EXHIBIT 10.27
LICENSE AND DEVELOPMENT AGREEMENT
This Agreement is between PROTEIN POLYMERS TECHNOLOGIES, INC., a Delaware
corporation, having its place of business at 00000 Xxxxxxxx Xxxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as "PPTI"), and
PROSPECTIVEPIERCING LIMITED, to be known as FEMCARE UROLOGY LIMITED, a company
incorporated under the laws of England and Wales whose registered office is at
Xx. Xxxxx Xxxxxx, Xxxxxxxxxx XX0 0XX, Xxxxxxx (hereinafter referred to as
"FEMCARE").
W I T N E S S E T H:
WHEREAS, PPTI is developing and intends to commercialize the Product; and
WHEREAS, FEMCARE, has experience and capability in obtaining governmental
approvals in the Territories for medical devices and in marketing such products
throughout the Territories; and
WHEREAS, FEMCARE, desires to purchase from PPTI an exclusive license to market
the Product in the Territories solely for use in the Field; and
WHEREAS, PPTI desires to sell to FEMCARE an exclusive license to market the
Product in the Territories in the Field, subject to the terms and conditions of
this Agreement; and
WHEREAS, FEMCARE desires to engage PPTI to manufacture and supply to FEMCARE,
the Product for Commercialization in the Territories in the Field;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, PPTI
and FEMCARE agree as follows:
1. DEFINITIONS
In this Agreement (including the recitals) the following expressions shall have
the following meanings unless the context otherwise requires:
1
"Affiliate" shall mean, in relation to either party, (a) any company,
partnership, limited liability company, or other entity in which the relevant
party directly or indirectly holds 30% or more of the voting interests, (b) any
company which holds directly or indirectly 30% or more of the voting stock or
shares of the relevant party, (c) any other company, partnership, limited
liability company, or other entity in which 30% or more of the voting interests
is directly or indirectly held by any company described in clause (b), or (d)
any company partnership, limited liability company, or other entity in which the
relevant party directly or indirectly holds less than 30% of the voting
interests but has management control of such company in that it has the ability
to appoint or remove the majority of the directors or managers of such company.
"Calendar Quarter" shall mean the usual and customary FEMCARE calendar quarters,
the first quarter being the months of January, February and March, the second
quarter being the months of April, May and June, the third quarter being the
months of July, August and September, and the fourth quarter being the months of
October, November and December.
"Clinical Efficacy Trials" shall mean trials of the Product on sufficient
numbers of patients to establish the safety and efficacy of the Product in order
to assist the parties in obtaining Regulatory Approval for the manufacture and
Commercialization of Product.
"Clinical Safety Trials" shall mean trials for the first introduction into
humans of the Product with the purpose of establishing its safety sufficiently
to proceed to Clinical Efficacy Trials.
"Commercialization" shall mean the continuous marketing, use, offer for sale,
sale and supply of the Product to third parties, and "Commercialized" shall be
construed accordingly.
"Competitive Product" shall mean Contigen, Macroplastique, Durasphere and
similar injectable or inplantable products for the treatment of stress urinary
incontinence which compete with the Product in the Territories in the Field.
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"Copyright" shall mean all copyright and rights in the nature of copyright to
which PPTI or its Subsidiaries may now or may subsequently become entitled in or
in respect of all drawings and other documents, recordings in any form and/or
other materials bearing or embodying any part of the Know-How or the Regulatory
Information including without limitation any such materials consisting of or
containing software or databases.
"Effective Date" shall mean January 26, 2000.
"Existing IDE" shall mean the investigational device exemption application filed
with the FDA by PPTI in respect to the Product: ***.
"FDA" shall mean the United States Food and Drug Administration.
"Field" shall mean soft tissue augmentation in the genitourinary tract to treat
urological symptoms of disease, including the delivery in any manner of
lidocaine or an equivalent local anesthetic to ameliorate pain associated with
such treatment, but excluding all other drug delivery (except as aforesaid),
birth control, cosmetic tissue augmentation, and adhesive and sealant
applications and all other uses of soft tissue augmentation.
"IDE" shall mean an investigational device exemption application filed with the
FDA by PPTI.
"Intellectual Property" shall mean Patents, Know-How and Copyright.
"Know-How" shall mean all information, data or experience whether patentable or
not, useful in the Field in the Territories owned or controlled by PPTI or its
Subsidiaries at any time prior to or during the term of this Agreement,
including without limitation, processes, techniques, methods, products,
apparatuses, cultures, other biological materials and other materials and
compositions, operating instructions, machinery designs, raw material or
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*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
3
product specifications, drawings, blue prints, and any other technical and
commercial information relating to research, design, development, manufacture,
assembly, use or sale of the Product which are or may be useful in the Field,
but excluding PMA Know-How and information and data that cannot be disclosed
without PPTI or its Subsidiaries being in breach of a bona-fide confidentiality
obligation to a third party.
"Joint Product" shall mean a product whose manufacture, marketing, use or sale
would infringe a Valid Claim of a Joint Invention.
"Marketing Year" shall mean each period of 12 months calculated from the first
day of the month following the date on which FEMCARE shall first sell Products
to independent third parties on a commercial basis in any of the Territories.
The first Marketing Year shall include sales made in the month preceding the
commencement date of the first Marketing Year.
"Net Sales" shall, subject to the two provisos to this definition, mean:
(a) the invoiced price of Product upon the sale by a party or its
Affiliates and distributors of Product to third parties (other than
Affiliates);
(b) subject to paragraph (c) of this definition the fair market value of
sales or transfers of Product from a party to Affiliates, where the
fair market value shall be determined from the sales of similar
volumes of Product in the same Territory (or if none a comparable
Territory) to third parties (other than Affiliates); or
(c) invoiced price of Product upon the sale by a party to an Affiliate of
Product which is to be used primarily for performing clinical trials
or testing to obtain Regulatory Approval in the United States or the
Territories, in each case less the following amounts:
(i) all normal discounts of any type or nature (e.g., cash
discounts, volume discounts, credits and rebates if not
already reflected in the invoiced price);
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(ii) credits or allowances actually granted upon claims or returns
regardless of the party requesting the return;
(iii) provided the amounts are separately charged upon the invoice
and not already excluded from Net Sales all proper deductions
for any costs of packaging, insurance, carriage, freight,
value added tax or other sales tax, import duties or similar
government levies or export insurance cost;
each determined in accordance with such party's accounting principles
from time to time or if none are applicable generally accepted
accounting principles in the United Kingdom or United States, as the
case may be, from time to time consistently applied.
Provided that if Product is sold by a party in a Territory in
combination with another product sold by that party and the Product
is not separately invoiced or priced on the relevant invoice for the
Product and the other product, Net Sales for such Product in a
Calendar Quarter will be calculated by multiplying actual Net Sales
of the Product and other product in the Territory in such Calendar
Quarter by the fraction A/(A+B) where A is the average invoiced price
(less the amounts referred to in (iii) of this definition) of Product
when sold separately by such party is such Territory in such Calendar
Quarter to third parties (other than Affiliates) and B is the invoice
price (less the amounts referred to in (iii) of this definition) of
the other product when sold separately by such party in such
Territory to such third parties (other than Affiliates) in such
Territory in such Calendar Quarter.
Provided further that if in the circumstances described in the
preceding proviso either the Product or the other product is not sold
separately in a Territory in a Calendar Quarter by party, Net Sales
for Product shall be calculated by multiplying actual Net Sales of
the Product and other product by the fraction D/E where D is a
party's direct cost of Product, and E shall be a party's aggregate
direct cost of the Product and other product. For purposes of the
foregoing, if the party is FEMCARE, party shall mean FEMCARE and its
Affiliates and if the party is PPTI, party shall mean PPTI and its
Subsidiaries (and the term "Subsidiaries" (and the term
"Subsidiaries" shall be substituted for "Affiliates").
5
"Net Selling Price" shall mean the same as Net Sales save that Joint Product or
Joint
Products shall be substituted for "Product" or "Products" (as the case may be)
wherever the latter appear.
"Patent(s)" shall mean:
(a) any and all the patents and applications for patents that are
identified in Schedule A, any foreign counterparts thereof, all
continuations, continuations-in-part, divisions and renewals thereof,
all patent supplementary protection certificates and similar rights
that are based on or derive priority from any of the foregoing or
which may be granted thereon, and all reissues, re-examinations,
extensions, patents of addition and patent of importation thereof;
(b) any and all patent applications by PPTI related to or based on any
Know-How related to the Product or Product Improvements, if
applicable, that is developed by PPTI during the term of this
Agreement, all continuations, continuations-in-part or divisions of
any such applications, any patents which shall issue based on such
applications, continuations, continuations-in-part or divisions and
any and all patents, patent supplementary protection certificates and
similar rights that are based upon or derive priority from any of the
foregoing or which may be granted thereon and all reissues or
extensions thereof or patents of addition thereto but not including
any PMA Know-How developed by PPTI after completion of its
obligations under Article 3.01; and
(c) all such patent applications, patents Certificates and rights, a
Valid Claim of which would be infringed by the manufacture marketing
use or sale of the Product (but for the license granted herein).
