Exhibit 10.21

 

CONFIDENTIAL TREATMENT REQUESTED:

 

Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.  Such redacted portions
have been replaced with “{***}” in this Exhibit.  An unredacted version of this
document has been filed separately with the Securities and Exchange Commission
along with the request for confidential treatment.

 

 

DATED 10th December 1998

 

 

(1)                                  LIFEHEALTH LIMITED

 

 

AND

 

 

(2)                                  CAMBRIDGE SELFCARE DIAGNOSTICS LIMITED

 

 

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LICENCE AGREEMENT

 

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Stringer Saul
17 Hanover Square
London W1R 9AJ

 

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Date: 10/12 1998

 

Parties:

 

1                                          LIFEHEALTH LIMITED an English company
registered under number 3017293 whose registered office is at Richmond House,
Old Brewery Court, Sandyford Road, Newcastle-upon-Tyne, NE2 1XG (“Lifehealth”).

 

2                                          CAMBRIDGE SELFCARE DIAGNOSTICS
LIMITED an English company registered under number 2039082 whose registered
office is at Richmond House, Old Brewery Court, Sandyford Road,
Newcastle-upon-Tyne, NE2 1XG (“CSD”).

 

Recitals:

 

(A)                              Pursuant to an agreement dated 29 May 1995
between Lifehealth and Roche, Lifehealth acquired the rights to manufacture,
use, sell or otherwise deal in certain products, including the Product (as
hereinafter defined) in the United Kingdom and the Republic of Ireland.

 

(B)                                Pursuant to an agreement dated 18 July 1995
between the parties, Lifehealth granted to CSD a licence to manufacture, use,
sell or otherwise deal in certain products, including the Product in the United
Kingdom and the Republic of Ireland.

 

(C)                                Pursuant to agreements between Roche and
Lifehealth dated 04 August 1997 and 16 September 1997 Lifehealth has acquired
the rights to manufacture, use, sell or otherwise deal in the Product for all
countries in the world excluding the United Kingdom and the Republic of Ireland.

 

(D)                               The parties have agreed that Lifehealth shall
grant to CSD a licence to manufacture, use, sell or otherwise deal in the
Product for all countries in the world subject to the terms and conditions set
forth herein and that this agreement should replace the terms of the agreement
of 18 July 1995 in so far as it relates to the Product.

 

Operative provisions:

 

1.                                      Definitions

 

1.1                                 In this Agreement the following terms shall
have the following meanings unless the context otherwise requires:

 

 

‘Commercial Life’

means for so long as any market exists for the relevant product in any country
which results in sufficient demand to make the continued production and sale of
the relevant product commercially viable.

 

 

 

 

‘Confidential information’

means any and all information of a proprietary or confidential nature relating
to the Product,

 

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including, without limitation, the Information, information relating to
Improvements, price data and customer lists whether disclosed (orally or in
writing) and/or whether acquired prior to or pursuant to this Agreement.

 

 

 

 

‘CSD’s Cost of Goods’

includes, without limitation:

 

 

 

 

 

(a)

the costs of procuring all raw materials including (without limitation) purchase
costs of the raw materials and costs incurred in their delivery to CSD or any
contract manufacturer engaged by CSD; and

 

 

 

 

 

 

(b)

sums paid for the services of any contract manufacturer in the manufacturing of
the Product and for delivery of the Product when so manufactured to CSD’s
premises PROVIDED that the parties will consult in good faith with a view to
agreeing an appropriate figure for this item, it being acknowledged that if any
contract manufacturer manufactures other products for CSD in addition to the
Product a fair allocation needs to be made between all the products so
manufactured of the total of such costs of manufacture and delivery; and

 

 

 

 

 

 

(c)

costs incurred in preparing cartons, leaflets and any foil or other packaging
for the Products (including, without limitation, artwork, organisation and
printing costs); and

 

 

 

 

 

 

(d)

tooling costs incurred by CSD with Lifehealth’s consent for equipment to
manufacture the Product PROVIDED that Lifehealth may not withhold its consent to
the incurring of any costs if the tooling in question is required in order for
the Product to comply with any requirements of a Regulatory Authority.

 

2

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‘Development Plan’

means the plan, to be agreed between the parties, pertaining to CSD seeking,
obtaining and maintaining Marketing Authorisations for the Product in counties
in the Territory

 

 

 

 

‘Effective Date’

means the date of signature of this Agreement

 

 

 

 

‘Financial Year’

means each period of twelve months from the 1st of July to the 30th of June.

 

 

 

 

‘Improvements’

means all improvements, modifications or adaptations to any part of the
Information and/or the Product which might reasonably be of commercial interest
to either party in the design manufacture or supply of the Product and which may
be made or acquired by either party during the term of this Agreement.

 

 

 

 

‘Information’

means all identifiable know-how, clinical reports, studies and pre-clinical
studies, experience, data and all other technical or commercial information of
Lifehealth relating to the Product whether in human or machine readable form and
whether stored electronically or otherwise and which might reasonably be of
commercial interest to either party in the design manufacture or supply of the
Product or in seeking, obtaining, varying and maintaining any Marketing
Authorisations.

 

 

 

 

‘Interest’

means interest (both before and after judgement) calculated at the rate of
{***}† above the base rate from time to time of Lifehealth’s bankers compounded
with quarterly rests.

 

 

 

 

‘Marketing Authorisation’

means the regulatory approval or approvals from a Regulatory Authority
permitting the holder of the approval to market the Product in a country in the
Territory.

 

 

 

 

‘Marketing Plan’

means the five (5) year plan pertaining to the marketing of the Product to be
agreed between the parties and updated annually by mutual

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

3

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agreement between the parties pursuant to this Agreement.

