe, [ *** ,] then the Minimum Price payable in such Region [ *** ] Agreement Years immediately following such [ *** ] shall equal [ *** ,] and [ *** ] Agreement Years following such [ *** ] shall equal [ *** ] for each Treatment Syringe. "Net Retail Sales" shall mean, with respect to sales of a Dermal Tissue Augmentation Product in a country in the Territory, the aggregate gross price invoiced for retail sales of such product during a period in such country to unaffiliated third-party purchasers [ *** .] It is Biomatrix's understanding that the foregoing definition is consistent with how the Distributor reports its sales in its audited financial statements. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 4 -4- "New Products" shall mean [ *** ] "Patents" shall mean Letters Patent or similar statutory rights relating to any Agreement Product and any Improved Agreement Product(s) (including any continuation-in-part, continuation or division thereof or substitute thereof), and patent applications which are pending as of the Effective Date, in each case as set forth in Exhibit C, together with any supplementary or complementary protection certificates therefor if and when such are granted. "Person" shall mean an individual, a corporation, limited liability company, a partnership, a trust, an unincorporated organization or a government or any agency or political subdivision thereof. "Product License Approvals" shall mean those regulatory approvals required for the importation, promotion, marketing and sale of the Agreement Product and any Improved Agreement Product(s) in the Territory (including any reimbursement or pricing approvals). "Region" shall mean any one of the following countries or groups of countries: (i) the United Kingdom and Ireland; (ii) Germany; (iii) France; (iv) Italy; (v) Spain and Portugal; (vi) Denmark, Finland, Sweden, Norway and Iceland; (vii) Belgium, Luxembourg and the Netherlands; (viii) Japan; (ix) Austria, Liechtenstein and Switzerland; (x) Australia and New Zealand; (xi) Greece and Israel; (xii) Argentina, (xiii) Brazil, (xiv) Chile, (xv) Mexico, (xvi) Canada, (xvii) Columbia, (xviii) Cyprus, (xix) Lebanon, and (xx) Turkey. "Supply Forecast" shall mean that term as defined in Section 7.3(b). "Territory" shall mean, collectively, the EU Countries, Switzerland, Norway, Liechtenstein, Iceland, Australia, New Zealand, Japan, Israel, Argentina, Brazil, Mexico, Chile, Columbia, Cyprus, Lebanon, Turkey and Canada and any countries added hereto pursuant to Section 2.4. "Trademarks" shall mean (i) the trademark Hylaform(R), the details of which are described in Exhibit C, and (ii) any other trademarks, as may be agreed upon in writing from time to time by the parties hereto for use by the Distributor in connection with the promotion, marketing and sale of the Agreement Product and any Improved Agreement Product(s) under this Agreement. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 5 -5- "Treatment Syringe" shall mean a ready-for-injection 1.0cc syringe of the Agreement Product. "United States Consumer Price Index" shall mean the Consumer Price Index, All Items, United States, as published by the Bureau of Labor Statistics. 1.2. In this Agreement, unless the context otherwise requires: (a) clause headings are inserted for convenience of reference only and have no legal effect; (b) references to sections, exhibits and schedules are to be construed as references to the sections of, and exhibits and schedules to, this Agreement and references to this Agreement include its exhibits and schedules. (c) references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended, varied, substituted, supplemented, restated or novated in accordance with the terms thereof or, as the case may be, with the agreement of the relevant parties and (where such consent is, by the terms of this Agreement or the relevant document, required to be obtained as a condition to such amendment being permitted) the prior written consent of Biomatrix; (d) words importing the plural shall include the singular and vice versa; (e) references to a person shall be construed as including references to an individual, firm, consortium, company, corporation, unincorporated body of persons or any State or any agency thereof; and (f) references to statutory provisions shall be construed as references to those provisions as replaced, amended or re-enacted from time to time. 2. APPOINTMENT; BEST EFFORTS; EXCLUSIVITY. 2.1. Appointment. (a) Subject to the terms and conditions hereinafter set forth, Biomatrix hereby appoints the Distributor as its exclusive [ *** ] (except to the extent set forth in Section 2.3) distributor for the registration (other than in the European Territory), promotion, marketing, sale and distribution within the Territory of the Agreement Product and any Improved Agreement Product(s) supplied by Biomatrix or an Affiliate of Biomatrix to the Distributor pursuant to this Agreement. Such appointment does not include the right to sublicense or appoint subdistributors except to an Affiliate of Distributor or a Subdistributor of Distributor set forth on Exhibit E hereto (each a "Subdistributor") without ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 6 -6- the approval of Biomatrix; (and only for such time as such an Affiliate remains an Affiliate or Subdistributor of Distributor). (b) Except as specifically provided to the contrary herein, the foregoing appointment shall not be construed, by implication or otherwise, (i) to effect any sale of proprietary Biomatrix technology, (ii) to grant any license relating to Biomatrix's proprietary methods of formulating, fabricating and manufacturing the Agreement Product or any Improved Agreement Product(s), or (iii) to grant the Distributor any rights in or to any proprietary technology or Patents or Trademarks of Biomatrix. (c) During the term of this Agreement the Distributor shall neither seek customers for the Agreement Product or any Improved Agreement Product(s) outside the Territory nor establish any branch or maintain any distribution facilities outside the Territory for the registration, promotion, marketing, sale or distribution of the Agreement Product or any Improved Agreement Product(s). (d) [ *** ] to enter into subdistribution arrangements [ *** ] hereto and no Subdistributor shall have any further right to sublicense any rights or appoint additional subdistributors. The rights of Subdistributors to maintain a sublicense hereunder shall be subject to the following: (i) Each Subdistributor shall agree with Distributor that its rights to sell the Agreement Product and Improved Agreement Product(s) are subject to the terms of this Agreement, including without limitation Distributor's or Biomatrix's rights to terminate or convert this Agreement into a non-exclusive arrangement; (ii) [ *** ] (iii) [ *** ] (iv) Without the prior written consent of Biomatrix, Distributor shall not waive any default or breach of any Subdistributor which would adversely affect Biomatrix; and (v) Upon any termination of this Agreement (or with respect to any country), all subdistributor arrangements shall automatically terminate; provided that Biomatrix may, in its sole discretion, negotiate a license directly with any terminated Subdistributor. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 7 -7- 2.2. Acceptance of Obligations; Best Efforts. The Distributor hereby accepts the appointment described in Section 2.1 and hereby agrees to use its best efforts at all times during the term hereof to register, promote, market, sell and distribute the Agreement Product and any Improved Agreement Product(s) in the Territory. [ *** ] 2.3. Conversion to Non-Exclusive Distributorship. In the event that (i) in any Agreement Year after and including the third Agreement Year or (ii) from, after and including the first year of the Distributor acquiring and/or commercializing a New Product pursuant to Section 10.1(b) (and so long as (i) no force majeure condition of the Distributor exists at such time pursuant to Section 20, (ii) Biomatrix has met its supply obligations under Section 7.4 and (iii) Distributor is able to lawfully sell the Agreement Product and any Improved Agreement product(s) in each of the countries within any such Region) the Distributor's (or its Affiliates' or Subdistributors', as applicable) Net Retail Sales of the Agreement Product and any Improved Agreement Product(s) in a Region comprise less than [ *** ] of its Net Retail Sales of [ *** ,] including the Agreement Product and any Improved Agreement Product(s), [ *** ] Upon conversion of Distributor's rights to a ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 8 -8- non-exclusive distribution arrangement in any Region, Biomatrix shall have the right to distribute the Agreement Product and Improved Agreement Product and/or engage another distributor for such Region. Biomatrix will give Distributor [ *** ] days notice prior to appointing a third party distributor for such Region. From and after the date of a conversion to a non-exclusive distribution arrangement within a Region, the Distributor shall lose its rights hereunder to register, promote, market, sell and distribute within such Region any Improved Agreement Product(s) commercialized on or after such date. Notwithstanding the foregoing, the Distributor shall retain the exclusive rights in all trademarks under which the Distributor launched the Agreement Product or any Improved Agreement Product(s) in such Region. Upon conversion of Distributor's rights to a non-exclusive distribution arrangement in any Region in the European Territory, the arrangements between the parties under this Agreement shall no longer be governed by this Agreement and such Region shall no longer be deemed a part of the Territory, but rather, such Region shall become the subject of a new agreement between the parties upon the same terms and conditions set forth in this Agreement. Upon such conversion to a non-exclusive arrangement, the parties agree to execute such further documents and agreements as are necessary in order to give effect to the provisions of this Section. 2.4. Expansion of Territory. One or more countries may be added to the Territory from time to time after the Effective Date by mutual written agreement of the parties hereto, conditional upon the satisfactory completion of the necessary due diligence in such country and the satisfaction of Biomatrix with the proposed arrangements for the registration, promotion, marketing, sale and distribution of the Agreement Product and any Improved Agreement Product(s) by the Distributor in such country. Biomatrix agrees to discuss the appointment of Distributor or one of its subdistributors prior to appointing a third party distributor of the Agreement Product in any additional country. 3. TERM AND TERMINATION. 3.1. Effective Date. This Agreement shall take effect as of the Effective Date. 3.2. Term. (a) Unless this Agreement is sooner terminated, in its entirety or as to a country or Region in the Territory in accordance with the provisions of this Agreement, the term of the appointment hereunder for a country in the Territory shall commence on the first day of the first Agreement Year for such country and shall end on the last day of the tenth (10th) Agreement Year for such country (the "Initial Term"). ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 9 -9- (b) Unless this Agreement is sooner terminated, in its entirety or as to any Region in the Territory in accordance with the provisions of this Agreement, the appointment of the Distributor hereunder as exclusive distributor of the Agreement Product for each Region in the Territory shall be renewable by the Distributor, at its option, upon written notice to Biomatrix received at least ninety (90) days prior to the end of the Initial Term for such Region, for an additional consecutive term of five (5) years following the date of expiration of the Initial Term for such Region, provided that the Distributor shall only be entitled to exercise such renewal option with respect to any Region if as of the date of expiration of the Initial Term for such Region the Distributor is not in material breach of any of its obligations under this Agreement with respect to any Region (it being understood that any payment default by Distributor under this Agreement will be deemed a default as to the entire Territory). Thereafter, the appointment of the Distributor as exclusive distributor of the Agreement Product for such Region shall be renewable upon the expiration of such additional five (5) year term, upon written notice to Biomatrix received at least ninety (90) days prior to the end of such term for such Region, for one additional consecutive renewal term of five (5) years, provided that, as of the date of expiration of the first renewal term for such Region, the Distributor is not in material breach of any of its obligations under this Agreement with respect to any Region (it being understood that any payment default by Distributor under this Agreement will be deemed a default as to the entire Territory). For the avoidance of any doubt, the Distributor's rights with respect to any Improved Agreement Product(s) commercialized after the tenth anniversary of the Effective Date shall terminate upon the tenth anniversary of the Effective Date. Subject to the terms of this Agreement, Distributor shall have the right to continue to sell the Agreement Product and any Improved Agreement Products it is then currently selling. (c) This Agreement may be terminated with respect to any country in the Territory by either party, by written notice to the other party, in the event that (i) a mutual decision not to Launch the Agreement Product in such country is reached or (ii) a Launch is not commenced with respect to such country within thirty (30) days after the time period set forth on Exhibit B. (d) In the event that in any Agreement Year commencing with the third Agreement Year (and so long as (i) no force majeure condition of the Distributor exists at such time pursuant to Section 20, (ii) Biomatrix has met its supply obligations under Section 7.4, and (iii) Distributor is able to lawfully sell the Agreement product and any Improved Agreement Product(s) in each of the countries within any such Region), the Distributor's (and its Affiliates' or Subdistributors', as applicable) Net Retail Sales of the Agreement Product and any Improved Agreement Product(s) in any Region comprise less than seven and one-half percent (7-1/2%) of its Net Retail Sales in such Region of all Dermal Tissue Augmentation Products, including the Agreement Product and any Improved Agreement Product(s), the Distributor's distribution rights (including, without limitation, its right to use the Trademarks) under this Agreement for the Agreement Product and any Improved Agreement Product(s) in such Region shall terminate upon 90 days notice, but in any event no later than 120 days after the end of the applicable Agreement Year, to Distributor from Biomatrix; provided, however, that Distributor may within thirty (30) days after receipt of any such notice from Biomatrix, cure a shortfall of Net Retail Sales with respect to a Region in the Territory, other than Regions in the European Territory, Australia and Canada, for an Agreement Year by paying to Biomatrix an amount equal to twenty-five percent (25%) of the total dollar amount of any such shortfall of Net Retail Sales in such Agreement Year for such Region (such amount the "Cure Amount"); further provided that with respect to any Region in the Territory, at Biomatrix's election, Biomatrix may refuse to allow such cure if Distributor has taken advantage of such cure provision with respect to such Region in each of the two preceding Agreement Years. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 10 -10- By way of example, if Distributor's Net Retail Sales of all Dermal Tissue Augmentation Products in a Region in a given Agreement Year [$10,000,] and Distributor's Net Retail Sales of the Agreement Product in such Region in such Agreement Year were $500, then Distributor could cure such shortfall and prevent termination by paying Biomatrix $62.50. Distributor may cure a shortfall of Net Retail Sales with respect to Regions in the European Territory, Australia or Canada in an Agreement Year by paying the Cure Amount to Biomatrix with respect to any such Region for such Agreement Year as provided above; provided, however, that in exchange for such Cure Amount Biomatrix will supply Distributor with an amount of units of the Agreement Product purchasable for such Cure Amount at the applicable Minimum Price or Formula Price for the applicable Agreement Year for such Region; further provided that with respect to any such Region, at Biomatrix's election, Biomatrix may refuse to allow such cure if Distributor has taken advantage of such cure provision w/respect to such Region in each of the two preceding Agreement Years. Upon any such termination of the Distributor's distribution rights in a Region, the Distributor's obligation to pay any royalties pursuant to Sections 8.1 and 8.2 for any sales in such Region after such termination shall cease, but the Distributor shall remain obligated to pay all such royalties for sales in such Region accrued prior to such termination. (e) If the Distributor's rights to distribute the Agreement Product and any Improved Agreement Product(s) in any country in the European Territory shall terminate solely pursuant to subsection (d) above, Biomatrix agrees to sell the Agreement Product and any Improved Agreement Product(s) developed before the date of such termination to the Distributor a price not greater than the price paid by another distributor appointed in such country in the European territory, for the period of time equal to the period that would have remained in the Initial Term in such country had the Distributor's distribution rights not terminated. 3.3. Inventory. (a) Upon termination of this Agreement for any reason, Biomatrix shall have the right (but not the obligation) to repurchase all or part of the inventory of the Agreement Product and any Improved Agreement Product(s) held by the Distributor or its Affiliates or Subdistributors. (b) The price for inventory to be repurchased by Biomatrix pursuant to Section 3.3(a) above shall be the landed cost thereof actually paid by the Distributor to Biomatrix. With respect to any quantities not repurchased by Biomatrix, the Distributor shall have the ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 11 -11- right to sell such inventory of the Agreement Product and any Improved Agreement Product(s), in its usual and customary manner, in the ordinary course of business, for a period of six (6) months following termination of this Agreement and notwithstanding such termination the terms and conditions of this Agreement shall apply to such sales. 3.4. Insolvency. This Agreement may be immediately terminated as to the entire Territory by either party, upon giving written notice to the other party, in the event that the other party shall become insolvent or be declared bankrupt by a court of competent jurisdiction or shall be the subject of any reorganization (other than a corporate reorganization effected in the ordinary course of business and not arising out of any insolvency) or winding up, receivership or dissolution, bankruptcy or liquidation proceeding, or any proceeding or action similar to one or more of the above, in which case termination shall be effective upon such written notice. The failure of either party to give notice of termination upon obtaining knowledge of any such event shall not be interpreted as a waiver of such party's rights under this Section 3.4, and such party reserves the right to exercise any such rights at any time after the occurrence of any such event. 3.5. Breach. This Agreement may be terminated as to the entire Territory by either party if the other party shall breach any of its payment obligations hereunder or with respect to any Region if Distributor (or its Affiliates or Subdistributors, as applicable) shall commit a material breach of any of its warranties, covenants, conditions, obligations or agreements contained herein with respect to such Region, provided that such breach shall continue for a period of thirty (30) days after written notice thereof and provided further that such termination shall be immediately effective upon further written notice to that effect to the breaching party after its failure to cure such breach within such applicable notice period. For avoidance of doubt, the parties agree that if a Launch is not reached with respect to a country within thirty days after the time period set forth on Exhibit B, then either party may terminate this Agreement with respect to such country (provided that such failure to reach a Launch is not caused by a force majeure condition of the Distributor or Biomatrix's failure to meet its supply obligations under Section 7.4). 