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"Performance Benchmarks" shall mean the goals set forth on Schedule B as may
from time to time be modified by the Advisory Board.
"PMA" shall mean a premarket approval application filed with the FDA, or if a
PMA is not the appropriate filing, then the suitable filing to obtain Regulatory
Approval in the United States.
"PMA Know-How" shall mean any Know-How that would be embodied in Product
Improvements.
"Product(s)" shall mean Polymer 47K Urethral Bulking Agent as currently approved
by the FDA under IDE *** (whether or not including or injecting lidocaine or an
equivalent local anaesthetic) and any modifications made thereto as part of its
PMA approval and any amendment thereto.
"Product Improvements" shall mean any improvement, enhancement or modification
of or alternative or substitute for the Product proposed to be developed by PPTI
or its Subsidiaries that if made, would require the filing of a new IDE or PMA
or the like with the FDA in addition to the Existing IDE and any PMA to be
obtained in respect to the Product pursuant to the provisions of Article 3.
"Regulatory Approval" shall mean with respect to any country, filing for and
receipt of all regulatory agency or other registrations and approvals required
in such country in respect of Product for any purpose specified in this
Agreement of if no purpose is specified to enable the Product to be manufactured
and for Commercialization to take place in such country.
"Regulatory Information" shall mean all information, correspondence, reports,
documentation and approvals (however stored) in the possession or under the
control of a party in respect of any Regulatory Approvals required for the
Product in the United States or any Territory.
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*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
7
"Subsidiary" shall mean a corporation, limited liability company or partnership
of which a party holds 50% or more of the voting or economic interest.
"Supply Agreement" shall mean the Supply Agreement to be entered into between
PPTI and FEMCARE substantially in form attached as Schedule E.
"Territories" shall mean the countries listed in Schedule D and such other
countries as the parties shall agree in writing from time to time and
"Territory" shall mean any one of them.
"Valid Claim" shall mean a claim in any pending patent application or unexpired
patent which has not been held invalid by a decision of a court or other
appropriate body of competent jurisdiction against which there is no appeal or
where any period for appealing against such decision has expired without an
appeal having been validly submitted.
2 GRANT OF LICENSE
2.01 Rights Granted.
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(a) Subject to the terms and conditions of this Agreement, PPTI hereby
grants to FEMCARE and FEMCARE hereby accepts from PPTI a license to
use the Intellectual Property for the purpose of Commercialization of
the Product solely in the Field in the Territories.
(b) Subject to paragraph (c) of this Article, Article 4.02(b) and
Schedule B the grant of such license to FEMCARE shall be exclusive
against all parties including PPTI for the term of this Agreement.
(c) If during the term of this Agreement FEMCARE shall sell Competitive
Products in the Territories without the prior written consent of
PPTI, the grant of this license shall immediately become non-
exclusive for the remainder of the term of this Agreement.
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(d) The grant of such license to FEMCARE shall not include the right to
sublicense to any other person or entity any rights granted
hereunder, in whole or in part, without the prior written approval of
PPTI, except as permitted pursuant to paragraph (e) of this Article.
(e) FEMCARE shall have the right to grant sublicenses to any Affiliate or
to any third party of such license or any rights granted to FEMCARE
under this Agreement upon such terms and conditions as PPTI shall
approve, such approval not to be unreasonably withheld or delayed.
(f) The parties shall execute such formal licenses as are consistent with
the terms and provisions of this Agreement that FEMCARE considers may
be necessary or appropriate for registration with any relevant patent
or other authorities in the Territories.
2.02 Product Improvement Option.
--------------------------
(a) PPTI hereby grants to FEMCARE an exclusive right of first opportunity
to be granted rights and licenses by PPTI or any of its Subsidiaries
to obtain Regulatory Approval for and undertake Commercialization of
any Product Improvements during the term of this Agreement in the
Field and the provisions of this Article 2.02 shall apply in respect
of such opportunity.
(b) During the term of this Agreement, PPTI shall:
(i) promptly notify FEMCARE of each Product Improvement that it
proposes to develop, obtain Regulatory Approval for and
commence Commercialization of (either by itself or through a
Subsidiary or third party), and
(ii) present to FEMCARE in writing the terms and conditions upon
which PPTI would require FEMCARE to participate in the
development of, and obtaining of Regulatory Approvals for
such Product Improvement and be willing to license/sublicense
such Product Improvement to FEMCARE together with such
information as FEMCARE
9
reasonably requires to enable it to evaluate the validity of
the proposed development, obtaining such Regulatory Approvals
and undertaking such Commercialization itself or through an
Affiliate in the Field in the Territories.
(c) FEMCARE shall have sixty (60) days in which to accept such terms and
conditions proposed by PPTI, or, if it so desires, to propose to PPTI
alternative terms and conditions. PPTI shall have fifteen (15) days
in which to accept or reject any such alternative.
(d) If FEMCARE accepts PPTI's terms and conditions or if PPTI accepts
such alternative terms and conditions, the parties shall promptly
execute and deliver to each other a license agreement containing the
mutually agreed terms and conditions.
(e) If the conditions in paragraph (d) of this Article shall not apply,
FEMCARE shall be deemed to have waived and relinquished any and all
rights it may have to participate in the development of, obtain
Regulatory Approval for or to exploit the subject Product Improvement
and PPTI shall thereafter have the right to develop, obtain
Regulatory Approvals for and to commence Commercialization (either by
itself or through a Subsidiary or a third party) of the Product
Improvement anywhere in the world except in the Field within the
Territories, unless it has the prior written consent of FEMCARE. If
the preceding provision shall prove to be invalid for any reason, and
PPTI shall offer any other person such rights as aforesaid in the
Field in the Territories on more favorable terms than those offered
to FEMCARE or proposed by FEMCARE under this Article 2.02, PPTI shall
make a new offer to FEMCARE of such rights on the same terms as are
offered to such third party, and FEMCARE shall have ten (10) Business
Days (any day other than Saturday, Sunday or a legal holiday on which
the banks in New York City are closed) to accept such new offer,
failing which FEMCARE shall have no further claim to such Product
Improvements rights.
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2.03 Manufacturing Rights. PPTI hereby grants to FEMCARE an exclusive option
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to acquire the right and license to the Intellectual Property and the
Escrow Materials (as defined in the Escrow Agreement), to make or have made
the Product for use and Commercialization by FEMCARE and its Affiliates,
distributors and sub-licensees on the terms and conditions of Article 2.01
in the Field within the Territories. Said option shall be deemed to have
been exercised if at any time during the term of this Agreement, FEMCARE
shall have properly given notice to withdraw the Escrow Materials pursuant
to the Escrow Agreement.
2.04 Reserved Rights. PPTI retains all rights to the Product and the
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Intellectual Property not expressly granted to FEMCARE pursuant to this
Agreement.
2.05 Sale outside of Territories. During the terms of this Agreement PPTI
---------------------------
shall not and shall procure that no Subsidiary shall sell or offer for sale
the Product to any third party outside the Territories knowing or having
reasonable grounds for believing that such third party intends to sell the
Product in the Territories.
3 PRODUCT DEVELOPMENT
3.01 PPTI undertakes to FEMCARE to use its reasonable efforts:-
(a) to further research and develop the Product so that it complies in
all respects with the specification referred to in the Supply
Agreement;
(b) develop the methods and processes of manufacturing the Product so
that PPTI is able to comply in all respects with its obligations to
FEMCARE under the Supply Agreement;
(c) develop the procedures for manufacturing, producing and packaging
(except to the extent that this is the responsibility of FEMCARE
pursuant to clause 3.02(C)) the Product under FDA Quality System
Regulations and/or ISO 9001 Standards, as applicable, in commercial
quantities; provided that PPTI's obligation in respect of packaging
shall only
11
extend to developing the minimum packaging required for or pursuant
to such FDA Regulations;
(d) develop cost estimates for the commercial scale production of
Product;
(e) complete the Clinical Safety Trials in accordance with the IDE;
(f) Upon receipt of FDA and other applicable Regulatory Approvals for the
export of the Product to the Territories, to thereafter supply to
FEMCARE, at FEMCARE's expense as provided herein, at the times and in
the quantities reasonably required by FEMCARE to achieve its
Performance Benchmarks and otherwise determined by the Advisory Board
such samples of Product as FEMCARE reasonably deems to be required
for the Clinical Efficacy Studies and other clinical trials within
the Territories;
(g) supply to FEMCARE promptly all Know-How reasonably requested and
Regulatory Information required by FEMCARE in sufficient detail and
quality for use in connection with obtaining Regulatory Approvals or
for any other proper purpose under this Agreement, including, without
limitation, carrying out its duties under paragraph (f) of Article
3.02; and
(h) at the request and expense of FEMCARE, conduct or permit FEMCARE to
conduct any clinical and field trials and studies in addition to the
Clinical Efficacy Trials required in connection with any Regulatory
Approvals in the Territories.