 

 

 

 

{***}†

{***}†

 

 

 

 

‘Product’

means any pharmaceutical preparation and/or product containing Tetrabenazine.

 

 

 

 

‘Regulatory Authority’

shall mean the Medicines Control Agency in respect of the United Kingdom, the
FDA in respect of the United States and such equivalent authority in respect of
each of the other countries in the Territory.

 

 

 

 

‘Roche’

means Roche Products Limited.

 

 

 

 

‘Roche Agreements’

mean the agreements between Roche and Lifehealth dated 29 May 1995, 04
August 1997 and 16 September 1997.

 

 

 

 

‘Specification’

means, in relation to any country in the Territory, the specification for the
Product as appears in the Marketing Authorisation for the Product in the
relevant country in the Territory.

 

 

 

 

‘Territory’

means all countries in the world.

 

 

 

 

‘Total Net Receipts’

means the total monies actually received by CSD resulting from sales of the
Product (including, for the avoidance of doubt and without limitation, any sums
actually received by CSD from any insurer in respect of any Product which may be
lost, damaged and/or destroyed) after deduction of VAT and any charges payable
in respect of transport or insurance included therein but shall exclude
extraordinary payments made to CSD by third parties for the acquisition by those
third parties of any rights in relation to the Product, such payments to be
dealt with in the manner set forth in Clause 6.9

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

4

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2.             Grant of rights

 

2.1           The terms of this Agreement replace the terms of the agreement
between the parties dated 18 July 1995 in so far as it relates to the Product.
Otherwise the agreement dated 18 July 1995 shall remain in full force and
effect.

 

2.2           For the term of this Agreement Lifehealth, to the extent that it
is capable of doing so, hereby grants to CSD:

 

2.2.1        an exclusive licence to use its Information to manufacture Product
and to seek, obtain, vary and maintain, where possible, in the name of
Lifehealth, Marketing Authorisations and manufacturing licences for the Product;
and

 

2.2.2        an exclusive licence to use, sell, market, promote or otherwise
deal in the Product manufactured under the licence of clause 2.2.1 anywhere in
the Territory.

 

2.3           The parties shall be entitled to sub-license any wholly owned
subsidiary (as defined in s 736 of the Companies Act 1985 as amended) of the
parties for so long as it is such a wholly-owned subsidiary under the rights
granted or to be granted under clause 2.2 hereof provided that

 

2.3.1        the sub-licence is in writing and contains obligations on the
sub-licensee at least as onerous as those set out in this Agreement; and

             

2.3.2        the parties shall remain responsible for any and all acts and/or
omissions of their sub-licensees as though they were the acts and/or omissions
of themselves under this Agreement; and

             

2.3.3        the party granting the sub-licence shall forthwith notify the other
party in writing of any sub-licence granted pursuant to this clause and shall at
the same time provide the other party with a copy of such sub-licence.

 

2.4           CSD shall have the right to grant sub-licenses of any of the
rights licensed under clause 2.2 and/or appoint agents or distributors for the
Product and/or to subcontract the manufacture of the Product, to a third party
(save that CSD shall not have the right to sub-licence any such rights to a
third party in respect of the United Kingdom) on condition that CSD obtains the
prior written approval of Lifehealth to the identity of such person and the
terms of their appointment. Lifehealth’s approval to any such agreement and/or
appointment shall not be unreasonably withheld or delayed.

 

2.5           In the case of any sub-license granted by CSD under the terms of
this Agreement the terms of such sub-licence shall not permit the sub-licensee
to further sub-license the rights granted to them save where Lifehealth has
agreed in writing that a sub-licensee may have the right to further sub-licence
the rights granted.

 

2.6           CSD shall use its reasonable endeavours to ensure that any person
appointed by it pursuant to clause 2.4 above complies with the terms of their
appointment and that such person is restrained, to the fullest extent
permissible by law, from manufacturing and

 

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distributing in competition to CSD, Lifehealth and/or other persons appointed
under this Agreement in relation to the Product.

 

2.7           Both parties agree to the fullest extent permitted by law that
they will not be involved directly or indirectly in the manufacture,
development, production, distribution, sale, promotion and/or marketing of any
Tetrabenazine product competitive to the Product without the prior written
consent of the other party such consent not to be unreasonably withheld or
delayed.

 

3.             Technical information

 

3.1           The parties acknowledge that, pursuant to the agreement between
them dated 18 July 1995 some of the Information in Lifehealth’s possession that
is reasonably necessary or desirable to enable CSD to design, manufacture on a
commercial scale and sell the Product has already been provided to CSD as has
all technical assistance. Within 30 days of the Effective Date Lifehealth shall
provide to CSD any other Information in its possession which will assist CSD to
design, manufacture on a commercial scale and sell the Product and seek, obtain,
vary and maintain Marketing Authorisations and manufacturing licences for the
Product.

 

3.2           Lifehealth warrants that all Information disclosed to CSD by
Lifehealth is, to the best of Lifehealth’s knowledge and belief, accurate
(provided always that Lifehealth will promptly correct any significant errors in
the Information subsequently discovered by Lifehealth or CSD which CSD notifies
in writing to Lifehealth and promptly inform CSD of any changes to the
Information).

 

4.             Improvements

 

4.1           Each party shall forthwith disclose to the other in confidence and
in such detail as that other may reasonably require all Improvements that it may
develop or acquire during the term of this Agreement except in so far as such
disclosure would disclose information derived from and subject to
confidentiality obligations in favour of a third party.

 

4.2           Save as otherwise provided herein, Improvements arising from work
carried out by and/or on behalf of either Lifehealth or CSD shall be jointly
owned by the parties. Neither party shall license and/or exploit such
Improvements in any way without the consent of the other party.