3.6. Certain Rights Upon Termination. Upon termination of this Agreement for any reason whatsoever, Biomatrix shall have the following rights, or if such termination is as to a country in the Territory in accordance with the provisions of this Agreement, Biomatrix shall have the following rights in such country: (a) Biomatrix shall have the unrestricted right to review, access, use and permit others to review, access and use, either directly or by cross-reference or incorporation or otherwise, all information, data, investigations, preclinical and clinical protocols, marketing information disseminated by Distributor publicly to customers and patients and all information required to be provided to Biomatrix by law, information relating to laboratory, animal and human studies, and related regulatory approvals pertaining to the Agreement Product or any Improved Agreement Product(s) (the "Information") which are possessed or controlled by the Distributor or any of its Affiliates or Subdistributors, or to which the Distributor or any of its Affiliates or Subdistributors has a right to review, access or use. 12 -12- The Distributor unconditionally agrees promptly to take any action and to execute and deliver to Biomatrix any documents or instruments reasonably requested by Biomatrix to permit Biomatrix to make full use of such unrestricted right. (b) Further, Biomatrix shall have exclusive ownership rights to the Trademarks and to all other product specific logos, slogans and other intangibles used by the Distributor solely in association with the independent sale of the Agreement Product and any Improved Agreement Product(s) (including all registrations relating thereto) possessed or controlled by the Distributor or any of its Affiliates or Subdistributors, and the Distributor unconditionally agrees, subject to the provisions of Section 3.3(b), (i) immediately upon termination to cease using the Trademarks and any such logos, slogans, and marketing rights of Biomatrix or any imitations thereof and (ii) immediately to execute and deliver to Biomatrix any documents or instruments reasonably requested by Biomatrix to give full effect to the provisions of this Section 3.6; provided, however, if the Distributor maintains a license to distribute the Agreement Product(s) in (a) two Regions, (b) one Region in the European Territory or (c) in the United States, then Distributor shall retain the exclusive rights in the Trademarks in the entire Territory. (c) In addition, the Distributor unconditionally agrees, subject to the provisions of Section 3.3(b), that it shall, upon the request of Biomatrix, immediately inform all relevant regulatory authorities that the Distributor (or its Affiliate or Subdistributor) is no longer a distributor of the Agreement Product or the Improved Agreement Product(s) and shall take all action and execute and deliver all documents and instruments necessary in order to transfer to the fullest extent permitted under applicable law all registrations and Product License Approvals, or applications therefor, for the Agreement Product or any Improved Agreement Product(s) to Biomatrix or any Person nominated by Biomatrix. 3.7. Effects of Termination. (a) Upon termination of this Agreement for any reason, the Distributor shall immediately discontinue making any representations regarding its status as a distributor for Biomatrix and shall immediately cease conducting any activities with respect to the marketing, promotion, sale or distribution of the Agreement Product and any Improved Agreement Product(s), provided, however, that the Distributor shall be permitted to sell inventory not repurchased by Biomatrix in accordance with Section 3.3. (b) Termination of this Agreement shall not affect obligations of either party that may have accrued prior to the effective date of termination. Subject to Clause 3.8 below, termination of this Agreement shall be in addition to, and shall not be exclusive of or prejudicial to, any other grounds for termination or rights or remedies at law or in equity which either party may have on account of any default of the other party. 3.8. Waiver. The Distributor (for itself and on behalf of its Affiliates and Subdistributors) hereby waives, to the extent it is able to do so under the law of 13 -13- every country in the Territory and other applicable law, any statutory rights it may have or acquire in respect of the termination of the relationship established hereby pursuant to the terms hereof, and agrees that the rights available to it hereunder in the event of such termination are adequate and reflect the agreement of the parties. The Distributor shall not have any right to claim any indemnity for goodwill or lost profits or any damages arising from the rightful termination of this Agreement in accordance with the terms hereof. 4. PAYMENTS. All payments hereunder shall be made in Dollars. Payments to Biomatrix shall be wired to an account designated by Biomatrix and the costs of any such remittance shall be borne by the Distributor. All amounts (except for the Minimum Price, which shall be denominated in Dollars) denominated in another currency shall be converted to Dollars using the average month-end rates of exchange for the relevant period as published in The Wall Street Journal (or, if The Wall Street Journal shall no longer publish such exchange rates, as determined by a method that is mutually agreed upon in writing by the parties). 5. WITHHOLDING. All payments to be made by the Distributor under this Agreement shall be made in full, free and clear of and without any deduction of or withholding for or on account of any taxes levied in any country of the Territory or elsewhere; provided that if the Distributor shall be required by law to make any deduction or withholding from any payment to Biomatrix then: (a) the Distributor shall ensure that such deduction or withholding does not exceed the minimum legal liability therefor; and (b) not later than five (5) days before each deduction or withholding of any taxes, the Distributor shall forward to Biomatrix such documentary evidence as may be required by Biomatrix in respect of the proposed deduction, withholding or payment; and (c) prior to any deduction or withholding the parties shall attempt in good faith to agree upon revised mutually acceptable pricing and/or payment terms. 6. TRADEMARKS; AGREEMENT PRODUCT MARKING; PROMOTIONAL INFORMATION. 6.1. Trademarks. Subject to the provisions of Section 3.6, Biomatrix hereby licenses to the Distributor the right to use, and hereby requires solely in association with the independent sale by the Distributor of the Agreement Product and any Improved Agreement Products the use of, the Trademarks in the Territory during the term of this Agreement. The Distributor warrants that it shall not use any of the Trademarks at any time outside the Territory or use any of the Trademarks for any products other than the Agreement Product and any Improved Agreement Product(s) within the Territory. The Distributor shall not use a trademark or other mark (other than a Trademark) in connection with its distribution of the Agreement Product and any Improved Agreement Products unless and until it has been agreed upon in writing by each of the parties and become a Trademark as defined herein. 14 -14- Biomatrix shall prosecute, maintain and defend the Trademarks throughout the Term of this Agreement in all countries in the Territory in which the Distributor, any of its Affiliates or any Subdistributor is selling the Agreement Product and/or any Improved Agreement Product. The parties shall execute a short form Trademark assignment agreement to the extent that it is necessary to record the Trademark license under this Section 6.1 in any country whose laws require any such registration. 6.2. Termination of Right to Use Trademarks. Subject to the sell-out right of Section 3.3(b) and except as otherwise provided in Section 3.6, upon termination of this Agreement, the license to use the Trademarks in the Territory shall terminate, and the Distributor unconditionally agrees promptly to take all necessary action and execute and deliver to Biomatrix all necessary documents and instruments to remove the Distributor as a registered user and/or a recorded licensee of the Trademarks. In the event that the Distributor fails promptly upon written request by Biomatrix to comply with any of its agreements in the preceding sentence of this Section 6.2, the Distributor hereby irrevocably consents to Biomatrix's taking any action necessary to give effect to such agreements. 6.3. Notice. Each party hereto agrees promptly to notify the other in writing of any infringements or imitations of the Trademarks by third parties which may come to its attention. 6.4. Labelling and Promotional Materials; Approved Use of Product. (a) The Distributor shall provide Biomatrix with labelling masters, instructions, specifications and copies of all marketing, labelling and promotional material it intends to use relating to the Agreement Product and any Improved Agreement Product(s). All such labelling, packaging and promotional material shall be consistent with the relevant Product License Approvals and all labelling and packaging materials shall be reviewed by Biomatrix and shall be subject to its written approval prior to use, such approval not to be unreasonably withheld. Biomatrix shall communicate its acceptance or rejection of such labelling, packaging and any major promotional materials that include claims or items impacting regulatory approvals within [ *** ] of its receipt thereof and if no such communication is received by Distributor from Biomatrix within such [ *** ] Biomatrix shall be deemed to have accepted. Distributor shall provide Biomatrix with all major promotional materials for launches and subsequent promotions within a reasonable time prior to their use in order to allow Biomatrix to comment on such materials. Distributor shall provide Biomatrix with copies of all other promotional materials at or prior to their use. (b) The Distributor agrees that its (and its Affiliates' and Subdistributors') promotion, marketing, sale and distribution of the Agreement Product and any Improved Agreement Product(s) in the Territory, and the promotional materials and labelling used in connection therewith, shall be strictly in accordance with the approved use of the Agreement Product and any Improved Agreement Product(s) as specified in the Product License Approvals and as further provided in this Agreement. Specifically, for purposes of this ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 15 -15- Agreement, the Distributor (and its Affiliates and Subdistributors) agrees [ *** ,] or unless agreed to in writing by Biomatrix. 6.5. Legend. Subject to applicable laws and regulations in the Territory, all relevant packaging and promotional material for the Agreement Product and any Improved Agreement Product(s) used or sold by the Distributor (and its Affiliates and Subdistributors) shall contain (i) all applicable markings needed to keep the Trademarks enforceable throughout the Territory as reasonably specified by Biomatrix to the Distributor and (ii) a legend which shall be displayed in a reasonably conspicuous manner on all packaging of such Agreement Product and any Improved Agreement Product(s) containing the corporate identification logo of Biomatrix and indicating that such product has been developed and manufactured by Biomatrix, Inc., and its affiliates, 65 Railroad Avenue, Ridgefield, New Jersey, 07657 U.S.A. 6.6. Promotional Support. Biomatrix and the Distributor (and its Affiliates and Subdistributors) shall provide to each other on an ongoing basis and without charge (to the extent not prevented by law or contract from doing so) all medical information relating to the Agreement Product and any Improved Agreement Product(s) (including summary data from studies, clinical trials and the like as well as information regarding adverse events associated with the use of the Agreement Product), the proceedings of all symposia on the Agreement Product and any Improved Agreement Product(s) and all promotional information that is available to such party relating to the Agreement Product and any Improved Agreement Product(s). In addition, Biomatrix and the Distributor (and its Affiliates and Subdistributors) shall provide each other with access to such primary data and information in its possession as the other may reasonably request regarding the results of the studies contained in such summary data referred to above. 6.7 Joint Coordinating Committee. Upon the execution of this Agreement, Biomatrix and the Distributor shall establish a joint coordinating committee (the "Committee") to review all matters relating to product labelling, product claims, regulatory matters or clinical trials. The Committee shall consist of an equal number, not to [ *** ,] of voting representatives from each of Biomatrix and the Distributor and shall meet [ *** .] In the event of a dispute between representatives of Biomatrix and the Distributor on the Committee, a senior representative of each such party shall be appointed to resolve such dispute, and in the event such senior representatives are unable to resolve the matter, Biomatrix's view shall prevail over the Distributor's. 6.8 Recalls of the Agreement Product. (a) If either party in good faith determines that a recall of the Agreement Product in any country in the Territory is warranted, such party shall immediately notify the other party in writing and shall advise such other party of the reasons underlying its determination that a recall is warranted. The parties shall consult with each other as to any action to be ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 16 -16- taken in regard to such a recall, but in any event if after consultations either party in good faith still believes that such a recall should be undertaken, the parties shall cooperate in carrying out such recall. (b) Except as otherwise provided in (c) below, in the event of a recall of the Agreement Product, Biomatrix shall correct any deficiency relating to its manufacturing, packaging, testing, labelling, storing or handling of the Agreement Product for which it is responsible, if applicable, and shall at its cost replace the Agreement Product recalled. (c) Biomatrix shall reimburse Distributor for all direct costs and expenses (including without limitation shipping, quality control testing and notification costs) incurred by Distributor and its Affiliates as a result of any recall, except where such recall (i) is the result of the failure of Distributor or its Affiliates or Subdistributors to comply with their obligations under this Agreement and/or (ii) was opposed by Biomatrix and proved to be unwarranted, in which case Distributor shall reimburse Biomatrix for all direct costs and expenses (including without limitation shipping, quality control testing and notification costs) incurred by Biomatrix and its Affiliates as a result of such recall. 6.9. Product Vigilance System. The Distributor shall be responsible for maintaining medical device vigilance systems, as established for the Agreement Product by Biomatrix, and shall promptly provide Biomatrix with notice of all product complaints, including medical complaints. Biomatrix shall be solely responsible for processing, analyzing and, if necessary, reporting medical complaints to regulatory authorities. The Distributor shall provide all necessary support to Biomatrix for carrying out such activities. 7. SUPPLY OF AGREEMENT PRODUCT. 7.1. General; Fee. (a) Biomatrix agrees to sell the Agreement Product and any Improved Agreement Product(s) to the Distributor, on the terms and subject to the conditions set forth herein, for resale by the Distributor within the Territory, and the Distributor shall obtain the Agreement Product and any Improved Agreement Product(s) for resale in the Territory only from Biomatrix or its Affiliates. Biomatrix shall not sell the Agreement Product or any Improved Agreement Product(s) itself or supply or license the manufacture of the Agreement Product or any Improved Agreement Product(s) to any third party for resale within the Territory, provided that Biomatrix's obligations under this sentence shall be subject to (i) applicable law, including without limitation EU competition law and, in particular, EEC Regulation 1983/83 (as amended or succeeded) and (ii) the provisions of this Agreement, including Section 2.3. (b) [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 17 -17- [ *** ,] the Distributor shall pay to Biomatrix a fee in the amount of five million Dollars (US$5,000,000) in cash or by wire transfer on the execution of this Agreement by the parties hereto. Such fee shall not be refundable in whole or part. 7.2. Price; Adjustment; Reports; Payment. (a) The parties shall attempt in good faith to agree in writing, prior to the Launch in each country, upon mutually acceptable supply pricing for the Distributor's purchase of the Agreement Product and any Improved Agreement Product(s), but such pricing in any event shall not be less than the greater of (i) the Minimum Price, or (ii) the Formula Price, except as provided in subsection (b) below. The parties shall attempt in good faith to agree in writing upon mutually acceptable minimum pricing for the Agreement Product in sizes other than the 1.0cc Treatment Syringe and for any Improved Agreement Product(s). For any syringe with a fill volume of greater than one cc (1cc), the Minimum Price shall be the amount calculated as [ *** ] plus the dollar amount which equals [ *** ] of such product with a larger fill volume [ *** ] of the one cc(1cc) syringe. In the event that Biomatrix's actual incremental Cost of Goods Sold exceeds such dollar amount, the Minimum Price shall be the amount calculated as [ *** .] Subject to the general commercial availability of appropriate syringes for the Agreement Product, the [ *** ] for a one and one-half (1.5)cc syringe, [ *** ] for a two (2.0)cc syringe, and [ *** ] for a two and one-half (2.5)cc syringe. (b) If Biomatrix has appointed a new distributor for a country in the Territory pursuant to Section 2.3 and the Distributor has the right to distribute the Agreement Product and any Improved Agreement Product(s) in such country, the supply pricing for the Distributor's purchase of the Agreement Product and any Improved Agreement Product(s) for resale in such country [ *** .] (c) The price initially payable by the Distributor to Biomatrix for each unit of the Agreement Product during each month of each Agreement Year shall be the Minimum Price applicable to sales in such country (subject to adjustment at the close of each applicable Contract Quarter and Agreement Year in accordance with Section 7.2(e) below). (d) Within [ *** ] after the end of each month of each Agreement Year for each country in the Territory, the Formula Price for the Agreement Product in such ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 18 -18- country shall be calculated, and, to the extent that such Formula Price exceeds the applicable Minimum Price for such Agreement Year for such country, an adjustment resulting from the [ *** ] with respect to all units of the Agreement Product sold by the Distributor (and its Affiliates and Subdistributors) in such country during such monthly period, such payment to be made [ *** ] after the end of the month following such monthly period. (e) Within [ *** ] after the end of each Contract Quarter and Agreement Year for each country, the Formula Price for the Agreement Product in such country shall be calculated and an adjustment resulting from the [ *** ,] as appropriate, to the other party with respect to all units of the Agreement Product sold by the Distributor in such country during such Contract Quarter and Agreement Year, such payment to be made within [ *** ] after the end of such [ *** ] period following the end of such Contract Quarter and Agreement Year. The price calculated annually in this manner shall be the final price payable for all units of the Agreement Product sold by the Distributor, any Affiliates or Subdistributors of Distributor during such Agreement Year. For the avoidance of doubt, the aggregate amount payable by Distributor for the Agreement Product(s) and any Improved Agreement Product(s) in any country for any Agreement Year shall in no event be lower than the Minimum Price multiplied by the total units sold in such Agreement Year in such country. (f) Within [ *** ] following the end of each calendar month in each Agreement Year, the Distributor shall submit to Biomatrix written reports detailing the units and value of the Distributor's, Affiliates' and Subdistributors' Net Retail Sales and aggregate number of units sold of the Agreement Product and any Improved Agreement Product(s) in each country in the Territory during the immediately preceding calendar month. (g) Within [ *** ] following the end of each Agreement Year, the Distributor shall submit to Biomatrix written reports detailing the Distributor's and its Affiliates' and Subdistributors' sales of the Agreement Product and any Improved Agreement Product(s) during the immediately preceding Agreement Year, which reports shall contain the Net Retail Sales of the Agreement Product and any Improved Agreement Product(s) in each country in the Territory, and the aggregate number of units of the Agreement Product and any Improved Agreement Product(s) sold in each country in the Territory during the applicable Agreement Year. (h) All purchases of the Agreement Product and any Improved Agreement Product(s) hereunder shall be billed and paid in Dollars within [ *** ] after the later of the date of delivery or the date of the Distributor's receipt of the invoice for each shipment of same to the Distributor. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 19 -19- 7.3. Sales and Supply Forecasts; Accounts. (a) Exhibit D, which shall be supplied by the Distributor within [ *** ] of the Effective Date, sets forth a sales forecast of units of the Agreement Product in the Territory for the first year after the Effective Date. (b) Within [ *** ] after the end of each month, the Distributor shall provide to Biomatrix an updated rolling twelve (12) month monthly supply forecast for all unit sizes of the Agreement Product in the Territory. Each such supply forecast described in this subsection (b) is referred to herein as a "Supply Forecast"; provided, that updated Supply Forecasts shall not vary (whether up or down) from the immediately preceding Supply Forecast by more than [ *** ] with respect to each month covered by such preceding Supply Forecast. (c) The Distributor shall maintain, and shall require its Affiliates and Subdistributors to maintain, books of account with respect to sales of the Agreement Product in the Territory by it and its Affiliates and Subdistributors. Biomatrix shall have the right, not more than once during each calendar year, to have an independent accountant selected and retained by Biomatrix (reasonably acceptable to the Distributor, provided that any "big six" accounting firm shall be deemed reasonable) to inspect and examine such books of the Distributor, its Affiliates and Subdistributors during regular business hours for the purpose of verifying the statements of the aggregate Net Retail Sales of all Dermal Tissue Augmentation Products for all purposes hereunder, including verification of Formula Price and the royalties described in Section 8. The cost of each such audit shall be borne by Biomatrix unless a material error is discovered in the course of such audit, in which case the cost shall be borne by the Distributor. For purposes of this Section 7.3(d), a material error shall be defined as an understatement of five percent (5%) or more of the aggregate amount owed to Biomatrix with respect to sales of Dermal Tissue Augmentation Products in a country in the Territory. Any additional payments required as a result of such inspection and examination shall be immediately paid to Biomatrix and shall bear interest from the date such amount would otherwise have been paid until the date of actual payment at the rate per annum set forth in Section 20. Such independent accounting firm shall conduct such inspections and examinations under conditions of confidentiality. 