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*** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST UNDER 17 C.F.R. SECTIONS 200.80(B)(4) AND
230.406.

Exhibit 10.1

LICENSE AGREEMENT

by and between

ORTHOVITA, INC.

and

ANGIOTECH PHARMACEUTICALS (US), INC.

dated

March 20, 2006

(Effective January 1, 2006)

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TABLE OF CONTENTS

 

         Page ARTICLE 1.           DEFINITIONS    1 ARTICLE 2.  
        LICENSES; RESPONSIBILITIES    8         2.1   License Grants    8
        2.2   Sublicense Agreements    9         2.3   Improvements and New
Accessories    10         2.4   Independent Contractor    12         2.5  
Misappropriation of Licensed Patents and Licensed Know-How    12         2.6  
Retained Rights of Angiotech    13         2.7   Costs Borne by each Party    13
ARTICLE 3.           CERTAIN PERFORMANCE REQUIREMENTS    13         3.1  
Orthovita’s Commercialization of Products    13         3.2   ***    14
        3.3   Collection of Taxes    14         3.4   Product Packaging and
Labeling    14         3.5   Promotion and Marketing    14 ARTICLE 4.  
        JOINT COMMITTEE    15         4.1   Joint Committee    15         4.2  
Committee Responsibilities    15         4.3   Committee Meetings    16
        4.4   Committee Decisions; Dispute Resolution    16 ARTICLE 5.  
        ANGIOTECH-BRANDED COSTASIS PRODUCTS    16         5.1   Notice of Intent
to Commercialize an Angiotech-Branded CoStasis Product(s)    16         5.2  
Joint Committee Oversight    17         5.3   Promotion and Marketing    17
        5.4   Booking of Product Sales    17         5.5   Promotional Materials
   17         5.6   Branding of CoStasis Products by Angiotech    17

 

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

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TABLE OF CONTENTS

(continued)

 

         Page ARTICLE 6.           MANUFACTURE OF PRODUCTS BY ORTHOVITA    17
        6.1   Responsibility for Product Manufacturing    17         6.2  
Orthovita’s Supply of Products and Accessories to Angiotech    18 ARTICLE 7.  
        PAYMENTS AND REPORTS BY ORTHOVITA    20         7.1   Payments on Sales
of Products by Orthovita and its Agents    20         7.2   Non-Arm’s Length
Sales; Non-Cash Sales    20         7.3   Payment Reports    21         7.4  
Audit Rights    21         7.5   Shortfall in Achieving Minimum Sales    22
        7.6   Adjustments to Minimum Sales Requirements    23         7.7  
Payments    23         7.8   Interest Due    23 ARTICLE 8.           REGULATORY
MATTERS    24         8.1   No Misstatements, Adulteration or Misbranding    24
        8.2   Responsibility for Regulatory Approvals and Regulatory Filings   
24         8.3   Clinical Data    24         8.4   Adverse Events    25
        8.5   Product Recalls    25         8.6   Right of Reference    25
ARTICLE 9.           REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION    26
        9.1   Each Party    26         9.2   Additional Representations,
Warranties and Covenants By Orthovita    26         9.3   Books and Records of
Orthovita    27         9.4   Representations to Third Parties    27         9.5
  Sole Remedy for Non-Conformance    27         9.6   Additional Representations
and Warranties of Angiotech    27         9.7   Limitations    28         9.8  
Indemnification by Orthovita    28         9.9   Indemnification by Angiotech   
29         9.10   Indemnification Procedure    29

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TABLE OF CONTENTS

(continued)

 

         Page         9.11   Product Liability Claims    30         9.12  
Insurance    30         9.13   Employee Safety    30 ARTICLE 10.  
        INTELLECTUAL PROPERTY    31         10.1   Patent Applications and
Foreign Filing    31         10.2   Notification of Infringement    31
        10.3   Defense and Enforcement of Patents    31 ARTICLE 11.  
        TERM AND TERMINATION    33         11.1   Term    33         11.2  
Angiotech’s Right to Terminate for Orthovita’s Breach    33         11.3  
Orthovita’s Remedy for Angiotech’s Breach    33         11.4   Each Party’s
Right to Terminate for Insolvency    33         11.5   ***    34         11.6  
***    34         11.7   Effects of Expiration or Termination    34         11.8
  Manufacturing Technology Transfer    35         11.9   Post-Termination Sale
of Inventory    35         11.10   Survival    35 ARTICLE 12.  
        TRADEMARKS    36         12.1   Ownership; Permitted and Required Uses
   36         12.2   Right to Review and Approve Trademark Usage    36
        12.3   Use of Other Party’s Trademarks    36         12.4   Infringement
   36         12.5   Remedies    37 ARTICLE 13.           CONFIDENTIAL
INFORMATION    37         13.1   General    37         13.2   Terms of this
Agreement    38

CONFIDENTIAL EXECUTION COPY

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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TABLE OF CONTENTS

(continued)

 

         Page ARTICLE 14.           FORCE MAJEURE    38         14.1   Event of
Force Majeure    38         14.2   Monetary Payments Not Excused    38
ARTICLE 15.           AMENDMENT    38         15.1   Executed in Writing    38
ARTICLE 16.           ENTIRE AGREEMENT    38         16.1   Entire Agreement   
38         16.2   Invalid or Unenforceable Provision    39 ARTICLE 17.  
        ASSIGNMENT    39         17.1   Rights and Limitations    39 ARTICLE 18.
          GOVERNING LAW    39         18.1   New York Law    39 ARTICLE 19.  
        NOTICES    39         19.1   Notice Requirements    39 ARTICLE 20.  
        WAIVER    40         20.1   No Waiver    40 ARTICLE 21.  
        ARBITRATION    40         21.1   Arbitration Procedure    40
        21.2   Arbitrator    41         21.3   Decision    41 ARTICLE 22.  
        INTERPRETATION    41         22.1   Headings    41         22.2  
Singular Includes Plural    41         22.3   References to Law    41
ARTICLE 23.           EXHIBITS    41         23.1   Integral Part    41
ARTICLE 24.           BINDING EFFECT    41         24.1   Successors    41
ARTICLE 25.           COUNTERPARTS; FACSIMILE    42         25.1   Execution of
Agreement    42

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LICENSE AGREEMENT

THIS LICENSE AGREEMENT (“Agreement”) is executed as of March 20, 2006 by and
between Orthovita, Inc., a Pennsylvania corporation with principal offices at 45
Great Valley Parkway, Malvern, Pennsylvania 19355 (“Orthovita”), and Angiotech
Pharmaceuticals (US), Inc., a Delaware corporation with principal offices at 101
W. North Bend Way, Suite 201, PO Box 2840, North Bend, WA 98045 (“Angiotech”).

W I T N E S S E T H :

WHEREAS, Angiotech is engaged in the business of developing, manufacturing,
selling and distributing certain biopharmaceutical and biosurgical products;

WHEREAS, Angiotech (through its former subsidiary, Angiotech BioMaterials Corp.,
under its former name, Cohesion Technologies, Inc.) and Orthovita previously
executed an Exclusive Sales Distribution Agreement dated July 1, 2004, as
amended by Amendment No.1 dated September 30, 2005 (the “Distribution
Agreement”), to establish Orthovita as distributor of CoStasis® products in the
United States (with options for the European Union and the rest of the world);

WHEREAS, Orthovita now desires to be Angiotech’s licensee for Products in the
Territory (as each term is defined in Article 1 hereof), and desires to assume
responsibilities for manufacturing Products for sale within the Territory; and

WHEREAS, Angiotech desires to grant such license to Orthovita, and to transfer
CoStasis Product manufacturing responsibilities to Orthovita.

NOW, THEREFORE, the Parties hereto, in consideration of the premises and mutual
covenants and undertakings herein contained, agree as follows:

Article 1.

Definitions

As used in this Agreement, the following terms shall have the meanings specified
in this Article 1:

1.1 “AAA” is defined in Section 21.1.

1.2 “Accessory(ies)” means both the Existing Accessories and the New
Accessories, collectively.

1.3 “Acquiring Party” is defined in Section 11.5.

1.4 “Act” means the United States Food, Drug and Cosmetic Act of 1938, as it has
been amended prior to the Effective Date and may be amended thereafter during
the Term.

1.5 “Action” is defined in Section 10.3(c)(i).

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1.6 “Adverse Event” means any untoward medical occurrence in a patient or
clinical investigation subject administered a Product and which may or may not
have a causal relationship with such treatment. An Adverse Event includes any
unfavorable and unintended sign (including an abnormal laboratory finding),
symptom or disease temporally associated with the use of a Product, whether or
not related to the Product.

1.7 “Affiliate” of a Party means any entity (a) which directly or indirectly
through one or more intermediaries controls, is controlled by, or is under
common control with, that Party, but only for so long as the relationship
exists; or (b) wherein more than fifty percent (50%) of the voting capital stock
(or such lesser maximum percentage permitted by applicable law) is beneficially
owned or held by that Party or any of such Party’s subsidiaries or parents.

1.8 “Agent(s)” means an Affiliate(s), a permitted sublicensee(s) or a
distributor(s) of Orthovita or Angiotech (as applicable).

1.9 “Agreement” is defined in the introductory paragraph.

1.10 “Angiotech” is defined in the introductory paragraph.

1.11 “Angiotech-Branded CoStasis Product(s)” means a CoStasis Product(s) for use
and exploitation in the Non-Orthopedic Hemostat Field that is distributed,
promoted, marketed and/or sold by or on behalf of Angiotech and/or its
Affiliates under one or more Angiotech Trademarks selected by Angiotech;
provided that if Orthovita loses its exclusive (or co-exclusive, as applicable)
rights with respect to CoStasis Products in the Orthopedic Hemostat Field
pursuant to Sections 7.5, 11.5 or 11.6, then the term “Angiotech-Branded
CoStasis Product(s)” shall also include use and exploitation in the Orthopedic
Hemostat Field.

1.12 “Angiotech Improvement” is defined in Section 2.3(b)(i).

1.13 “Angiotech Improvement Patents” is defined in Section 10.1.

1.14 “Angiotech Trademark(s)” means a Trademark(s) owned or Controlled by
Angiotech. Angiotech shall select one or more Angiotech Trademarks for use in
conjunction with an Angiotech-Branded CoStasis Product(s), and these Angiotech
Trademark(s) shall be different from Orthovita Trademark(s) used in conjunction
with CoStasis Product(s). Angiotech Trademark(s) shall expressly include
ANGIOTECHKNOWLEDGY® and CELLPAKER®.

1.15 “Baseline Sales” is defined in Section 11.5.

1.16 “Calendar Quarter” means each three (3) month period during the Term
commencing on January 1, April 1, July 1 or October 1; provided, however, that
the calendar quarter in which this Agreement is terminated or expires shall
extend from the first day of such calendar quarter until the effective date of
the termination or expiration of this Agreement.

1.17 “Calendar Year” means each twelve (12) month period during the Term
starting on January 1 of a year and ending on December 31 of the same year;
provided, however, that the calendar year in which this Agreement is terminated
or expires shall extend from January 1 of such calendar year until the effective
date of the termination or expiration of this Agreement.

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1.18 “CellPaker Field” means human medical uses of the CellPaker Products and/or
Accessories in connection with CoStasis Products.

1.19 “CellPaker Product(s)” means a CellPaker® Plasma Collection System
product(s) for use with CoStasis Products, as further described in Exhibit A
hereto.

1.20 “CFO” means Chief Financial Officer.

1.21 “Clinical Data” means the study protocols, results and analysis of data
arising from the testing of a biomaterial, device or a combination thereof in
vitro, in vivo in non-human subjects and in vivo in human subjects, including
safety and toxicity testing (or other pre-clinical testing), patient screening,
patient enrollment, patient status, any clinical or patient data included in any
communications (including Regulatory Filings) with Regulatory Authorities,
actions taken or modification in study design/conduct and summary of data
collected on CRFs (Case Report Forms), either paper or electronic, and
interactions with a DSMB (data safety monitoring board), if applicable.

1.22 “Co-Chair” is defined in Section 4.1.

1.23 “Competitive Product” means a product, other than a CoStasis Product or a
CellPaker Product, which has obtained Regulatory Approval for use as a Hemostat
for any indication.