3.02 FEMCARE Activities.
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FEMCARE undertakes to PPTI to use its reasonable efforts to:
(a) obtain all Regulatory Approvals that are required for
Commercialization of the Product in the Field in the Territories
listed in Schedule C;
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(b) obtain all Regulatory Approvals that are required for
Commercialization of the Product in the Field in the Territories
other than those listed in Schedule C when FEMCARE in its absolute
discretion shall determine that obtaining such Regulatory Approvals
is warranted to provide timely and orderly market introduction of the
Product in such Territories;
(c) develop packaging and labelling of the packaging of the Product
(except to the extent this is the responsibility of PPTI pursuant to
clause 3.01(c) which complies with any Regulatory Approvals for
Territories or other laws of Territories where Commercialization is
imminent;
(d) conduct the Clinical Efficacy Trials and such outcome analysis
thereof as may be required in the Territories; and
(e) provide to PPTI such information and cooperation as PPTI reasonably
requires in order to assist PPTI to obtain any required Regulatory
Approvals for the export of Product to the Territories.
3.03 Expenses Unless otherwise expressly stated each party shall bear the cost
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and expense of carrying out their respective obligations under Articles 3.01 and
3.02 and, without prejudice to such obligations, each party undertakes to the
other to:
(a) carry out its obligations expeditiously (subject to Article 3.02(b))
with all due diligence care and skill with a view to complying with
such obligations where time is a relevant factor (subject as
aforesaid) as soon as is reasonably practicable after the date
hereof;
(b) liaise with and provide all reasonable advise assistance and
information to the other party arising out of such obligations;
(c) supply to the other promptly all Regulatory Information in its
possession;
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(d) exchange with each other status reports and updates in reasonable
detail setting out the progress they have made in connection with
such obligations upon request by either of them, such requests not to
be made more often than once in each Calendar Quarter;
(e) permit the other party at any time during normal business hours upon
reasonable notice and at reasonable intervals to visit any premises
in its ownership or control, and to use reasonable efforts to obtain
permission for other facilities at which testing or trials are being
carried out by the other directly or indirectly in connection with
such obligations;
(f) procure that in complying with such obligations it complies strictly
with all applicable laws and regulations including without limitation
those that apply to the conduct of any activities at any site at
which such activities are being carried on.
3.04 (a) After this Agreement has been executed and delivered, the parties
agree to form an Advisory Board made up of not more than four (4)
individuals, two (2) each from PPTI and FEMCARE, which shall include
PPTI's President from time to time and FEMCARE's managing director
from time to time, which Advisory Board shall be retained throughout
the term of this Agreement.
(b) Subject to paragraph (c) of this Article the Advisory Board shall
meet from time to time (but at least once a Calendar Quarter and more
frequently if mutually agreed to by PPTI and FEMCARE) to discuss such
matters as it considers appropriate arising out of this Agreement and
the Supply Agreement.
(c) After the commencement of Commercialization in Australia and at least
one other Territory, the Advisory Board shall meet semiannually.
(d) The location, time and length of meetings of and all procedural
matters (including quorums and voting) relating to the Advisory Board
shall be agreed to by the parties.
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(e) The Advisory Board shall alternate the location of its meetings
between the facilities of each of the parties or by mutual agreement
meet at any location or telephonically.
(f) Without prejudice to the respective rights and obligations of the
parties under this Agreement the Advisory Board shall have executive
authority to deal with such matters as shall be mutually agreed upon
in writing by all members of the Advisory Board.
3.05 Supply Agreement
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(a) Each of PPTI and FEMCARE shall cause to be deposited into escrow with
Piper, Marbury, Xxxxxxx & Xxxxx, Chicago, Illinois, a copy of the
Supply Agreement executed by a duly authorized officer or director of
such party.
(b) The copies of the Supply Agreement shall be dated and delivered to
FEMCARE (as to the PPTI executed Supply Agreement) and PPTI (as to
the FEMCARE executed Supply Agreement) as provided in the written
instructions and notice to said law firm setting forth the date on
which Commercialization is to commence or has commenced (i) from
FEMCARE that it intends to commence the Commercialization of Product
under this Agreement or (ii) from PPTI that FEMCARE has commenced the
Commercialization of Product under this Agreement.
(c) If written instructions and notice to said law firm have not been
delivered thereto on or before ***, without any further instruction
or action, said law firm shall return to PPTI the copy of the Supply
Agreement deposited by it and return to FEMCARE the copy of the
Supply Agreement deposited by it.
(d) FEMCARE and PPTI jointly and severally agree to indemnify, defend and
hold Xxxxx Xxxxxxx Xxxxxxx & Xxxxx harmless from any and all losses,
costs, damages and expenses said law firm may suffer or incur as a
result of its serving as escrow agent for the Supply Agreement.
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
15
(e) Xxxxx Xxxxxxx Xxxxxxx & Xxxxx may, upon 10 days notice to PPTI and
FEMCARE withdraw as escrow agent for the Supply Agreement. The
parties shall promptly meet to designate a replacement escrow agent
and so notify Xxxxx Xxxxxxx Xxxxxxx & Xxxxx, who on the written
instructions of the parties shall deliver the Supply Agreements in
its possession to the replacement escrow agent. Failing the
appointment of a replacement escrow agent for the Supply Agreement,
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx shall return the Supply Agreement
signed by PPTI to PPTI and the return the Supply Agreement signed by
FEMCARE to FEMCARE.
4 PAYMENTS TO PPTI
4.01 License Fees. FEMCARE, relying on the representations and warranties by
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PPTI in Article 20.2 shall pay to PPTI a non-refundable license fee of
US$1,000,000, which shall be payable in two equal US$500,000 installments, the
first being due and payable by wire transfer upon execution and delivery of this
Agreement and the second being due and payable by wire transfer on May 1, 2000.
4.02 Royalties.
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(a) Subject to the provisions of this Agreement, FEMCARE shall pay PPTI,
within thirty (30) days after the close of each Calendar Quarter
throughout the term of this Agreement commencing after the first day
of the first Marketing Year a royalty equal to *** of Net Sales of
Product for the Calendar Quarter (or part thereof in the case of the
first or last Calendar Quarter for which a royalty is payable if not
a full quarter) then ended, such royalty to be calculated initially
in Pounds Sterling (on the basis of Net Sales) and converted to and
paid in United States Dollars at the average buy/sell exchange rate
announced by Chase Manhattan Bank, N.A., New York, New York, or its
successor, for the last Business Day of the Calendar Quarter for
which such royalties are payable.
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
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(b) If the total royalty payable to PPTI by FEMCARE for the first
Marketing Year and each subsequent Marketing Year is less than the
applicable "Minimum Royalty" for that Marketing Year, FEMCARE shall
within 90 days of the end of each such Marketing Year pay to PPTI
(subject to paragraph (e) of this Article 4.02) a sum equal to the
applicable Minimum Royalty less the actual royalty payable. At any
time after the fifth Marketing Year, FEMCARE may notify PPTI that it
is not going to make such payment in respect of any Marketing Year
commencing after such fifth Marketing Year in which case the license
granted pursuant to clause 2.01 shall at the expiry of such 90 day
period become non-exclusive to FEMCARE for the remainder of the term
of this Agreement.
The applicable Minimum Royalty shall be as follows:
Marketing Year Minimum Royalty
First ***
Second ***
Third ***
Fourth ***
Fifth and thereafter ***
Provided that if the rate of royalty payable under Article 4.02 is reduced
pursuant to any provision of this Agreement or FEMCARE is permitted by this
Agreement to set off or deduct any monies against any royalty payable to
clause 4.02, the Applicable Minimum Royalty shall be calculated as if such
rate of royalty had not been so reduced and such set off or deduction had
not been made.
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*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
17
Provided further that in any relevant Marketing Year such applicable
Minimum Royalty shall be reduced by the extent to which FEMCARE failed to
sell or procure that sale of sufficient Products to avoid having to pay
such Minimum Royalty directly as a result of any material breach of this
Agreement or the Supply Agreement by PPTI (and for this purpose force
majeure under either Agreement which prevents PPTI from being in breach
thereof shall be disregarded, and in the case of a force majeure affecting
FEMCARE or its performance on which such Minimum Royalty for such
Marketing Year depends is affected by the force majeure, the Minimum
Royalty shall be reduced by such fair amount.
Provided, however, that no Minimum Royalty shall be payable in respect of
any period during which Product cannot be Commercialized as a result of any
inherent defect in the Product, any Recall required by any applicable
regulatory body that is not specific to identified Product lots that are
replaced within a reasonable period of time, or the Product being found to
not be safe for use in humans.
(c) If the applicable royalty rate exceeds the permissible rate
established in a Territory for royalty payments in that Territory or
royalty remission from that Territory, as the case may be, the rate
of royalty shall not exceed the established permissible rate and
FEMCARE shall pay the difference between the royalty due and the
royalty at the established permissible rate unless said payments made
outside the Territory are illegal. In such event, the parties shall
negotiate in good faith such equitable adjustments to other payments
and financial obligations as may be appropriate so that the parties
realize the intended benefits of this Agreement.
(d) Any Affiliate of FEMCARE may pay any royalty obligations of FEMCARE
under this Agreement directly to PPTI with the same effect as if the
payment had been made by FEMCARE.
(e) All payments under this Agreement shall be made without deduction of
any taxes, charges, or duties except for such taxes, charges or
duties which are required under any applicable laws to be deducted.