7.4. Shipment and Delivery; Packaging. (a) Biomatrix or an Affiliate of Biomatrix shall arrange for shipment to the Distributor of the Agreement Product and any Improved Agreement Product(s) ordered by the Distributor [ *** ]. The Distributor shall pay all customs duties, sales taxes and other governmental charges relating to the Agreement Product and any Improved Agreement Product(s), and shall be solely responsible for clearing such products through customs throughout the Territory. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 20 -20- (b) The Distributor shall submit a firm purchase order setting forth the quantities, delivery date and shipping instructions with respect to each shipment of the Agreement Product and any Improved Agreement Product(s), such purchase orders to be received by Biomatrix at least [ *** ] prior to the requested delivery date; provided that the Distributor shall not submit any purchase order for fewer than [ *** ] units of the Agreement Product or the Improved Agreement Product(s) (although multiple delivery sites for purchase orders shall be allowed). Biomatrix shall use commercially reasonable efforts but shall have no obligation to supply Distributor with quantities of the Agreement Product(s) and Improved Agreement Product(s) in excess of the amounts in the then current Supply Forecast for the relevant monthly period. For avoidance of doubt, so long as Biomatrix supplies Distributor with quantities of the Agreement Product and Improved Agreement Product(s) as set forth in the Supply Forecast, then Biomatrix shall not be deemed to be in default under this section or any other provision of this Agreement relating to Biomatrix's supply obligations. In addition to the foregoing, within [ *** ,] in consideration for which units the Distributor shall pay to Biomatrix a price of [ *** ] per unit. (c) Biomatrix agrees that with respect to languages for packaging for the European Territory three separate forms of packaging shall be made available, as applicable, as follows: (i) Northern Europe - English, Dutch, French, German and Italian; (ii) Southern Europe - English, Italian, Spanish, Portuguese and Greek; and (iii) Scandinavia - English, Swedish, Norwegian, Danish and Finnish. (d) Each unit of the Agreement Product and any Improved Agreement Products shipped to the Distributor shall have, as of the time of delivery, a remaining shelf life of no less than [ *** ] less than the maximum shelf life for such product, as approved by the United States Food and Drug Administration. Biomatrix shall continually use its best efforts at all times during the term hereof to lengthen to [ *** ] the shelf life of the Agreement Product and any Improved Agreement Products to the extent supported by stability data. Biomatrix' "best efforts" in this section shall mean that Biomatrix shall use such methods, exercise such degree of effort and diligence, and adhere to such standards as are commercially reasonable. 7.5. Title. Legal title to all quantities of the Agreement Product and any Improved Agreement Product(s) sold hereunder shall remain in Biomatrix until delivery of the Agreement Product and any Improved Agreement Product(s) to Distributor or its agent and acceptance thereof and upon such delivery and acceptance the title to such Agreement ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 21 -21- Product and any Improved Agreement Product(s) shall, without further action, be transferred to and vested in the Distributor. 7.6. Risk of Loss. Biomatrix shall bear all risk of loss of, or damage to, all units of the Agreement Product and any Improved Agreement Product(s) to the extent the same is in its possession or the possession of its Affiliates, nominees or agents. The Distributor shall bear all risk of loss of, or damage to, all units of the Agreement Product and any Improved Agreement Product(s) after delivery to a common carrier for shipment to the Distributor in accordance with Section 7.4. 7.7. Acceptance. [ *** .] All units of the Agreement Product and Improved Agreement Products delivered to Distributor pursuant to this Agreement shall be [ *** ,] the specifications listed in Exhibit A. Any non-conformity which arises after acceptance by Distributor directly associated with product specification shall be the responsibility of Biomatrix unless such non-conformity is due to improper storage conditions subsequent to delivery of the Agreement Product. All other non-conformities of the Agreement Product shall be the responsibility of the Distributor. Biomatrix and the Distributor agree to consult with each other in order to resolve the discrepancy between each other's determinations. If such consultation does not resolve the discrepancy, the parties agree to nominate a reputable independent laboratory, acceptable to both parties, that shall carry out tests on representative samples taken from such shipment, and the results of such tests shall be binding on the parties. Biomatrix shall at its expense replace any such shipment to the extent that it does not conform to the Agreement Product Specifications. All defective units of the Agreement Product or any Improved Agreement Product(s) shall be returned to Biomatrix at the address set forth in Section 23 of this Agreement, accompanied or preceded by a reasonably detailed statement of the claimed defect or non-conformity and proof of date of purchase, and packed and shipped according to instructions provided by Biomatrix. The shipping costs of any such returned units shall be borne by Biomatrix, unless such units are determined not to be defective under the terms of this Agreement, in which case such shipping costs shall be borne by the Distributor. 7.8. Purchase Orders. The provisions of this Agreement shall prevail over any inconsistent statement or provisions contained in any document related to this Agreement passing between the parties hereto including, but not limited to, any purchase order, acknowledgment, confirmation or notice. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 22 -22- 7.9. Limited Warranty; Limitation on Liability. Biomatrix represents and warrants that the Agreement Product and any Improved Agreement Product(s) supplied to the Distributor hereunder shall: (a) conform to the Agreement Product Specifications; and (b) be manufactured, labelled, packaged and tested (while in the possession or control of Biomatrix) in accordance with the applicable Product License Approvals therefor and all applicable laws and regulations in the Territory relating to the manufacture, labelling, packaging and testing of the Agreement Product, and shall be manufactured for use for the indications specified in the applicable Product License Approvals therefor. THE FOREGOING WARRANTY IS THE SOLE AND EXCLUSIVE WARRANTY GIVEN BY BIOMATRIX WITH RESPECT TO THE AGREEMENT PRODUCT, AND BIOMATRIX GIVES AND MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, OTHER THAN THE FOREGOING. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO IMPLIED WARRANTY OF MERCHANTABILITY, NO IMPLIED WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE, AND NO IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE IS GIVEN OR MADE BY BIOMATRIX OR SHALL ARISE BY OR IN CONNECTION WITH ANY SALE OR PROVISION OF THE AGREEMENT PRODUCT BY BIOMATRIX, OR THE DISTRIBUTOR'S (OR ITS AFFILIATES' OR SUBDISTRIBUTORS') USE OR SALE OF THE AGREEMENT PRODUCT, OR BIOMATRIX'S AND/OR THE DISTRIBUTOR'S (OR ITS AFFILIATES' OR SUBDISTRIBUTORS') CONDUCT IN RELATION THERETO OR TO EACH OTHER. NO REPRESENTATIVE OF BIOMATRIX IS AUTHORIZED TO GIVE OR MAKE ANY OTHER REPRESENTATION OR WARRANTY OR TO MODIFY THE FOREGOING WARRANTY IN ANY WAY. The limited warranty set forth in this Section 7.9 does not apply to any non-conformity of the Agreement Product or any Improved Agreement Product(s) resulting from (a) repair or alteration by any party other than Biomatrix or its Affiliates, (b) misuse, negligence, abuse, accident, mishandling or storage in an improper environment by any party other than Biomatrix or its Affiliates, or (c) use, handling, storage or maintenance other than in accordance with instructions and recommendations provided by Biomatrix or its Affiliates. Biomatrix's obligation with respect to units of the Agreement Product and any Improved Agreement Product(s) which do not meet the warranty contained herein is limited to replacement of such units of the Agreement Product or Improved Agreement Product(s) as applicable, provided that such units are returned to Biomatrix accompanied by a reasonably detailed statement of the claimed defect or non-conformity and proof of date of purchase, and packed and shipped according to instructions provided by Biomatrix, and only 23 -23- if, upon examination by Biomatrix, such units of the Agreement Product or the Improved Agreement Product(s) are determined to have been defective under the terms of this Agreement. BIOMATRIX'S LIABILITY, AND THE EXCLUSIVE REMEDY, IN CONNECTION WITH THE SALE OR USE OF THE AGREEMENT PRODUCT AND ANY IMPROVED AGREEMENT PRODUCT(S) (WHETHER BASED ON CONTRACT, NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY OR ANY OTHER LEGAL THEORY), SHALL BE STRICTLY LIMITED TO BIOMATRIX'S OBLIGATIONS AS SPECIFICALLY AND EXPRESSLY PROVIDED IN THIS SECTION 7.9 AND IN SECTION 9 BELOW. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 7.9 AND IN SECTION 9 BELOW, BIOMATRIX SHALL HAVE NO LIABILITY, OBLIGATION OR RESPONSIBILITY OF ANY KIND, IN ANY WAY OR TO ANY EXTENT, FOR ANY DAMAGES, LOSSES, COSTS, EXPENSES OR LIABILITIES FOR ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE AGREEMENT PRODUCT AND ANY IMPROVED AGREEMENT PRODUCT(S) OR THE PERFORMANCE THEREOF, OR ARISING IN ANY WAY IN CONNECTION WITH THE PURCHASE OR USE OR INABILITY TO USE THE AGREEMENT PRODUCT OR ANY IMPROVED AGREEMENT PRODUCT(S), EVEN IF BIOMATRIX HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WHATSOEVER SHALL BIOMATRIX HAVE ANY LIABILITY, OBLIGATION OR RESPONSIBILITY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING IN ANY WAY IN CONNECTION WITH THE AGREEMENT PRODUCT OR ANY IMPROVED AGREEMENT PRODUCT(S) OR THEIR SALE OR USE. 24 -24- 8. ROYALTY PAYMENTS BY DISTRIBUTOR. 8.1. Royalties for Sales of Dermal Tissue Augmentation Products. The Distributor shall pay to Biomatrix a royalty of [ *** ] of the Net Retail Sales by the Distributor and its Affiliates and Subdistributors of all Dermal Tissue Augmentation Products (other than sales of the Agreement Product and any Improved Agreement Product(s)) in all countries in the Territory on a country-by-country basis, including any countries that are added to the Territory after the Effective Date, [ *** .] Such royalty shall commence with respect to each country in the Territory at the earlier of (a) the Launch of the Agreement Product in such country or (b) the Launch date for such country set forth on Exhibit B; provided that if a Launch is delayed due to Biomatrix's failure to meet its supply obligations under Section 7.4, due to a force majeure condition of Distributor or if the Distributor is not able to lawfully sell the Agreement product in such country, such royalty with respect to any such country shall not commence until Biomatrix meets its supply obligations, Distributor is able to lawfully sell the Agreement Product in such country, or until such force majeure condition ceases. Such royalty shall be paid by not later than [ *** ] after the end of each Contract Quarter. 8.2. Incremental Royalties. The Distributor shall pay to Biomatrix the following annual royalties (the "Incremental Royalties") on the Distributor's and its Affiliates' and Subdistributors' total incremental increases in Net Retail Sales of all Dermal Tissue Augmentation Products (including the Agreement Product and any Improved Agreement Product(s)), in each country in the Territory based on the incremental increases, if any, in Net Retail Sales of all Dermal Tissue Augmentation Products in such country in each Agreement Year over a base year amount comprised of Net Retail Sales of Dermal Tissue Augmentation Products in the twelve (12) months immediately preceding the first commercial sale of either the Agreement Product or any Improved Agreement Product(s) in such country:
Increase in Total Sales Over Base Royalty on Total Year Amount Incremental Sales ----------- ----------------- [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ]
***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 25 -25- The Distributor's obligation to pay the Incremental Royalties shall cease with respect to a country in the Territory in the event that the Distributor's rights to sell, distribute, market and promote the Agreement Product and any Improved Agreement Product have become non-exclusive with respect to such country pursuant to Section 2.3 or have terminated pursuant to Section 3.2(d). The Incremental Royalty shall be paid by not later than [ *** ] after the end of each Agreement Year. For the avoidance of doubt, if the Distributor had no sales of any Dermal Tissue Augmentation Products in a country prior to the first commercial sale of either the Agreement Product or any Improved Agreement Product in such country, the Distributor shall be obligated to pay a [ *** ] royalty on Net Retail Sales of all Dermal Tissue Augmentation products sold after such first commercial sale. 9. INDEMNIFICATION; CONFIDENTIALITY; PUBLIC ANNOUNCEMENT 9.1. Indemnification from the Distributor. Subject to the provisions of Section 9.3, the Distributor shall defend, indemnify and hold Biomatrix and its Affiliates and their respective directors, officers, agents and employees harmless from and against any and all liabilities, claims, damages and expenses (including without limitation actual court costs and reasonable attorneys' fees regardless of outcome) resulting from claims of third parties or arising out of: (a) any failure by the Distributor, its Affiliates or Subdistributors to act in accordance with the terms of this Agreement and/or any applicable laws and regulations in the Territory in connection with the Agreement Product and any Improved Agreement Product(s), including without limitation any unauthorized representations, warranties or guarantees given by the Distributor, its Affiliates or Subdistributors; (b) any unauthorized use of an unapproved label on the Agreement Product or any Improved Agreement Product(s); and/or (c) any activities of the Distributor, its Affiliates or Subdistributors relating to the promotion, marketing, sale and distribution of the Agreement Product and any Improved Agreement Product(s); provided, however, that upon Biomatrix being advised of any assertions of any such third party claims or suits or upon the bringing or filing of such claims or suits by any third party against Biomatrix, Biomatrix will promptly notify the Distributor thereof and Biomatrix may, at its option, permit the Distributor's attorneys to handle and control the defense of such claims or suits at the Distributor's cost and Biomatrix will co-operate with the Distributor in the defense thereof. The parties agree that there shall be no settlements, whether agreed to in court or out of court, without the prior written consent of the indemnifying party. 9.2. Indemnification from Biomatrix. Subject to the provisions of Section 9.3, Biomatrix shall defend, indemnify and hold the Distributor and its Affiliates and their ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 26 -26- respective directors, officers, agents and employees harmless from and against any and all liabilities, claims, damages and expenses (including without limitation actual court costs and reasonable attorneys' fees regardless of outcome) resulting from claims of third parties arising out of: (a) any failure by Biomatrix to act in accordance with applicable laws and regulations in the Territory in connection with the Agreement Product and any Improved Agreement Product(s) (including changing a jointly agreed upon label without the consent of Distributor); (b) a product or manufacturing defect in the Agreement Product or any Improved Agreement Product(s); and (c) any infringement of the patent rights of third parties resulting from the use or sale of the Agreement Product in the Territory in accordance with this Agreement. provided, however, that upon the Distributor being advised of any assertions of any such third party claims or suits or upon the bringing or filing of such claims or suits by any third party against the Distributor, the Distributor will promptly notify Biomatrix thereof and, at Biomatrix's cost, permit Biomatrix's attorneys to handle and control the defense of such claims or suits and will co-operate with Biomatrix in the defense thereof. The parties agree that there shall be no settlements, whether agreed to in court or out of court, without the prior written consent of the indemnifying party. 9.3. Limitation on Liability. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN SECTIONS 9.1 AND 9.2 ABOVE, OR ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT (INCLUDING THE FAULT, NEGLIGENCE OR STRICT LIABILITY OF EITHER PARTY) SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES OTHER THAN TO THE EXTENT NECESSARY TO REIMBURSE SUCH OTHER PARTY FOR DAMAGES ACTUALLY PAID TO A NON-AFFILIATED THIRD PARTY, PROVIDED THAT SUCH DAMAGES ARE OTHERWISE COVERED BY THE PROVISIONS OF SECTION 9.1 OR SECTION 9.2, AS THE CASE MAY BE. 9.4. Confidential Information. All information acquired by either party (the "Recipient") from the other party or any of its Affiliates (the "Discloser") during the term of this Agreement or prior to the Effective Date, relating directly or indirectly to the present or potential business, operations, corporate, technical or financial situation of the Discloser, or to manufacturing know-how, patents, data, test results, techniques, processes, procedures, raw materials, dealer, supplier and customer lists, pre-clinical and clinical protocols or any improvements thereof of the Discloser ("Confidential Information") is confidential, and shall be held in trust by the Recipient for the exclusive benefit of the Discloser. Unless otherwise 27 -27- agreed to in writing by the Discloser, the Recipient shall not at any time, either during or subsequent to the term of this Agreement, use for itself (other than in accordance with the terms of this Agreement) or any other Person, or disclose or divulge to any Person, other than to those of its employees and advisors and Affiliates who require the same for the purposes hereof and who are bound by the same obligations of confidentiality, non-disclosure and non-use as set forth herein, any Confidential Information or any other confidential or proprietary information of the Discloser of which the Recipient may acquire knowledge; provided, however, that the confidentiality, non-disclosure and non-use provisions contained in this Section 9.4 shall not apply to any information or data to the extent that the Recipient: (a) shall demonstrate by clear and convincing evidence that such information or data is known generally to persons in the trade through no act or omission of the Recipient or any of its Affiliates; (b) is required by any government authority to disclose such information or data, including without limitation for the purposes of obtaining and maintaining any Product License Approvals under this Agreement; or (c) shall demonstrate by its written records was disclosed to or created by it or its Affiliates on a non-confidential basis from a source other than the Discloser or its Affiliates and that such disclosure or creation did not constitute a breach of any applicable confidentiality obligations. Confidential Information shall be immediately returned to the Discloser upon termination of this Agreement, along with any copies, reproductions, digests, abstracts or the like of all or any part thereof in the Recipient's possession or under the Recipient's control, and upon such return any computer entries or the like relating thereto shall, to the extent legally permissible, be destroyed. Such return (and destruction) will not affect the Recipient's obligations hereunder which shall survive indefinitely. Notwithstanding anything herein to the contrary, the provisions of this Section 9.4 shall be subject to Biomatrix's rights under Section 3.6. 9.5. Public Announcement. Except as shall be necessary for governmental notification purposes or to comply with applicable laws and regulations, and except as otherwise agreed to by the parties hereto in writing, the parties agree to keep the existence of this Agreement, and the transactions contemplated hereby, strictly confidential. In the event that a party must file this document or otherwise disclose any of its subject matter pursuant to public filing requirements, such party shall seek confidential treatment of those portions of the Agreement as the parties shall mutually agree upon; provided, however, that the Distributor must provide written notice to Biomatrix no later than June 30, 1996 of those portions of the Agreement for which the Distributor requests confidential treatment. The parties shall agree upon the text of an initial public announcement relating to the transactions contemplated by this Agreement as soon as 28 -28- possible. Any subsequent public announcements regarding this Agreement or the transactions contemplated herein shall also be agreed upon in writing between the parties prior to any release thereof. 