1.24 “Confidential Information” is defined in Section 13.1.

1.25 “Control” or “Controlled” means the legal authority or right of a Party to
grant a license or sublicense of intellectual property rights to the other
Party, without breaching the terms of any agreement with a Third Party, or
misappropriating or unlawfully disclosing the confidential, proprietary or trade
secret information of a Third Party.

1.26 “Cost of Goods” means the fully allocated cost of manufacturing a Product,
which may include the following items: (a) the costs of labor, including
salaries, wages, benefits, payroll taxes and current period employee benefits,
(b) material costs, including raw materials, supplies, services and fees, as
well as any freight and duty (where applicable), (c) direct and factory overhead
determined in accordance with Orthovita’s standard internal practices and
consistently applied, including Product-related expenses associated with quality
assurance testing, batch review, equipment maintenance costs, manufacturing
energy and utilities, waste removal, storage, transportation, insurance,
management and administrative costs for personnel integral to manufacturing,
general facilities costs, environmental engineering, interest expense and
property taxes, and (d) depreciation costs, including the depreciation costs of
the manufacturing facility, machinery or equipment dedicated either solely or
partly (on a pro rata basis) to the manufacturing cost of such Products, as
applicable, all the foregoing items as determined in accordance with generally
accepted accounting principles, consistently applied, and in a manner consistent
with the exemplary cost determinations set forth in Exhibit C, and with the
methods used by Orthovita to calculate cost of goods for its other products. ***

1.27 “CoStasis Ingredient Improvement” is defined in Section 2.3(a)(iii).

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*** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST UNDER 17 C.F.R. SECTIONS 200.80(B)(4) AND
230.406.

 

3

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1.28 “CoStasis Ingredient Improvement Patents” is defined in Section 10.1.

1.29 “CoStasis Ingredients” means collagen and thrombin.

1.30 “CoStasis Product(s)” means a product(s) containing the Formulated CoStasis
Ingredients in a syringe that is manufactured by or for Orthovita or by or for
Angiotech (and/or Angiotech’s Affiliates) for use and exploitation in the
Licensed Field in accordance with this Agreement. The current formulation of the
CoStasis Product is described in Exhibit A hereto. The term “CoStasis Products”
includes Angiotech-Branded CoStasis Products. The term “CoStasis Products” shall
expressly exclude Drug-Loaded Products. However, Orthovita may add one or more
additional ingredients to the CoStasis Ingredients to make a CoStasis Product;
provided that no such additional ingredient is an active pharmaceutical
ingredient or a drug.

1.31 “Declined Action” is defined in Section 10.3(c)(ii).

1.32 “Distribution Agreement” is defined in the recitals.

1.33 “Dollars” means the lawful currency of the United States of America.

1.34 “Drug-Loaded Product” means a mixture, formulation or product that includes
at least one active pharmaceutical ingredient or drug in addition to the
CoStasis Ingredients, whether or not such mixture, formulation or product is
used as a Hemostat.

1.35 “Effective Date” means January 1, 2006.

1.36 “Existing Accessory(ies)” means the malleable extended applicator (MEA)
and/or the laparoscopic extended applicator (LEA) accessory items, collectively
or individually, as the context requires, for use with the CoStasis Products, as
such accessories exist as of the Effective Date.

1.37 “Force Majeure” is defined in Section 14.1.

1.38 “Formulated CoStasis Ingredients” means the pharmaceutically formulated
sterile suspension of the CoStasis Ingredients in calcium chloride.
Notwithstanding the foregoing sentence, the term “Formulated CoStasis
Ingredients” shall expressly exclude Drug-Loaded Products. However, Orthovita
may add one or more additional ingredients to the Formulated CoStasis
Ingredients to make a CoStasis Product; provided that no such additional
ingredient is an active pharmaceutical ingredient or a drug.

1.39 “Future Indication” means an indication for a Product in the Licensed Field
which has not obtained Regulatory Approval in a given country in the Territory
as of the Effective Date. For the sake of clarity, and by way of example only,
if a Product has obtained Regulatory Approval for a certain indication in
Canada, but not in the United States, as of the Effective Date, then such
indication is a Future Indication with respect to the United States.

1.40 “Hemostat” means a product, the primary purpose of which is to stop
bleeding through an activation of the coagulation cascade.

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1.41 “Improvement(s)” means any enhancement, upgrade, addition or modification
to the CoStasis Ingredients, Formulated CoStasis Ingredients, Products and/or
Accessories (and/or the manufacture or use thereof) that is or may be useful in
the Licensed Field, and that is conceived, reduced to practice, discovered,
derived or developed by or on behalf of a Party or its Affiliates prior to or
during the Term. The term “Improvements” includes Angiotech Improvements and
Orthovita Improvements.

1.42 “Indemnified Party” means the Party entitled to be indemnified by the other
Party pursuant to Article 9.

1.43 “Indemnifying Party” means the Party obligated to indemnify the Indemnified
Party.

1.44 “Joint Committee” is defined in Section 4.1.

1.45 “Licensed Field” means, collectively or individually, as the context
requires, (a) the Orthopedic Hemostat Field; (b) the Non-Orthopedic Hemostat
Field; and (c) the CellPaker Field. The terms “Licensed Field,” “Orthopedic
Hemostat Field” and “Non-Orthopedic Hemostat Field” are expressly inapplicable
to Drug-Loaded Products, even if a Drug-Loaded Product is approved for human use
in the Licensed Field.

1.46 “Licensed Know-How” means information, materials, formulations,
manufacturing technology, trade secrets and data that are owned or Controlled by
Angiotech and have been or are transferred by Angiotech or its Affiliates to
Orthovita prior to or during the Term, and that are necessary for the
manufacture, use, sale, offer for sale or importation of CoStasis Ingredients,
Formulated CoStasis Ingredients, CoStasis Product(s), CellPaker Product(s) or
Existing Accessories.

1.47 “Licensed Patents” means all (a) patents and patent applications listed on
Exhibit B, and (b) corresponding foreign patents and patent applications,
including any patents issuing from any of the foregoing patent applications and
any reissues, re-examinations, confirmations, extensions, renewals,
substitutions, continuations, divisions, patent term extensions, and
continuation-in-part applications (only to the extent, however, that the
continuation-in-part applications are entirely supported in the specification
and entitled to the priority date of a parent patent application) of the
foregoing. The term “Licensed Patents” expressly excludes Angiotech Improvement
Patents and CoStasis Ingredient Improvement Patents.

1.48 “Licensed Technology” means, collectively, Licensed Patents and Licensed
Know-How.

1.49 “Loss” is defined in Section 9.8.

1.50 “Measuring Period(s)” is defined in Section 11.5.

1.51 “Minimum Sales” are set forth in Exhibit D, as it may be amended from time
to time in accordance with this Agreement.

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1.52 “Net Sales” means, for a given Calendar Quarter, the gross amount invoiced
for the sale of the CoStasis Products (other than Angiotech-Branded CoStasis
Products) and CellPaker Products anywhere in the Territory during such Calendar
Quarter that are attributable to sales of such Products by Orthovita or its
Affiliates to a Third Party, less the sum of the following items (as applicable,
and to the extent not included in Cost of Goods) as determined in accordance
with generally accepted accounting principles:

(a) discounts (including cash discounts and quantity discounts), cash and
non-cash coupons, refunds, rebates, credits, chargebacks, returns and
allowances, vouchers, retroactive price adjustments and any other allowances,
including amounts written off by reason of uncollectible debt, actually granted
or given with respect to the Products that effectively reduce the net selling
price, in each case, as may be extended in the ordinary course of business
consistent with past practice or as customary in the industry, including those
granted or given to managed health care organizations, wholesalers and other
distributors, buying groups, health care insurance carriers, and/or to federal,
state and local governments, their agencies;

(b) any tax imposed on the sale, delivery or use of the Products (other than
Angiotech-Branded CoStasis Products), including, without limitation, sales, use,
excise or value added taxes, provided in each such case that such tax is
included in the gross amount invoiced for such Products; and

(c) allowances for reasonable and customary Product shipping expenses, provided
that such allowance is included in the gross amount invoiced for such
Product(s).

For purposes of this Agreement, the sale or transfer of Products in the
Territory between Orthovita (or an Affiliate of Orthovita) and an Affiliate of
Orthovita for resale by the receiving entity shall not be deemed a sale for the
purpose of this provision, but the resale by such receiving entity to any other
Third Party shall be a sale for such purposes.

1.53 “New Accessory(ies)” means any accessory item (other than a CellPaker
Product or an Existing Accessory) for use with CoStasis Ingredients, Formulated
CoStasis Ingredients, CoStasis Products or CellPaker Product(s) that is
conceived, reduced to practice, discovered, derived or developed by or on behalf
of Orthovita or its Affiliates, and wherein Orthovita and/or its Affiliates own
or Control intellectual property pertaining to such New Accessory(ies) that
would preclude a Third Party from making, using, selling, offering for sale,
importing or otherwise exploiting such New Accessory(ies) without a license from
Orthovita and/or its Affiliates.

1.54 “Non-Orthopedic Hemostat Field” means, with respect to a CoStasis Product,
human medical uses of the CoStasis Product as a Hemostat for all indications,
other than indications within the Orthopedic Hemostat Field.

1.55 “Orthopedic Hemostat Field” means, with respect to a CoStasis Product,
human medical uses of the CoStasis Product as a Hemostat for all indications
treated by an orthopedic surgeon or other surgeon relating to the surgical
repair of diseases or injuries of the spine, bone or related soft tissue, such
as ligaments or cartilage.

1.56 “Orthovita” is defined in the introductory paragraph.

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1.57 “Orthovita Improvement” is defined in Section 2.3(a)(i).

1.58 “Orthovita Trademark(s)” means a Trademark(s) owned or Controlled by
Orthovita. Orthovita shall select one or more Orthovita Trademarks for use in
conjunction with CoStasis Product(s) (other than Angiotech-Branded CoStasis
Product(s)), and these Orthovita Trademark(s) shall be different from Angiotech
Trademark(s) used in conjunction with Angiotech-Branded CoStasis Product(s).

1.59 “Parties” means both Angiotech and Orthovita, and “Party” means either of
them, as the context requires.

1.60 “Post-Licensure Marketing Study” means human clinical trials of a Product
in the Licensed Field conducted or continued after Regulatory Approval has been
achieved (for example, such trials may be designed to provide information that
will optimize or expand use of the Product, and/or to provide additional safety
and effectiveness data for a specific procedure for which the Product is
currently indicated for use).

1.61 “Product Liability Claim” means a Loss (other than a Loss described in
Section 9.8 and/or Section 9.9) resulting from, arising out of, or relating to
claims, actions or suits (including a governmental investigation) by Third
Parties arising from the attributes of a Product manufactured by or on behalf of
Orthovita, including, but not limited to, the immunogenicity, toxicity,
teratogenicity, carcinogenicity, or inherent risk of the use or administration
of such Product.

1.62 “Products” means CoStasis Products and CellPaker Products, collectively or
individually, as the context requires.

1.63 “Program Director” is defined in Section 4.1.

1.64 “Proposal” is defined in Section 8.2(b).

1.65 “R&D Products” is defined in Section 6.2(b).

1.66 “Regulatory Approval” means all authorizations by the appropriate
governmental entity or entities necessary for commercial sale of a Product in a
country in the Territory, including, without limitation and where applicable,
approval of labeling, price, reimbursement and/or manufacturing.

1.67 “Regulatory Authority” means, with respect to any particular country,
territory or union, the governmental authority, body, commission, agency or
other instrumentality of such country, territory or union with the primary
responsibility for the evaluation and/or approval of Products and Accessories
before such Products and Accessories can be tested, marketed, promoted,
distributed or sold in such country, territory or union, including, without
limitation, such governmental bodies that have jurisdiction over the pricing of
such Product. The term “Regulatory Authority” includes, but is not limited to,
the United States Food and Drug Administration, the European Agency for the
Evaluation of Medicinal Products, European Member State Competent Authorities
and the Ministry of Health, Labour and Welfare.