Any tax deducted by FEMCARE or
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any Affiliate of FEMCARE under the laws of any foreign country for
the account of PPTI shall be promptly paid to the proper governmental
authority, and FEMCARE or its Affiliates shall furnish PPTI with
proof of payment of such tax together with official or other
appropriate evidence issued by the appropriate governmental authority
sufficient to enable PPTI to document claim for income tax credit in
respect to any sum so deducted. Any such tax required to be withheld
shall be an expense of and borne solely by PPTI.
(f) FEMCARE shall keep accurate books and records of all payments due to
PPTI. Said books of account shall be kept at FEMCARE's principal
place of business or the principal place of business of an
appropriate Affiliate to which this Agreement relates.
(g) PPTI shall have the right to nominate an independent accountant
acceptable to and approved by FEMCARE (which approval shall not be
unreasonably withheld) who shall have access to FEMCARE's records on
reasonable notice during reasonable business hours for the purpose of
verifying, at PPTI's expense (except as provided below), the royalty
payable as provided for in this Agreement for the three preceding
years, but this right may not be exercised more than once in any
year. PPTI shall solicit or receive only information relating to the
accuracy of the royalty report and the royalty payments made. Any
underpayment of royalty shall be paid within thirty (30) days of the
delivery of a detailed written accountants report to FEMCARE. Any
overpayment of royalty shall be credited to the next royalty payment
due from FEMCARE. If no further royalty payments will be due then a
refund will be made within sixty (60) days of the audit. If the
accountant's report shows an underpayment of royalties of five
percent (5%) or more, FEMCARE shall reimburse PPTI for all cost and
expense of the accountant's report.
(h) FEMCARE shall deliver to PPTI written reports of Net Sales during the
preceding Calendar Quarter on or before the thirtieth (30th) day
following the end of each Calendar Quarter. Such reports shall
include a calculation of the earned royalty due and shall be
accompanied by the monies due. If no earned royalties are due, then
FEMCARE shall indicate such on its written report.
19
4.03 Samples.
-------
(a) FEMCARE shall purchase from PPTI and PPTI shall sell to FEMCARE such
quantities of Product in units of *** purchased in a primary
container, individually wrapped and labelled so as to comply with any
applicable Regulatory Approvals or laws as FEMCARE may reasonably
require to conduct the Clinical Efficacy Trials.
(b) Initial sample delivery shall be determined by the Advisory Board.
(c) FEMCARE shall pay to PPTI upon delivery of each such sample (FOB at
PPTI in San Diego, California) an amount equal to PPTI's cost of
manufacture, not to exceed *** unit of Product plus the cost of
packaging and delivery of (by the method required by FEMCARE) the
Product from San Diego, California to Nottingham, England or other
site(s) designated by FEMCARE.
5 DUTIES OF FEMCARE AND TRADE MARKS
5.01 FEMCARE shall during the term of this Agreement:
(a) Subject to paragraphs (a) and (b) of Article 3.02 use its reasonable
efforts:
(i) to Commercialize the Product in the Territories throughout
the term of this Agreement;
(ii) to begin selling the Product in a Territory promptly after
obtaining Regulatory Approval therefor;
(iii) to maintain adequate sales representation in each Territory
once sales of the Product have commenced there;
(iv) maintaining adequate facilities for the storage and
distribution of such quantities of the Product as may from
time to time be reasonably necessary to adequately serve the
applicable Territories; and
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
20
(v) subject to the express provisions of this Agreement to
provide the standard and type of services consistent with the
services currently provided by FEMCARE in connection with the
sale and distribution of its own products or any products
sold by FEMCARE, Ltd. provided that FEMCARE may satisfy any
of the foregoing obligations either itself or through
Affiliates, distributors or sub-licencees;
(b) not to permit its Affiliates, distributors or sub-licensees to make
any verbal or written warranties, representations, or claims
concerning the Product except as approved in advance by PPTI in
writing;
(c) to address and resolve promptly all customer complaints related to
Products supplied by FEMCARE, its Affiliates or distributors or sub-
licencees in a manner consistent with FEMCARE'S and FEMCARE, Ltd.'s
approach to the resolution of complaints lodged against other
products marketed by them, (subject to PPTI providing FEMCARE with
any information in its possession that may facilitate prompt and
favorable resolution of any such complaints);
(d) to maintain complete records regarding such complaints and the
resolution thereof and make these available to inspection by PPTI on
reasonable notice during business hours;
(e) to maintain such reports of the Product sold by FEMCARE as are
required by all applicable laws and retain such records for at least
five (5) years following the expiration or other termination of this
Agreement;
(f) not to sell, nor authorise its Affiliates, distributors or sub-
licensees to sell any Product past the shelf date or expiration date
for such Product printed on the packaging thereon.
21
5.02 (a) FEMCARE shall have the exclusive right to select all trademarks and
trade names to be associated with the Product in the Territories
subject to the approval of PPTI, which approval will not be
unreasonably withheld or delayed.
(b) All costs associated with the registration and maintenance of such
trademarks and trade names in the Territories will be borne by
FEMCARE.
(c) FEMCARE shall grant to PPTI a royalty free, perpetual license (with
the right to sublicense) to use the trademarks and trade names in
connection with the marketing and sale of Product outside the
Territories in the Field on such other terms as FEMCARE shall
reasonably require so as to prevent FEMCARE'S rights in such trade
marks or trade names being damaged by PPTI's use thereof under such
license.
(d) The parties will not do or cause or permit to be done any act or
thing impairing the validity or enforceability of such trademarks or
trade names.
5.03 While the Product is manufactured by or for PPTI all labeling for the
Product shall disclose that the Product is manufactured by PPTI. Such
statements shall prominently appear on all packaging, labels, advertising
and promotional materials for the Product.
6 CONFIDENTIALITY
6.01 Subject to Article 6.03 during the term of this Agreement and for a period
of five (5) years thereafter, each party shall maintain in confidence and
shall not disclose to any third party any Know-How or other information
received from the other party relating to the Product, and shall not use
the other party's Know-How or other information except for the purposes of
this Agreement without the prior written consent of such other party (such
Know-How and other information being called in this Article "Confidential
Information"). These confidentiality and non-use obligations shall not
apply to any Confidential Information that the receiving party can
demonstrate:
22
(a) at the time of disclosure to the receiving party was, or thereafter
becomes, a part of the public domain through no fault of the
receiving party, its Affiliates distributors or sub-licensees;
(b) was subsequently lawfully disclosed to the receiving party by a third
party not under an obligation of confidentiality with or through the
disclosing party;
(c) was in the lawful possession of the receiving party prior to
disclosure by the disclosing party; or
(d) is required to be disclosed by judicial or administrative order
provided that notice is given to the disclosing party and the
disclosing party has an opportunity to seek a protective order, and
further provided, that disclosure is limited to compliance with the
judicial or administrative order.
6.02 During the term of this Agreement, each party shall take all reasonable
steps to:
(a) prevent any disclosure in breach of Article 6.01 of Confidential
Information of the other which would be materially prejudicial to the
interests of the other party;
(b) limit the disclosure of information to such of its Affiliates,
distributors and sub-licensees and their respective employees as
require the information for the purposes of this Agreement; and
(c) procure that the persons referred to in paragraph (b) of this Article
6.02 enter into appropriate confidentiality agreements.
6.03 Notwithstanding the foregoing provisions of this Article, the parties and
their Affiliates, distributors and sub-licensees shall be entitled (subject
to obtaining the prior written approval of PPTI such approval not to be
unreasonably withheld or denied) to disclose Confidential Information of
the other party which would otherwise be protected by the
23
provisions of Article 6.01 to actual or potential customers for Product in
so far as such disclosure is reasonably necessary to Commercialize
Products.
6.04 FEMCARE shall not, without the prior written consent of PPTI, during the
term of this Agreement or for a period of two (2) years after its
termination or expiration, unless PPTI has ceased operation in the Field,
employ or contract with any person employed by PPTI or its Affiliates
during the term of this Agreement who has worked on any of the subject
matter of the Know-How.
6.05 PPTI shall not, during the term of this agreement or for a period two (2)
years after its termination or explanation (unless FEMCARE has ceased
operation) employ or contract with in the Field any Affiliate, distributor
or sub-licensee of FEMCARE in the Field during the term of this Agreement
or any employee of FEMCARE, its Affiliates, distributors or sub-licensees
in the Field during the term of this Agreement without the prior written
consent of FEMCARE.
6.06 Immediately upon the expiration or other termination of this Agreement,
FEMCARE shall return to PPTI all of the information regarding the Know-How
and all copies thereof (including summaries and notes thereof), in its
possession or control, except that one copy of such information may be
retained by FEMCARE's counsel under seal to evidence compliance with this
Agreement.
7 INDEMNIFICATION
7.01 By FEMCARE. FEMCARE shall indemnify, defend and hold PPTI, its Affiliates,
----------
and the officers, directors and employees of PPTI and its Affiliates
harmless from and against any and all liabilities, damages, loss, cost or
expense (including reasonable attorneys' fees) resulting from third party
claims or suits brought against PPTI or its Affiliates which arise out of
FEMCARE's breach of any of its duties or obligations under this Agreement
or from any willful misconduct or negligent acts or omissions of FEMCARE,
24
its Affiliates, distributors or employees in the manufacture, labeling,
storage, transport, distribution or Commercialization of the Product.