10. NEW PRODUCTS. 10.1 [ *** ,] Distributor shall not commercialize nor begin the commercialization process with respect to or acquire any New Product anywhere in the Territory or the United States, either independently or in conjunction with one or more third parties, unless and until the following conditions have been satisfied: (a) Distributor has made a commercially reasonable written offer to Biomatrix to participate with Distributor in the development and commercialization of such New Product; and (b) Biomatrix has failed to accept such written offer within [ *** ] of its receipt of such offer. In the event that Biomatrix fails to accept any written offer made by Distributor pursuant to this Section 10.1 within [ *** ] of Biomatrix's receipt thereof, then Distributor, subject to the terms of this Agreement, shall have the right to independently or with other parties develop and/or commercialize any New Product to which such written offer relates; provided, however, that any such New Product does not infringe upon any of the intellectual property rights of Biomatrix. Distributor shall not be required to make the written offer to Biomatrix set forth in Section 10.1(a) above only in the event and to the extent that it is prevented from doing so due to patented proprietary rights of a third party. (c) At all times during the term of this Agreement, Distributor shall notify Biomatrix in writing within [ *** ] of each occurrence of one or more of the following: (i) Distributor's entering into an agreement with one or more third parties with regard to the development, acquisition and/or commercialization of any New Product, and Distributor shall provide to Biomatrix notice of such agreement and any and all agreements relating thereto and a non-confidential summary of such agreements; or (ii) Distributor's commencing a clinical trial (either alone or in conjunction with a third party) with respect to any New Product, together with notice of the commencement of such clinical trial and a list of all countries where such clinical trial will take place; or ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 29 -29- (iii) Distributor's filing of an application (either alone or in conjunction with a third party) for marketing approval with the United States Food and Drug Administration or an equivalent regulatory agency in any country with respect to any New Product stating in which countries any such filings have been made. 10.2 So long as either [ *** ] Agreement Product and any Improved Agreement Product [ *** ] and/or (b) Distributor [ *** ,] either independently or in conjunction with one or more third parties, [ *** ,] Biomatrix shall not [ *** ] until the following conditions have been satisfied: (i) Biomatrix has made a commercially reasonable [ *** ] to Distributor to[ *** ;] and (ii) Distributor has [ *** .] In the event that Distributor [ *** ] by Biomatrix pursuant to this Section 10.2 [ *** ] then Biomatrix [ *** ] by this Agreement [ *** ;] provided, however, that Biomatrix shall not have the right to commercialize any such New Products within [ *** ] so long as either of the conditions set forth in Section 10.2(a) or 10.2(b) is satisfied. Specifically, once one of the conditions in Section 10.2(a) or 10.2(b) is not satisfied, Distributor shall (subject to the terms of this Agreement) [ *** ,] however, after such date it shall [ *** .] 10.3. Nothing in this Section 10 shall be construed, by implication or otherwise, (i) to effect any sale or license of proprietary Biomatrix technology (including any New Products), (ii) to grant any license relating to Biomatrix's proprietary methods of formulating, fabricating and manufacturing the Agreement Product, Improved Agreement ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 30 -30- Products or New Products, or (iii) to grant Distributor any rights in or to any proprietary technology or Patents or Trademarks of Biomatrix. 11. REPRESENTATIONS OF BIOMATRIX. Biomatrix represents, warrants and covenants as follows: 11.1. It is a corporation duly organized and validly existing under the laws of the State of Delaware with the full power to conduct its affairs as currently conducted and contemplated hereunder. All necessary action has been taken to enable it to execute and deliver this Agreement and perform its obligations hereunder. 11.2. This Agreement is a valid and binding obligation of Biomatrix enforceable in accordance with its terms. Biomatrix has the unencumbered right to enter into this Agreement and to fulfill its duties hereunder. It is not and will not become a party to any agreement in conflict herewith. Accordingly, Biomatrix has the right to appoint the Distributor as the exclusive distributor of the Agreement Product in the Territory in accordance with the terms of this Agreement and such appointment will not constitute a breach of any existing contractual or other arrangements between Biomatrix and any Affiliated or non-Affiliated third party, nor shall it infringe the rights of any Affiliated or non-Affiliated third party. 11.3 No approval, consent, order, authorization or license by, giving notice to or taking any other action with respect to, any governmental or regulatory authority is required in connection with the execution and delivery of this Agreement by Biomatrix and the performance by Biomatrix of its obligations hereunder. 12. REPRESENTATIONS OF THE DISTRIBUTOR. The Distributor represents, warrants and covenants as follows: 12.1 It is a corporation duly organized and validly existing under the laws of Delaware with full power to conduct its affairs as currently conducted and contemplated hereunder. All necessary action has been taken to enable it to execute and deliver this Agreement and perform its obligations hereunder. 12.2. This Agreement is the Distributor's valid and binding obligation enforceable in accordance with its terms. The Distributor has the unencumbered right to enter into this Agreement and to fulfill its obligations hereunder. It is not and will not become a party to any agreement in conflict herewith. Accordingly, the Distributor has the right to act as the exclusive distributor of the Agreement Product in the Territory in accordance with the terms of this Agreement and the performance of its obligations hereunder will not constitute a breach of any existing contractual or other arrangements between the Distributor and any Affiliated or non-Affiliated third party, nor shall it infringe the rights of any Affiliated or non-Affiliated third party. 31 -31- 12.3. No approval, consent, order, authorization or license by, giving notice to or taking any other action with respect to any governmental or regulatory authority is required in connection with the execution and delivery of this Agreement by the Distributor and the performance by the Distributor of its obligations hereunder. 13. INSURANCE. Each party hereto shall (a) obtain and maintain such insurance policies as are adequate to cover its respective obligations hereunder and which are consistent with normal business practices of prudent companies similarly situated and (b) provide the other party, upon request, with certificates of insurance confirming the existence of such insurance policies. 14. INFRINGEMENT. Each of the Distributor and Biomatrix will promptly notify the other party in writing of any infringement of a Patent or Trademark or unauthorized disclosure or use of any Confidential Information, of which it becomes aware in the Territory. Biomatrix shall have the exclusive right at its own cost to take all legal action in the Territory it deems necessary or advisable to eliminate or minimize the consequences of such infringement of a Patent or Trademark in the Territory. For the purpose of taking any such legal action, Biomatrix shall have the right, subject to the Distributor's consent which consent shall not be unreasonably withheld or delayed, to use the name of the Distributor as plaintiff, either solely or jointly in accordance with the applicable rules of procedure; provided that Biomatrix shall give the Distributor prior notice of such use of the Distributor's name. The Distributor shall promptly furnish Biomatrix with whatever written authority may be required in order to enable Biomatrix to use the Distributor's name in connection with any such legal action, and shall otherwise cooperate fully and promptly with Biomatrix in connection with any such action. All proceeds realized upon any judgment or settlement regarding such action shall belong to Biomatrix. 15. REGULATORY ACTIVITIES; CLINICAL TRIALS AND MARKETING STUDIES. 15.1. General. (a) Biomatrix shall be responsible for maintaining at its cost the Product License Approvals required for the marketing and sale of the Agreement Product and any Improved Agreement Product(s) in the European Territory throughout the term of this Agreement. The Distributor shall use its best efforts to obtain and maintain at its cost any Product License Approvals and to conduct at its cost any clinical trials required for the marketing and sale of the Agreement Product and any Improved Agreement Product(s) in each country in the Territory, except for the European Territory, throughout the term of this Agreement. "Best efforts" in this context shall mean such that Distributor shall generally use the same methods, exercise the same degree of effort and diligence, and adhere to the same standards as Distributor and its Affiliates would apply to their own actively promoted pharmaceutical products in the Territory, and shall be as are commercially reasonable. (b) Biomatrix shall assist the Distributor in submitting applications for Product License Approvals, provided that (i) Biomatrix shall be entitled generally to oversee the 32 -32- strategy and content of regulatory approval applications (in their original form whether in English or any other language) and (ii) the content of all such applications shall be subject to Biomatrix's prior written approval, such approval or disapproval to be given by Biomatrix within [ *** ] of its receipt thereof. The timing of such applications shall be mutually agreed in writing by the parties. Biomatrix shall hold in its name all regulatory approvals required for the marketing and sale of the Agreement Product and any Improved Agreement Product(s) in the Territory, except to the extent that applicable law requires that such regulatory approvals be held in the name of the Distributor. (c) The Distributor and Biomatrix shall provide reasonable advice and assistance to each other as may be necessary to obtain and maintain Product License Approvals. (d) Except to the extent necessary to give effect to the provisions of Section 3.3(b), the Product License Approvals relating to the Agreement Product and any Improved Agreement Product(s) in the Territory in the name of the Distributor or any of its Affiliates shall be transferred to Biomatrix immediately upon termination of the Agreement. (e) During the term of this Agreement, each party shall immediately notify the other in writing in the event that such party becomes aware of any failure of the Agreement Product and any Improved Agreement Product(s) to comply with any of the requirements therefor specified in any Product License Approvals. (f) Each of the Distributor and Biomatrix shall keep the other advised of regulatory interactions, activities and correspondence and the registration status of the Agreement Product and any Improved Agreement Product(s) on at least a quarterly basis, and any matters requiring immediate attention shall be communicated as soon as practicable. 15.2. Clinical Trials and Marketing Studies. (a) The Distributor shall be responsible at its own cost for conducting and managing any clinical trials which the Distributor or Biomatrix may be required to undertake in order to obtain Product License Approvals in the Territory, except in the European Territory. The protocols for any such clinical trials will be developed jointly by Biomatrix and the Distributor, and Biomatrix shall have the right to audit the performance of any clinical studies performed by or on behalf of the Distributor in respect of the Agreement Product and any Improved Agreement Product(s). The Distributor shall provide Biomatrix with the results of all such clinical trials, and Biomatrix and its Affiliates shall be free to use the results of such clinical trials. (b) The parties agree that if any marketing-related studies are deemed necessary, such studies will not delay the Launch in any country in the European Territory. The protocols for any marketing-related studies requested by the Distributor will be developed jointly by Biomatrix and the Distributor, and the Distributor will be responsible for conducting and managing such studies at its own expense. Biomatrix shall have the right to ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 33 -33- audit the performance of any marketing-related studies performed by or on behalf of the Distributor. The results of such studies will not be published or publicized in any way without the prior written approval of Biomatrix. 16. FURTHER ASSURANCES. The parties hereto agree to execute such further or other documents and assurances as are necessary from time to time in order to give effect to the provisions of this Agreement. 17. ASSIGNMENT. The rights and obligations of the parties hereto shall inure to the benefit of and shall be binding upon the authorized successors and permitted assigns of each party. Neither party may assign its rights or obligations under this Agreement or may designate another person to perform all or part of its obligations under this Agreement, or to have all or part of its rights and benefits under this Agreement without the prior written consent of the other party, except to an Affiliate or to a successor of the business, by merger or otherwise, to which this Agreement relates, provided that in the case of an assignment to an Affiliate the assigning party shall promptly notify the other party in writing of such assignment and shall remain liable (both directly and as guarantor) with respect to all obligations so assigned. In the event of any assignment or in the event that an Affiliate of either party shall exercise rights and/or perform obligations hereunder pursuant to the terms of this Agreement, the assignee or Affiliate, as the case may be, shall specifically assume and be bound by the provisions of the Agreement by executing and agreeing to an assumption agreement satisfactory to the other party hereto. 18. GOVERNING LAW; ARBITRATION; INJUNCTIVE RELIEF. (a) This Agreement shall be governed by and construed in accordance with the internal and substantive laws of the State of New York, United States of America. The parties hereby agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement or any other document contemplated hereby. In the event of any dispute touching or concerning this Agreement, the parties hereby agree to submit such dispute to their respective presidents by notice delivered in accordance with the provisions of Section 23, and if within [ *** ,] or such other period as is agreed upon in writing by the parties hereto, following such reference the dispute remains unresolved, to submit the dispute for arbitration in Boston, Massachusetts under the Rules of the American Arbitration Association in effect on the date of this Agreement (the "Rules") by arbitrators appointed in accordance with said Rules. Any decision of such arbitrators shall be written and shall be final and binding upon the parties. In any arbitration pursuant to this Section the award shall be rendered by a majority of three (3) arbitrators, one (1) of whom shall be appointed by each party and the third of whom shall be appointed by mutual agreement of the two (2) party-appointed arbitrators. In the event of failure of a party to appoint an arbitrator within thirty (30) days after commencement of the arbitration proceeding or in the event of failure of the two (2) party-appointed arbitrators to agree upon the appointment of the third arbitrator within sixty (60) days after commencement of the arbitration proceeding, such arbitrator shall be appointed by the American Arbitration Association in accordance with the Rules. The arbitrators shall apply ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 34 -34- the governing law set forth in this Section. Judgment upon an award rendered by the arbitrators may be entered in any court having jurisdiction thereof. (b) Each of the parties hereto acknowledges and agrees that damages will not be an adequate remedy for any material breach or violation of this Agreement if such material breach or violation would cause immediate and irreparable harm (an "Irreparable Breach"). Accordingly, notwithstanding the provisions of Section 18(a) to the contrary, in the event of a threatened or ongoing Irreparable Breach, each party hereto shall be entitled to seek, in any state or federal court in the State of New York, equitable relief of a kind appropriate in light of the nature of the ongoing threatened Irreparable Breach, which relief may include, without limitation, specific performance or injunctive relief; provided, however, that if the party bringing such action is unsuccessful in obtaining the relief sought, the moving party shall pay the non-moving party's reasonable costs, including attorney's fees, incurred in connection with defending such action. Such remedies shall not be the parties' exclusive remedies, but shall be in addition to all other remedies provided in this Agreement. 19. SEVERABILITY. In the event that any provision of this Agreement shall be held by a court of competent jurisdiction or by any governmental body to be invalid or unenforceable, such provision shall be deemed severable and the remaining parts and provisions of this Agreement shall remain in full force and effect. 20. FORCE MAJEURE. Each of the parties shall be excused from the performance of its obligations hereunder in the event such performance is prevented by force majeure, and such excuse shall continue as long as the condition constituting such force majeure continues. For the purpose of this Agreement, force majeure is defined as contingencies beyond the reasonable control of either party, including, without limitation, acts of God, judicial or regulatory action, war, civil commotion, destruction of production facilities or materials by fire, earthquake or storm and labor disturbances (whether or not any such labor disturbance is within the power of the affected party to settle). 21. INTEREST. Any overdue amounts payable by either party hereunder shall bear interest compounded monthly at the prime lending rate for Dollars published from time to time in The Wall Street Journal plus [ *** ] per annum, or, if lower, the highest rate permissible by applicable law, from the due date until the date of payment. 22. NO PARTNERSHIP OR AGENCY. This Agreement and the relations hereby established by and between Biomatrix and the Distributor do not constitute a partnership, joint venture, agency or contract of employment between them. 23. NOTICES. All communications in connection with this Agreement shall be in writing and sent by postage prepaid first class mail, courier, or telefax, and if relating to default, late payment or termination, by certified mail, return receipt requested, telefax or courier, addressed to each party at the address set forth at the beginning of this Agreement, in the case of Biomatrix, Attn: Chief Executive Officer, with a copy to: Justin P. Morreale, Esq., Bingham, Dana & Gould LLP, 150 Federal Street, Boston, Massachusetts 02110, ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 35 -35- U.S.A., and in the case of the Distributor, Attn: President, with a copy to Kimberlie L. Cerrone, Esq., Venture Law Group, 2800 Sand Hill Road, Menlo Park, California 94025, or to such other address as the addressee shall last have designated by notice to the communicating party. The date of giving any notice shall be the date of its actual receipt. 24. EU REGULATIONS. It is the intention of the parties hereto that this Agreement shall at all times qualify for the exemption from the provisions of Article 85(1) of the Treaty of Rome dated 25 March, 1957, as amended, which either (a) is available under EEC Regulation Number 1983/83, or (b) may subsequently be available under any successor regulation or regulations thereto. In the event that any provision of this Agreement is deemed to violate the conditions for qualifying for the exemption, set out in whichever of those regulations may be in effect at the relevant time, or if any such regulation is amended after the date of this Agreement so as to cause this Agreement to fail to qualify for the exemption, the parties hereto agree that they will, as soon as it is practicable to do so, enter into good faith negotiations to amend this Agreement as necessary in order to re-qualify for the exemption or to notify the Agreement. If those negotiations are not successfully concluded within a reasonable time (not to exceed ninety (90) days, or such other period as is agreed upon in writing by the parties hereto, after the relevant regulation is amended), either party may terminate this Agreement upon written notice to the other party. 25. SURVIVAL. The provisions of Sections 3.3, 3.6, 3.7, 3.8, 6.2, 9.1, 9.2, 9.3, 9.4 and 9.5 of this Agreement shall survive the termination or expiration of this Agreement (as the case may be) and shall remain in full force and effect. The provisions of this Agreement that do not survive termination or expiration hereof (as the case may be) shall, nonetheless, be controlling on, and shall be used in construing and interpreting the rights and obligations of the parties hereto with regard to, any dispute, controversy or claim which may arise under, out of, or in connection with this Agreement. 26. MISCELLANEOUS. This Agreement sets forth the entire agreement between the parties with respect to the transactions and arrangements contemplated hereby and supersedes all prior oral or written arrangements. This Agreement may be modified or amended only by a written instrument executed and delivered by both parties. None of the provisions of this Agreement shall be deemed to have been waived by any act or acquiescence on the part of either party except by an instrument in writing signed and delivered by the party executing the waiver. This Agreement may be executed in several identical counterparts, each of which shall be an original, but all of which constitute one instrument, and in making proof of this Agreement it shall not be necessary to produce or account for more than one such counterpart. [The remainder of this page is intentionally left blank.] 36 -36- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. COLLAGEN CORPORATION By: /s/ HOWARD D. PALEFSKY ------------------------------------- Name: HOWARD D. PALEFSKY Title: CHAIRMAN & CEO BIOMATRIX, INC. By: /s/ ENDRE A. BALAZS ------------------------------------- Name: ENDRE A. BALAZS Title: CEO 37 -37- EXHIBITS Exhibit A - Agreement Product Specification and Approval Documents Exhibit B - Launch Schedule Exhibit C - Patents and Trademarks Exhibit D - Sales Forecasts Exhibit E - Subdistributors
38 EXHIBIT A Agreement Product Specification and Approval Documents TESTS PROCEDURES SPECIFICATIONS [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 39 -39- EXHIBIT B Launch Schedule