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1.68 “Regulatory Filing” means all activities, filings and documents relating to
the filing for and procurement of Regulatory Approval for the marketing and sale
of a Product or Accessory from the relevant Regulatory Authorities.

1.69 “Sales & Marketing Commission” means the average actual commission paid by
Orthovita to its sales representatives, independent sales agencies, and
authorized and trained representatives with experience in the Licensed Field for
sale of a Product.

1.70 “Section 7.1 Payment” is defined in Section 7.1.

1.71 “Shortfall” is defined in Section 7.5.

1.72 “Shortfall Payment” is defined in Section 7.5.

1.73 “Supplied Products” is defined in Section 6.2(a).

1.74 “Term” is defined in Section 11.1.

1.75 “Territory” means the entire world.

1.76 “Third Party(ies)” means any person or entity other than Angiotech or
Orthovita and their respective Affiliates.

1.77 “Trademarks” means all trademarks, trade names, service marks, logos and
derivatives thereof relating to Products and Accessories as of the Effective
Date and during the Term that are used, or are intended to be used, in
conjunction with distribution, promotion, marketing, sales, offers to sell,
import, export or other exploitation of Products or Accessories, but excluding
any trademarks, trade names, service marks, logos and derivatives thereof
(a) containing the word “Orthovita” or “Angiotech,” or (b) which are not used
solely on Products or Accessories. The term “Trademarks” includes Angiotech
Trademarks and Orthovita Trademarks.

Article 2.

Licenses; Responsibilities

2.1 License Grants. Subject to the terms and conditions of this Agreement,
during the Term Angiotech hereby grants to Orthovita, and Orthovita hereby
accepts:

(a) an exclusive license under the Licensed Technology, CoStasis Ingredient
Improvements and CoStasis Ingredient Improvement Patents to make, have made,
sell, have sold, offer for sale, export, have exported, import and have imported
CoStasis Products in the Orthopedic Hemostat Field in the Territory;

(b) until such time as Angiotech elects to distribute, promote, market and/or
sell one or more Angiotech-Branded CoStasis Products pursuant to Article 5, an
exclusive license under the Licensed Technology, CoStasis Ingredient
Improvements and CoStasis Ingredient Improvement Patents to make, have made,
sell, have sold, offer for sale, export, have exported, import and have imported
CoStasis Products in the Non-Orthopedic Hemostat Field in the Territory;

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(c) from and after such time as Angiotech elects to distribute, promote, market
and/or sell one or more Angiotech-Branded CoStasis Products pursuant to Article
5, a co-exclusive (meaning that only Orthovita and Angiotech can act in each
country of the Territory) license under the Licensed Technology, CoStasis
Ingredient Improvements and CoStasis Ingredient Improvement Patents to make,
have made, sell, have sold, offer for sale, export, have exported, import and
have imported CoStasis Products in the Non-Orthopedic Hemostat Field in the
Territory;

(d) a non-exclusive license under the Licensed Technology to make, have made,
use, sell, have sold, offer for sale, export, have exported, import and have
imported CellPaker Products and Accessories in the CellPaker Field in the
Territory; and

(e) a non-exclusive license under the Licensed Technology and CoStasis
Ingredient Improvements and CoStasis Ingredient Improvement Patents to use
(including, without limitation, to research, have researched, develop and have
developed) CoStasis Ingredients and Formulated CoStasis Ingredients (but only
for uses directly related to Orthovita’s Product licenses and rights hereunder),
Products (other than Angiotech-Branded CoStasis Products) and Accessories in the
Licensed Field in the Territory.

2.2 Sublicense Agreements.

(a) Except as otherwise expressly set forth herein, Orthovita shall have no
right to grant a sublicense under the license rights granted to Orthovita in
Section 2.1 without Angiotech’s prior written consent. If applicable laws and/or
regulations require Orthovita to grant a sublicense to its Agent in a
country(ies) in the Territory to enable such Agent to distribute, promote,
market, sell, offer for sale and/or import Products and/or Existing Accessories
in the Licensed Field in accordance with this Agreement, then Orthovita shall
notify the Joint Committee of such requirement. The Joint Committee shall
determine in good faith whether Orthovita is required by applicable law and/or
regulation to grant such sublicense for this limited purpose to such Agent, and
if the Joint Committee determines that such limited sublicense is required, such
limited sublicense agreement shall be subject to the following: (i) Orthovita
shall promptly provide to Angiotech a copy of the applicable executed limited
sublicense agreement, subject to applicable confidentiality restrictions;
(ii) Orthovita’s execution and delivery of each such limited sublicense
agreement does not in any way diminish, reduce or eliminate any of Orthovita’s
obligations under this Agreement, and Orthovita remains liable for all such
obligations; and (iii) Orthovita shall not receive cash or non-cash
consideration for such limited sublicense. In addition, Orthovita shall obtain
contractual undertakings from every such permitted sublicensee that provide that
the rights of such permitted sublicensee shall terminate upon expiration or
termination of this Agreement. For the avoidance of doubt, the foregoing shall
not preclude Orthovita from appointing an Agent who does not need a sublicense
to distribute, promote, market, sell, offer for sale and/or import Products
and/or Existing Accessories in the Licensed Field.

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(b) Except as otherwise expressly set forth herein, Angiotech shall have no
right to grant a license under the Licensed Technology with respect to
Angiotech-Branded CoStasis Products in the Non-Orthopedic Hemostat Field without
Orthovita’s prior written consent. If applicable laws and/or regulations require
Angiotech to grant a license to its Agent in a country(ies) in the Territory to
enable such Agent to distribute, promote, market and/or sell Angiotech-Branded
CoStasis Products in the Licensed Field in accordance with this Agreement, then
Angiotech shall notify the Joint Committee of such requirement. The Joint
Committee shall determine in good faith whether Angiotech is required by
applicable law and/or regulation to grant such license for this limited purpose
to such Agent and if the Joint Committee determines that such limited license is
required, such limited license agreement shall be subject to the following:
(i) Angiotech shall promptly provide to Orthovita a copy of the applicable
executed limited license agreement, subject to applicable confidentiality
restrictions; and (ii) Angiotech’s execution and delivery of each such limited
license agreement does not in any way diminish, reduce or eliminate any of
Angiotech’s obligations under this Agreement, and Angiotech remains liable for
all such obligations. For the avoidance of doubt, the foregoing shall not
preclude Angiotech from appointing an Agent who does not need a sublicense to
distribute, promote, market, sell, offer for sale and/or import Products and/or
Existing Accessories in the Non-Orthopedic Hemostat Field.

(c) For the avoidance of doubt, Angiotech shall have no right to grant a license
(except for the licenses granted to Orthovita under this Agreement) under the
Licensed Technology with respect to CoStasis Products in the Orthopedic Hemostat
Field.

2.3 Improvements and New Accessories.

(a) By Orthovita and its Affiliates. Orthovita and its Affiliates have a right
to make Improvements prior to or during the Term. Orthovita shall notify the
Joint Committee in writing of any CoStasis Ingredient Improvements as soon as
reasonably possible, and shall provide the Joint Committee with a written
description of all such CoStasis Ingredient Improvements. Within sixty (60) days
after the end of each Calendar Year during the Term, Orthovita shall deliver to
the Joint Committee a summary report of all other Improvements that have been
conceived, reduced to practice, discovered, derived or developed by Orthovita
and its Affiliates during that Calendar Year which are relevant to Angiotech’s
rights, licenses and retained rights in connection with this Agreement.

(i) Orthovita Improvements. Orthovita and/or its Affiliates (as applicable)
shall own all right, title and interest in and to Improvements to the CoStasis
Products (other than the CoStasis Ingredient Improvements), CellPaker Products
and Accessories that are conceived, reduced to practice, discovered, derived or
developed by or on behalf of Orthovita and/or its Affiliates (as applicable);
provided that no employee or agent of Angiotech or its Affiliates is properly
named as an inventor of such Improvement (each, an “Orthovita Improvement”).

(ii) Angiotech Licenses to Orthovita Improvements.

(A) During the period when Angiotech is distributing, promoting, marketing
and/or selling Angiotech-Branded CoStasis Products in the

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Non-Orthopedic Hemostat Field in the Territory, Orthovita hereby grants to
Angiotech an exclusive option to obtain on commercially reasonable terms a
license to any Orthovita Improvements to make, have made, use, sell, have sold,
offer for sale and import Angiotech-Branded CoStasis Products, CellPaker
Products and/or Accessories (as applicable) to which such Orthovita Improvements
relate within the Non-Orthopedic Hemostat Field and/or CellPaker Field, as
applicable, in the Territory.

(B) Upon the request of Angiotech or the election of Orthovita, Orthovita (in
its sole discretion) may provide notice to Angiotech, through the Joint
Committee, that Orthovita desires to offer to Angiotech on commercially
reasonable terms a license under one or more Orthovita Improvements to research,
have researched, develop, have developed, make, have made, use, sell, have sold,
offer for sale and import one or more (1) CellPaker Products and/or Accessories
(as applicable) to which such Orthovita Improvements relate outside the
Non-Orthopedic Hemostat Field in the Territory; and/or (2) products other than
CellPaker Products and/or Accessories (and related processes) to which such
Orthovita Improvements relate within or outside of the Licensed Field in the
Territory.

(C) Except as otherwise expressly provided herein or as otherwise mutually
agreed by the Parties in writing, Angiotech shall have no right to any Orthovita
Improvement for any purpose.

(iii) CoStasis Ingredient Improvements. With respect to an Improvement to the
CoStasis Ingredients and/or the Formulated CoStasis Ingredients (including,
without limitation, any Improvement constituting a composition, method of making
and/or method of using any of the foregoing) that is conceived, reduced to
practice, discovered, derived or developed by or on behalf of Orthovita or its
Affiliates (each, a “CoStasis Ingredient Improvement”), Orthovita and its
Affiliates agree to assign, and hereby do assign, their right, title and
interest in and to each such CoStasis Ingredient Improvement to Angiotech.

(b) By Angiotech and its Affiliates. Angiotech and its Affiliates have a right
to make Improvements. Within sixty (60) days after the end of each Calendar Year
during the Term, Angiotech shall deliver to the Joint Committee a summary report
of all Angiotech Improvements that have been conceived, reduced to practice,
discovered, derived or developed during that Calendar Year which are relevant to
Orthovita’s rights and licenses in the Licensed Field.

(i) Angiotech Improvements. Angiotech and/or its Affiliates (as applicable)
shall own all right, title and interest in and to Improvement(s) to the CoStasis
Ingredients, Formulated CoStasis Ingredients, CoStasis Products, CellPaker
Products and/or Accessories (including, without limitation, any Improvement
constituting a composition, method of making and/or method of using any of the
foregoing) that are conceived, reduced to practice, discovered, derived or
developed by or on behalf of Angiotech and/or its Affiliates (as applicable);
provided that no employee or agent of Orthovita or its Affiliates is properly
named as an inventor of such Improvement (each an “Angiotech Improvement”).

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(ii) Orthovita Licenses to Angiotech Improvements.

(A) Upon the request of Orthovita or the election of Angiotech, Angiotech (in
its sole discretion) may provide notice to Orthovita, through the Joint
Committee, that Angiotech desires to offer to Orthovita on commercially
reasonable terms a license (without the right to sublicense) under one or more
Angiotech Improvements to research, have researched, develop, have developed,
make, have made, use, sell, have sold, offer for sale and import one or more
products (including, without limitation, Products and/or Accessories) and
related processes to which such Angiotech Improvements relate within the
Licensed Field in the Territory.

(B) For the avoidance of doubt, Orthovita shall have no right to any Angiotech
Improvement outside of the Licensed Field or in connection with any Drug-Loaded
Product, or for any purposes other than those expressly set forth herein or
otherwise mutually agreed by the Parties in writing.

(iii) Orthovita’s First Right to Negotiate. With respect to any CoStasis
Ingredient Improvement(s), if Angiotech elects (in its sole discretion) to use a
Third Party (other than distributors or contract sales organizations that
Angiotech and/or its Affiliates then use (or in the future elect to use) for
distribution, promotion, marketing and/or sale of other Angiotech products
and/or products of Angiotech’s Affiliates) to distribute any product that
incorporates such CoStasis Ingredient Improvement, Orthovita shall have a first
right to negotiate in good faith with Angiotech for a commercially reasonable
period of time a mutually acceptable agreement whereby Orthovita would obtain a
right to distribute such product on commercially reasonable terms.