7.02 By PPTI. PPTI shall indemnify, defend and hold FEMCARE, its Affiliates,
-------
distributors and sub-licensees harmless against all liabilities, damages,
loss, cost or expense (including reasonable attorneys' fees) resulting from
third party claims and suits brought against them which arise out of PPTI's
breach of any of its duties or obligations under this Agreement or from any
or any of them willful misconduct or negligent acts or omissions of PPTI or
its Subsidiaries, licensees or employees in the manufacture, labelling,
storage, transport, distribution or Commercialization of the Product.
7.03 Notice and Defense. Each party seeking indemnity ("Claimant") pursuant to
------------------
this Article shall promptly notify in writing the other ("Indemnitor") of
any claims or suits for which it seeks indemnification from the other
party. The Indemnitor shall promptly assume responsibility for the defense
of the claim or suit, including settlement negotiations and any legal
proceedings which Indemnitor shall handle at its sole discretion, and
Claimant shall fully cooperate in Indemnitor's handling and defense
thereof. In no event shall a Claimant make any payment on any claim or suit
for which indemnity may be sought without the prior written consent of the
Indemnitor.
7.04 Damages. Notwithstanding any provision in this Agreement which may be to
-------
the contrary in no event will either party be liable to the other for
special, exemplary, or punitive damages.
8 RECALL
If the Supply Agreement is not in effect and FEMCARE is manufacturing or
having manufactured the Product pursuant to any license granted hereunder,
FEMCARE, in its sole discretion, by order of a government or government
agency, or at the direction of
25
PPTI, determine to recall any Product, FEMCARE shall notify PPTI promptly
by telephone or electronic mail or telecopy. FEMCARE shall give PPTI
reasonable opportunity to comment in advance on any public announcement to
be made by FEMCARE regarding any recall. In the event any Product is
recalled, FEMCARE shall assume complete responsibility for conducting such
recall; however, PPTI shall provide FEMCARE with any information that may
be in PPTI's possession or control concerning the manufacture of the
Product which FEMCARE reasonably may require to conduct such recall.
FEMCARE and PPTI shall cooperate to identify and correct deficiencies, if
any, in the manufacture, shipment, storage or distribution of the Product.
FEMCARE shall pay all costs of conducting such recall.
9 INVENTIONS
9.01 PPTI Inventions.
---------------
(a) Title to any inventions or discoveries made by PPTI employees or
agents without inventive contribution of FEMCARE employees or agents,
based on any PPTI Know-How related in any way to the Product or
developed during PPTI'S performance under Article 3.01 ("PPTI
Inventions") shall belong to PPTI.
(b) PPTI may file applications for U.S. and/or foreign patents at its own
expense for such PPTI Inventions and shall keep FEMCARE fully and
promptly informed as to such PPTI Inventions and the filing,
prosecution and maintenance of such patent applications) and
patent(s) and corresponding foreign patent applications.
(c) If PPTI does not elect to file, prosecute or maintain any such patent
applications or patent(s) on such PPTI Inventions after being reduced
to practice, PPTI shall so notify FEMCARE and FEMCARE shall, in its
sole discretion, have the right to require that PPTI file, prosecute
or maintain on a country-by-country basis such patent applications or
patent(s) on such PPTI Invention in which case FEMCARE shall pay the
costs and expenses of and manage the prosecution of such patent
application(s) or patent(s) and
26
PPTI will co-operate fully and promptly with FEMCARE in respect of
such management and prosecution.
(d) Until FEMCARE shall have recovered all costs and expenses associated
with filings, prosecuting, issuing and maintaining said patent
applications or patent(s) FEMCARE'S obligation to pay royalties to
PPTI pursuant to Article 4.02 shall be reduced from *** to not less
than *** for Net Sales in each Territory in which the patent
application is being prosecuted.
9.02 FEMCARE Inventions. Title to any inventions and discoveries made by
------------------
FEMCARE employees or agents without inventive contribution by PPTI
employees or agents and conceived or first reduced to practice under this
Agreement (hereinafter, "FEMCARE Inventions") shall belong to FEMCARE.
FEMCARE may file patent application(s) for FEMCARE Inventions in its own
discretion and at its own expense.
9.03 Joint Inventions.
----------------
(a) Title to any inventions or discoveries made jointly by employees or
agents of PPTI and FEMCARE and conceived or first reduced to practice
under this Agreement ("Joint Inventions") shall belong to PPTI and
FEMCARE jointly, i.e., each shall own an undivided one-half interest
therein.
(b) PPTI and FEMCARE shall keep each other fully and promptly informed as
to such Joint Inventions.
(c) After Joint Inventions are reduced to practice FEMCARE shall have
primary responsibility for filing, prosecuting and maintaining any
U.S. patent application(s) or patent(s) and foreign counterpart
thereof for Joint Inventions, but shall give full consideration to
PPTI's recommendations including selection of attorney(s).
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
27
(d) The expenses for Joint Inventions shall be borne equally by FEMCARE
and PPTI, but either may, by giving at least one month's notice to
the other, withdraw from further participation in the filing,
prosecution and/or maintenance of any such patent application(s) or
patent(s)and shall not be liable for any expenses incurred after
written notice is given.
(e) If either party does not elect to file, prosecute or maintain any
such patent application (s) or patent(s) in a country or countries or
after electing to participate in the filing, prosecution and/or
maintenance on such Joint Inventions in a country or countries, does
not pay its share of the expenses within one hundred twenty (120)
days of written notification of expenses being due, the other party,
in its sole discretion, shall have the right to file, prosecute or
maintain at its expense on a country-by-country basis each such
patent application(s) and patent(s).
(f) If FEMCARE pays all of the costs and expenses of filing, prosecuting
and maintaining any Joint Invention, until FEMCARE recovers one-half
of such costs and expenses, its royalty rate to PPTI in the Territory
in which the patent issues shall be reduced from *** to not less than
***.
(g) If PPTI pays all of the costs and expenses of filing, prosecuting and
maintaining any Joint Invention, until PPTI recovers one-half of such
reasonable costs and expenses, the royalty rate charged to FEMCARE,
its Affiliates and distributors in the Territory in which the Patent
issues shall increase from *** to not more than ***.
9.04 Each party shall require its employees or agents responsible for conducting
research in performance of this Agreement to keep contemporaneous records
of their results and findings in sufficient detail to document any
inventions of discoveries made by such employees and agents under this
Agreement in bound notebooks (that shall be reviewed and signed by a
witness on a regular basis).
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
28
9.05 PPTI and FEMCARE will cooperate in a timely manner to prepare, review and
execute patent applications and all such further papers, as may be
necessary to enable the parties or the party pursuing any patent
application to protect Joint Inventions by patent in any and all countries
and to vest title to said patent application(s) and patent(s) and assist
in Patent Office proceedings.
9.06 If either party wishes to practice a Joint Invention patented in its sole
name or in the joint names of the parties outside the grant provided to
FEMCARE under Article 2.01, the party practicing the patented Joint
Invention will pay to the other party a royalty of not less than *** nor
more than *** of the Net Selling Price of any Joint Product. In no event
shall such royalty be payable with respect to the use of a Joint Invention
by one party to provide goods or services to the other party. Provided
however, that if a party seeks to practice such Joint Invention for which
it did not pay its share of the cost and expenses, such party shall have
to reimburse the party that paid the costs and expenses one-half of the
costs and expenses incurred in the country or countries in which the party
is seeking to practice the Joint Invention.
9.07 Clause 4.02 (except for paragraph (b)) shall apply in respect of any such
royalty payable making such changes as are necessary to reflect the proper
payor and payee of the royalty hereunder, and when the royalty is payable
by PPTI to pay it in Pounds Sterling.
10 TERM AND TERMINATION
10.01 The term of this Agreement shall commence as of the date it is executed
and delivered by both parties, and, unless terminated earlier in
accordance with its terms, shall continue for an initial period of the
greater of twenty (20) years from the Effective Date or the date upon
which the last of the Patents in the Territories expires.
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
29
10.02 This Agreement may be terminated as follows:
(a) (i) By one party in the event the other substantially fails to
perform or otherwise breaches any of its material
obligations, other than obligations to pay money or achieve a
Performance Benchmark under this Agreement by giving notice
of its intent to terminate and stating the grounds therefor.
(ii) The party receiving the notice shall, subject to the
provisions of Article 15 and sub-paragraph (v) of this
paragraph (a) have sixty (60) days from the date of receipt
thereof to cure the failure or breach.
(iii) In the event such breach is cured, the notice shall be of no
effect.
(iv) In the event it is not cured, this Agreement shall, without
further action, terminate at the end of such sixty (60) day
period.
(v) Notwithstanding the foregoing provisions of this Article 10
if the failure to perform or other breach is due to
circumstances referred to in Article 17 and such party has
complied with the provisions of such Article 17 and is making
all reasonable efforts to perform or cure such failure or
breach, Article 10.02 (a) shall not apply unless or until the
failure to perform or other breach shall have lasted
continuously for one hundred and twenty (120) days from the
initial receipt of notice of breach.