Country: Date of Launch -------- -------------- 1. Australia [ *** ] 2. Austria [ *** ] 3. Belgium [ *** ] 4. Denmark [ *** ] 5. Finland [ *** ] 6. France [ *** ] 7. Germany [ *** ] 8. Greece [ *** ] 9. Iceland [ *** ] 10. Ireland [ *** ] 11. Italy [ *** ] 12. Japan [ *** ] 13. Liechtenstein [ *** ] 14. Luxembourg [ *** ] 15. The Netherlands [ *** ] 16. New Zealand [ *** ] 17. Norway [ *** ] 18. Portugal [ *** ]
***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 40 -40- 19. Spain [ *** ] 20. Sweden [ *** ] 21. Switzerland [ *** ] 22. United Kingdom [ *** ] 23. Israel [ *** ] 24. Argentina [ *** ] 25. Brazil [ *** ] 26. Mexico [ *** ] 27. Canada [ *** ] 28. Chile [ *** ]
***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 41 -41- EXHIBIT C Patents and Trademarks Patents(1)/ [ *** ] - ---------- 1 All numbers given are for issued patents except [ ***,] and [ ***.] 2 This [ *** ] has been allowed and will issue in the next few months under the same number. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 42 -42- [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 43 -43- [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 44 -44- Trademark - Hylaform* Country and Status Ser Nos. or Reg. Nos. - ------------------ --------------------- [ *** ] - ---------- * Filed in International Classes 5 and 10 Legend: [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 45 -45- EXHIBIT D Sales Forecasts(1) (Units) First Agreement Year (1) The parties acknowledge that in the event of the addition of other syringe sizes this forecast is subject to adjustment to incorporate such new sizes. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 46 -46- EXHIBIT E Collagen Subdistributors
Country Subdistributor - ------- -------------- Argentina New Pharma S.A. Brazil Magistral Chile Prater Laboratorios Mexico Bard Mexico SA Israel T.C. Technocare Ltd. Japan Lederle (Japan) K.K. Ltd. Columbia Consumed Cyprus Charitonos Enterprises Lebanon Pharmed S.A.L. Turkey Assos Pharmaceuticals
47 UNITED STATES DISTRIBUTION AGREEMENT THIS AGREEMENT is made as of the 14th day of June 1996 by and between BIOMATRIX, INC., a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 65 Railroad Avenue, Ridgefield, New Jersey 07657, U.S.A. ("Biomatrix") and COLLAGEN CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 2500 Faber Place, Palo Alto, California 94303, U.S.A. (the "Distributor"). WHEREAS, Biomatrix is engaged in the development and manufacture of the Agreement Product (as hereinafter defined); WHEREAS, the Distributor desires to enter into a distribution agreement and be appointed the exclusive distributor (even to Biomatrix) of the Agreement Product and any Improved Agreement Product(s) in the Territory (as such terms are hereinafter defined), and Biomatrix is willing to so appoint the Distributor on the terms and subject to the conditions set forth herein; and WHEREAS, the Distributor desires to purchase from Biomatrix, and Biomatrix desires to sell to the Distributor, the Distributor's orders of the Agreement Product and any Improved Agreement Product(s) in the Territory on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the premises and of the mutual covenants of the parties hereto, it is hereby agreed as follows: 1. DEFINITIONS AND INTERPRETATION. 1.1. In this Agreement, the following words and expressions shall have the following meanings: "Affiliate" shall mean, with respect to any party, any Person which, directly or indirectly, is controlled by, controls or is under common control with such party. For purposes of this definition, the term "control" (including with correlative meanings, the terms "controlled by" and "under common control with") shall mean, with respect to any Person, the direct or indirect ownership of more than fifty percent (50%) of the voting or income interest in such Person or the possession otherwise, directly or indirectly, of the power to direct the management or policies of such Person. 48 -2- "Agreement Product" shall mean the one product made of hylan B and called by Biomatrix Hylaform(R), the specifications for which are set forth on Exhibit A, for use in the correction of wrinkles and depressed scars. "Agreement Product Specifications" shall mean the specifications for the Agreement Product set forth in Exhibit A, as such specifications may be modified or supplemented by Biomatrix from time to time in accordance with Product License Approvals or to reflect any Improved Agreement Product(s). "Agreement Year" shall mean the twelve (12) month period commencing on the date of first commercial sale of the Agreement Product in the United States and each separate successive twelve (12) month period thereafter. "Contract Quarter" shall mean, for sales of Agreement Product, the period commencing with the Distributor's first commercial sale of the Agreement Product in the United States and ending on the first to occur of March 31, June 30, September 30 and December 31, as applicable, and each three (3) month period thereafter throughout the term of this Agreement. "Dermal Tissue Augmentation Products" shall mean biomaterial(s) that are [ *** ] "Dollars" and "$" shall mean the lawful currency of the United States of America. "Effective Date" shall mean June 17, 1996. "EU Countries" shall mean, collectively, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom. "European Territory" shall mean, collectively, the EU Countries, Switzerland, Norway, Liechtenstein and Iceland. "Formula Price" shall mean an amount equal to [ *** ] of the Agreement Product, provided that if the [ *** ] the Agreement Product in the Territory [ *** ] then the Formula Price shall mean an amount equal to [ *** ] of the Agreement Product [ *** ]. "Improved Agreement Product(s)" shall mean (i) any modification of the Agreement Product (made entirely from hylan B) regarding the formulation of hylan B in the ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 49 -3- Agreement Product, that is changes of concentration of the polymer or other changes in the Agreement Product Specifications, whether or not requiring new regulatory approval in the EU Countries or in the United States, and (ii) any modifications or changes related to the packaging of the Agreement Product, including the syringe used, mode of application or dosage. "Incremental Royalties" shall mean that term as defined in Section 8.2. "Initial Term" shall mean that term as defined in Section 3.2. "International Agreement" means the Distribution Agreement between Biomatrix and Distributor, dated as of the date hereof, relating to the sale of the Agreement Product in the EU Countries, Switzerland, Norway, Liechtenstein, Iceland, Australia, New Zealand, Canada, Israel, Argentina, Mexico, Chile and Brazil. "International Territory" shall mean, collectively, the EU Countries, Switzerland, Norway, Liechtenstein, Iceland, Australia, New Zealand and Japan, Israel, Argentina, Brazil, Chile, Mexico and Canada. "Launch" shall mean the commencement by the Distributor of sales of the Agreement Product in commercial quantities in the Territory for use in the Territory. "Minimum Price" shall mean an amount equal to [ *** ] for each Treatment Syringe, [ *** ] then the Minimum Price payable [ *** ] Agreement Years immediately following such [ *** ] shall equal , and [ *** ] Agreement Years following such [ *** ] shall equal [ *** ] for each Treatment Syringe. "Net Retail Sales" shall mean, with respect to sales of a Dermal Tissue Augmentation Product in the Territory, the aggregate gross price invoiced for retail sales of such product during a period in such country to unaffiliated third-party purchasers [ *** ] It is Biomatrix's understanding that the foregoing definition is consistent with how the Distributor reports its sales in its audited financial statements. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 50 -4- "New Products" shall mean [ *** ] "Patents" shall mean Letters Patent or similar statutory rights relating to any Agreement Product and any Improved Agreement Product(s) (including any continuation-in-part, continuation or division thereof or substitute thereof), and patent applications which are pending as of the Effective Date, in each case as set forth in Exhibit C, together with any supplementary or complementary protection certificates therefor if and when such are granted. "Person" shall mean an individual, a corporation, limited liability company, a partnership, a trust, an unincorporated organization or a government or any agency or political subdivision thereof. "Product License Approvals" shall mean those regulatory approvals required for the importation, promotion, marketing and sale of the Agreement Product and any Improved Agreement Product(s) in the United States (including any reimbursement or pricing approvals). "Region" shall mean any one of the following countries or groups of countries: (i) the United Kingdom and Ireland; (ii) Germany; (iii) France; (iv) Italy; (v) Spain and Portugal; (vi) Denmark, Finland, Sweden, Norway and Iceland; (vii) Belgium, Luxembourg and the Netherlands; (viii) Japan; (ix) Austria, Liechtenstein and Switzerland; (x) Australia and New Zealand; (xi) Greece and Israel; and (xii) Argentina, (xiii) Brazil, (xiv) Chile, (xv) Mexico; (xvi) Canada, (xvii) Columbia, (xviii) Cyprus, (xix) Lebanon, and (xx) Turkey. "Supply Forecast" shall mean that term as defined in Section 7.3(b). "Territory" shall mean the United States. "Trademarks" shall mean (i) the trademark Hylaform(R), the details of which are described in Exhibit C, and (ii) any other trademarks, as may be agreed upon in writing from time to time by the parties hereto for use by the Distributor in connection with the promotion, marketing and sale of the Agreement Product and any Improved Agreement Product(s) under this Agreement. "Treatment Syringe" shall mean a ready-for-injection 1.0cc syringe of the Agreement Product. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 51 -5- "United States Consumer Price Index" shall mean the Consumer Price Index, All Items, United States, as published by the Bureau of Labor Statistics. 1.2. In this Agreement, unless the context otherwise requires: (a) clause headings are inserted for convenience of reference only and have no legal effect; (b) references to sections, exhibits and schedules are to be construed as references to the sections of, and exhibits and schedules to, this Agreement and references to this Agreement include its exhibits and schedules. (c) references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended, varied, substituted, supplemented, restated or novated in accordance with the terms thereof or, as the case may be, with the agreement of the relevant parties and (where such consent is, by the terms of this Agreement or the relevant document, required to be obtained as a condition to such amendment being permitted) the prior written consent of Biomatrix; (d) words importing the plural shall include the singular and vice versa; (e) references to a person shall be construed as including references to an individual, firm, consortium, company, corporation, unincorporated body of persons or any State or any agency thereof; and (f) references to statutory provisions shall be construed as references to those provisions as replaced, amended or re-enacted from time to time. 2. APPOINTMENT; BEST EFFORTS; EXCLUSIVITY. 2.1. Appointment. (a) Subject to the terms and conditions hereinafter set forth, Biomatrix hereby appoints the Distributor as its exclusive [ *** ] (except to the extent set forth in Section 2.3) distributor for the promotion, marketing, sale and distribution within the Territory of the Agreement Product and any Improved Agreement Product(s) supplied by Biomatrix or an Affiliate of Biomatrix to the Distributor pursuant to this Agreement. Such appointment does not include the right to sublicense or appoint subdistributors except to an Affiliate of Distributor without the approval of Biomatrix; (and only for such time as such an Affiliate remains an Affiliate of Distributor). (b) Except as specifically provided to the contrary herein, the foregoing appointment shall not be construed, by implication or otherwise, (i) to effect any sale of proprietary Biomatrix technology, (ii) to grant any license relating to Biomatrix's proprietary ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 52 -6- methods of formulating, fabricating and manufacturing the Agreement Product or any Improved Agreement Product(s), or (iii) to grant the Distributor any rights in or to any proprietary technology or Patents or Trademarks of Biomatrix. 2.2. Acceptance of Obligations; Best Efforts. The Distributor hereby accepts the appointment described in Section 2.1 and hereby agrees to use its best efforts at all times during the term hereof to promote, market, sell and distribute the Agreement Product and any Improved Agreement Product(s) in the Territory. [ *** ] 2.3. Conversion to Non-Exclusive Distributorship. In the event that (i) in any Agreement Year after and including the third Agreement Year or (ii) from, after and including the first year of the Distributor acquiring and/or commercializing a New Product pursuant to Section 10.1(b) (and so long as (i) no force majeure condition of Distributor exists at such time pursuant to Section 20, (ii) Biomatrix has met its supply obligations under Section 7.4 and (iii) Distributor is able to lawfully sell the Agreement Product and any Improved Agreement Product(s) in the Territory) the Distributor's Net Retail Sales of the Agreement Product and any Improved Agreement Product(s) in the Territory, comprise less than [ *** ] of its Net Retail Sales of [ *** ] including the Agreement Product and any Improved Agreement Product(s), [ *** ] within [ *** ] days after receipt of any such notice from Biomatrix, a shortfall of [ *** ] with respect to the Territory for an Agreement Year by [ *** ] Biomatrix shall have the right to distribute the Agreement Product and Improved Agreement Product and/or engage another distributor for the Territory. From and after ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 53 -7- the date of a conversion to a non-exclusive distribution arrangement within the Territory, the Distributor shall lose its rights hereunder to promote, market, sell and distribute within the Territory any Improved Agreement Product(s) commercialized on or after such date. Notwithstanding the foregoing, the Distributor shall retain the exclusive right to use all trademarks under which the Distributor launched the Agreement Product or any Improved Agreement Product(s) in the Territory. 3. TERM AND TERMINATION. 3.1. Effective Date. This Agreement shall take effect as of the Effective Date. 3.2. Term. (a) Unless this Agreement is sooner terminated in accordance with the provisions of this Agreement, the term of the appointment hereunder for shall commence on the first day of the first Agreement Year and shall end on the last day of the tenth (10th) Agreement Year (the "Initial Term"). (b) Unless this Agreement is sooner terminated in accordance with the provisions of this Agreement, the appointment of the Distributor hereunder as exclusive distributor of the Agreement Product shall be renewable by the Distributor, at its option, upon written notice to Biomatrix received at least ninety (90) days prior to the end of the Initial Term, for an additional consecutive term of five (5) years following the date of expiration of the Initial Term, provided that the Distributor shall only be entitled to exercise such renewal option if as of the date of expiration of the Initial Term the Distributor is not in material breach of any of its obligations under this Agreement. Thereafter, the appointment of the Distributor as exclusive distributor of the Agreement Product shall be renewable upon the expiration of such additional five (5) year term, upon written notice to Biomatrix received at least ninety (90) days prior to the end of such term for one additional consecutive renewal term of five (5) years provided that, as of the date of expiration of the first renewal term, the Distributor is not in material breach of any of its obligations under this Agreement. For the avoidance of any doubt, Distributor's rights with respect to any Improved Agreement Product(s) commercialized after the tenth anniversary of the Effective Date shall terminate upon the tenth anniversary of the Effective Date. Subject to the terms of this Agreement, Distributor shall have the right to continue to sell the Agreement Product and any Improved Agreement Products it is then currently selling. (c) This Agreement may be terminated by either party, by written notice to the other party, in the event that (i) a mutual decision not to Launch the Agreement Product in such country is reached or (ii) a Launch is not commenced within the time period set forth on Exhibit B. (d) In the event that in any Agreement Year after and including the third Agreement Year (and so long as (i) no force majeure condition of Distributor exists at such time pursuant to Section 20, (ii) Biomatrix has met its supply obligations under Section 7.4, ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 54 -8- and (iii) Distributor is able to lawfully sell the Agreement Product and any Improved Agreement Product(s) in the Territory), the Distributor's Net Retail Sales of the Agreement Product and any Improved Agreement Product(s) in the Territory comprise less than seven and one-half percent (7-1/2%) of its Net Retail Sales in the Territory of all Dermal Tissue Augmentation Products, including the Agreement Product and any Improved Agreement Product(s), the Distributor's distribution rights (including, without limitation, its right to use the Trademarks) under this Agreement for the Agreement Product and any Improved Agreement Product(s) in the Territory shall terminate upon ninety (90) days notice, but in any event not later than one hundred and twenty (120) days after the end of the applicable Agreement Year, at the election of Biomatrix; provided, however, that Distributor may cure a shortfall of Net Retail Sales for an Agreement Year by paying to Biomatrix an amount equal to twenty-five percent (25%) of the total dollar amount of such shortfall of Net Retail Sales in such Agreement Year; further provided that, at Biomatrix's election, Biomatrix may refuse to allow such cure if Distributor has taken advantage of such cure provision in each of the two preceding Agreement Years. By way of example, if Distributor's Net Retail Sales of all Dermal Tissue Augmentation Products in the Territory in a given Agreement Year were $10,000, and Distributor's Net Retail Sales of the Agreement Product in the Territory in such Agreement Year were $500, then Distributor could cure such shortfall and prevent termination by paying Biomatrix $62.50. Upon any such termination of the Distributor's distribution rights in the Territory, the Distributor's obligation to pay any royalties pursuant to Sections 8.1 and 8.2 for any sales in the Territory after such termination shall cease, but the Distributor shall remain obligated to pay all such royalties for sales in the Territory accrued prior to such termination. (e) Notwithstanding any other provision of this Agreement to the contrary, Biomatrix may terminate this Agreement at any time prior to receipt of the Approved Letter (as defined hereafter) from the U.S. Food and Drug Administration if Distributor is in material breach of the International Agreement, which material breach has not been cured within thirty (30) days after written notice of such breach is received by Distributor. The parties expressly agree that Distributor's failure to meet or adhere to the launch schedule for the Agreement Product for each country as set forth in the International Agreement shall be deemed a material breach of the International Agreement except to the extent that Distributor's failure to meet such launch schedule is due to (i) Biomatrix's failure to meet its supply obligations under the International Agreement, (ii) a force majeure condition of the Distributor, or (iii) it being unlawful for the Distributor to sell the Agreement Product or any Improved Agreement Product in the Territory, provided that such unlawfulness is not the result of any act or failure to act of the Distributor. (f) Notwithstanding any other provision in this Agreement to the contrary, the Distributor may terminate this Agreement upon notice to Biomatrix of the Distributor's decision not to pay the fee called for in Section 7.1(b). ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 55 -9- 3.3. Inventory. (a) Upon termination of this Agreement for any reason, Biomatrix shall have the right (but not the obligation) to repurchase all or part of the inventory of the Agreement Product and any Improved Agreement Product(s) held by the Distributor or its Affiliates. (b) The price for inventory to be repurchased by Biomatrix pursuant to Section 3.3(a) above shall be the landed cost thereof actually paid by the Distributor to Biomatrix. With respect to any quantities not repurchased by Biomatrix, the Distributor shall have the right to sell such inventory of the Agreement Product and any Improved Agreement Product(s), in its usual and customary manner, in the ordinary course of business, for a period of six (6) months following termination of this Agreement and notwithstanding such termination the terms and conditions of this Agreement shall apply to such sales. 3.4. Insolvency. This Agreement may be immediately terminated by either party, upon giving written notice to the other party, in the event that the other party shall become insolvent or be declared bankrupt by a court of competent jurisdiction or shall be the subject of any reorganization (other than a corporate reorganization effected in the ordinary course of business and not arising out of any insolvency) or winding up, receivership or dissolution, bankruptcy or liquidation proceeding, or any proceeding or action similar to one or more of the above, in which case termination shall be effective upon such written notice. The failure of either party to give notice of termination upon obtaining knowledge of any such event shall not be interpreted as a waiver of such party's rights under this Section 3.4, and such party reserves the right to exercise any such rights at any time after the occurrence of any such event. 3.5. Breach. This Agreement may be terminated by either party if the other party shall breach any of its payment obligations hereunder or if Distributor shall commit a material breach of any of its warranties, covenants, conditions, obligations or agreements contained herein, provided that such breach shall continue for a period of thirty (30) days (ten (10) days in the event that such breach is the failure of the Distributor to pay the fee called for in Section 7.1(b)) after written notice thereof and provided further that such termination shall be immediately effective upon further written notice to that effect to the breaching party after its failure to cure such breach within such applicable notice period. For avoidance of doubt, the parties agree that if a Launch is not reached within thirty days after the time period set forth on Exhibit B, then either party may terminate this Agreement (provided that such failure to reach a Launch is not due to (i) a force majeure condition of the Distributor, (ii) Biomatrix's failure to meet its supply obligations under Section 7.4, or (iii) it being unlawful for the Distributor to sell the Agreement Product or any Improved Agreement Product in the Territory, provided that such unlawfulness is not the result of any act or failure to act of the Distributor). 3.6. Certain Rights Upon Termination. Upon termination of this Agreement for any reason whatsoever, Biomatrix shall have the following rights: 56 -10- (a) Biomatrix shall have the unrestricted right to review, access, use and permit others to review, access and use, either directly or by cross-reference or incorporation or otherwise, all information, data, investigations, preclinical and clinical protocols, marketing information disseminated by Distributor publicly to customers and patients and all information required to be provided to Biomatrix by law, information relating to laboratory, animal and human studies, and related regulatory approvals pertaining to the Agreement Product or any Improved Agreement Product(s) (the "Information") which are possessed or controlled by the Distributor or any of its Affiliates, or to which the Distributor or any of its Affiliates has a right to review, access or use. The Distributor unconditionally agrees promptly to take any action and to execute and deliver to Biomatrix any documents or instruments reasonably requested by Biomatrix to permit Biomatrix to make full use of such unrestricted right. (b) Further, Biomatrix shall have exclusive ownership rights to the Trademarks and to all other product specific logos, slogans and other intangibles used by the Distributor solely in association with the independent sale of the Agreement Product and any Improved Agreement Product(s) (including all registrations relating thereto) possessed or controlled by the Distributor or any of its Affiliates, and the Distributor unconditionally agrees, subject to the provisions of Section 3.3(b), (i) immediately upon termination to cease using the Trademarks and any such logos, slogans, and marketing rights of Biomatrix or any imitations thereof and (ii) immediately to execute and deliver to Biomatrix any documents or instruments reasonably requested by Biomatrix to give full effect to the provisions of this Section 3.6. (c) In addition, the Distributor unconditionally agrees, subject to the provisions of Section 3.3(b), that it shall, upon the request of Biomatrix, immediately inform all relevant regulatory authorities that the Distributor is no longer a distributor of the Agreement Product or the Improved Agreement Product(s) and shall take all action and execute and deliver all documents and instruments necessary in order to transfer to the fullest extent permitted under applicable law all registrations and Product License Approvals, or applications therefor, for the Agreement Product or any Improved Agreement Product(s) to Biomatrix or any Person nominated by Biomatrix. 3.7. Effects of Termination. (a) Upon termination of this Agreement for any reason, the Distributor shall immediately discontinue making any representations regarding its status as a distributor for Biomatrix and shall immediately cease conducting any activities with respect to the marketing, promotion, sale or distribution of the Agreement Product and any Improved Agreement Product(s), provided, however, that the Distributor shall be permitted to sell inventory not repurchased by Biomatrix in accordance with Section 3.3. (b) Termination of this Agreement shall not affect obligations of either party that may have accrued prior to the effective date of termination. Subject to Clause 3.8 below, termination of this Agreement shall be in addition to, and shall not be exclusive of or 57 -11- prejudicial to, any other grounds for termination or rights or remedies at law or in equity which either party may have on account of any default of the other party. 3.8. Waiver. The Distributor hereby waives, to the extent it is able to do so under the laws of the United States and other applicable law, any statutory rights it may have or acquire in respect of the termination of the relationship established hereby pursuant to the terms hereof, and agrees that the rights available to it hereunder in the event of such termination are adequate and reflect the agreement of the parties. The Distributor shall not have any right to claim any indemnity for goodwill or lost profits or any damages arising from the rightful termination of this Agreement in accordance with the terms hereof. 4. PAYMENTS. All payments hereunder shall be made in Dollars. Payments to Biomatrix shall be wired to an account designated by Biomatrix and the costs of any such remittance shall be borne by the Distributor. 5. WITHHOLDING. All payments to be made by the Distributor under this Agreement shall be made in full, free and clear of and without any deduction of or withholding for or on account of any taxes levied in any country of the Territory or elsewhere; provided that if the Distributor shall be required by law to make any deduction or withholding from any payment to Biomatrix then: (a) the Distributor shall ensure that such deduction or withholding does not exceed the minimum legal liability therefor; and (b) not later than five (5) days before each deduction or withholding of any taxes, the Distributor shall forward to Biomatrix such documentary evidence as may be required by Biomatrix in respect of the proposed deduction, withholding or payment; and (c) prior to any deduction or withholding the parties shall attempt in good faith to agree upon revised mutually acceptable pricing and/or payment terms. 6. TRADEMARKS; AGREEMENT PRODUCT MARKING; PROMOTIONAL INFORMATION. 6.1. Trademarks. Subject to the provisions of Section 3.6, Biomatrix hereby licenses to the Distributor the right to use, and hereby requires solely in association with the independent sale by the Distributor of the Agreement Product and any Improved Agreement Products the use of, the Trademarks in the Territory during the term of this Agreement. The Distributor warrants that it shall not use any of the Trademarks at any time outside the Territory or use any of the Trademarks for any products other than the Agreement Product and any Improved Agreement Product(s) within the Territory. The Distributor shall not use a trademark or other mark (other than a Trademark) in connection with its distribution of the Agreement Product and any Improved Agreement Products unless and until it has been agreed upon in writing by each of the parties and become a Trademark as defined herein. Biomatrix shall prosecute, maintain and defend the Trademarks throughout the Term of this Agreement in the Territory. The parties shall execute a short form Trademark assignment 58 -12- agreement to the extent that it is necessary to record the Trademark license under this Section 6.1. 6.2. Termination of Right to Use Trademarks. Subject to the sell-out right of Section 3.3(b) and except as otherwise provided in Section 3.6, upon termination of this Agreement, the license to use the Trademarks in the Territory shall terminate, and the Distributor unconditionally agrees promptly to take all necessary action and execute and deliver to Biomatrix all necessary documents and instruments to remove the Distributor as a registered user and/or a recorded licensee of the Trademarks. In the event that the Distributor fails promptly upon written request by Biomatrix to comply with any of its agreements in the preceding sentence of this Section 6.2, the Distributor hereby irrevocably consents to Biomatrix's taking any action necessary to give effect to such agreements. 6.3. Notice. Each party hereto agrees promptly to notify the other in writing of any infringements or imitations of the Trademarks by third parties which may come to its attention. 6.4. Labelling and Promotional Materials; Approved Use of Product. (a) The Distributor shall provide Biomatrix with labelling masters, instructions, specifications and copies of all marketing, labelling and promotional material it intends to use relating to the Agreement Product and any Improved Agreement Product(s). All such labelling, packaging and promotional material shall be consistent with the relevant Product License Approvals and all labelling and packaging materials shall be reviewed by Biomatrix and shall be subject to its written approval prior to use, such approval not to be unreasonably withheld. Biomatrix shall communicate its acceptance or rejection of such labelling packaging and any major promotional materials that include claims or items impacting regulatory approvals within [ *** ] of its receipt thereof and if no such communication is received by Distributor from Biomtrix within such [ *** ] Biomatrix shall be deemed to have accepted. Distributor shall provide Biomatrix with all other major promotional materials for launches and subsequent promotions within a reasonable time prior to their use in order to allow Biomatrix to comment on such materials. Distributor shall provide Biomatrix with copies of all other promotional materials at or prior to their use. (b) The Distributor agrees that its promotion, marketing, sale and distribution of the Agreement Product and any Improved Agreement Product(s) in the Territory, and the promotional materials and labelling used in connection therewith, shall be strictly in accordance with the approved use of the Agreement Product and any Improved Agreement Product(s) as specified in the Product License Approvals and as further provided in this Agreement. Specifically, for purposes of this Agreement, the Distributor agrees [ *** ] or unless agreed to in writing by Biomatrix. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 59 -13- 6.5. Legend. Subject to applicable laws and regulations in the Territory, all relevant packaging and promotional material for the Agreement Product and any Improved Agreement Product(s) used or sold by the Distributor shall contain (i) all applicable markings needed to keep the Trademarks enforceable throughout the Territory as reasonably specified by Biomatrix to the Distributor and (ii) a legend which shall be displayed in a reasonably conspicuous manner on all packaging of such Agreement Product and any Improved Agreement Product(s) containing the corporate identification logo of Biomatrix and indicating that such product has been developed and manufactured by Biomatrix, Inc., and its affiliates, 65 Railroad Avenue, Ridgefield, New Jersey, 07657 U.S.A. 6.6. Promotional Support. Biomatrix and the Distributor shall provide to each other on an ongoing basis and without charge (to the extent not prevented by law or contract from doing so) all medical information relating to the Agreement Product and any Improved Agreement Product(s) (including summary data from studies, clinical trials and the like as well as information regarding adverse events associated with the use of the Agreement Product), the proceedings of all symposia on the Agreement Product and any Improved Agreement Product(s) and all promotional information that is available to such party relating to the Agreement Product and any Improved Agreement Product(s). In addition, Biomatrix and the Distributor shall provide each other with access to such primary data and information in its possession as the other may reasonably request regarding the results of the studies contained in such summary data referred to above. 6.7 Joint Coordinating Committee. Upon the execution of this Agreement, Biomatrix and the Distributor shall establish a joint coordinating committee (the "Committee") to review all matters relating to product labelling, product claims, regulatory matters or clinical trials. The Committee shall consist of an equal number, not to [ *** ], of voting representatives from each of Biomatrix and the Distributor and shall meet [ *** ]. In the event of a dispute between representatives of Biomatrix and the Distributor on the Committee, a senior representative of each such party shall be appointed to resolve such dispute, and in the event such senior representatives are unable to resolve the matter, Biomatrix's view shall prevail over the Distributor's. 6.8. Recalls of the Agreement Product. (a) If either party in good faith determines that a recall of the Agreement Product in the Territory is warranted, such party shall immediately notify the other party in writing and shall advise such other party of the reasons underlying its determination that a recall is warranted. The parties shall consult with each other as to any action to be taken in regard to such a recall, but in any event if after consultations either party in good faith still believes that such a recall should be undertaken, the parties shall cooperate in carrying out such recall. (b) Except as otherwise provided in (c) below, in the event of a recall of the Agreement Product, Biomatrix shall correct any deficiency relating to its manufacturing, ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 60 -14- packaging, testing, labelling, storing or handling of the Agreement Product for which it is responsible, if applicable, and shall at its cost replace the Agreement Product recalled. (c) Biomatrix shall reimburse Distributor for all direct costs and expenses (including without limitation shipping, quality control testing and notification costs) incurred by Distributor and its Affiliates as a result of any recall, except where such recall (i) is the result of the failure of Distributor or its Affiliates to comply with their obligations under this Agreement and/or (ii) was opposed by Biomatrix and proved to be unwarranted, in which case Distributor shall reimburse Biomatrix for all direct costs and expenses (including without limitation shipping, quality control testing and notification costs) incurred by Biomatrix and its Affiliates as a result of such recall. 6.9 Product Vigilance System. The Distributor shall be responsible for maintaining medical device vigilance systems, as established for the Agreement Product by Biomatrix, and shall promptly provide Biomatrix with notice of all product complaints, including medical complaints. Biomatrix shall be solely responsible for processing, analyzing and, if necessary, reporting medical complaints to regulatory authorities. The Distributor shall provide all necessary support to Biomatrix for carrying out such activities. 7. SUPPLY OF AGREEMENT PRODUCT. 7.1. General; Fee. (a) Biomatrix agrees to sell the Agreement Product and any Improved Agreement Product(s) to the Distributor, on the terms and subject to the conditions set forth herein, for resale by the Distributor within the Territory, and the Distributor shall obtain the Agreement Product and any Improved Agreement Product(s) for resale in the Territory only from Biomatrix or its Affiliates. Biomatrix shall not sell the Agreement Product or any Improved Agreement Product(s) itself or supply or license the manufacture of the Agreement Product or any Improved Agreement Product(s) to any third party for resale within the Territory, provided that Biomatrix's obligations under this sentence shall be subject to (i) applicable law and (ii) the provisions of this Agreement, including Section 2.3. (b) In consideration of the costs and expenses that have been incurred by Biomatrix in connection with the Agreement Product, including, without limitation, the incurrence of costs and expenses of research and development, developing manufacturing capability, prosecuting and maintaining patents and trademarks, obtaining regulatory approvals, conducting clinical trials, making regulatory filings and taking other actions, as well as the legal, general and administrative costs related thereto, the Distributor shall pay to Biomatrix a fee in the amount of seven million Dollars (US$7,000,000) in cash or by wire transfer within ten (10) days after notice to the Distributor by Biomatrix of receipt by Biomatrix of an approval letter (the "Approved Letter") from the United States Food and Drug Administration indicating the approval of the Agreement Product for sale in the United States, with which notice Biomatrix shall deliver a copy of such Approved Letter. Such fee shall not be refundable in whole or part. 61 -15- 7.2. Price; Adjustment; Reports; Payment. (a) The parties shall attempt in good faith to agree in writing, prior to the Launch in each country, upon mutually acceptable supply pricing for the Distributor's purchase of the Agreement Product and any Improved Agreement Product(s), but such pricing in any event shall not be less than the greater of (i) the Minimum Price, or (ii) the Formula Price, except as provided in subsection (b) below. The parties shall attempt in good faith to agree in writing upon mutually acceptable minimum pricing for the Agreement Product in sizes other than the 1.0cc Treatment Syringe and for any Improved Agreement Product(s). For any syringe with a fill volume of greater than one cc (1cc), the Minimum Price shall be the amount calculated as [ *** ] plus the dollar amount which equals [ *** ] of such product with a larger fill volume [ *** ] of the one cc (1cc) syringe. In the event that Biomatrix's actual incremental Cost of Goods Sold exceeds such dollar amount, the Minimum Price shall be the amount calculated as [ *** ] Subject to the general commercial availability of appropriate syringes for the Agreement Product, the [ *** ] for a one and one-half (1.5)cc syringe, [ *** ] for a two (2.0)cc syringe, and [ *** ] for a two and one-half (2.5)cc syringe. (b) If Biomatrix has appointed a new distributor in the Territory pursuant to Section 2.3 and the Distributor has the right to distribute the Agreement Product and any Improved Agreement Product(s) in the Territory, the supply pricing for the Distributor's purchase of the Agreement Product and any Improved Agreement Product(s) for resale in the Territory [ *** ] (c) The price initially payable by the Distributor to Biomatrix for each unit of the Agreement Product during each month of each Agreement Year shall be the Minimum Price (subject to adjustment at the close of each applicable Contract Quarter and Agreement Year in accordance with Section 7.2(e) below). (d) Within [ *** ] after the end of each month of each Agreement Year, the Formula Price for the Agreement Product shall be calculated, and, to the extent that such Formula Price exceeds the applicable Minimum Price for such Agreement Year, an adjustment resulting from the [ *** ] with respect to all units of the Agreement Product sold by the Distributor in the Territory during such monthly ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 62 -16- period, such payment to be made [ *** ] after the end of the month following such monthly period. (e) Within [ *** ] after the end of each Contract Quarter and Agreement Year, the Formula Price for the Agreement Product shall be calculated and an adjustment resulting from the [ *** ] as appropriate, to the other party with respect to all units of the Agreement Product sold by the Distributor in the Territory during such Contract Quarter and Agreement Year, such payment to be made within [ *** ] after the end of such [ *** ] period following the end of such Contract Quarter and Agreement Year. The price calculated annually in this manner shall be the final price payable for all units of the Agreement Product sold by the Distributor or any Affiliate during such Agreement Year. For the avoidance of doubt, the aggregate amount payable by Distributor for the Agreement Product(s) and any Improved Agreement Product(s) for any Agreement Year shall in no event be lower than the Minimum Price multiplied by the total units sold in such Agreement Year in the Territory. (f) Within [ *** ] following the end of each calendar month in each Agreement Year, the Distributor shall submit to Biomatrix written reports detailing the units and value of the Distributor's and its Affiliates' Net Retail Sales and aggregate number of units sold of the Agreement Product and any Improved Agreement Product(s) in the Territory during the immediately preceding calendar month. (g) Within [ *** ] following the end of each Agreement Year, the Distributor shall submit to Biomatrix written reports detailing the Distributor's and its Affiliates' sales of the Agreement Product and any Improved Agreement Product(s) during the immediately preceding Agreement Year, which reports shall contain the Net Retail Sales of the Agreement Product and any Improved Agreement Product(s) in the Territory, and the aggregate number of units of the Agreement Product and any Improved Agreement Product(s) sold in the Territory during the applicable Agreement Year. (h) All purchases of the Agreement Product and any Improved Agreement Product(s) hereunder shall be billed and paid in Dollars within [ *** ] after the later of the date of delivery or the date of the Distributor's receipt of the invoice for each shipment of same to the Distributor. 