 

5.             Confidentiality

 

5.1           Each party agrees to maintain secret and confidential all
Confidential Information and to use the same exclusively for the purposes of
this Agreement, and to disclose the same only to those of its employees,
contractors and sub-licensees pursuant to this Agreement (if any) to whom and to
the extent that such disclosure is reasonably necessary for the purposes of this
Agreement.

 

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5.2           The foregoing obligations of clause 5.1 above shall not apply to
Confidential Information or other information which:

 

5.2.1        is or becomes generally available to the public in eye readable
form (except where due to a breach of the terms of this Agreement or the
agreement dated 18th July 1995 or breach of the terms of appointment of any
person appointed by either party under this Agreement); or

 

5.2.2        is required to be disclosed by an order of a court or other
tribunal of competent jurisdiction.

 

5.3           The parties acknowledge that it will be necessary to disclose
Confidential Information to consultants, agents, licensees, distributors or
agents of CSD or any third party engaged by CSD to prepare submissions or
applications to Regulatory Authorities. CSD shall ensure, prior to disclosure to
any such person, that the intended recipient has signed a confidentiality
agreement on terms no less onerous than the provisions in this Agreement and
that such terms have been approved by Lifehealth (such approval not to be
unreasonably withheld or delayed).

 

5.4           Notwithstanding the foregoing provisions the parties and any
sub-licensees pursuant to this Agreement shall be entitled to disclose the
Information to actual or potential customers for the Product in so far as such
disclosure is reasonably necessary to promote the sale or use of Product.

 

5.5           Each party shall procure that all its employees, contractors and
sub-licensees pursuant to this Agreement (if any) who have access to any
Confidential Information of the other to which the obligations of clause 5.1
apply shall be made aware of and subject to these obligations.

 

6.             Payment

 

6.1           CSD shall pay to Lifehealth {***}† of the {***}† which shall be
calculated in accordance with the following:

 

6.1.1        No later than the 10th day of October of each year following the
Effective Date CSD shall supply to Lifehealth an audited certificate produced by
its auditors showing the Total Net Receipts and the sum of {***}† referred to in
the definition of {***}† for the Financial Year ending 30 June in that year.

 

6.1.2        At any time following receipt of the said audited certificate
Lifehealth may submit to CSD an invoice for {***}† of the {***}† shown therein
and CSD agrees to pay to Lifehealth such of that amount as, at the date of the
invoice, has not already been paid to Lifehealth, plus VAT thereon (in so far as
is applicable) at the appropriate rate no later than 14 days after receipt of
the said invoice.

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

7

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6.2           In the event that, in respect of any Financial Year, the sum of
{***}† referred to in the definition of {***}† exceeds the Total Net Receipts
for that period, CSD shall be entitled to recoup from any {***}† payable to
Lifehealth in the future a sum equal to {***}† of the amount by which the sum of
{***}† referred to in the definition of {***}† exceeds the Total Net Receipts
for that period.

 

6.3           CSD shall account direct to Roche (or to any such other party, if
any, as may be entitled thereto) for the amount of any royalties due to be paid
pursuant to the Roche Agreements.

 

6.4           Should CSD become aware that the cumulative sum of the Total Net
Receipts in any Financial Year of the Agreement have exceeded {***}† CSD shall
notify Lifehealth of such in writing and thereafter, subject to the following,
payments to Lifehealth of its {***}† of the {***}† based on management accounts
prepared by CSD shall be made quarterly within thirty (30) days of the end of
each quarter of the Financial Year in respect of the {***}† from the Total Net
Receipts in excess of {***}† SAVE THAT the parties acknowledge that CSD’s
priority is to apply such funds as are necessary to meet the obligations jointly
agreed under the Marketing Plan and the Development Plan and thus CSD shall make
any quarterly payments contemplated hereunder only when that can be done without
jeopardising the ability of CSD to achieve the objectives jointly agreed
pursuant to the Marketing Plan and the Development Plan.

 

6.5           Should CSD become aware that the cumulative sum of the Total Net
Receipts in any Financial Year of the Agreement has exceeded {***}† CSD shall
notify Lifehealth of such in writing and thereafter, subject to the following,
payments to Lifehealth of its {***}† of the {***}† based on management accounts
prepared by CSD shall be made monthly within thirty (30) days of the end of each
month of the Financial Year in respect of the {***}† from the Total Net Receipts
in excess of {***}† SAVE THAT the parties acknowledge that CSD’s priority is to
apply such funds as are necessary to meet the obligations jointly agreed under
the Development Plan and the Marketing Plan and thus CSD shall make any monthly
payments contemplated hereunder only when that can be done without jeopardising
the ability of CSD to achieve the objectives jointly agreed in the Marketing
Plan and the Development Plan.

 

6.6           The parties agree that the {***}† is to be shared {***}† between
the parties subject to the terms set forth in this Agreement. If interim
payments have been made to Lifehealth under clauses 6.4 and/or 6.5 the parties
shall carry out an appropriate reconciliation once the {***}† has been
determined in accordance with clauses 6.1 and 7.2 so that each party receives
{***}† of the {***}† for any Financial Year and both parties agree to make any
payments that are necessary to achieve that end. All sums due under this
Agreement shall be paid in Sterling to the credit of the recipient’s bank
account to be designated in writing by the recipient and shall be made in full
without deduction of taxes charges and other duties that may be imposed except
in so far as any such deduction may be credited in full by Lifehealth against
Lifehealth’s own tax liabilities (except in relation to VAT). The

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

8

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parties agree to co-operate in all respects necessary to take advantage of such
double taxation agreements as may be available.