(b) (i) By one party in the event the other fails to make any payment
of money due under this Agreement or the Supply Agreement by
giving notice of its intent to terminate and stating the
amount of money due, reason said amount is due, and the
intended termination date.
(ii) The party receiving the notice shall, subject to the
provisions of Article 15 have thirty (30) days from the date
of receipt thereof to cure the failure to pay (during which
30
time if PPTI is the party issuing the notice it shall not be
obligated to supply Product to FEMCARE under the Supply
Agreement unless payment of such Product is protected by a
suitable letter of credit).
(iii) In the event such payment breach is cured, the notice shall
be of no effect.
(iv) In the event it is not, this Agreement shall, without further
action terminate at the end of such thirty (30) day period.
(c) (i) Subject to Schedule B, by one party in the event the other
party substantially fails to meet its Performance Benchmarks
through no fault of the first party by giving notice of its
intent to terminate and stating the grounds therefor.
(ii) The party receiving the notice shall subject to the
provisions of Article 15 have one hundred eighty (180) days
from the date of receipt thereof to cure the default by
achieving the Performance Benchmark.
(iii) In the event such default is cured, the notice shall be of no
effect.
(d) FEMCARE is dissolved or liquidates, makes a general assignment for
the benefit of its creditors, files a voluntary petition under any
applicable bankruptcy or insolvency law, has a receiver appointed for
its property, or has a petition for bankruptcy or insolvency filed
against it which petition is not dismissed within one hundred eighty
(180) days after filing.
10.03 If the party in default under Article 10.02 is FEMCARE, and the default is
not cured within the applicable period, this Agreement shall, unless PPTI
notifies FEMCARE in writing prior to the end of such period, without
further action, terminate at the end of such period and PPTI shall be
entitled to use any and all data and information of FEMCARE to continue
obtaining Regulatory Approvals in its own name and right.
31
10.04 If FEMCARE shall have properly exercised its rights to withdraw the Escrow
Materials from the Escrow pursuant to the Escrow Agreement (and
correspondingly exercised its option under Article 2.02 above, FEMCARE may
continue to prosecute any Regulatory Approvals in the Territories and
shall be entitled to deduct from any sums payable to PPTI whatsoever any
moneys due to it from PPTI whether in respect of any breach of this
Agreement by PPTI or otherwise; provided that if FEMCARE does not exercise
as aforesaid and serve notice of termination upon PPTI, this Agreement
shall terminate and the deposits in the Escrow under the Escrow Agreement
shall be returned to PPTI.
10.05 Effects of Termination or Expiration. Subject to Articles 10.04 and 11
------------------------------------
upon the expiration or termination of this Agreement under 10.01 and 10.02
above, the obligations of PPTI and the rights of FEMCARE hereunder shall
immediately terminate.
Provided that following such expiration or termination FEMCARE, its
Affiliates, distributors and sub-licensees shall continue to have the
right to sell, for a reasonable period not to exceed ninety (90) days
following the date of termination or expiration, any Product then held in
its inventory at not less than 75% of its then usual and customary sales
prices.
Provided further that notwithstanding such termination or expiration,
FEMCARE shall pay to PPTI any royalties due to it through and including
the sale of such inventory Product.
10.06 Escrow Agreement. To secure its obligations to manufacture and supply
----------------
Product or enable FEMCARE to manufacture or have manufactured Product in
certain circumstances, PPTI has agreed to enter into an Escrow Agreement
of even date herewith.
11 RIGHTS UPON TERMINATION
11.01 Subject to Article 10, the termination or expiration of this Agreement
shall not relieve and release either party from its obligations to make
any other payment which may be owing to
32
the other party under the terms of this Agreement or from any other
liability which either may have to the other arising out of this Agreement
or the breach of this Agreement.
11.02 All provisions of this Agreement which in order to give effect to their
meaning need to survive its termination or expiration shall remain in full
force and effect thereafter.
12 ADVERSE EFFECTS
12.01 (a) The parties recognize that the holder of or applicant for Regulatory
Approvals for a country may be required to submit information and
file reports to various governmental agencies on Products under
clinical investigation, Products proposed for Commercialization, or
Commercialized Products.
(b) Consequently, each party agrees to provide to the other within three
(3) Business Days (any day other than a Saturday, Sunday or legal
holiday in the U.S. on which banks in New York shall be closed) of
the initial receipt a copy of a report of any adverse experience with
Product that is serious or unexpected.
(c) Serious adverse experience means any experience that suggests a
significant hazard, contraindication, side effect or precaution, or
any experience that is fatal or life threatening, is permanently
disabling, requires or prolongs inpatient hospitalization, or is a
congenital anomaly, cancer, or overdose.
(d) An unexpected adverse experience is one not identified in nature,
specificity, severity or frequency in the current investigator
brochure or labeling for the Product.
12.02 In the case where either party has licensed the sale of Product to a third
party, each party agrees to obligate any such licensee or distributor
thereof to promptly report to the licensing party any serious adverse
experience or unexpected adverse experience relating to such Product so
that each party can report such experience to the other party pursuant to
the provisions hereunder.
13 PATENTS
33
13.01 (a) Subject to Article 13.02(a) PPTI agrees faithfully, at its sole
expense to diligently prosecute to (and thereafter maintain) all
patents applications for Patents referred to in paragraph (a) of the
definition of "Patents" in the United States and, when reasonable
under the circumstances or required by a Patent Office because more
than one invention is claimed in an application, to file and
prosecute additional patent applications, re-examinations, reissues
or the like covering patentable technology disclosed in the Patents
in the United States and within any applicable time limits to file
foreign corresponding applications in the Territories (unless
otherwise agreed in writing by FEMCARE) and to prosecute the same to
grant and thereafter maintain the same.
(b) PPTI shall have the duty and responsibility to pay when due for
payment all taxes, maintenance fees and annuities on the Patents and
to maintain in force all patents within the Patents granted in the
Territories for the full terms thereof.
(c) PPTI shall within thirty (30) days of mailing or receipt, provide
FEMCARE with copies of all future filed patent applications relating
to the Patents and, upon request, all correspondence from and to
patent offices worldwide relating to both the Patents and future
filed patent applications, re-examinations, reissues or the like.
13.02 (a) If PPTI, in its discretion, decides not to comply with any of the
actions required to be taken by it under Article 13.01(a) and notifies
FEMCARE in writing accordingly (such notice to specify clearly the
countries in respect of which it is not going to take such actions) at
least three months before the expiration of any material time period
in respect of such actions, PPTI will be released from its obligations
thereunder in respect of the actions so notified. PPTI shall so notify
FEMCARE and FEMCARE shall, in its sole discretion, have the right to
elect to assume the prosecution of such patent application on behalf
of PPTI in respect of any such actions (including for the avoidance of
doubt filing any applicable patent applications and prosecuting to
grant any applicable patents and thereafter maintaining such patents)
and PPTI shall co-operate fully and promptly with FEMCARE in the
taking of any such actions by it.
34
(b) If FEMCARE so elects, it shall pay the costs and expenses of taking
such actions and, notwithstanding anything in Section 4.02 to the
contrary, FEMCARE's obligation to pay a royalty to PPTI in such
country which is a Territory under Article 4 shall be reduced from
*** to no less than *** until FEMCARE shall have recovered all costs
and expenses associated with filings, prosecuting, issuing and
maintaining said patent applications or patent(s).
(c) If the country to which paragraph (b) of this Article 13.02 is the
United States FEMCARE shall be entitled to deduct all costs and
expenses as aforesaid from any sums payable to PPTI under this
Agreement until they have been reimbursed in full.
(d) PPTI shall not be deemed to be in breach of this Agreement for
failing to comply with Article 13.01(a) to the extent that it fails
to take any actions properly notified to FEMCARE pursuant to Article
13.02(a).
13.03 (a) The parties agree to cooperate in order to avoid loss of any rights
which may otherwise be available to the parties under the U.S. Drug
Price Competition and Patent Term Restoration Act of 1984, the
Supplementary Certificate of Protection of the Member States of the
European Common Market and other similar measures in any other
country in the Territories.
(b) Without limiting the foregoing, PPTI agrees to notify FEMCARE
promptly upon receipt of any PMA approval to Commercialize Product in
the United States and PPTI agrees to file an application for patent
extension in the U.S. Patent and Trademark Office within the sixty
(60) day period following the receipt of such PMA approval.
14 INFRINGEMENT
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
35
14.01 (a) If, as a result of the manufacture or Commercialization of the
Product in the Territories pursuant to this Agreement and the Supply
Agreement, PPTI and its Subsidiaries or FEMCARE and/or its
Affiliates, distributors or sub-licensees, are sued for patent
infringement or infringement of other intellectual property rights or
threatened with such a lawsuit or other action by a third party, PPTI
and FEMCARE shall promptly meet to analyze the infringement claim and
avoidance of same.
(b) If following such meeting the parties fail to agree on a joint
program of action, including how the costs of any such action are to
be borne and how any damages or other sums received from such action
are to be distributed, then FEMCARE shall be entitled to take action
against the third party at its sole expense and it shall be entitled
to all damages or other sums received from such action. PPTI shall
agree to be joined in any suit to enforce such rights subject to
being indemnified and secured in a reasonable manner as to any costs,
damages, expenses or other liability and shall have the right to be
separately represented by its own counsel at its own expenses.