7.3. Sales and Supply Forecasts; Accounts. (a) Exhibit D, which shall be supplied by the Distributor within [ *** ] of the Distributor's receipt of notice from Biomatrix of [ *** ] shall set forth a sales forecast of units of the Agreement Product in the Territory for the first Agreement Year. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 63 -17- (b) Within [ *** ] after the end of each month of each Agreement Year in the Territory, the Distributor shall provide to Biomatrix an updated rolling twelve (12) month monthly supply forecast for all unit sizes of the Agreement Product. Each such supply forecast described in this subsection (b) is referred to herein as a "Supply Forecast"; provided, that updated Supply Forecasts shall not vary (whether up or down) from the immediately preceding Supply Forecast by more than [ *** ] with respect to each month covered by such preceding Supply Forecast. (c) The Distributor shall maintain books of account with respect to its sales of the Agreement Product in the Territory. Biomatrix shall have the right, not more than once during each calendar year, to have an independent accountant selected and retained by Biomatrix (reasonably acceptable to Distributor, provided that any "big six" accounting firm shall be deemed reasonable) to inspect and examine such books of the Distributor during regular business hours for the purpose of verifying the statements of the aggregate Net Retail Sales of all Dermal Tissue Augmentation Products for all purposes hereunder, including verification of Formula Price and the royalties described in Section 8. The cost of each such audit shall be borne by Biomatrix unless a material error is discovered in the course of such audit, in which case the cost shall be borne by the Distributor. For purposes of this Section 7.3(d), a material error shall be defined as an understatement of five percent (5%) or more of the aggregate amount owed to Biomatrix with respect to sales of Dermal Tissue Augmentation Products in the Territory. Any additional payments required as a result of such inspection and examination shall be immediately paid to Biomatrix and shall bear interest from the date such amount would otherwise have been paid until the date of actual payment at the rate per annum set forth in Section 20. Such independent accounting firm shall conduct such inspections and examinations under conditions of confidentiality. 7.4. Shipment and Delivery; Packaging; Shelf Life. (a) Biomatrix or an Affiliate of Biomatrix shall arrange for shipment to the Distributor of the Agreement Product and any Improved Agreement Product(s) ordered by the Distributor [ *** ] The Distributor shall pay all customs duties, sales taxes and other governmental charges relating to the Agreement Product and any Improved Agreement Product(s), and shall be solely responsible for clearing such products through customs throughout the Territory. (b) The Distributor shall submit a firm purchase order setting forth the quantities, delivery date and shipping instructions with respect to each shipment of the Agreement Product and any Improved Agreement Product(s), such purchase orders to be received by Biomatrix at least [ *** ] prior to the requested delivery date; provided that the Distributor shall not submit any purchase order for fewer than [ *** ] units of the Agreement Product or the Improved Agreement Product(s) (although multiple delivery site for purchase orders shall be allowed). Biomatrix shall have no obligation to supply Distributor with quantities of the Agreement Product(s) and Improved Agreement Product(s) in excess of the amounts in the then current Supply Forecast for the relevant monthly period. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 64 -18- (c) Each unit of the Agreement Product and any Improved Agreement Products shipped to the Distributor shall have, as of the time of delivery, a remaining shelf life of no less than [ *** ] less than the maximum shelf life for such product, as approved by the U.S. Food and Drug Administration. Biomatrix shall continually use its best efforts at all times during the term hereof to lengthen to [ *** ] the shelf life of the Agreement Product and any Improved Agreement Products to the extent supported by stability data. Biomatrix' "best efforts" in this section shall mean that Biomatrix shall use such methods, exercise such degree of effort and diligence, and adhere to such standards as are commercially reasonable. 7.5. Title. Legal title to all quantities of the Agreement Product and any Improved Agreement Product(s) sold hereunder shall remain in Biomatrix until delivery of the Agreement Product and any Improved Agreement Product(s) to Distributor or its agent and acceptance thereof, and upon such delivery and acceptance the title to such Agreement Product and any Improved Agreement Product(s) shall, without further action, be transferred to and vested in the Distributor. 7.6. Risk of Loss. Biomatrix shall bear all risk of loss of, or damage to, all units of the Agreement Product and any Improved Agreement Product(s) to the extent the same is in its possession or the possession of its Affiliates, nominees or agents. The Distributor shall bear all risk of loss of, or damage to, all units of the Agreement Product and any Improved Agreement Product(s) after delivery to a common carrier for shipment to the Distributor in accordance with Section 7.4. 7.7. Acceptance. [ *** ]All units of the Agreement Product and Improved Agreement Products delivered to Distributor pursuant to this Agreement shall be [ *** ] the specification listed in Exhibit A. Any non-conformity which arises after acceptance by Distributor directly associated with Product specification shall be the responsibility of Biomatrix unless such non-conformity is due to improper storage conditions subsequent to delivery of the Agreement Product. All other non-conformities of the Agreement Product shall be the responsibility of the Distributor. Biomatrix and the Distributor agree to consult with each other in order to resolve the discrepancy between each other's determinations. If such consultation does not resolve the discrepancy, the parties agree to nominate a reputable independent laboratory, acceptable to both parties, that shall carry out tests on representative samples taken from such shipment, and the results of such tests shall be binding on the ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 65 -19- parties. Biomatrix shall at its expense replace any such shipment to the extent that it does not conform to the Agreement Product Specifications. All defective units of the Agreement Product or any Improved Agreement Product(s) shall be returned to Biomatrix at the address set forth in Section 23 of this Agreement, accompanied or preceded by a reasonably detailed statement of the claimed defect or non-conformity and proof of date of purchase, and packed and shipped according to instructions provided by Biomatrix. The shipping costs of any such returned units shall be borne by Biomatrix, unless such units are determined not to be defective under the terms of this Agreement, in which case such shipping costs shall be borne by the Distributor. 7.8. Purchase Orders. The provisions of this Agreement shall prevail over any inconsistent statement or provisions contained in any document related to this Agreement passing between the parties hereto including, but not limited to, any purchase order, acknowledgment, confirmation or notice. 7.9. Limited Warranty; Limitation on Liability. Biomatrix represents and warrants that the Agreement Product and any Improved Agreement Product(s) supplied to the Distributor hereunder shall: (a) conform to the Agreement Product Specifications; and (b) be manufactured, labelled, packaged and tested (while in the possession or control of Biomatrix) in accordance with the applicable Product License Approvals therefor and all applicable laws and regulations in the Territory relating to the manufacture, labelling, packaging and testing of the Agreement Product, and shall be manufactured for use for the indications specified in the applicable Product License Approvals therefor. THE FOREGOING WARRANTY IS THE SOLE AND EXCLUSIVE WARRANTY GIVEN BY BIOMATRIX WITH RESPECT TO THE AGREEMENT PRODUCT, AND BIOMATRIX GIVES AND MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, OTHER THAN THE FOREGOING. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO IMPLIED WARRANTY OF MERCHANTABILITY, NO IMPLIED WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE, AND NO IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE IS GIVEN OR MADE BY BIOMATRIX OR SHALL ARISE BY OR IN CONNECTION WITH ANY SALE OR PROVISION OF THE AGREEMENT PRODUCT BY BIOMATRIX, OR THE DISTRIBUTOR'S (OR ITS AFFILIATES') USE OR SALE OF THE AGREEMENT PRODUCT, OR BIOMATRIX'S AND/OR THE DISTRIBUTOR'S (OR ITS AFFILIATES') CONDUCT IN RELATION THERETO OR TO EACH OTHER. NO REPRESENTATIVE OF BIOMATRIX IS AUTHORIZED TO GIVE OR MAKE ANY OTHER REPRESENTATION OR WARRANTY OR TO MODIFY THE FOREGOING WARRANTY IN ANY WAY. 66 -20- The limited warranty set forth in this Section 7.9 does not apply to any non-conformity of the Agreement Product or any Improved Agreement Product(s) resulting from (a) repair or alteration by any party other than Biomatrix or its Affiliates, (b) misuse, negligence, abuse, accident, mishandling or storage in an improper environment by any party other than Biomatrix or its Affiliates, or (c) use, handling, storage or maintenance other than in accordance with instructions and recommendations provided by Biomatrix or its Affiliates. Biomatrix's obligation with respect to units of the Agreement Product and any Improved Agreement Product(s) which do not meet the warranty contained herein is limited to replacement of such units of the Agreement Product or Improved Agreement Product(s) as applicable, provided that such units are returned to Biomatrix accompanied by a reasonably detailed statement of the claimed defect or non-conformity and proof of purchase, and packed and shipped according to instructions provided by Biomatrix, and only if, upon examination by Biomatrix, such units of the Agreement Product or the Improved Agreement Product(s) are determined to have been defective under the terms of this Agreement. BIOMATRIX's LIABILITY, AND THE EXCLUSIVE REMEDY, IN CONNECTION WITH THE SALE OR USE OF THE AGREEMENT PRODUCT AND ANY IMPROVED AGREEMENT PRODUCT(S) (WHETHER BASED ON CONTRACT, NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY OR ANY OTHER LEGAL THEORY), SHALL BE STRICTLY LIMITED TO BIOMATRIX'S OBLIGATIONS AS SPECIFICALLY AND EXPRESSLY PROVIDED IN THIS SECTION 7.9 AND IN SECTION 9 BELOW. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 7.9 AND IN SECTION 9 BELOW, BIOMATRIX SHALL HAVE NO LIABILITY, OBLIGATION OR RESPONSIBILITY OF ANY KIND, IN ANY WAY OR TO ANY EXTENT, FOR ANY DAMAGES, LOSSES, COSTS, EXPENSES OR LIABILITIES FOR ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE AGREEMENT PRODUCT AND ANY IMPROVED AGREEMENT PRODUCT(S) OR THE PERFORMANCE THEREOF, OR ARISING IN ANY WAY IN CONNECTION WITH THE PURCHASE OR USE OR INABILITY TO USE THE AGREEMENT PRODUCT OR ANY IMPROVED AGREEMENT PRODUCT(S), EVEN IF BIOMATRIX HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WHATSOEVER SHALL BIOMATRIX HAVE ANY LIABILITY, OBLIGATION OR RESPONSIBILITY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING IN ANY WAY IN CONNECTION WITH THE AGREEMENT PRODUCT OR ANY IMPROVED AGREEMENT PRODUCT(S) OR THEIR SALE OR USE. 8. ROYALTY PAYMENTS BY DISTRIBUTOR. 8.1. Royalties for Sales of Dermal Tissue Augmentation Products. The Distributor shall pay to Biomatrix a royalty of [ *** ] of the Net Retail Sales by the ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 67 -21- Distributor and its Affiliates of all Dermal Tissue Augmentation Products (other than sales of the Agreement Product and any Improved Agreement Product(s)) in the Territory, including any countries that are added to the Territory after the Effective Date, [ *** ]. Such royalty shall commence at the earlier of (a) Launch of the Agreement Product in the Territory or (b) the Launch date set forth on Exhibit B; provided that if a the Launch is delayed due to Biomatrix's failure to meet its supply obligations under Section 7.4, due to a force majeure condition of Distributor or if Distributor is not able to lawfully sell the Agreement Product in the Territory, such royalty shall not commence until Biomatrix meets its supply obligations, until Distributor is able to sell the Agreement Product in the Territory, or until such force majeure condition ceases. Such royalty shall be paid by not later than [ *** ] after the end of each Contract Quarter. 8.2. Incremental Royalties. The Distributor shall pay to Biomatrix the following annual royalties (the "Incremental Royalties") on the Distributor's and its Affiliates' total incremental increases in Net Retail Sales of all Dermal Tissue Augmentation Products (including the Agreement Product and any Improved Agreement Product(s)), in the Territory based on the incremental increases, if any, in Net Retail Sales of all Dermal Tissue Augmentation Products in each Agreement Year over a base year amount comprised of Net Retail Sales of Dermal Tissue Augmentation Products in the twelve (12) months immediately preceding the first commercial sale of either the Agreement Product or any Improved Agreement Product(s): ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 68 -22-
Increase in Total Sales Over Base Royalty on Total Year Amount Incremental Sales ----------- ----------------- [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ]
The Distributor's obligation to pay the Incremental Royalties shall cease in the event that the Distributor's rights to sell, distribute, market and promote the Agreement Product and any Improved Agreement Product have become non-exclusive pursuant to Section 2.3 or have terminated pursuant to Sect ion 3.2(d). The Incremental Royalty shall be paid by not later than [ *** ] after the end of each Agreement Year. For the avoidance of doubt, if the Distributor had no sales of any Dermal Tissue Augmentation Products prior to the first commercial sale of either the Agreement Product or any Improved Agreement Product, the Distributor shall be obligated to pay a [ *** ] royalty on Net Retail Sales of all Dermal Tissue Augmentation products sold after such first commercial sale. 9. INDEMNIFICATION; CONFIDENTIALITY; PUBLIC ANNOUNCEMENT 9.1. Indemnification from the Distributor. Subject to the provisions of Section 9.3, the Distributor shall defend, indemnify and hold Biomatrix and its Affiliates and their respective directors, officers, agents and employees harmless from and against any and all liabilities, claims, damages and expenses (including without limitation actual court costs and reasonable attorneys' fees regardless of outcome) resulting from claims of third parties or arising out of: (a) any failure by the Distributor to act in accordance with the terms of this Agreement and/or any applicable laws and regulations in the Territory in connection with the Agreement Product and any Improved Agreement Product(s), including without limitation any unauthorized representations, warranties or guarantees given by the Distributor or its Affiliates; (b) any unauthorized use of an unapproved label on the Agreement Product or any Improved Agreement Product(s); and/or (c) any activities of the Distributor or its Affiliates relating to the promotion, marketing, sale and distribution of the Agreement Product and any Improved Agreement Product(s); provided, however, that upon Biomatrix being advised of any assertions of any such third party claims or suits or upon the bringing or filing of such claims or suits by any third party ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 69 -23- against Biomatrix, Biomatrix will promptly notify the Distributor thereof and Biomatrix may, at its option, permit the Distributor's attorneys to handle and control the defense of such claims or suits at the Distributor's cost and Biomatrix will co-operate with the Distributor in the defense thereof. The parties agree that there shall be no settlements, whether agreed to in court or out of court, without the prior written consent of the indemnifying party. 9.2. Indemnification from Biomatrix. Subject to the provisions of Section 9.3, Biomatrix shall defend, indemnify and hold the Distributor and its Affiliates and their respective directors, officers, agents and employees harmless from and against any and all liabilities, claims, damages and expenses (including without limitation actual court costs and reasonable attorneys' fees regardless of outcome) resulting from claims of third parties arising out of: (a) any failure by Biomatrix to act in accordance with applicable laws and regulations in the Territory in connection with the Agreement Product and any Improved Agreement Product(s) (including changing a jointly agreed upon label without the consent of Distributor); (b) a product or manufacturing defect in the Agreement Product or any Improved Agreement Product(s); and (c) any infringement of the patent rights of third parties resulting from the use or sale of the Agreement Product in the Territory in accordance with this Agreement. provided, however, that upon the Distributor being advised of any assertions of any such third party claims or suits or upon the bringing or filing of such claims or suits by any third party against the Distributor, the Distributor will promptly notify Biomatrix thereof and, at Biomatrix's cost, permit Biomatrix's attorneys to handle and control the defense of such claims or suits and will co-operate with Biomatrix in the defense thereof. The parties agree that there shall be no settlements, whether agreed to in court or out of court, without the prior written consent of the indemnifying party. 9.3. Limitation on Liability. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN SECTIONS 9.1 AND 9.2 ABOVE, OR ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT (INCLUDING THE FAULT, NEGLIGENCE OR STRICT LIABILITY OF EITHER PARTY) SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES OTHER THAN TO THE EXTENT NECESSARY TO REIMBURSE SUCH OTHER PARTY FOR DAMAGES ACTUALLY PAID TO A NON-AFFILIATED THIRD PARTY, PROVIDED THAT SUCH DAMAGES ARE OTHERWISE COVERED BY THE PROVISIONS OF SECTION 9.1 OR SECTION 9.2, AS THE CASE MAY BE. 70 -24- 9.4. Confidential Information. All information acquired by either party (the "Recipient") from the other party or any of its Affiliates (the "Discloser") during the term of this Agreement or prior to the Effective Date, relating directly or indirectly to the present or potential business, operations, corporate, technical or financial situation of the Discloser, or to manufacturing know-how, patents, data, test results, techniques, processes, procedures, raw materials, dealer, supplier and customer lists, pre-clinical and clinical protocols or any improvements thereof of the Discloser ("Confidential Information") is confidential, and shall be held in trust by the Recipient for the exclusive benefit of the Discloser. Unless otherwise agreed to in writing by the Discloser, the Recipient shall not at any time, either during or subsequent to the term of this Agreement, use for itself (other than in accordance with the terms of this Agreement) or any other Person, or disclose or divulge to any Person, other than to those of its employees and advisors and Affiliates who require the same for the purposes hereof and who are bound by the same obligations of confidentiality, non-disclosure and non-use as set forth herein, any Confidential Information or any other confidential or proprietary information of the Discloser of which the Recipient may acquire knowledge; provided, however, that the confidentiality, non-disclosure and non-use provisions contained in this Section 9.4 shall not apply to any information or data to the extent that the Recipient: (a) shall demonstrate by clear and convincing evidence that such information or data is known generally to persons in the trade through no act or omission of the Recipient or any of its Affiliates; (b) is required by any government authority to disclose such information or data, including without limitation for the purposes of obtaining and maintaining any Product License Approvals under this Agreement; or (c) shall demonstrate by its written records was disclosed to or created by it or its Affiliates on a non-confidential basis from a source other than the Discloser or its Affiliates and that such disclosure or creation did not constitute a breach of any applicable confidentiality obligations. Confidential Information shall be immediately returned to the Discloser upon termination of this Agreement, along with any copies, reproductions, digests, abstracts or the like of all or any part thereof in the Recipient's possession or under the Recipient's control, and upon such return any computer entries or the like relating thereto shall, to the extent legally permissible, be destroyed. Such return (and destruction) will not affect the Recipient's obligations hereunder which shall survive indefinitely. Notwithstanding anything herein to the contrary, the provisions of this Section 9.4 shall be subject to Biomatrix's rights under Section 3.6. 