(c) New Accessories. Orthovita shall own all right, title and interest in and to
New Accessories that are conceived, reduced to practice, discovered, derived or
developed by or on behalf of Orthovita. Upon the request of Angiotech or the
election of Orthovita, Orthovita (in its sole discretion) may provide notice to
Angiotech, through the Joint Committee, that Orthovita desires to offer to
Angiotech on commercially reasonable terms a license to research, have
researched, develop, have developed, make, have made, use, sell, have sold,
offer for sale and import New Accessories for use with the Products and/or other
products and processes within or outside of the Licensed Field.

2.4 Independent Contractor. Orthovita shall be considered an independent
contractor and shall not be considered a partner, employee, agent or servant of
Angiotech or its Affiliates. As such, Orthovita and its Agents have no authority
of any nature whatsoever to bind Angiotech or its Affiliates, or to incur any
liability for or on behalf of Angiotech or its Affiliates, and Orthovita shall
not represent itself as anything other than a licensee of Angiotech in the
Licensed Field with respect to Products and Accessories in the Territory; and
Angiotech and its Agents have no authority of any nature whatsoever to bind
Orthovita or its Affiliates, or to incur any liability for or on behalf of
Orthovita or its Affiliates, and Angiotech shall not represent itself as
anything other than a licensor of Orthovita in the Licensed Field with respect
to Products and Accessories in the Territory. For the avoidance of doubt,
Orthovita agrees to make clear in all dealings with Third Parties that it is
acting as a licensee of the Products and Accessories in the Licensed Field in
the Territory, and not as an agent of Angiotech or any of its Affiliates.

2.5 Misappropriation of Licensed Patents and Licensed Know-How. Orthovita shall,
and shall ensure that its Agents shall, promptly inform Angiotech of any
misappropriation

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of the Licensed Patents and Licensed Know-How which comes to Orthovita’s or its
Agents’ attention. After discussing any such misappropriation situation with
Orthovita, Angiotech shall have the sole right, in its discretion, to take such
action as it deems appropriate, and Orthovita, at Angiotech’s written request
and expense, shall cooperate with and assist Angiotech in taking legal action,
if deemed appropriate by Angiotech, to stop any such misappropriation of
Licensed Know-How; provided that if Orthovita has reasonably requested that
Angiotech take legal action to stop such misappropriation of Licensed Know-How,
and if Angiotech determines that such legal action is not appropriate, then
Orthovita may present this issue to the Joint Committee. Promptly thereafter,
and taking into account each Party’s circumstances and concerns, the Joint
Committee shall analyze and resolve such issue regarding misappropriation of
Licensed Know-How in a commercially reasonable manner that is acceptable to both
Parties.

2.6 Retained Rights of Angiotech. Except as expressly set forth herein or as
otherwise mutually agreed by the Parties in writing, no rights or licenses are
granted to Orthovita under this Agreement. Angiotech retains all rights to all
Licensed Technology, Angiotech Improvement Patents, CoStasis Ingredient
Improvement Patents, Angiotech Improvements and CoStasis Ingredient
Improvements, to the extent such rights are not expressly granted to Orthovita
under this Agreement. The Parties acknowledge and agree that Angiotech retains
the right under the Licensed Technology, Angiotech Improvement Patents, CoStasis
Ingredient Improvement Patents, Angiotech Improvements and CoStasis Ingredient
Improvements to research, develop, make, have made, use, sell, have sold, offer
for sale, import and otherwise exploit the CoStasis Ingredients, Formulated
CoStasis Ingredients, Product(s) and Existing Accessories for all purposes other
than those expressly granted to Orthovita hereunder. For the avoidance of doubt,
Angiotech has and retains (a) the sole and exclusive right (even as to Orthovita
and its Affiliates) to research, develop, make, have made, use, sell, have sold,
offer for sale and import (i) CoStasis Ingredients, Formulated CoStasis
Ingredients and Products and Existing Accessories outside the Licensed Field in
the Territory, and (ii) Drug-Loaded Products in and outside of the Licensed
Field in the Territory, and (b) the sole and exclusive right (even as to
Orthovita and its Affiliates) to distribute, promote, market and sell
Angiotech-Branded CoStasis Products outside of the Orthopedic Hemostat Field in
the Territory.

2.7 Costs Borne by each Party. Except as expressly set forth herein, all costs
and expenses connected with a Party’s activities or performance under this
Agreement shall be borne solely by that Party.

Article 3.

Certain Performance Requirements

3.1 Orthovita’s Commercialization of Products. Orthovita shall use commercially
reasonable efforts to promote, market, sell and distribute the Products (other
than Angiotech-Branded CoStasis Products) in the Licensed Field in the
Territory. Orthovita shall not knowingly, under any circumstances, either
directly or indirectly through Third Parties, promote, market, sell, or
distribute CoStasis Products (a) for any use outside the Licensed Field, or
(b) in any circumstance wherein the purchaser incorporates, or intends to
incorporate, such CoStasis Product into a Drug-Loaded Product.

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3.2 *** For purposes of estimating the Section 7.1 Payment royalty rate and the
transfer price of any Angiotech-Branded CoStasis Products, Supplied Products and
R&D Products provided to Angiotech and/or its Affiliates by Orthovita hereunder,
within sixty (60) days prior to the end of each Calendar Year, Orthovita shall
provide Angiotech with a good faith, reasonable estimate of ***, for the
following Calendar Year; provided that the forecast for Calendar Year 2006 shall
be provided within sixty (60) days after the Effective Date. Orthovita shall
promptly notify Angiotech if it reasonably believes that *** at any time in such
Calendar Year will vary from the applicable estimated ***, respectively, by more
than ***, whereupon the Joint Committee shall meet to determine the appropriate
adjustment (if any) to the estimated Section 7.1 Payment royalty rate, which
adjustment (if any) shall become effective the next Calendar Quarter. Within
sixty (60) days after the end of each Calendar Year, the Joint Committee shall
meet to determine any true-up payment that is due between the Parties for the
difference between the estimated Section 7.1 Payment made by Orthovita to
Angiotech and the calculation of the actual Section 7.1 Payment that should have
been made by Orthovita to Angiotech. Within thirty (30) days after determination
of the true-up payment due (if any), such true-up payment shall be made by the
owing Party.

3.3 Collection of Taxes. Orthovita shall be responsible for and shall collect
all governmental and regulatory sales and other taxes, charges, duties and fees
that are due and owing upon sales of Products and Accessories by Orthovita and
its Affiliates to Third Parties.

3.4 Product Packaging and Labeling. All Products manufactured by (or on behalf
of) Orthovita that are intended for sale by Orthovita or its Affiliates to Third
Parties shall be packaged and labeled for sale by Orthovita and its Agents in
accordance with all applicable federal, state and local rules, laws and
regulations and this Agreement. Each Product and Existing Accessory marketed and
sold by (or on behalf of) Orthovita under this Agreement to a Third Party shall
be marked (to the extent not prohibited by law): (a) with a notice that such
Product or Existing Accessory (as applicable) is sold by Orthovita under a
license from Angiotech; (b) with all patent and other intellectual property
notices pertaining to all relevant Licensed Patents; (c) with the Angiotech
Trademark ANGIOTECHKNOWLEDGY® (or other Angiotech Trademark(s) that Angiotech
may wish to substitute therefor during the Term upon the reasonable prior
written notice to Orthovita, it being understood Orthovita shall be free to
utilize any existing inventories of promotional materials, Products and/or
Existing Accessories containing the previous Angiotech Trademark prior to such
substitution); and (d) with respect to a CellPaker Product with the Angiotech
Trademark CELLPAKER® (or other Angiotech Trademark(s) that Angiotech may wish to
substitute therefor during the Term upon the reasonable prior written notice to
Orthovita, it being understood Orthovita shall be free to utilize any existing
inventories of promotional materials, CellPaker Products containing the previous
Angiotech Trademark prior to such substitution). Solely for purposes of
fulfilling Orthovita’s obligations under this Section 3.4 with respect to the
Angiotech Trademarks ANGIOTECHKNOWLEDGY® and CELLPAKER® (or other Angiotech
Trademark(s) that Angiotech may wish to substitute therefor during the Term),
Angiotech grants to Orthovita a non-exclusive right and license to use such
Angiotech Trademarks for this limited purpose.

3.5 Promotion and Marketing. For the avoidance of doubt, Orthovita, its
Affiliates and/or Agents shall not promote or market co-administration of an
active pharmaceutical

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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ingredient or drug at the site of application of the Formulated CoStasis
Ingredients delivered using a CoStasis Product, and shall not provide directly
or indirectly an active pharmaceutical ingredient or drug for such
co-administration.

Article 4.

Joint Committee

4.1 Joint Committee. Within thirty (30) days after the Effective Date, the
Parties shall form a joint committee (the “Joint Committee”), and each Party
shall designate its program director on such committee (“Program Director”). The
Joint Committee shall consist of up to three (3) representatives from each
Party, one of which shall be each Party’s Program Director, for a total of up to
six (6) committee members. Angiotech and Orthovita shall each retain the right
to change its representative(s) to the Joint Committee, including its Program
Director, from time to time, upon written notice to the other Party, or to
appoint one or more substitutes to serve in the place of an absent member(s).
The Program Directors also shall serve as co-chairs of the Joint Committee
(each, a “Co-Chair”). The committee representatives of Angiotech and Orthovita
shall be employees that agree to be bound by the terms of confidentiality and
other pertinent provisions of this Agreement. Each committee member, including
the Program Directors, shall have expertise in a relevant discipline, such as
business development, research and development, clinical and/or regulatory
affairs, sales or marketing.

4.2 Committee Responsibilities. The Joint Committee shall perform the following
functions:

(a) serve as a conduit for information sharing between the Parties, including,
without limitation, information pertaining to Improvements, inventions, Clinical
Data pertaining to Products, patents and patent applications, regulatory
activities and responsibilities;

(b) unless prohibited by applicable law or regulation, review and approve all
Product and Accessories packaging, Product and Accessories positioning and
Product and Accessories branding or rebranding (including Trademark usage in
accordance with Article 12);

(c) analyze and resolve any issues related to misappropriation of Licensed
Know-How, as described in Section 2.5;

(d) review and recommend adjustments to Minimum Sales requirements pursuant to
Section 7.6, and document and retain pertinent records and calculations related
thereto;

(e) review and accept or reject Proposals, as described in Section 8.2(b);

(f) resolve issues regarding alleged infringement of Licensed Patents in the
Licensed Field, as described in Section 10.3(c)(iii);

(g) review and determine appropriate adjustments (if any) to the estimated
Section 7.1 Payment royalty rate, determine the Section 7.1 Payment true-up
mechanism and calculation (if necessary), as described in Section 3.2, and
document and retain pertinent records and calculations related thereto; and

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(h) perform such other duties and functions as are assigned to the Joint
Committee under this Agreement.

4.3 Committee Meetings. The Joint Committee shall hold meetings at least once
each Calendar Quarter (at mutually agreed times), or more frequently as
necessary or upon prior request by a Program Director. Meetings of the Joint
Committee will be initiated by the Co-Chairs on an alternating basis, and will
be held in person at alternating locations of the respective Co-Chair’s
choosing, or by teleconference or videoconference at the respective Co-Chair’s
discretion. The initial meeting of the Joint Committee shall be held before the
end of the second Calendar Quarter of 2006, and will be initiated by the
Orthovita Co-Chair. Other employees of each Party involved in the development
and/or commercialization of a Product may attend such meetings as nonvoting
participants, and, with the consent of each Party, consultants, representatives,
and/or advisors involved in the development and/or commercialization of a
Product may attend such meetings as nonvoting observers; provided that such
Third Party consultants, representatives and/or advisors are under obligations
of confidentiality and non-use applicable to the Confidential Information of
each Party that are at least as stringent as those set forth in this Agreement.
Each Party shall be responsible for all of its own expenses of participating in
a Joint Committee meeting.