 

6.7           If part of the Total Net Receipts shall not be received by CSD in
Sterling then it shall be convened to Sterling for the purposes of calculation
of the Total Net Receipts at the exchange rate at which CSD does actually
convert it to Sterling or if it is not so converted within the relevant period
the exchange rate shall be deemed to be the spot rate for Sterling quoted by
Lifehealth’s bankers at close of business on the business day immediately on
which the monies were received by CSD.

 

6.8           The parties shall, save as provided herein, share equally any
extraordinary payments made to CSD by third parties for the acquisition by those
third parties of any rights pertaining to the Product. Save as provided herein,
CSD shall pay to Lifehealth, within seven (7) days of clearance of any such
extraordinary payment contemplated herein, an amount equal to {***}† of that
extraordinary payment.

 

6.9           If as a requirement of the agreement giving rise to an
extraordinary payment CSD is obliged to incur costs and/or expenses, including,
but not limited to, a requirement to develop or further develop the Product,
which has not already been provided for in the allocation of funds to implement
the Development Plan and/or Marketing Plan then the parties shall meet to agree
any necessary revisions to the Development Plan and/or Marketing Plan as
appropriate.

 

6.10         If at the time of receipt of any extraordinary payment there exists
a carried forward shortfall under clause 6.2 and/or the agreement giving rise to
the extraordinary payment imposes an immediate obligation upon CSD to expend any
costs or expenses not provided for in the Development Plan and/or Marketing Plan
which cannot be met out of the then Total Net Receipts then CSD shall be
entitled to deduct and retain from the extraordinary payment the amount of the
shortfall and/or such costs and expenses and CSD shall pay to Lifehealth, within
seven (7) days of receipt of the extraordinary payment {***}† of the balance
remaining of the extraordinary payment. The amount deducted shall form part of
the Total Net Receipts and the amount of any immediate actual costs and expenses
incurred shall be included in those items {***}† the Total Net Receipts to give
the {***}†.

 

7.             Records and reports

 

7.1           CSD agrees to keep true and accurate records and books of account
containing all data necessary for the determination of Total Net Receipts and
the {***}† which records and books of account shall upon reasonable notice of
Lifehealth be open at all reasonable times during business hours for inspection
by Lifehealth or an independent accountant selected by Lifehealth and acceptable
to CSD (which acceptance shall not be unreasonably withheld) for the purpose of
verifying the accuracy of CSD’s reports

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

9

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hereunder. The accountant may take copies of the records and books of account
but shall not disclose to Lifehealth any information relating to the business or
affairs of CSD other than such information as relates to the calculation of the
Total Net Receipts and {***}†. Lifehealth shall be solely responsible for the
costs of the accountant.

 

7.2           If the independent accountant appointed pursuant to clause 7.1
above certifies that the amount of royalties due to Lifehealth in respect of any
period differs from the amount of royalties actually paid to Lifehealth for that
period then CSD shall forthwith pay such shortfall plus Interest thereon to
Lifehealth upon Lifehealth serving a copy of such certificate upon CSD. If the
shortfall for that period exceeds five percent (5%) of the amount actually paid
for that period and the reason for such variation is the failure of CSD to
provide to its auditors correct or sufficient information then CSD shall also
reimburse Lifehealth for the costs of the independent accountant.

 

7.3           CSD shall maintain a register of agreements entered into in
carrying out its obligations under this agreement including but not limited to
all sub-licence, agency, distribution confidentiality, consultancy, technical
and contract manufacturing agreements. Lifehealth shall have the right to
inspect said register of agreements during normal working hours and on the
provision of reasonable notice. In the event that Lifehealth signs a
confidentiality or other such agreement pertaining to the Product, the
Information or the Improvements, it shall provide a copy of such to CSD and CSD
shall place of copy of any such agreement in the register of agreements.

 

7.4           Lifehealth agrees to maintain confidential all financial
information received with respect to CSD’s operations pursuant to the foregoing
clauses 6.1 and 7.1.

 

8.             Regulatory Approvals and Development Plan

 

8.1           As soon as practicable following the Effective Date the parties
shall agree the Development Plan. The Development Plan shall address, amongst
other things, the proposed activities of the parties with regard to the seeking,
obtaining, varying and maintaining of Marketing Authorisations, the costs of
implementing the proposed activities, the time frame within which the proposed
activities are to be achieved, the procedure for the review of the proposed
objectives and a non-binding forecast by CSD of the Total Net Receipts and
{***}† for the next Financial Year of the Agreement and a non-binding forecast
of its anticipated expenditure in carrying out its obligations pursuant to this
Agreement and the Development Plan for the next two (2) Financial Years
(hereinafter “the Anticipated Expenditure”). The Anticipated Expenditure for any
year should not exceed the forecast {***}† for that year except by written
agreement of the parties.

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

10

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8.2           The Development Plan shall be reviewed and revised bi-monthly at
meetings which shall take place between the parties. At those bi-monthly
meetings the parties shall agree the level of expenditure to be committed to the
Development Plan.

 

8.3           Lifehealth shall during the agreement of the Development Plan, at
each revision of the Development Plan and otherwise upon request by CSD provide
advice concerning the Product and such other strategic advice as is required or
requested.

 

8.4           Should CSD encounter any obstacle to achieving one of the
objectives in the Development Plan such that achieving that objective becomes,
in the opinion of CSD, economically undesirable, the parties shall meet to
discuss the difficulty encountered by CSD and endeavour to determine a strategy
to overcome the difficulty.

 

8.5           Lifehealth shall provide to CSD, at the cost of Lifehealth, all
information in its possession regarding the Product so as to assist CSD in
obtaining Marketing Authorisations.

 

8.6           CSD shall be responsible, either by itself or through agents,
consultants, distributors or licensees appointed by CSD with the prior approval
of Lifehealth, for preparing and submitting all applications for Marketing
Authorisations and/or manufacturing licences and variations or renewals of the
same in countries in the Territory save that Lifehealth shall provide such
assistance in carrying out the said tasks as CSD reasonably requests.