9.5. Public Announcement. Except as shall be necessary for governmental notification purposes or to comply with applicable laws and regulations, and except as otherwise agreed to by the parties hereto in writing, the parties agree to keep the existence of 71 -25- this Agreement, and the transactions contemplated hereby, strictly confidential. In the event that a party must file this document or otherwise disclose any of its subject matter pursuant to public filing requirements, such party shall seek confidential treatment of those portions of the Agreement as the parties shall mutually agree upon; provided, however, that the Distributor must provide written notice to Biomatrix no later than June 30, 1996 of those portions of the Agreement for which the Distributor requests confidential treatment. The parties shall agree upon the text of an initial public announcement relating to the transactions contemplated by this Agreement as soon as possible. Any subsequent public announcements regarding this Agreement or the transactions contemplated herein shall also be agreed upon in writing between the parties prior to any release thereof. 10. NEW PRODUCTS. 10.1 [ *** ] Distributor shall not commercialize nor begin the commercialization process with respect to or acquire any New Product anywhere in the International Territory or the United States, either independently or in conjunction with one or more third parties, unless and until the following conditions have been satisfied: (a) Distributor has made a commercially reasonable written offer to Biomatrix to participate with Distributor in the development and commercialization of such New Product; and (b) Biomatrix has failed to accept such written offer within [ *** ] of its receipt of such offer. In the event that Biomatrix fails to accept any written offer made by Distributor pursuant to this Section 10.1 within [ *** ] of Biomatrix's receipt thereof, then Distributor, subject to the terms of this Agreement, shall have the right to independently or with other parties develop and/or commercialize any New Product to which such written offer relates; provided, however, that any such New Product does not infringe upon any intellectual property rights of Biomatrix. Distributor shall not be required to make the written offer to Biomatrix set forth in Section 10.1(a) above only to the extent that it is prevented from doing so due to the patented proprietary rights of a third party. (c) At all times during the term of this Agreement, Distributor shall notify Biomatrix in writing within [ *** ] of each occurrence of one or more of the following: (i) Distributor's entering into an agreement with one or more third parties with regard to the development, acquisition and/or commercialization of any New Product, and Distributor shall provide to Biomatrix notice of such agreement and any and all agreements relating thereto and a non-confidential summary of such agreements; or ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 72 -26- (ii) Distributor's commencing a clinical trial (either alone or in conjunction with a third party) with respect to any New Product, together with a notice of the commencement of such clinical trial and a list of all countries where such clinical trials will take place; or (iii) Distributor's filing of an application (either alone or in conjunction with a third party) for marketing approval with the United States Food and Drug Administration or an equivalent regulatory agency in any country with respect to any New Product stating in which countries any such filings have been made. 10.2 So long as either [ *** ] Agreement Product and any Improved Agreement Product [ *** ] and/or (b) Distributor [ *** ] either independently or in conjunction with one or more third parties, [ *** ] Biomatrix shall not [ *** ] until the following conditions have been satisfied: (i) Biomatrix has made a commercially reasonable [ *** ] to Distributor to [ *** ]; and (ii) Distributor has [ *** ] In the event that Distributor [ *** ] by Biomatrix pursuant to this Section 10.2 [ *** ] then Biomatrix [ *** ] by this Agreement [ *** ]; provided, however, that Biomatrix shall not have the right to commercialize any such New Products within [ *** ] so long as either of the conditions set forth in Section 10.2(a) or 10.2(b) is satisfied. Specifically, once one of the conditions in Section 10.2(a) or 10.2(b) is not satisfied, Distributor shall, subject to the terms of this Agreement, [ *** ] however, after such date it shall [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 73 -27- 10.3. Nothing in this Section 10 shall be construed, by implication or otherwise, (i) to effect any sale or license of proprietary Biomatrix technology (including any New Products), (ii) to grant any license relating to Biomatrix's proprietary methods of formulating , fabricating and manufacturing the Agreement Product, Improved Agreement Products or New Products, or (iii) to grant Distributor any rights in or to any proprietary technology or Patents or Trademarks of Biomatrix. 11. REPRESENTATIONS OF BIOMATRIX. Biomatrix represents, warrants and covenants as follows: 11.1. It is a corporation duly organized and validly existing under the laws of the State of Delaware with the full power to conduct its affairs as currently conducted and contemplated hereunder. All necessary action has been taken to enable it to execute and deliver this Agreement and perform its obligations hereunder. 11.2. This Agreement is a valid and binding obligation of Biomatrix enforceable in accordance with its terms. Biomatrix has the unencumbered right to enter into this Agreement and to fulfill its duties hereunder. It is not and will not become a party to any agreement in conflict herewith. Accordingly, Biomatrix has the right to appoint the Distributor as the exclusive distributor of the Agreement Product in the Territory in accordance with the terms of this Agreement and such appointment will not constitute a breach of any existing contractual or other arrangements between Biomatrix and any Affiliated or non-Affiliated third party, nor shall it infringe the rights of any Affiliated or non-Affiliated third party. 11.3 No approval, consent, order, authorization or license by, giving notice to or taking any other action with respect to, any governmental or regulatory authority is required in connection with the execution and delivery of this Agreement by Biomatrix and the performance by Biomatrix of its obligations hereunder. 12. REPRESENTATIONS OF THE DISTRIBUTOR. The Distributor represents, warrants and covenants as follows: 12.1 It is a corporation duly organized and validly existing under the laws of Delaware with full power to conduct its affairs as currently conducted and contemplated hereunder. All necessary action has been taken to enable it to execute and deliver this Agreement and perform its obligations hereunder. 12.2. This Agreement is the Distributor's valid and binding obligation enforceable in accordance with its terms. The Distributor has the unencumbered right to enter into this Agreement and to fulfill its obligations hereunder. It is not and will not become a party to any agreement in conflict herewith. Accordingly, the Distributor has the right to act as the exclusive distributor of the Agreement Product in the Territory in accordance with the terms of this Agreement and the performance of its obligations hereunder will not constitute a 74 -28- breach of any existing contractual or other arrangements between the Distributor and any Affiliated or non-Affiliated third party, nor shall it infringe the rights of any Affiliated or non-Affiliated third party. 12.3. No approval, consent, order, authorization or license by, giving notice to or taking any other action with respect to any governmental or regulatory authority is required in connection with the execution and delivery of this Agreement by the Distributor and the performance by the Distributor of its obligations hereunder. 13. INSURANCE. Each party hereto shall (a) obtain and maintain such insurance policies as are adequate to cover its respective obligations hereunder and which are consistent with normal business practices of prudent companies similarly situated and (b) provide the other party, upon request, with certificates of insurance confirming the existence of such insurance policies. 14. INFRINGEMENT. Each of the Distributor and Biomatrix will promptly notify the other party in writing of any infringement of a Patent or Trademark or unauthorized disclosure or use of any Confidential Information, of which it becomes aware in the Territory. Biomatrix shall have the exclusive right at its own cost to take all legal action in the Territory it deems necessary or advisable to eliminate or minimize the consequences of such infringement of a Patent or Trademark in the Territory. For the purpose of taking any such legal action, Biomatrix shall have the right, subject to the Distributor's consent which consent shall not be unreasonably withheld or delayed, to use the name of the Distributor as plaintiff, either solely or jointly in accordance with the applicable rules of procedure; provided that Biomatrix shall give the Distributor prior notice of such use of the Distributor's name. The Distributor shall promptly furnish Biomatrix with whatever written authority may be required in order to enable Biomatrix to use the Distributor's name in connection with any such legal action, and shall otherwise cooperate fully and promptly with Biomatrix in connection with any such action. All proceeds realized upon any judgment or settlement regarding such action shall belong to Biomatrix. 75 -29- 15. Regulatory Activities; Clinical Trials and Marketing Studies. 15.1. General. (a) Biomatrix shall be responsible for maintaining at its cost the Product License Approvals required for the marketing and sale of the Agreement Product and any Improved Agreement Product(s) in the Territory throughout the term of this Agreement. (b) Biomatrix shall hold in its name all regulatory approvals required for the marketing and sale of the Agreement Product and any Improved Agreement Product(s) in the Territory. (c) The Distributor and Biomatrix shall provide reasonable advice and assistance to each other as may be necessary to obtain and maintain Product License Approvals. (d) During the term of this Agreement, each party shall immediately notify the other in writing in the event that such party becomes aware of any failure of the Agreement Product and any Improved Agreement Product(s) to comply with any of the requirements therefor specified in any Product License Approvals. (e) Each of the Distributor and Biomatrix shall keep the other advised of regulatory interactions, activities and correspondence relating to the Agreement Product and any Improved Agreement Product(s) on at least a quarterly basis, and any matters requiring immediate attention shall be communicated as soon as practicable. Notwithstanding the foregoing, within [ *** ]. Biomatrix shall deliver a [ *** ] to the Distributor. 15.2. Marketing Studies. The parties agree that if any marketing-related studies are deemed necessary, such studies will not delay the Launch in the Territory. The protocols for any marketing-related studies requested by the Distributor will be developed jointly by Biomatrix and the Distributor, and the Distributor will be responsible for conducting and managing such studies at its own expense. Biomatrix shall have the right to audit the performance of any marketing-related studies performed by or on behalf of the Distributor. The results of such studies will not be published or publicized in any way without the prior written approval of Biomatrix. 16. FURTHER ASSURANCES. The parties hereto agree to execute such further or other documents and assurances as are necessary from time to time in order to give effect to the provisions of this Agreement. 17. ASSIGNMENT. The rights and obligations of the parties hereto shall inure to the benefit of and shall be binding upon the authorized successors and permitted assigns of each party. Neither party may assign its rights or obligations under this Agreement or may designate another person to perform all or part of its obligations under this Agreement, or to ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 76 -30- have all or part of its rights and benefits under this Agreement without the prior written consent of the other party, except to an Affiliate or to a successor of the business, by merger or otherwise, to which this Agreement relates, provided that in the case of an assignment to an Affiliate the assigning party shall promptly notify the other party in writing of such assignment and shall remain liable (both directly and as guarantor) with respect to all obligations so assigned. In the event of any assignment or in the event that an Affiliate of either party shall exercise rights and/or perform obligations hereunder pursuant to the terms of this Agreement, the assignee or Affiliate, as the case may be, shall specifically assume and be bound by the provisions of the Agreement by executing and agreeing to an assumption agreement satisfactory to the other party hereto. 18. GOVERNING LAW; ARBITRATION; INJUNCTIVE RELIEF. (a) This Agreement shall be governed by and construed in accordance with the internal and substantive laws of the State of New York, United States of America. The parties hereby agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement or any other document contemplated hereby. In the event of any dispute touching or concerning this Agreement, the parties hereby agree to submit such dispute to their respective presidents by notice delivered in accordance with the provisions of Section 23, and if within [ *** ], or such other period as is agreed upon in writing by the parties hereto, following such reference the dispute remains unresolved, to submit the dispute for arbitration in Boston, Massachusetts under the Rules of the American Arbitration Association in effect on the date of this Agreement (the "Rules") by arbitrators appointed in accordance with said Rules. Any decision of such arbitrators shall be written and shall be final and binding upon the parties. In any arbitration pursuant to this Section the award shall be rendered by a majority of three (3) arbitrators, one (1) of whom shall be appointed by each party and the third of whom shall be appointed by mutual agreement of the two (2) party-appointed arbitrators. In the event of failure of a party to appoint an arbitrator within thirty (30) days after commencement of the arbitration proceeding or in the event of failure of the two (2) party-appointed arbitrators to agree upon the appointment of the third arbitrator within sixty (60) days after commencement of the arbitration proceeding, such arbitrator shall be appointed by the American Arbitration Association in accordance with the Rules. The arbitrators shall apply the governing law set forth in this Section. Judgment upon an award rendered by the arbitrators may be entered in any court having jurisdiction thereof. (b) Each of the parties hereto acknowledges and agrees that damages will not be an adequate remedy for any material breach or violation of this Agreement if such material breach or violation would cause immediate and irreparable harm (an "Irreparable Breach"). Accordingly, notwithstanding the provisions of Section 18(a) to the contrary, in the event of a threatened or ongoing Irreparable Breach, each party hereto shall be entitled to seek, in any state or federal court in the State of New York, equitable relief of a kind appropriate in light of the nature of the ongoing threatened Irreparable Breach, which relief may include, without limitation, specific performance or injunctive relief; provided, however, that if the party bringing such action is unsuccessful in obtaining the relief sought, the moving party ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 77 -31- shall pay the non-moving party's reasonable costs, including attorney's fees, incurred in connection with defending such action. Such remedies shall not be the parties' exclusive remedies, but shall be in addition to all other remedies provided in this Agreement. 19. SEVERABILITY. In the event that any provision of this Agreement shall be held by a court of competent jurisdiction or by any governmental body to be invalid or unenforceable, such provision shall be deemed severable and the remaining parts and provisions of this Agreement shall remain in full force and effect. 20. FORCE MAJEURE. Each of the parties shall be excused from the performance of its obligations hereunder in the event such performance is prevented by force majeure, and such excuse shall continue as long as the condition constituting such force majeure continues. For the purpose of this Agreement, force majeure is defined as contingencies beyond the reasonable control of either party, including, without limitation, acts of God, judicial or regulatory action, war, civil commotion, destruction of production facilities or materials by fire, earthquake or storm and labor disturbances (whether or not any such labor disturbance is within the power of the affected party to settle). 21. INTEREST. Any overdue amounts payable by either party hereunder shall bear interest compounded monthly at the prime lending rate for Dollars published from time to time in The Wall Street Journal plus [ *** ] per annum, or, if lower, the highest rate permissible by applicable law, from the due date until the date of payment. 22. NO PARTNERSHIP OR AGENCY. This Agreement and the relations hereby established by and between Biomatrix and the Distributor do not constitute a partnership, joint venture, agency or contract of employment between them. 23. NOTICES. All communications in connection with this Agreement shall be in writing and sent by postage prepaid first class mail, courier, or telefax, and if relating to default, late payment or termination, by certified mail, return receipt requested, telefax or courier, addressed to each party at the address set forth at the beginning of this Agreement, in the case of Biomatrix, Attn: Chief Executive Officer, with a copy to: Justin P. Morreale, Esq., Bingham, Dana & Gould LLP, 150 Federal Street, Boston, Massachusetts 02110, U.S.A., and in the case of the Distributor, Attn: President, with a copy to Kimberlie L. Cerrone, Esq., Venture Law Group, 2800 Sand Hill Road, Menlo Park, California 94025, or to such other address as the addressee shall last have designated by notice to the communicating party. The date of giving any notice shall be the date of its actual receipt. 24. SURVIVAL. The provisions of Sections 3.3, 3.6, 3.7, 3.8, 6.2, 9.1, 9.2, 9.3, 9.4 and 9.5 of this Agreement shall survive the termination or expiration of this Agreement (as the case may be) and shall remain in full force and effect. The provisions of this Agreement that do not survive termination or expiration hereof (as the case may be) shall, nonetheless, be controlling on, and shall be used in construing and interpreting the rights and obligations of the parties hereto with regard to, any dispute, controversy or claim which may arise under, out of, or in connection with this Agreement. ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 78 -32- 25. MISCELLANEOUS. This Agreement sets forth the entire agreement between the parties with respect to the transactions and arrangements contemplated hereby and supersedes all prior oral or written arrangements. This Agreement may be modified or amended only by a written instrument executed and delivered by both parties. None of the provisions of this Agreement shall be deemed to have been waived by any act or acquiescence on the part of either party except by an instrument in writing signed and delivered by the party executing the waiver. This Agreement may be executed in several identical counterparts, each of which shall be an original, but all of which constitute one instrument, and in making proof of this Agreement it shall not be necessary to produce or account for more than one such counterpart. [The remainder of this page is intentionnaly left blank.] 79 -33- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. COLLAGEN CORPORATION By: /s/ HOWARD D. PALEFSKY --------------------------------------- Name: Howard D. Palefsky Title: Chairman & CEO BIOMATRIX, INC. By: /s/ ENDRE A. BALAZS --------------------------------------- Name: Endre A. Balazs Title: CEO 80 -34- EXHIBITS Exhibit A - Agreement Product Specification and Approval Documents Exhibit B - Launch Schedule Exhibit C - Patents and Trademarks Exhibit D - Sales Forecasts
81 EXHIBIT A Agreement Product Specification and Approval Documents TESTS PROCEDURES SPECIFICATIONS [ *** } ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 82 EXHIBIT B Launch Schedule Date of Launch -------------- United States [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 83 EXHIBIT C Patents and Trademarks Patents [ *** ] Trademarks [ *** ] ***Confidential portions have been omitted and filed separately with the Securities and Exchange Commission. 84 EXHIBIT D Sales Forecasts(1) (Units) First Agreement Year (1) The parties acknowledge that in the event of the addition of other syringe sizes this forecast is subject to adjustment to incorporate such new sizes. -----END PRIVACY-ENHANCED MESSAGE-----