4.4 Committee Decisions; Dispute Resolution. All decisions of the Joint
Committee shall be made by a consensus of the members of the committee. However,
in the event that the members of the committee are unable to reach consensus on
a particular issue, then the Co-Chairs shall attempt to decide such issue. If
the Co-Chairs are unable to reach consensus and resolve such issue, then prior
to submitting the dispute to arbitration pursuant to Article 21, the dispute
shall be referred to Angiotech’s CFO and to Orthovita’s CFO for resolution. The
CFOs to whom any dispute is submitted shall attempt to resolve the dispute
through good faith negotiations over a reasonable period, not to exceed fifteen
(15) business days in the aggregate unless otherwise agreed upon by the CFOs.
Such fifteen (15) business day period shall be deemed to commence on the date
the dispute was submitted to the CFOs. All negotiations pursuant to this
Section 4.4 shall be confidential and shall be treated as compromise and
settlement negotiations for purposes of applicable rules of evidence.

Article 5.

Angiotech-Branded CoStasis Products

5.1 Notice of Intent to Commercialize an Angiotech-Branded CoStasis Product(s).
At its option, on or after January 1, 2007, Angiotech and/or its Affiliates may,
at their sole discretion, begin to distribute, promote, market and/or sell one
or more Angiotech-Branded CoStasis Products that, subject to Section 6.2(c),
will be manufactured and supplied by Orthovita (or, in Angiotech’s discretion,
by a Third Party in accordance with the terms and conditions of this Agreement);
provided that Angiotech shall provide Orthovita with written notice of its
intent to commence such distribution, promotion, marketing and/or selling at
least ninety (90) days prior to commencing such activities. Angiotech also shall
provide Orthovita with advance written notice of its election to have Orthovita
supply Angiotech-Branded CoStasis Product(s) at least ninety (90) days prior to
the date upon which Angiotech desires Orthovita to commence supplying
Angiotech-Branded CoStasis Product(s). At Angiotech’s request, during this
ninety-day notice period, through the Joint Committee, the Parties shall
formulate a mutually

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agreeable plan for Orthovita’s manufacture and supply of Angiotech-Branded
CoStasis Products, and at the end of the ninety-day notice period, all of the
provisions of this Article 5 shall apply until such time as Angiotech and its
Affiliates cease all Angiotech-Branded CoStasis Product distribution, promotion,
marketing and selling activities. Angiotech and its Affiliates shall distribute,
promote, market and/or sell Angiotech-Branded CoStasis Products using employees
or using distributors or contract sales organizations that Angiotech and/or its
Affiliates then use (or in the future elect to use) for distribution, promotion,
marketing and/or sale of other Angiotech products and/or products of Angiotech’s
Affiliates.

5.2 Joint Committee Oversight. In a manner consistent with the Parties’ rights
and obligations hereunder and with all applicable laws, regulations and rules,
the Joint Committee shall oversee Product-related distribution, promotion,
marketing and selling activities under this Agreement, and oversee the
development and use of Product advertising and promotional materials, to ensure
that the Products are distributed, promoted, marketed and sold in manner that is
lawful and, to the extent practicable, is not detrimental to the Products’
current or reasonably anticipated future value. The Joint Committee shall also
ensure that distribution, promotion, marketing and selling of the Products for
their approved indications throughout the Territory shall be performed in
accordance with this Agreement and all applicable laws, regulations and rules.

5.3 Promotion and Marketing. Angiotech, its Affiliates and/or Agents shall not
promote or market co-administration of an active pharmaceutical ingredient or
drug at the site of application of the Formulated CoStasis Ingredients delivered
using an Angiotech-Branded CoStasis Product, and shall not provide directly or
indirectly an active pharmaceutical ingredient or drug for such
co-administration, in the absence of appropriate Regulatory Approval for such
co-administration.

5.4 Booking of Product Sales. All Product sales to Third Parties (for example,
distributors, hospitals, physicians) made by or on behalf of Orthovita shall be
booked by Orthovita (whether such Product sales are made by Orthovita or its
Agents). All Angiotech-Branded CoStasis Product sales to Third Parties (for
example, distributors, hospitals, physicians) shall be booked by Angiotech
(whether such Angiotech-Branded CoStasis Product sales are made by Angiotech or
its Agents).

5.5 Promotional Materials. Each Party may prepare promotional materials for the
Products rightfully distributed, promoted, marketed and/or sold by such Party
using the Trademarks of such Party.

5.6 Branding of CoStasis Products by Angiotech. For the avoidance of doubt, any
CoStasis Product(s) manufactured by or for Angiotech for use and exploitation in
the Licensed Field shall be branded with one or more Angiotech Trademarks.

Article 6.

Manufacture of Products by Orthovita

6.1 Responsibility for Product Manufacturing. During the Term, Orthovita shall
be solely responsible for obtaining the CoStasis Ingredients and for
manufacturing (or having manufactured by a Third Party) the Formulated CoStasis
Ingredients, Product(s) and Accessories to be used and exploited by Orthovita
hereunder.

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6.2 Orthovita’s Supply of Products and Accessories to Angiotech.

(a) Supplied Products for Angiotech R&D. Upon Angiotech’s reasonable written
request, Orthovita shall supply to Angiotech and its Affiliates, for ***,
CoStasis Ingredients, Formulated CoStasis Ingredients, CoStasis Products,
CellPaker Products and/or Existing Accessories (and/or Improvements to and/or
components of each of the foregoing), to the extent then manufactured or
obtained by or on behalf of Orthovita (collectively, the “Supplied Products”),
for Angiotech’s and its Affiliates’ research, pre-clinical and clinical
development of (i) potential or actual Angiotech-Branded CoStasis Products in
the Territory; (ii) CoStasis Ingredients, Formulated CoStasis Ingredients,
Products, and Existing Accessories (and/or Improvements to and/or components of
each of the foregoing) outside the Orthopedic Hemostat Field in the Territory,
and (iii) Drug-Loaded Products in and outside of the Licensed Field in the
Territory. Angiotech shall submit to Orthovita a purchase order with reasonably
acceptable delivery lead-times for any such Supplied Product(s) for use in
research and development.

(b) R&D Products for Angiotech R&D. If Angiotech reasonably requests that
Orthovita supply CoStasis Ingredients, Formulated CoStasis Ingredients, CoStasis
Products, Drug-Loaded Products, CellPaker Products and/or Existing Accessories
(and/or Improvements to and/or components of each of the foregoing) that are
different from the CoStasis Ingredients, Formulated CoStasis Ingredients,
CoStasis Products, CellPaker Products and/or Existing Accessories (and/or
Improvements to and/or components of each of the foregoing) then being
manufactured or obtained by or on behalf of Orthovita (collectively, “R&D
Products”), for Angiotech’s and its Affiliates’ research, pre-clinical and
clinical development, such request shall be referred to the Joint Committee. The
Joint Committee shall determine *** would be required for Orthovita to supply
such requested R&D Product(s) to Angiotech and/or its Affiliates, taking into
account (without limitation) the ***. If the Joint Committee determines that ***
would be required for Orthovita to supply such requested R&D Product(s) to
Angiotech and/or its Affiliates, then Orthovita shall use commercially
reasonable efforts to supply such R&D Product(s) to Angiotech and/or its
Affiliates, at a supply price equal to ***.

(c) Angiotech Commercialization.

(i) If Angiotech or its Affiliates should desire that Orthovita provide a
commercial supply of any Angiotech-Branded CoStasis Product(s), Supplied
Product(s) or R&D Product(s), then to the extent that Orthovita is then
manufacturing such Angiotech-Branded CoStasis Product(s), Supplied Product(s) or
R&D Product(s), Orthovita shall supply such Angiotech-Branded CoStasis
Product(s), Supplied Product(s) or R&D Product(s) (as applicable) to Angiotech
and its Affiliates, for a transfer price calculated according to the formula
described in Exhibit C(2), subject to negotiation by the Parties in good faith
of additional commercially reasonable terms and conditions for Orthovita’s
commercial supply of such Angiotech-Branded CoStasis Product(s), Supplied
Product(s) and R&D Product(s) (as applicable), in accordance with Angiotech’s or
its Affiliates’ request; provided that the specific terms and conditions of such
commercial supply by Orthovita shall be set forth in a separate, written
commercial manufacturing and supply agreement.

 

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

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(ii) If Angiotech or its Affiliates should desire that Orthovita provide a
commercial supply of any Angiotech-Branded CoStasis Product(s), Supplied
Product(s) or R&D Product(s), and Orthovita is not then currently manufacturing
such Angiotech-Branded CoStasis Product(s), Supplied Product(s) or R&D
Product(s) (as applicable), and ***, would be required for Orthovita to supply
such requested Angiotech-Branded CoStasis Product(s), Supplied Product(s) or R&D
Product(s) to Angiotech and/or its Affiliates, ***, then Orthovita shall use
commercially reasonable efforts to supply such Angiotech-Branded CoStasis
Product(s), Supplied Product(s) or R&D Product(s) to Angiotech and its
Affiliates in accordance with Section 6.2(c)(i) above. For purposes of this
Section 6.2(c)(ii), so long as Orthovita used and is using commercially
reasonable efforts to supply such Angiotech-Branded CoStasis Product, Supplied
Product or R&D Product (as applicable), a failure by Orthovita to provide such
Angiotech-Branded CoStasis Product, Supplied Product or R&D Product (as
applicable) will not be deemed a breach under Section 11.2.

(iii) If Orthovita promptly determines and informs Angiotech in writing that it
has sound business reasons (which are not inconsistent with the rights and
licenses granted to Angiotech hereunder) why it does not wish to provide such
commercial supply under Section 6.2(c)(i) or (ii) above upon Angiotech’s or its
Affiliates’ request, or if Angiotech provides Orthovita with written notice that
Angiotech desires to obtain a commercial supply of Angiotech-Branded CoStasis
Product(s), Supplied Product(s) or R&D Product(s) (as applicable) from a Third
Party, then:

(A) Orthovita shall promptly, (1) ***, transfer to Angiotech and/or its designee
and instruct Angiotech and/or its designee *** any manufacturing technology and
know-how that was obtained and/or transferred to Orthovita at any time prior to
such transfer to Angiotech and/or its designee) which is relevant to manufacture
of such Angiotech-Branded CoStasis Product(s), Supplied Product(s) and/or R&D
Product(s) (as applicable); and (2) shall grant to Angiotech, subject to any
licenses from Orthovita that may be necessary under Section 2.3(a), *** as a
result of such sublicense grant by Orthovita to Angiotech; and

(B) if, at the time of such determination by Orthovita or such written notice by
Angiotech, Orthovita is manufacturing for Angiotech a commercial supply of the
Angiotech-Branded CoStasis Product(s), Supplied Product(s) and/or R&D Product(s)
to be transferred to a Third Party, then (1) the written notice described above
shall be given no less than one hundred eighty (180) days in advance; and (2) if
such written notice is given by Angiotech, Angiotech (I) shall pay to Orthovita
a ***, commercially reasonable transfer fee equal to: *** calculated in
accordance with Exhibit C(2); (II) ***; and (III) shall purchase any remaining
Product-, Supplied Product-, R&D Product- or Existing Accessory-related raw
materials, work-in-process and finished goods ***; and

(C) in any event, Orthovita shall also immediately grant to Angiotech the right
to cross-reference and access Regulatory Filings and Regulatory Approvals owned
or Controlled by Orthovita that are relevant to the manufacture, use and/or sale
of Angiotech-Branded CoStasis Product(s), Supplied Product(s) and/or R&D
Product(s).

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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(d) Angiotech’s Inspection.

(i) If Orthovita provides Angiotech-Branded CoStasis Products, Supplied Products
or R&D Products to Angiotech pursuant to terms of this Agreement, Angiotech
shall have the right to inspect those portions of Orthovita’s facilities where
Angiotech-Branded CoStasis Products, Supplied Products or R&D Products are
manufactured, handled and stored. Orthovita’s facilities shall be subject to
inspection by Angiotech or its representatives upon seventy-two (72) hours prior
written notice, but no more than once per Calendar Year and during regular
business hours; provided, however, that if such an inspection reveals that
Orthovita is not in compliance with its manufacturing, handling or storing
obligations with respect to such Angiotech-Branded CoStasis Products, Supplied
Products or R&D Products, then Angiotech shall be entitled to inspect
Orthovita’s facilities at reasonable intervals until such time as Orthovita is
in compliance with such obligations for an entire Calendar Year. For all
Angiotech inspection requests under this Section 6.2(d), Orthovita shall
promptly respond to Angiotech’s requests for inspection and the Parties shall
agree on the time, scope and manner of the inspection. Similar inspection rights
of Angiotech shall be included in any commercial manufacturing and supply
agreement negotiated by the Parties in accordance with Section 6.2(c) above.