(c) If it is necessary to obtain a license from such third party, PPTI
and FEMCARE in negotiating such a license shall in the extent
practicable use their reasonable efforts to minimize the license fees
and/or royalty payable to such third party.
(d) If FEMCARE or its Affiliates, distributors or sub-licensees shall be
obligated to pay a license fee and/or royalty to a third party under
such licence as the result of the Commercialization of the Product or
the use of Patents or Know-How then PPTI shall elect within ten (10)
days of the execution of the license with such third party to:
(i) pay all fees and expenses associated with obtaining and
maintaining the license; or
(ii) to have the royalties specified in Article 4.02 reduced by
***.
(e) FEMCARE shall be entitled to deduct from up to one-half of the
royalties payable under clause 4.02 any sums paid to third parties
(including without limitation damages, payments in settlement of
litigation and reasonable cost and expenses incurred in relation to
any alleged or actual infringement of third party rights in the
manufacture or
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
36
Commercialization of any product; provided that such payments are
specifically approved, in advance, by PPTI, such approval to not be
unreasonably withheld or delayed).
14.02 (a) In the event that there is infringement of a Patent involving the
Product by a third party in the Territories, PPTI and FEMCARE shall
notify each other in writing to that effect immediately upon becoming
aware of the same, including if practicable with said written notice
evidence establishing a case of infringement by such third party.
(b) FEMCARE shall have the right, in its sole discretion, but not the
obligation to bring such suit at its own expense and in its own name,
if possible, or jointly in its name and in the name of PPTI or if
necessary in PPTI's sole name.
(c) FEMCARE shall bear all the expenses of any suit brought by it and
shall retain all damages or other monies awarded or received in
settlement of such suit; provided, however, that at its option
exercised by notice in writing to FEMCARE before it commences such
suit PPTI may contribute to the expenses of any such suit and, in
such event, FEMCARE and PPTI shall share proportionately to their
respective contributions all damages or other monies awarded or
received in settlement of such suit.
(d) PPTI will cooperate with FEMCARE in any such suit and shall have the
right to consult with FEMCARE and, if it elects pursuant to the
proviso to paragraph (c) of this Article, to be separately
represented by its counsel at its own expense.
14.03 (a) In the event that there is infringement of a patent of a Joint
Invention jointly owned by the parties outside the grant provided to
FEMCARE under Article 3.01 by a third party, PPTI and FEMCARE shall
notify each other in writing to that effect immediately upon becoming
aware of the same, including if practicable with said written notice
evidence establishing a case of infringement by such third party.
37
(b) PPTI and FEMCARE shall meet to analyze the infringement claim, the
evidence of same and attempt to agree upon a suitable approach for
addressing said infringement.
15 ARBITRATION OF DISPUTES
15.01 Excepting only actions and claims relating to actions commenced by a third
party against PPTI or FEMCARE (including, without limitation, for injuries
caused by a Product or in respect to a trademark or patent infringement
claim), any controversy or claim arising out of or relating to the terms
and conditions of this Agreement, or the decision to agree upon these
terms, or the breach thereof, including questions of validity,
infringement, or termination hereof, shall be settled exclusively by
arbitration in accordance with the rules of the American Arbitration
Association. If such controversy or claim relates to patent validity or
infringement, then the Patent Arbitration Rules of the AAA shall apply;
otherwise the International Arbitration Rules of the AAA shall apply.
Notwithstanding the foregoing to the contrary or in the arbitration rules
invoked or in this Section 15, the parties retain the right to request a
judicial authority to invoke interim measures of protection, and such
request shall not be deemed incompatible with this agreement to arbitrate
or a waiver of the right to arbitrate.
15.02 There shall be one (1) arbitrator to be mutually agreed upon by the
parties and to be selected from the Regional Panel of Distinguished
Neutrals. If the parties are unable to agreeupon such an arbitrator who is
willing to serve within ten (10) days of receipt of the demand by the
other party, the parties shall within three (3) days select one of the
five largest international public accounting firms (excluding those
providing services to the parties) and engage the managing partner or
senior officer of its New York City office to designate a partner of such
firm to serve as the arbitrator. Failing that, then the AAA shall appoint
an arbitrator willing to serve from the Regional Panel of Distinguished
Neutrals, or if no such panel exists, then from an appropriate AAA panel.
It shall be the duty of the arbitrator to set dates for preparation and
hearing of any dispute and to expedite the resolution of such dispute.
38
15.03 (a) The arbitration shall be held in the City of New York, State of New
York, U.S.A. and the arbitrator shall apply the substantive law of
Delaware except that the interpretation and enforcement of this
arbitration provision shall be governed by the Federal Arbitration
Act.
(b) The arbitrator shall permit and facilitate discovery, which will be
conducted in accordance with the Federal Rules of Civil Procedure,
taking into account the needs of the parties and the desirability of
making discovery expeditious and cost-effective.
(c) The arbitrator will set a discovery schedule with which the parties
will comply and attend depositions if requested by either party.
(d) The arbitrator will entertain such presentation of sworn testimony or
evidence, written briefs and/or oral argument as the parties may wish
to present, but no testimony or exhibits will be admissible unless
the adverse party was afforded an opportunity to examine such witness
and to inspect and copy such exhibits during the pre-hearing
discovery phase.
(e) The arbitrator shall among his other powers and authorities, have the
power and authority to award interim or preliminary relief.
(f) The arbitrator shall not be empowered to award either party exemplary
or punitive damages or any enhanced damages for willful infringement
and the parties shall be deemed to have waived any right to such
damages.
(g) A qualified court reporter will record and transcribe the proceeding.
(h) The decision of the arbitrator will be in writing and judgment upon
the award by the arbitrator may be entered in any court having
jurisdiction thereof.
(i) Prompt handling and disposal of the issue is important. Accordingly,
the arbitrator is instructed to assume adequate managerial initiative
and control over discovery and other aspects of the proceeding to
schedule discovery and other activities for substantially continuous
work, thereby expediting the arbitration as much as is deemed
reasonable to him, but in all events to effect a final award within
365 days of the arbitrator's selection or appointment and within 20
days of the close of evidence.
(j) The proceedings shall be confidential and the arbitrator shall issue
appropriate protective orders to safeguard both parties' confidential
information.
39
(k) The fees of the arbitrator and the AAA shall be paid as designated by
the arbitrator or, if he shall not so designate, they shall be split
equally between the parties.
16 NOTICES
16.01 Notices hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered, mailed by registered mail, return
receipt requested, or when sent by facsimile or other telegraphic means.
Such notices shall be effective upon receipt, if by personal delivery, on
the third business day following date of the receipt for registered mail,
or if by facsimile, on the date of the confirmation of "ok" transmission.
Addresses and persons to be notified may be changed by either party by
giving written notice thereof to the other party.
For FEMCARE:
FEMCARE UROLOGY LIMITED.
Xx. Xxxxx'x Xxxxxx
Xxxxxxxxxx XX0 0XX Xxxxxx Xxxxxxx
Attention: X. Xxxxxxx
Fax: 000-00-000-000-0000
With a copy to:
Nelsons Solicitors
Xxxxxxx Xxxxx, 0 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX0 0XX
FAX: 0000 000 0000
Attention: Xxxxx X. Xxxxxxxx
40
For PPTI:
Protein Polymer Technologies, Inc.
00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
00 XXXXX XXXXXXX
17.01 (a) Subject to compliance with paragraph (b) of this Article 17 any
delays in or failure of performance by either party under this
Agreement shall not be considered a breach of this Agreement if and
to the extent caused by any occurrences beyond the reasonable control
of the party affected, including but not limited to: acts of God;
acts, regulations or laws of any government; strikes or other
concerted acts of workers; fires; floods; explosions; riots; wars;
rebellion; embargo; and sabotage; and any time for performance
hereunder shall be extended by the actual time of delay caused by
such occurrence.
(b) Any party affected by such force majeure who wishes to rely on the
provisions of paragraph (a) of this Article shall as soon as
reasonably practicable give notice to the other party specifying the
matters constituting force majeure together with such evidence
41
thereof as it can reasonable give and specifying the period for which
it is estimated that the such delay will continue.
18 SAVINGS PROVISION
18.01 The invalidity of any provision of this Agreement shall not impair the
validity of any other provision; and any provision hereof which might
otherwise be invalid or contravene any applicable law shall hereby be
deemed to be amended to the extent necessary to remove the cause of such
invalidity and to the extent practicable to continue the intent of such
provision and of this Agreement, and such provision, as so amended, shall
remain in full force and effect as a part hereof.
19 RELATIONSHIP OF PARTIES
19.01 Each party shall act as an independent contractor in carrying out its
obligations under this Agreement. Nothing contained in this Agreement
shall be construed to imply a joint venture, partnership or principal-
agent relationship between the parties, and neither party by virtue of
this Agreement shall have the right, power or authority to act or create
any obligation, express or implied, on behalf of the other party. This
Agreement shall not be construed to create rights, express or implied, on
behalf of or for the use of any party aside from FEMCARE and PPTI, and
neither party shall be obligated, separately or jointly, to any third
parties by virtue of this Agreement.