 

8.7           All Marketing Authorisations shall be in the name of Lifehealth
unless such is not possible or the parties agree otherwise. CSD shall ensure, to
the extent that it is permissible under the laws of the relevant part of the
Territory, that all Marketing Authorisations which are not in the name of
Lifehealth shall be capable of assignment to Lifehealth or its nominee.

 

8.8           Upon termination of the agreement with the holder of the Marketing
Authorisation and the request of Lifehealth, CSD shall procure, to the extent
that it is legally permissible to do so and at the cost of Lifehealth, that the
relevant Marketing Authorisation is assigned to Lifehealth or its nominee. Upon
the termination of this Agreement and the request of Lifehealth, CSD shall
procure , to the extent that it is legally permissible to do so and at the cost
of Lifehealth, that all Marketing Authorisations are assigned to Lifehealth or
its nominee.

 

8.9           For the avoidance of doubt, CSD shall be in control of the day to
day conduct and implementation of the Development Plan.

 

8.10         In the event that CSD decides, with the written agreement of
Lifehealth, to pay any sum in respect of any objective in the Development Plan
or to bring about commercial advantage to the parties in respect of the sales or
distribution of the Product which will

 

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result in the sum of {***}† referred to in the definition of {***}† exceeding
the Total Net Receipts for that period, the provisions of clause 6.2 shall
apply.

 

8.11         Should any regulatory authority, court of law or governmental body
or agency in any country in the Territory require discontinuance of the sale of
the Product in that country, then the Product shall be withdrawn from sale in
that country and the associated costs (including the repurchase of relevant
stock Product where commercially desirable or CSD is obliged to do so) shall be
{***}† the Total Net Receipts for the purposes of calculating the {***}†.

 

8.12         Should the parties :

 

8.12.1      agree that the Product has reached the end of its useful Commercial
Life in the Territory or any part thereof; or

 

8.12.2      agree to cease implementation of the Development Plan

 

they shall ensure that all relevant costs have been paid from the Total Net
Receipts and to this end shall produce all necessary statements and make all
necessary payments.

 

9.             Marketing Plan

 

9.1           The parties shall, within ninety (90) days of the Effective Date,
agree the Marketing Plan setting forth details of the manner in which the
Product will be marketed in the Territory for the immediately succeeding five
(5) years of the Term of this Agreement.

 

9.2           Within sixty (60) days of the each anniversary of the Effective
Date the parties shall review and revise the Marketing Plan by mutual agreement.

 

9.3           The parties shall, in determining the Marketing Plan and any
amendment to or revision of the Marketing Plan, take account of the reasonable
strategic importance of any country in the Territory to the overall marketing
strategy for the Product, the likely commercial return to be made in marketing
the Product in a particular country in the Territory and the financial resources
available to the parties to market the Product in a particular country in the
Territory.

 

9.4           In the event that Lifehealth, for {***}† years, seeks to revise
the Marketing Plan so as to include commencement of marketing of the Product in
a particular country in the Territory and CSD, for those {***}† does not agree
with such a revision and the reason for CSD’s unwillingness to agree to the
revision relates to

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

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factors other than those set forth in clause 9.3, Lifehealth may, by written
notice, terminate this Agreement only insofar as it relates to the country in
issue.

 

10.          Performance

 

10.1         During the continuance of this Agreement CSD shall:

 

10.1.1      carry out the Marketing Plan and the Development Plan as widely as
its resources reasonably permit;

 

10.1.2      ensure that all Product supplied by CSD complies with the
Specifications and is manufactured in accordance with the requirements of any
relevant Regulatory Authority and shall upon reasonable notice from Lifehealth
give Lifehealth or its authorised representative access at any reasonable time
to the premises of CSD for the purpose of ensuring that CSD is observing these
obligations;

 

10.1.3      ensure that it complies with all requirements of any Regulatory
Authority in the Territory in so far as such requirements relate to an
acknowledgement to the effect that the Product is subject to a licence from
Lifehealth; and

 

10.1.4      not act as agent of Lifehealth and specifically not give any
indication that it is acting otherwise than as principal and in advertising or
selling Product not make any representation or give any warranty on behalf of
Lifehealth.

 

11.          Indemnities and Insurance

 

11.1         The parties have agreed that they shall be jointly liable in equal
shares for any liability arising pursuant to this Agreement and accordingly the
parties agree to indemnify and keep indemnified the other party against any and
all costs, damages, claims, expenses and/or other liabilities arising from any
third party claim (whether in contract, tort or otherwise) concerning:-

 

11.1.1      the Product;

 

11.1.2      the Information;

 

11.1.3      the manufacture of the Product;

 

11.1.4      the use of the Product;

 

11.1.5      the packaging of the Product;

 

11.1.6      the sale, distribution, marketing or promotion of the Product;

 

11.1.7      the infringement of the intellectual rights of a third party by the
acts set forth previously in this sub-clause, the Product or the Information;
and/or

 

11.1.8      the negligence or wilful malfeasance of either party;

 

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provided that the above indemnity shall not apply to any such liabilities which
arise as a result of any breach of any contract, any breach of duty of care
and/or any acts and/or omissions of the party claiming under the indemnity which
have not been approved by the party not claiming under the indemnity.

 

11.2         In relation to clause 11.1 above a matter agreed in the Development
Plan, Marketing Plan or otherwise agreed in writing or at any meeting between
the parties shall be deemed approved for the purposes of clause 11.1 provided
that full disclosure of all relevant information and factors of which each party
is aware have been made to the other party before reaching such agreement.