(ii) If Orthovita has engaged one or more Third Parties to manufacture, handle
and/or store Angiotech-Branded CoStasis Products, Supplied Products and/or R&D
Products, then Orthovita shall use commercially reasonable efforts to obtain for
Angiotech a right to inspect those portions of such Third Party’s (or Third
Parties’, if applicable) facilities where Angiotech-Branded CoStasis Products,
Supplied Products and/or R&D Products are manufactured, handled and stored. If
Orthovita is unable to obtain for Angiotech the inspection right set forth in
the preceding sentence, then upon Angiotech’s request, Orthovita shall exercise
its right to inspect those portions of such Third Party’s (or Third Parties’, if
applicable) facilities where Angiotech-Branded CoStasis Products, Supplied
Products and/or R&D Products are manufactured, handled and/or stored at the next
time that such an inspection by Orthovita is permissible under such Third Party
agreement. If Orthovita performs an inspection pursuant to Angiotech’s request
(as described in the preceding sentence), Orthovita shall provide Angiotech with
a copy of the report of the findings made by Orthovita in any such inspection.

Article 7.

Payments and Reports by Orthovita

7.1 Payments on Sales of Products by Orthovita and its Agents. Subject to the
terms and conditions of this Agreement, Orthovita shall pay to Angiotech *** at
the royalty rate calculated as set forth in Exhibit C attached hereto (the
“Section 7.1 Payment(s)”); provided, however, that sales of all Products
provided by Angiotech or its Affiliates to Orthovita under the terms of the
Distribution Agreement shall be governed by the terms of the Distribution
Agreement, including, without limitation, the royalty rates payable on Net Sales
(as defined therein) thereunder.

7.2 Non-Arm’s Length Sales; Non-Cash Sales. On sales of Products made by or on
behalf of Orthovita or its Affiliates to Third Parties in other than an arm’s
length transaction, and for purposes of determining the corresponding
Section 7.1 Payments hereunder, the value of the

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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Net Sales attributed under this Article 7 to such a transaction shall be that
value which would have been received in an arm’s length transaction. In the case
of any sale or other disposal of a Product by or on behalf of Orthovita or its
Affiliates to Third Parties for consideration other than cash, such as barter or
counter-trade, the value of such non-cash sale or other disposal shall be
calculated as described below for such non-cash consideration received, or shall
be the fair market price (if higher) of the Product in the country of such
non-cash sale or disposal. In the case of receipt by Orthovita or its Affiliates
of any non-cash consideration from any sale or other disposal of a Product, the
value of such non-cash consideration shall be calculated based on the fair
market value of such non-cash consideration received (along with any cash
consideration received). If any sale or other disposal of a Product includes
both cash and non-cash consideration, then the total value of such consideration
shall be allocated among the various components of such transaction in
accordance with generally accepted accounting principles.

7.3 Payment Reports. With each payment by Orthovita under Section 7.1 on a
Calendar Quarter basis, Orthovita shall include a report certified by
Orthovita’s CFO that sets forth accurately and in reasonable detail all such
sales, rentals, leases and other disposals of Products by Orthovita and its
Affiliates to Third Parties and the calculation of the Section 7.1 Payments due
to Angiotech for the applicable Calendar Quarter. Such quarterly payment reports
shall include at least the following information:

(a) ***

(b) ***

(c) ***

(d) The amount of Section 7.1 Payments due to Angiotech in accordance with
Exhibit C; and

(e) Such other information as may reasonably be requested by Angiotech to the
extent reasonably necessary to confirm the amount of Section 7.1 Payments owed
to Angiotech hereunder.

7.4 Audit Rights. Angiotech shall have the right, upon reasonable advance
written notice, to have Orthovita’s books, records and accounts examined during
normal business hours, at Angiotech’s expense. Such audits shall be performed by
a qualified independent certified

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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public accountant nominated by Angiotech and reasonably acceptable to Orthovita,
and shall be for the sole purpose of verifying the accuracy of Orthovita’s
accounting reports and any costs and/or payments incurred or to be incurred, or
made or to be made, pursuant to this Agreement (including, without limitation,
actual and estimated Cost of Goods, Sales & Marketing Commissions, average sale
price, and any transfer price to Angiotech that is calculated therefrom). Such
audits may not be performed by Angiotech more than once per Calendar Year;
provided, however, that if such an audit reveals that Orthovita is not in
compliance with the reporting requirements of Section 7.3, then Angiotech shall
be entitled to audit Orthovita’s books, records and accounts at reasonable
intervals until such time as Orthovita is again in compliance with the reporting
requirements of Section 7.3, including re-audit of books, records and accounts
for the same period of time for which an audit was previously conducted by
Angiotech. Such accountant shall be instructed not to reveal to Angiotech the
details of its review, except for (a) such information as is required to be
disclosed under this Agreement and (b) such information presented in a summary
fashion as is necessary to report the accountant’s conclusions to Angiotech, and
all such information disclosed to Angiotech under this Section 7.4 shall be
deemed Confidential Information of Orthovita. If the accountant makes a
determination of underpayment by Orthovita, Orthovita shall remit to Angiotech,
within thirty (30) days of receiving notice from Angiotech, any underreported
amounts, or other amounts due to Angiotech hereunder, together with interest
from the original due date for payment, as provided in Section 7.8. ***

7.5 Shortfall in Achieving Minimum Sales. As partial consideration for the
exclusive, co-exclusive and non-exclusive licenses granted to Orthovita by
Angiotech hereunder, Orthovita agrees to meet a Product Minimum Sales
requirement (as set forth in Exhibit D) during each Calendar Year of the Term,
commencing with Calendar Year 2006. If Orthovita fails to meet the Minimum Sales
requirement in Calendar Year 2006 or any subsequent Calendar Year during the
Term (including any extensions to the Term), then Angiotech, within sixty
(60) days after the end of the applicable Calendar Year, shall send written
notice to Orthovita of such shortfall in achieving such Minimum Sales
(“Shortfall”). With respect to the first occurrence of a Shortfall during the
Term, Angiotech may, in its sole discretion, (a) demand that, within thirty
(30) days after the date of such notice, Orthovita pay to Angiotech a Shortfall
payment (“Shortfall Payment”), and (b) if, and only if, Orthovita does not make
the Shortfall Payment, Angiotech may, in its sole discretion, ***. With respect
to the second or any subsequent Shortfall, Angiotech may, in its sole
discretion, ***. Any Shortfall Payment demanded by Angiotech shall be calculated
as follows: ***. Notwithstanding anything to the contrary in this Section 7.5,
if Orthovita should exhaust its inventory of CoStasis Products provided by
Angiotech pursuant to the Distribution Agreement prior to the date upon which
Orthovita receives Regulatory Approval in the United States to sell CoStasis
Products manufactured by or on behalf of Orthovita and such failure to obtain
Regulatory Approval prior to Orthovita’s exhaustion of its inventory of CoStasis
Products is due solely to delay on the part of the United States Food and Drug
Administration (and such delay is not attributable to an act or omission of
Orthovita), then:

(aa) Minimum Sales for Calendar Year 2006 shall be adjusted as follows: ***; and

(bb) Minimum Sales for Calendar Year 2007 shall be adjusted as follows: ***;

***.

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

22

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7.6 Adjustments to Minimum Sales Requirements. Beginning with Calendar Year
2009, the Minimum Sales requirement shall be determined by the Joint Committee
within the parameters set forth in Exhibit D. The Minimum Sales requirement
shall be determined after taking into consideration ***. If the Parties are
unable to reach agreement on determination or adjustment of the Minimum Sales
requirement, then the dispute shall be referred to the CFOs of each Party for
prompt resolution. Any adjustment to the Minimum Sales requirement agreed upon
by the Joint Committee or the CFOs shall be made by written amendment to this
Agreement.

7.7 Payments. All payments hereunder shall be made in Dollars. Payments to
Angiotech under Section 7.1 for each Calendar Quarter shall be paid within
thirty (30) days after the end of the applicable Calendar Quarter during the
Term. For conversion of foreign currency to Dollars, such conversion shall be
calculated monthly using the conversion rate quoted at www.xe.net on the last
business day of the applicable month (or such other source then-used by
Orthovita according to its standard accounting procedures and notified in
writing to Angiotech). All payments hereunder shall be made in immediately
available funds by wire transfer to Angiotech’s account in accordance with the
following instructions (unless amended by Angiotech’s written notice):

Beneficiary Bank:

US Bank

1450 5th Avenue

Seattle, WA 98101

Beneficiary account: 1535 908 17380

ABA No: 125000105

For credit to the account of:

Angiotech Pharmaceuticals (US), Inc.

Any taxes or other expenses incurred in the transfer or conversion of foreign
currencies to Dollars by or for Orthovita hereunder shall be paid entirely by
Orthovita. The report required by Section 7.3 shall accompany each such payment.

7.8 Interest Due. In case of any delay in payment by Orthovita to Angiotech or
its designee not occasioned by Force Majeure, interest on the overdue payment
shall accrue at an annual interest rate equal to the lesser of: (a) the prime
rate as reported in the Money Rates set forth in The Wall Street Journal, plus
three (3) percentage points, as determined for each month on the last business
day of the previous month, or (b) the maximum amount permitted by law, in either
instance assessed from the date that payment initially became due and owing. The
foregoing interest shall be due from Orthovita without any special notice, and
shall be in addition to any other remedies that Angiotech may have pursuant to
this Agreement.

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

23

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Article 8.

Regulatory Matters

8.1 No Misstatements, Adulteration or Misbranding. Under no circumstances shall
either Party or its Agents knowingly make any false or misleading statements
concerning a Product or Accessory, or knowingly adulterate or misbrand a Product
or Accessory for sale or distribution.

8.2 Responsibility for Regulatory Approvals and Regulatory Filings.

(a) Existing Regulatory Approvals and Regulatory Filings. All costs associated
with Regulatory Filings, and for obtaining and maintaining existing Regulatory
Approvals, for Products to be used by or on behalf of Orthovita and/or its
Affiliates or to be sold by or on behalf of Orthovita and/or its Affiliates to
Third Parties and their indications approved in the Licensed Field (as
applicable to a given CoStasis Product or CellPaker Product) in the Territory
during the Term, shall be borne ***. Orthovita shall be solely responsible for
obtaining the required Regulatory Approvals for the Products and Accessories
that Orthovita will manufacture or have manufactured. Angiotech shall be solely
responsible for all other Regulatory Filings and obtaining all other required
Regulatory Approvals for Angiotech-Branded CoStasis Products, Supplied Products
and R&D Products.

(b) Post-Licensure Marketing Studies and Future Indications. During the Term,
each Party will notify the Joint Committee if that Party desires to pursue
approval for a Future Indication of a Product (any such contemplated pursuit of
a Future Indication, a “Proposal”). The Joint Committee shall consider the value
of all Proposals (including, without limitation, an evaluation of market
analysis, financial projections, costs, resources, responsibilities of the
Parties, and timelines). After due consideration (but no later than ninety
(90) days after receipt of each such Proposal), the Joint Committee shall accept
or reject each such Proposal (such acceptance not to be unreasonably withheld).
If the Joint Committee does not accept or reject such Proposal within such
90-day period, the Proposal shall be deemed accepted by the Joint Committee. If
the Proposal is rejected by the Joint Committee, then the Joint Committee shall
discuss in good faith modifications to the Proposal that would make it
acceptable to both Parties. If the Proposal is accepted by the Joint Committee,
then the proposing Party may pursue such Proposal on its own and at its sole
expense. The Parties shall resolve all disputes related to Proposals pursuant to
the procedures described in Section 4.4. Each Party shall be permitted to
conduct Post-Licensure Marketing Studies of a Product(s) on its own and at its
sole expense, provided that progress reports on the status and clinical results
(including, without limitation, Clinical Data pertaining to such Product(s)) of
such Post-Licensure Marketing Studies shall be reported to the Joint Committee
at their regularly scheduled meetings.