20 WARRANTIES
20.01 FEMCARE warrants that it shall use its best efforts to comply with all
laws applicable to the purchase, storage, transport, labeling,
distribution or Commercialization by it of the Product in the Territories,
shall comply with the U.S. Export Administration laws and regulations and
shall not export or re-export any technical data or Intellectual Property,
or the direct products of such technical data or Intellectual Property, or
Products to any
42
prohibited country listed in the U.S. Export Administration Regulations
unless properly authorized to do so by the U.S. government.
20.02 PPTI represents and warrants to FEMCARE that the following statements are
true and accurate in all material respects as follows:
(a) To its knowledge and belief, it has sufficient right and title to and
ownership of, free and clear of all liens, claims and encumbrances of
any nature, the Intellectual Property to grant to FEMCARE the various
rights and Licenses granted to FEMCARE under this Agreement;
(b) It has not done and subject to clause 23, will not do nor agree to do
during the term of this Agreement, any of the following things if to
do so would be materially inconsistent with the exercise by FEMCARE
of the rights granted to it under this Agreement, assign, mortgage,
hypothecate, or otherwise transfer any of the Patents or any of its
rights or obligations under this Agreement;
(c) It is not aware that any third party owns any rights in the
Intellectual Property;
(d) It is not aware that any third party owns any rights which would be
infringed by the use of the Patents in accordance with provisions of
this Agreement;
(e) It has reasonable grounds for believing that the Product in its
present form will constitute substantially the Product for
Commercialization in the Territories;
(f) There is no information known to PPTI concerning the Product not
previously incorporated in the IDE *** or disclosed to FEMCARE which
indicates that it may not be safe for administration to humans or
that the development and Commercialization of the Product would not
be commercially successful.
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
43
(h) To PPTI's knowledge as of the date of this Agreement, no corporation,
limited liability partnership or partnership which has more than 250
employees and either an annual turnover which exceeds Euro 40 million
or an annual balance sheet total exceeding Euro 27 million owns more
than 25% of the share capital or voting rights of PPTI.
21 INTEGRATION AND CONFLICT
21.01 (a) It is the mutual desire and intent of the parties to provide
certainty as to their future rights and remedies against each other
by defining the extent of their mutual undertakings provided herein.
The parties have in this Agreement and in the related Supply
Agreement and Escrow Agreement incorporated the representations,
warranties, covenants, commitments and understandings on which they
have relied in entering into this Agreement and, except as provided
for herein and in the Supply Agreement and Escrow Agreement, neither
party has made any undertaking or other commitment to the other
concerning its future activities. Accordingly, this Agreement and the
related Supply Agreement and Escrow Agreement:
(i) constitute the entire agreement and understanding between the
parties with respect to the subject matter contained herein,
and there are no promises, representations, conditions,
provisions or terms related thereto other than as set forth
in this Agreement and the related Supply Agreement and Escrow
Agreement; and
(ii) supersede all previous understandings and agreements, and
representations between the parties, whether written or oral,
relating to the subject matter.
(b) The parties may from time to time during the term of this Agreement
modify any of its provisions by mutual agreement in writing.
44
(c) The parties agree that each has had the opportunity to be represented
by counsel of it choosing including the negotiations that preceded
this Agreement.
(d) In the event of any conflict between the provisions of this Agreement
and the Supply Agreement, unless expressly stated in this Agreement,
the provisions of this Agreement shall prevail.
22 GOVERNING LAW
22.01 This Agreement shall be construed and the rights of the parties shall be
determined in accordance with the substantive laws of the State of
Delaware, without regard to its conflict of laws principles, except that
the Arbitration provisions contained herein shall be governed as stated in
Section 15.
23 ASSIGNMENT
23.01 Except as specifically provided herein each party in its sole discretion,
may assign or transfer all or a portion of its rights under this Agreement
to any of its Affiliates, or designate or cause any Affiliate to have the
benefit of all or a portion of its rights hereunder; provided, however,
that any such party shall remain liable for the performance by its
Affiliate under this Agreement. Also, either party may assign this
Agreement to a party purchasing substantially all of the assets or
operations of such party. Except as herein provided, neither party shall
assign or otherwise transfer this Agreement or any part hereof to any
third party without the prior written permission of the other party.
24 BANKRUPTCY
24.01 All rights and licenses granted under or pursuant to this Agreement by a
party acting as licensor to the other party as licensee are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of Title 11,
U.S. Code (the "Bankruptcy Code") licenses of rights to "intellectual
45
property" as defined under Section 101(60) of the Bankruptcy Code. The
parties agree that a licensee of such rights under this Agreement, shall
retain and may fully exercise all of its rights and elections under the
Bankruptcy Code. The licensor of such rights agrees during the term of
this Agreement to create and maintain current copies or, if not amenable
to copying, detailed descriptions or other appropriate embodiments, of all
such intellectual property. The parties further agree that, in the event
of the commencement of a bankruptcy proceeding by or against the licensor
under the Bankruptcy Code, the licensee shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, and same, if
not already in its possession, shall be promptly delivered to licensee (i)
upon any such commencement of a bankruptcy proceeding upon written request
therefor by the licensee, unless licensor elects to continue to perform
all of its obligations under this Agreement, or [(ii) if not delivered
under (i) above, upon the rejection of this Agreement by or on behalf of
licensor upon written request therefor by licensee.
46
IN WITNESS WHEREOF, and FEMCARE have caused this Agreement to be executed in
duplicate by their fully authorized representatives.
PROTEIN POLYMERS, INC FEMCARE
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
--------------------------- ---------------------------
Xxxxxx Xxxxxxxx Xxxxxxx Xxxxxxx
President and CEO Managing Director
Date January 26, 2000 Date January 26, 2000
-------------------------- --------------------------
THE UNDERSIGNED PARENT COMPANY OF PROSPECTIVEPIERCING LIMITED (TO BECOME FEMCARE
UROLOGY LIMITED), TO INDUCE PROTEIN POLYMER TECHNOLOGIES, INC. TO ENTER INTO
THIS AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT,
ADEQUACY AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, HEREBY IRREVOCABLY AND
UNCONDITIONALLY GUARANTEES THE TIMELY AND FULL PERFORMANCE AND PAYMENTS UNDER
THIS AGREEMENT BY PROSPECTIVEPIERCING LIMITED AND AGREES THAT IT SHALL BE BOUND
BY THE ARBITRATION PROVISIONS HEREIN AS IF A FULL PARTY HERETO.
Date: January 26, 2000
----------------------------
By: /s/ Xxxxxxx Xxxxxxx
------------------------------
Xxxxxxx Xxxxxxx
Managing Director
47
SCHEDULE A
Schedule of Patents
-------------------
Corresponding
International Patents
Patent Number Issue Date Title and/or Applications
-------------- ----------- ------------------------- -------------------------
U.S. 5,243,038 Sep 7, 1993 Construction of Synthetic PCT/US87/02822: Issued in
DNA and Its Use in Large Australia, Finland, New
Polypeptide Synthesis Zealand; ***
U.S. 5,606,019 Feb 25, 1997 Synthetic Proteins as PCT/US95/02772: ***
Implantables
U.S. 5,770,697 Jun 23, 1998 Peptides Comprising Not Applicable
Repetitive Units of Amino
Acids and DNA Sequences
Encoding the Same
Patent Application Number Filing Date Title Corresponding
International Patents
and/or Applications
PCT/US89/05016 Nov 7, 1989 Functional Recombinantly Issued in Australia,
Prepared Synthetic Protein Xxxxxx, Xxxxxxx, Xxxxxx,
Xxxxxxx Xxxxx Xxxxx; ***
U.S. S/N 08/482,085 Jun 7, 1995 Peptides Comprising Not Applicable
Repetitive Units of Amino
Acids and DNA Sequences
Encoding the Same
*** *** *** ***
*** *** *** ***
*** *** *** ***
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
A-1
SCHEDULE B
PRODUCT DEVELOPMENT AND REGULATORY APPROVAL MILESTONES
MILESTONE TARGET DATE
--------- -----------
BEGIN NON-U.S. CLINICAL EFFICACY TRILAS ***
BEGIN EUROPEAN PRODUCT SALES ***
BEGIN AUSTRALIAN PRODUCT SALES ***
BEGIN MINIMUM ROYALTY PERIOD ***
* Provided that any failure to achieve this Performance Benchmark shall not
give rise to a right of termination of this Agreement even if the failure is not
cured within the required time period. In the event of such failure, FEMCARE's
license for Australia hereunder shall cease to be exclusive and shall become
non-exclusive for remaining term of, and subject to, this Agreement.
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
B-1
SCHEDULE C
***
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
C-1
SCHEDULE D
LIST OF THE TERRITORIES
TERRITORIES
Norway France
Finland Germany
Iceland Greece
Liechtenstein Ireland
Sweden Italy
Switzerland Luxembourg
Hungary Netherlands
Poland Portugal
Austria Spain
Belgium UK
Denmark Australia
***
------------------------
*** Material is confidential and has been omitted and filed separately with
the Securities and Exchange Commission.
D-1