 

11.3         In the event that a claim is made by any third party in any country
in the Territory against either of the parties relating to this Agreement
details of the claim shall be sent, as soon as is practicable, by the party that
received the claim to the other party. The parties shall discuss and agree a
course of action for dealing with the claim including but not limited to whether
the claim will be defended and the means by which the claim will be defended,
how the parties will pay the legal costs of the action and how the parties will
pay any award of damages and/or costs made against either of them.

 

11.4         Both parties shall ensure that they have in place and maintain
product liability insurance with a reputable insurer to cover the risks
associated with this Agreement to the value of {***}†. Either party shall, on
the request of the other party, provide evidence of the existence and
maintenance of such insurance. If possible, such insurance shall be in the joint
names of the parties, or in the alternative note the interest of the other
party. The cost of taking out and maintaining such insurance shall be an expense
to be deducted from the Total Net Receipts. Each year the parties shall review
and if necessary alter the extent of cover under the joint insurance policy.

 

11.5         Neither party shall be liable to the other to the extent that the
other party’s loss, claim, damages, costs, expenses, award and/or other
liability is covered by a policy of insurance.

 

11.6         Nothing in this Agreement shall exclude and/or limit the liability
of either party for death or personal injury due to its negligence or any other
liability which it is not permitted to exclude or limit as a matter of law.

 

12.          Intellectual property

 

12.1         To the best of Lifehealth’s knowledge and belief the exercise of
the rights granted or to be granted to CSD hereunder will not result in the
infringement of valid patents or other intellectual property rights of third
parties.

 

12.2         Where the parties have developed or acquired an Improvement to
which clause 4 above applies they shall not publish the same or do anything that
might prejudice the validity of

 

--------------------------------------------------------------------------------

† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

14

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any patent that might subsequently be granted on it until the parties have
agreed on whether or not patent protection will be sought for the Improvement.

 

12.3         CSD shall sell the Product under its generic name unless the
parties mutually agree otherwise.

 

13.          Packaging

 

13.1         CSD shall be responsible for ensuring that all packaging,
labelling, inserts and Patient Information Leaflets comply with the laws and
requirements of Regulatory Authorities of the countries in the Territory where
the Product is sold.

 

13.2         CSD shall provide to Lifehealth a printers’ proofs of the final
draft of any labelling, packaging, package inserts and Product Information
Leaflets for approval. For countries in the Territory where Lifehealth is the
holder of the Marketing Authorisation, Lifehealth shall notify CSD within five
(5) working days if it requires any changes to be made to the printers’ proofs
unless Lifehealth has notified CSD that its representative who would check such
printer’s proof is unavailable for any period due to holiday or illness in which
case such period of 5 days shall not commence until that person returns to work.
Failure by Lifehealth to provide such notice within the required time period
shall constitute acceptance of the printers’ proofs.

 

13.3         Any substantive changes in the packaging shall be discussed and
agreed between the parties pursuant to the Development Plan

 

14.          Warranties

 

14.1         In addition to any other warranties and representations set forth
elsewhere in this Agreement, Lifehealth hereby warrants:

 

14.1.1      that it has acquired the rights to manufacture, use, sell and
distribute the Product from Roche as set forth in the recitals to this
Agreement;

 

14.1.2      that it is not aware of any issued or pending patent or any other
intellectual property right of any third party which could be infringed by CSD
in carrying out its obligations under this Agreement;

 

14.1.3      that it has no knowledge of the existence of any data, clinical or
otherwise, which suggests there may exist safety and/or efficacy concerns with
the Product for any application of the Product; and

 

14.1.4      that it has not developed or acquired the rights to any product,
device or system that is or is likely to be directly competitive with the
Product.

 

14.2         In addition to any representations and warranties set forth
elsewhere in this Agreement CSD hereby warrants:-

 

15

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14.2.1      that it will comply with all laws pertaining to the packaging,
manufacture, marketing or sale of the Product in any country in the Territory in
which it manufactures and/or sells the Product;

 

14.2.2      that it will manufacture the Product or have it manufactured to
Specification and in accordance with any applicable requirements of any
Regulatory Authority in the countries in which the Product is manufactured
and/or sold; and

 

14.2.3      that it has not developed or acquired the rights to any product,
device or system that is or is likely to be directly competitive with the
Product.

 

14.3         In addition to any representations and warranties set forth
elsewhere in this Agreement, each party hereby warrants to the other:-

 

14.3.1      that they have the corporate power and authority to execute and
deliver this agreement and to carry out all the terms and provisions hereof in
so far as they apply to each other respectively;

 

14.3.2      that they are not prevented from entering into any of the
obligations set forth in this Agreement; and

 

14.3.3      that the execution and delivery of this Agreement has been duly
authorised by all necessary corporate action.

 

15.          Product Recall and Adverse Events Procedures

 

15.1         In the event that it proves necessary to recall any quantity of the
Product, the parties shall follow the product recall procedure set forth in
Schedule 2 to this Agreement as amended from time to time.

 

15.2         Should any adverse event occur concerning the Product the parties
shall follow the procedure set forth in Schedule 1 to this Agreement as amended
from time to time.

 

16.          Term and termination

 

16.1         Unless terminated earlier in accordance with the following
provisions of this clause this Agreement shall continue for the Commercial Life
of the Product in the Territory.

 

16.2         If either party is in breach of any obligation on it hereunder and,
in the case of a breach capable of remedy, it shall not have been remedied by
the defaulting party within 30 days of written notice specifying the breach and
requiring its remedy, or if either party becomes insolvent, has a receiver
appointed over the whole or any part of its assets, enters into any compound
with creditors, or has an order made or resolution passed for it to be wound up
(otherwise than in furtherance of a scheme for amalgamation or reconstruction)
then the other party or in the case of breach the parry not in breach of the
obligation or condition may forthwith terminate this Agreement by written notice
without prejudice to the accrued rights of either party.