8.3 Clinical Data. To the extent permitted by applicable law, regulations and
rules, each Party shall provide to the other Party any and all Clinical Data
obtained by such providing Party or its Affiliates, but only to the extent such
Clinical Data are related to Products and Accessories, within thirty (30) days
of the obtaining or generation of any such Clinical Data. Each Party hereby
grants to the other Party cross-reference rights to Regulatory Filings and
Regulatory Approvals that include such Clinical Data related to the Products
and/or Accessories, together with the right to access the same.

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8.4 Adverse Events. If either Party becomes aware of any Adverse Event, it shall
promptly notify the other Party of such Adverse Event. The Parties shall provide
reasonable assistance to each other in evaluating and investigating such Adverse
Event. When necessary, Orthovita shall report such Adverse Event arising from
administration or use of a Product or Accessory that had been sold by or on
behalf of Orthovita and/or its Affiliates to a Third Party to the applicable
Regulatory Authority(ies), and Angiotech shall report all other Adverse Events
to the applicable Regulatory Authority(ies). The Parties shall comply with any
necessary corrective action and with all applicable reporting laws, rules and
regulations governing such Adverse Events. Each Party shall provide the other
Party with copies of all Adverse Event reports and any required submissions to
Regulatory Authorities. The responsible Party shall enter all Adverse Events
arising from administration of a Product or use of an Accessory into an
industry-accepted database, periodically perform trend analyses, and give the
other Party access to the database.

8.5 Product Recalls. In the event that Orthovita or its Agents believe a recall,
field alert, Product withdrawal, or field corrective action may be necessary
with regard to any Product manufactured by or for Orthovita and/or its
Affiliates under this Agreement, Orthovita shall immediately notify Angiotech in
writing. With respect to a Product sold by or on behalf of Orthovita and/or its
Affiliates to a Third Party, when necessary, Orthovita shall report such recall,
field alert, withdrawal, or field corrective action to the applicable Regulatory
Authority(ies). With respect to all other Products, and as may be further
elaborated in a separately negotiated commercial supply agreement, when
necessary, Angiotech shall report such recall, field alert, withdrawal, or field
corrective action to the applicable Regulatory Authority(ies). The cost of any
such recall, field alert, withdrawal, or field corrective action shall be ***.

8.6 Right of Reference. Angiotech shall permit Orthovita access to and shall
grant to Orthovita the right to reference and use, in association with the
CoStasis Ingredients, Formulated CoStasis Ingredients, Products and/or Existing
Accessories, all Clinical Data pertaining to Products, regulatory filings and
regulatory communications associated with any Regulatory Filings and Regulatory
Approvals of Angiotech that are related to manufacture, use and/or sale of
CoStasis Ingredients, Formulated CoStasis Ingredients, Products and/or Existing
Accessories. Orthovita shall permit Angiotech access to and shall grant to
Angiotech the right to reference and use, in association with the CoStasis
Ingredients, Formulated CoStasis Ingredients, Products and/or Existing
Accessories, all Clinical Data pertaining to Products, regulatory filings and
regulatory communications associated with any Regulatory Filings and Regulatory
Approvals of Orthovita that are related to manufacture, use and/or sale of
CoStasis Ingredients, Formulated CoStasis Ingredients, Products and/or Existing
Accessories.

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

25

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Article 9.

Representations, Warranties and Indemnification

9.1 Each Party. Each Party represents, warrants and covenants that:

(a) this Agreement has been duly executed and delivered by such Party and
constitutes a valid and binding obligation of such Party, enforceable against
such Party in accordance with its terms, except as enforceability may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors’ rights generally and by general
equitable principles;

(b) as of the Effective Date, the execution, delivery and performance of this
Agreement have been duly authorized by all necessary action on the part of such
Party, its officers and directors and does not conflict with any agreement,
instrument or understanding, oral or written, to which such Party is a party or
by which it may be bound, and, to the best of its knowledge, does not violate
any material law or regulation of any court, governmental body or administrative
or other agency having authority over it;

(c) such Party has full power and authority to perform the obligations set forth
herein;

(d) such Party is not subject to any order, decree or injunction by a court of
competent jurisdiction which may prevent or materially delay the consummation of
the transactions contemplated by this Agreement;

(e) such Party is duly organized, validly existing and in good standing under
the laws of the jurisdiction where it is organized; and

(f) such Party is and will remain in material compliance with all applicable
federal, state and local laws, regulations and orders as they may apply to this
Agreement.

9.2 Additional Representations, Warranties and Covenants By Orthovita. Orthovita
represents, warrants and covenants that, with respect to all Products and
Accessories manufactured by or on behalf of Orthovita for marketing and sale by
Orthovita and its Affiliates to Third Parties, all such Products and Accessories
(a) will be manufactured, packaged and shipped in accordance with the
specifications and applicable federal, state and local laws, regulations and
rules; (b) will be free from defects in materials and workmanship; (c) will not
be adulterated, tampered with, contaminated, misused or misbranded within the
meaning of the Act; and (d) shall not be an article which may not, under the
Act, be introduced into interstate commerce. Orthovita further represents,
warrants and covenants with respect to all of its activities hereunder (y) that
as of the Effective Date none of it, its officers, directors, employees, or
Affiliates is debarred under the Generic Drug Enforcement Act or convicted of a
crime which could lead to debarment, and it has not knowingly utilized, and will
not knowingly utilize, the services of any individual or entity in conducting
its manufacturing activities hereunder that has been debarred under the Generic
Drug Enforcement Act or convicted of a crime that could lead to debarment; and
(z) that its employees shall comply with all safety and environmental
procedures, protocols, systems, laws, rules and regulations applicable to or
associated with its manufacturing activities hereunder. With respect to any
Angiotech-Branded CoStasis Product(s), Supplied Product(s) and/or R&D Product(s)
that Orthovita supplies to Angiotech or its Affiliates in accordance with
Section 6.2(a) or (b), Orthovita shall make the same representations, warranties
and covenants as set forth in clauses (a-d) above, to the extent applicable,
unless otherwise expressly modified by the Parties in writing; provided,
however, that all references to laws, regulations and rules shall only apply to
those laws, regulations and rules of the United States, unless otherwise
expressly agreed by the Parties in writing.

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9.3 Books and Records of Orthovita. Orthovita represents, warrants and covenants
that its books, records and accounts pertaining to all of its permitted
activities and operations under this Agreement are complete and accurate in all
material respects, and have been maintained in accordance with sound and
generally accepted accounting principles.

9.4 Representations to Third Parties. Orthovita shall not make any
representation or warranty to a Third Party with respect to the Products and
Accessories that is more extensive than, or inconsistent with, the
representations and warranties set forth in this Article 9 or that is
inconsistent with the policies or publications of Orthovita relating to the
Products and Accessories.

9.5 Sole Remedy for Non-Conformance. Angiotech’s sole and exclusive remedy under
this Agreement for any non-conforming Angiotech-Branded CoStasis Products,
Supplied Products and/or R&D Products provided to Angiotech by Orthovita
pursuant to Section 6.2(a) or (b) shall be reimbursement of, receipt of credits
for, or replacement of such non-conforming Angiotech-Branded CoStasis Products,
Supplied Product(s) and/or R&D Products (as applicable), unless otherwise
expressly agreed by the Parties in writing. For the avoidance of doubt, other
remedies for non-conformance may be provided to Angiotech pursuant to a
separately negotiated commercial supply agreement with Orthovita.

9.6 Additional Representations and Warranties of Angiotech. Angiotech hereby
represents and warrants to Orthovita as of the Effective Date that:

(a) Exhibit B sets forth a true and complete list of the Licensed Patents owned
or Controlled by Angiotech and its Affiliates which are necessary or useful for
making, using, selling, offering for sale and importing the Products and/or the
Existing Accessories, as each of the foregoing is configured as of the Effective
Date; provided that an inadvertent omission from such list may be cured by
amending Exhibit B;

(b) Angiotech has not granted to any Third Party any right or license which
would conflict in any material respect with the rights and licenses granted to
Orthovita hereunder;

(c) Angiotech has not knowingly transferred to Orthovita any Licensed Know-How
misappropriated from a Third Party;

(d) To the knowledge of Angiotech’s General Counsel, no lawsuit has been filed
against Angiotech or its Affiliates, nor has any Third Party threatened in
writing to file a lawsuit against Angiotech or its Affiliates, with respect to
the Products and/or the Existing Accessories;

(e) The Licensed Patents and Licensed Know-How are not subject to any
litigation, judgments or settlements against or owed by Angiotech or its
Affiliates, nor to the knowledge of Angiotech’s General Counsel has Angiotech
received written notice of any threats of such litigation;

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(f) The Licensed Patents are existing and to the knowledge of Angiotech’s
General Counsel no issued or granted patents within the Licensed Patents are
invalid or unenforceable;

(g) Inventorship of the Licensed Patents has been properly determined according
to applicable laws and regulations;

(h) Except as set forth in Exhibit E, Angiotech has not received written
notification that the Licensed Patents are the subject of any interference,
opposition, reissue or reexamination proceeding;

(i) Angiotech and its Affiliates have complied with applicable laws, rules,
regulations, including good manufacturing practices and the Act (if applicable),
in their manufacture and commercialization of the Products and/or the Existing
Accessories in the Licensed Field; and

(j) Angiotech has not knowingly failed to disclose to Orthovita any material
facts regarding: (i) communications to or from any pertinent Regulatory
Authority with respect to the Products and/or the Existing Accessories; and
(ii) Adverse Events with respect to the Products and/or the Existing
Accessories.

9.7 Limitations. THE LIMITED WARRANTIES CONTAINED IN THIS ARTICLE 9 ARE THE SOLE
WARRANTIES GIVEN BY THE PARTIES HEREUNDER, AND ARE MADE EXPRESSLY IN LIEU OF AND
EXCLUDE ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OR OTHERWISE, AND ALL OTHER EXPRESS OR IMPLIED
REPRESENTATIONS AND WARRANTIES PROVIDED BY COMMON LAW, STATUTE OR OTHERWISE ARE
HEREBY DISCLAIMED BY BOTH PARTIES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR INDIRECT, PUNITIVE, SPECIAL, CONSEQUENTIAL OR EXEMPLARY
DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS OR OTHER
COMMERCIAL OR ECONOMIC LOSS, AND LOSS OR INTERRUPTION OF BUSINESS. THE FOREGOING
PROVISION SHALL NOT BE CONSTRUED TO LIMIT A PARTY’S INDEMNIFICATION OBLIGATION
UNDER THIS AGREEMENT FOR THIRD PARTY CLAIMS WHICH MAY INCLUDE CONSEQUENTIAL,
PUNITIVE OR OTHER TYPES OF DAMAGES.

9.8 Indemnification by Orthovita. In each case, other than with respect to
Product Liability Claims (the treatment of which is governed exclusively by
Section 9.11), Orthovita shall defend, indemnify and hold harmless Angiotech and
its Affiliates, employees, officers, agents and directors against any and all
loss, damages, action, suit, claim, demand, liability, penalty, expense
(including, without limitation, reasonable attorneys’ fees and expenses), bodily
injury, death, or property damage (collectively, a “Loss”) resulting from,
arising out of, or relating to claims, actions or suits (including a
governmental investigation) by Third Parties to the extent arising from:

(a) a breach by Orthovita of any of its covenants, representations or warranties
set forth in this Agreement;

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(b) Orthovita’s uncured breach of its obligations under this Agreement, or
Orthovita’s (or its Affiliates’, representatives’, directors’, officers’,
employees’ and agents’) negligence or willful misconduct in its performance
hereunder; or

(c) improper business practices of Orthovita, as determined by a court or
governmental authority having jurisdiction over Orthovita;

provided in each case, however, that the foregoing indemnifications in this
Section 9.8 shall not apply to any Loss to the extent such Loss is caused by the
negligence or willful misconduct of Angiotech.