 

16

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16.3         Termination of this Agreement for any reason shall not bring to an
end:

 

16.3.1      the confidentiality obligations on the parties hereto;

 

16.3.2      CSD’s obligations to pay sums which have accrued due or which will
become due in respect of sales of the Product;

 

16.3.3      the obligations on the parties pursuant to clauses 4, 5, 6, 7, 8.7,
11, and 16;

 

16.4         On termination of this Agreement for any reason CSD shall continue
to have the right for a period of 12 months from the date of termination to
complete deliveries on contracts in force at that date and to dispose of Product
already manufactured subject to payment to Lifehealth of sums thereon in
accordance with the terms set forth in this Agreement.

 

16.5         On termination of this Agreement for any reason CSD shall offer to
Lifehealth, save as is necessary for the performance of obligations under clause
16.4, at cost all stocks of Product and promotional and other literature
relating thereto in its possession or control and shall provide Lifehealth with
all reasonable facilities to inspect the same.

 

16.6         On termination of this Agreement for any reason CSD shall deliver
up to Lifehealth all production manuals and all other documents or materials
whether human or machine readable and whether stored electronically or otherwise
(including copies thereof) in its possession or control containing Information
remaining subject to the confidentiality obligations of clause 5 hereof.

 

16.7         On termination of this Agreement for any reason the parties shall
undertake an account to each other for sums paid pursuant to this Agreement in
the same manner as would normally take place after each Financial Year of this
Agreement under clause 6 hereof.

 

16.8         In the event of termination of this Agreement for breach of the
Agreement the party in breach shall cease to have the right to utilise the
Improvements and all rights in the Improvements shall vest in the party not in
breach.

 

16.9         On the termination of this Agreement for any reason CSD (save where
expressly permitted by this Agreement) shall not anywhere in the Territory for a
period of 12 months after such termination be involved directly or indirectly in
the manufacture, development, production, distribution, sale, promotion and/or
marketing of any Product in competition with Lifehealth and/or its agents,
licensees and distributors.

 

16.10       For the avoidance of doubt on the termination of this Agreement for
any reason CSD shall not use any Confidential Information (for so long as it
remains confidential pursuant to clause 5.2) directly or indirectly in the
manufacture, development, production, distribution, sale, promotion and/or
marketing of any Product.

 

17.          Force majeure

 

17.1         If either party to this Agreement is prevented or delayed in the
performance of any of its obligations under this Agreement by force majeure, and
if such party gives written notice

 

17

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thereof to the other party specifying the matters constituting force majeure,
together with such evidence as it reasonably can give and specifying the period
for which it is estimated that such prevention or delay will continue then the
party in question shall be excused the performance or the punctual performance
as the case may be as from the date of such notice for so long as such cause of
prevention or delay shall continue up to a maximum period of 3 months.

 

17.2         If the event of force majeure persists for a period of 3 months
from the date of notification of such as provided for in clause 17.1 above,
either party may, by written notice to the other, terminate this Agreement.

 

17.3         For the purpose of this Agreement ‘force majeure’ shall be deemed
to be any cause affecting the performance of this Agreement arising from or
attributable to acts, events, omissions or accidents beyond the reasonable
control of the party to perform and without prejudice to the generality thereof
shall include the following:

 

17.3.1      strikes, lock-outs or other industrial action;

 

17.3.2      civil commotion, riot, invasion, war threat or preparation for war;

 

17.3.3      fire, explosion, storm, flood, earthquake, subsidence, epidemic or
other natural physical disaster;

 

17.3.4      impossibility of the use of railways, shipping, aircraft, motor
transport or other means of public or private transport; and

 

17.3.5      political interference with the normal operations of any party.

 

18.          General

 

18.1         This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their respective legal successors but shall not otherwise
be assignable by either party without the prior written consent of the other
which consent shall not be unreasonably withheld.

 

18.2         This Agreement constitutes the entire agreement and understanding
of the parties and supersedes all prior written or oral representations
agreements or understandings between them relating to the subject matter of this
Agreement other than any false misrepresentation made by a party to induce the
other party to enter into this Agreement.

 

18.3         No variation or amendment of this Agreement shall bind either party
unless made in writing and agreed to in writing by duly authorised officers of
both parties.

 

18.4         If any provision of this Agreement is agreed by the parties to be
illegal void or unenforceable under any law that is applicable hereto or if any
court or other authority of competent jurisdiction in a final decision so
determines this Agreement shall continue in force save that such provision shall
be deemed to be excised herefrom with effect from the date of such agreement or
decision or such earlier date as the parties may agree.

 

18

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18.5         The headings in this Agreement are for convenience only and are not
intended to have any legal effect.

 

18.6         A failure by either party hereto to exercise or enforce any rights
conferred upon it by this Agreement shall not be deemed to be a waiver of any
such rights or operate so as to bar the exercise or enforcement thereof at any
subsequent time or times.

 

18.7         Should Lifehealth receive an offer from a third party to acquire a
controlling interest in it or an offer from a third party to purchase its
business relating to the Product or should Lifehealth decide that it wishes to
sell its business relating to the Product it must provide CSD with notice of the
offer or the decision and CSD shall have first option to negotiate to either
purchase the business of or controlling interest in Lifehealth. If CSD and
Lifehealth do not agree terms for the purchase of the business of or a
controlling interest in Lifehealth within ninety (90) days of CSD exercising its
option hereunder, Lifehealth shall be entitled to continue negotiations with the
aforementioned third party or any other third party for the acquisition by those
third parties of the business of or controlling interest in Lifehealth.

 

19.          Notices

 

19.1         Any notice required to be given hereunder by either party to the
other shall be in writing and shall be served by sending the same by registered
or recorded delivery post to the address of the other party as given herein or
to such other address as that party may have previously notified to the party
giving notice as its address for such service.

 

19.2         All notices documents communications and any other data to be
provided under this Agreement shall be in the English language unless otherwise
agreed.

 

20.          Governing law and disputes

 

20.1         The construction validity and performance of this Agreement shall
be governed in all respects by English Law.

 

20.2         All disputes arising in any way out of or affecting this Agreement
shall be subject to the non-exclusive jurisdiction of the English courts to
which the parties hereto agree to submit.

 

IN WITNESS WHEREOF this Agreement was signed by the parties on the day of the
year first hereinbefore written

 

Signed by Mark Evans

)

 

for and on behalf of

)

/s/          MARK EVANS

 

 

 

CAMBRIDGE SELFCARE

)

 

DIAGNOSTICS LIMITED

)

/s/          P. MURRAY

in the presence of:

 

 

 

19

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Signed by

)

 

for and on behalf of

)

 

LIFEHEALTH LIMITED

)

/s/          P. MURRAY

in the presence of

 

 

 

20

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SCHEDULE 1

 

ADVERSE EXPERIENCE REPORTING

 

AND PROVISION OF MEDICAL INFORMATION

 

1.             ADVERSE EXPERIENCE REPORTING

 

CSD shall use its reasonable endeavours to obtain and record written medical
confirmation and relevant detail of all suspected or alleged adverse reactions
to the Product reported to CSD or coming to its attention and shall ensure by
means of a written log that all such cases and the dossiers of information
relating to them are uniquely identified and retrievable.

 

1.2           CSD in accordance with the attached reporting procedure:-

 

(a)           shall comply with all legal and regulatory requirements in those
countries  in the Territory in which the Product is sold concerning the
reporting of adverse experiences to the Product;

 

(b)           shall use all reasonable efforts to inform Lifehealth within one
working day CSD and Lifehealth consult and agree course of action of all serious
adverse reactions to the Product of which it is aware or made aware of. In the
event that a serious adverse reaction is recorded, CSD and Lifehealth shall
consult and agree a course of action to deal with the serious adverse reaction;

 

(c)           shall respond promptly to reasonable requests from Lifehealth for
further information on any adverse experience reported under (b) above; and

 

(d)           shall provide to Lifehealth every six (6) months a report
summarising all adverse experiences or a report confirming no adverse
experiences. Lifehealth and CSD shall review the report provided hereunder and
identify trends or changes in pattern of adverse experience and agree a course
of action to respond to any such trends or changes;

 

2.             PROVISION OF MEDICAL INFORMATION

 

2.1           CSD shall provide, in so far is it is able, answers to questions
raised by doctors or by paramedical personnel or by any other persons entitled
to such information.

 

2.2           Each party shall provide to the other as soon as is practicable
after it becomes aware of any toxicological or any other information insofar as
it relates to the Product which is relevant to the use, indications and
contra-indications or safety of the Product.

 

2.3           Lifehealth shall notify CSD of:

 

(a)           any revision of clinical recommendations and precautions relevant
to the Product; and

 

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(b)           toxicological or any other information insofar as it relates to
the Product which becomes available to Lifehealth which is relevant to the use,
indications and contra-indications or safety of the Product.

 

2.4           During the term of this Agreement Lifehealth shall use its
reasonable efforts to provide CSD with relevant data and access to Lifehealth’s
staff as CSD reasonably request to assist CSD properly to answer questions
relating to the Product raised by doctors or by paramedical personnel or by any
other persons entitled to such information.

 

3.             PRODUCT COMPLAINTS

 

3.1           CSD shall provide to Lifehealth, as soon as CSD becomes aware of
it, any information about any complaint received from users of the Product.

 

SPONTANEOUS ADVERSE EVENT (ADE) REPORTING PROCEDURE - INDIVIDUAL CASE REPORTS

 

All Adverse Event (ADE) reports provided to Lifehealth should be directed to a
named individual, nominated by CSD. The nominated contact will be responsible
for all communication between Lifehealth and CSD.

 

Standard form ADE1/C shall be used to record the initial report of an adverse
experience. As much information as possible about the ADE shall be requested and
recorded.

 

Each ADE Report shall be assigned an identifying number by the nominated
contact. All serious ADEs reported to CSD are to be forwarded as soon as
possible, i.e. on the same working day.

 

CSD shall follow up an ADE report to obtain additional details, and where the
reporter is a non health professional, medical confirmation. Form ADE1/D may be
used to obtain follow-up information and written confirmation of the initial
report.

 

CSD will log the initial report into its centralised procedure, and assign a
central reference number. Lifehealth will acknowledge receipt of the report and
advise CSD of the central reference number assigned.

 

CSD will submit the ADE report to Regulatory Authorities in all countries where
the Product is sold, including the Regulatory Authority in the country where the
report originated, according to regulatory requirements. Lifehealth will be
copied on any correspondence with any Regulatory Authority.

 

22

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SCHEDULE 2

 

PRODUCT RECALL PROCEDURE

 

Initiating Product Recall

 

CSD shall carry out a recall of the Product whenever so directed or requested by
a Regulatory Authority or other governmental authority in the Territory. In the
absence of any such direction or request CSD shall only carry out a recall of
the Product when so requested by Lifehealth. CSD shall immediately inform
Lifehealth of any request from a Regulatory Authority for the Product to be
recalled. The cost of any recall of Product shall be an expense to be {***}† the
Total Net Receipts in the calculation of the {***}†

 

--------------------------------------------------------------------------------

† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

23

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