9.9 Indemnification by Angiotech. In each case, other than with respect to
Product Liability Claims (the treatment of which is governed exclusively by
Section 9.11), Angiotech shall defend, indemnify and hold harmless Orthovita and
its Affiliates, employees, officers, agents and directors against any and all
Losses resulting from, arising out of, or relating to claims, actions or suits
(including a governmental investigation) by Third Parties to the extent arising
from:

(a) a breach by Angiotech of any of its covenants, representations or warranties
set forth in this Agreement;

(b) Angiotech’s uncured breach of its obligations under this Agreement, or
Angiotech’s (or its Affiliates’, representatives’, directors’, officers’,
employees’ and agents’) negligence or willful misconduct in its performance
hereunder;

(c) infringement claims relating to the use of the Angiotech Trademarks provided
that Orthovita complies with the reasonable instructions of Angiotech with
respect to use and/or cessation of use of such Angiotech Trademarks; or

(d) improper business practices of Angiotech, as determined by a court or
governmental authority having jurisdiction over Angiotech;

provided in each case, however, that the foregoing indemnifications in this
Section 9.9 shall not apply to any Loss to the extent such Loss is caused by the
negligence or willful misconduct of Orthovita.

9.10 Indemnification Procedure. If indemnification for a Loss is sought as a
result of any Third Party claim, suit or demand, the Indemnified Party shall:
(a) shall give written notice to the Indemnifying Party within fifteen (15) days
after receipt by the Indemnified Party of such claim, suit or demand; provided,
however, that the failure to give notice within such time period shall not
relieve the Indemnifying Party of its obligation to indemnify, unless it shall
be materially prejudiced by such failure; (b) permit the Indemnifying Party to
assume direction and control of the defense of claims resulting therefrom; and
(c) at its own cost and expense, cooperate fully as requested by the
Indemnifying Party in the defense of the claims. No offer of settlement,
settlement or compromise by the Indemnifying Party shall be binding on an

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Indemnified Party without its prior written consent (which consent shall not be
unreasonably withheld or delayed), unless such settlement fully releases the
Indemnified Party without any liability, loss, cost or obligation incurred by
such Indemnified Party. No offer of settlement, settlement or compromise by the
Indemnified Party shall be binding on an Indemnifying Party without its prior
written consent (which consent shall not be unreasonably withheld or delayed).

9.11 Product Liability Claims.

(a) Notwithstanding the foregoing Sections 9.8 and 9.9, the Parties’
responsibilities with respect to Product Liability Claims shall be governed by
this Section 9.11.

(b) Angiotech and Orthovita shall jointly conduct all Third Party litigation
relating to any Product Liability Claim. If the Parties agree that only one of
them will defend such Third Party action relating to a Product Liability Claim,
the other Party and its Affiliates shall assist and cooperate in any such
litigation at the defending or prosecuting Party’s reasonable request.

(c) *** No offer of settlement, settlement or compromise by either Party shall
be binding without the prior written consent of both Parties (which consent
shall not be unreasonably withheld or delayed).

9.12 Insurance. Each Party shall, at its own cost, maintain comprehensive
general liability insurance, including broad form contractual liability and
product liability coverages, in amounts and subject to deductibles customary in
the medical device industry and sufficient to cover its obligations under this
Agreement, but in no event less than Five Million Dollars ($5,000,000) in
coverage. Each Party shall maintain such insurance during the Term and
thereafter for a period of two (2) years. Each Party, upon request, shall
provide the other Party with a certificate of insurance as evidence of such
coverages, and shall give the other Party at least thirty (30) days notice of
any cancellation, termination or change in such insurance. Such insurance shall
(a) be issued by a reputable, financially sound company; (b) provide that the
insurance company will endeavor to provide at least thirty (30) days notice of
cancellation, non-renewal or material change of coverage to both Angiotech and
Orthovita, but its failure to do so shall impose no penalty or additional
obligations under this Agreement; and (c) contain a severability of interest or
separation of the insureds provision, affording defense and coverage for an
insured in the event of a claim brought by another insured. All of the foregoing
liability policies shall be primary and non-contributory. Nothing in this
Section 9.12 regarding insurance coverage amounts shall be deemed or interpreted
as a limitation on the indemnities set forth in this Agreement.

9.13 Employee Safety. Each Party shall be solely responsible for the safety of
its own employees, Agents, and independent contractors with respect to its
performance under this Agreement, and each shall hold the other Party harmless
with regard to any liability for damages or personal injuries resulting from
acts of its respective employees, Agents, and independent contractors.

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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Article 10.

Intellectual Property

10.1 Patent Applications and Foreign Filing. Angiotech shall file, prosecute and
maintain in force (a) any and all patents and patent applications included in
the Licensed Patents, (b) any and all patent and patent applications related to
any CoStasis Ingredient Improvement (“CoStasis Ingredient Improvement Patents”),
and (c) any and all patent and patent applications related to any Angiotech
Improvements licensed to Orthovita hereunder (“Angiotech Improvement Patents”).
The filing, prosecution and maintenance of patents and patent applications
pursuant to this Section 10.1 shall be done through patent counsel selected by
Angiotech. To the extent Angiotech has the right to do so, Angiotech will keep
Orthovita reasonably informed of all significant patent matters relating to the
Licensed Patents, CoStasis Ingredient Improvement Patents and Angiotech
Improvement Patents within the Licensed Field as they relate to Products or
Existing Accessories, and will give Orthovita a reasonable opportunity to review
and provide input on the prosecution of applications within the Licensed
Patents, CoStasis Ingredient Improvement Patents and Angiotech Improvement
Patents, to the extent such prosecution is pertinent to Products or Existing
Accessories in the Licensed Field. For the avoidance of doubt, Angiotech may
take ministerial and non-material procedural actions regarding the Licensed
Patents, CoStasis Ingredient Improvement Patents and Angiotech Improvement
Patents without obtaining prior input from Orthovita.

10.2 Notification of Infringement.

(a) By Orthovita. With respect to any Licensed Patents, CoStasis Ingredient
Improvement Patents and Angiotech Improvement Patents, Orthovita shall promptly
notify Angiotech in writing of any alleged or threatened infringement of such
Licensed Patents, CoStasis Ingredient Improvement Patents and Angiotech
Improvement Patents of which it becomes aware, and shall provide to Angiotech
available evidence thereof.

(b) By Angiotech. With respect to any Licensed Patents, CoStasis Ingredient
Improvement Patents and Angiotech Improvement Patents in the Licensed Field,
Angiotech shall promptly notify Orthovita in writing of any alleged or
threatened infringement of such Licensed Patents, CoStasis Ingredient
Improvement Patents and Angiotech Improvement Patents of which it becomes aware,
and shall provide to Orthovita available evidence thereof.

10.3 Defense and Enforcement of Patents.

(a) Defense of Declaratory Judgment Action. In the event of an assertion of
invalidity or unenforceability of Licensed Patents, CoStasis Ingredient
Improvement Patents and Angiotech Improvement Patents, Angiotech shall have the
*** right to defend such assertion, but to the extent such assertion relates to
Products in the Licensed Field, Angiotech shall ***.

(b) Non-Litigation Actions ***. Angiotech shall have the *** right, ***, to take
actions to terminate any alleged infringement identified pursuant to
Section 10.2 without litigation with respect to Licensed Patents and CoStasis
Ingredient Improvement Patents (including the ***); provided, however, where
such alleged infringement involves the Licensed Patents and/or CoStasis
Ingredient Improvement Patents within the Orthopedic Hemostat Field,

 

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

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***.

(c) Action within the Licensed Field.

(i) Angiotech shall have the *** right (subject to Section 10.3(c)(ii)), ***, to
commence and control any legal action or proceeding, or the filing of any
counterclaim, related to any alleged infringement of the Licensed Patents and/or
CoStasis Ingredient Improvement Patents (“Action”) within the Licensed Field. In
the event that Angiotech elects, ***, to undertake such an Action, Orthovita
agrees to reasonably cooperate with Angiotech, including providing access to all
necessary documents, executing all papers and performing such other acts as may
be reasonably required for such Action, including, but not limited to,
consenting to be joined as a Party plaintiff in such Action. Angiotech shall
control such Action, and Angiotech may enter into settlements, stipulated
judgments or other arrangements respecting such infringement; provided, however,
Angiotech shall ***. Angiotech shall keep Orthovita reasonably apprised of the
progress of any such Action. Orthovita may, at its option and ***, be
represented by counsel of its choice, but ***.

(ii) If, within one hundred twenty (120) days after discovering or being
notified by Orthovita in writing of an alleged infringement that would be the
basis of a potential Action solely within the Orthopedic Hemostat Field,
Angiotech declines to commence an Action, then Orthovita shall have the right,
but not the obligation, to commence an Action with respect to such alleged
infringement within the Orthopedic Hemostat Field (“Declined Action”); provided
that prior to commencing any such Declined Action, Orthovita shall reasonably
consider Angiotech’s reasons for declining to commence the Action. In the event
that Orthovita elects, in its sole discretion, to commence such Declined Action,
(A) Orthovita shall reasonably consider Angiotech’s input with respect to such
Declined Action; and (B) Angiotech agrees to reasonably cooperate with
Orthovita, including providing access to all necessary documents, executing all
papers and performing such other acts as may be reasonably required for such
Declined Action, such as consenting to be joined as a party plaintiff in such
Declined Action, ***. Orthovita shall keep Angiotech reasonably apprised of the
progress of any such Declined Action. Angiotech may, at its option and ***, be
represented by counsel of its choice, but ***.

(iii) With respect to an Action that is not a Declined Action, if, within one
hundred twenty (120) days after discovering or being notified by Orthovita in
writing of an alleged infringement that would be the basis of a potential Action
solely within the Licensed Field, Angiotech declines to commence an Action, then
Orthovita shall have the right, but not the obligation, to present such issue to
the Joint Committee for discussion and resolution. In resolving such issue, the
Joint Committee shall consider, without limitation, ***, and after a detailed
analysis of the alleged infringement, the likelihood that any Licensed Patent is
or would be infringed in the Licensed Field. In the event that the Joint
Committee determines that such alleged infringement is or would be reasonably
expected to have a material adverse effect on the

 

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

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sales of Products by Orthovita and its Affiliates in the Licensed Field, the
Joint Committee may consider ***, in order to reasonably and fairly compensate
Orthovita for any material adverse effect on Orthovita and its Affiliates of
such ongoing alleged infringement in the Licensed Field.

(iv) Recoveries. In any Action or Declined Action pursuant to this Section 10.3,
any damages or other recovery, including compensatory and other non-compensatory
damages or recovery actually received from a Third Party, shall be allocated
first to ***.

Article 11.

Term and Termination

11.1 Term. The term of this Agreement shall be for a period commencing on the
Effective Date and ending on December 31, 2014, unless extended by mutual
agreement of the Parties in accordance with this Agreement (the “Term”). At
least six (6) months prior to expiration of the then-current Term, the Parties
will meet to discuss in good faith whether the then-current Term will be
extended by mutual agreement. However, this Agreement shall automatically
terminate at the end of the then-current Term unless the Parties mutually agree
in writing to extend such Term prior to the expiration date. Notwithstanding the
foregoing, this Agreement may be terminated earlier in accordance with the
provisions of this Article 11 or as expressly provided elsewhere in this
Agreement (including, without limitation, Section 7.5).

11.2 Angiotech’s Right to Terminate for Orthovita’s Breach. Angiotech shall have
the absolute right to terminate this Agreement upon thirty (30) days prior
written notice to Orthovita if Orthovita fails to perform or breaches, in any
material respect, any term or provision of this Agreement; provided, however,
that such termination shall become effective only if Orthovita shall fail to
remedy or cure the breach within such thirty (30) day period, or to initiate a
remedy or cure within such period if it is not practicable to complete the cure
in such period. Without limiting the events which may constitute a breach or
material breach of this Agreement by Orthovita, Orthovita understands and agrees
that it shall be in material breach of this Agreement, and Angiotech shall have
the right to terminate this Agreement under this Section 11.2 (subject to the
applicable cure period), if Orthovita fails or refuses to pay to Angiotech any
undisputed payment when due.

11.3 Orthovita’s Remedy for Angiotech’s Breach. If Angiotech fails to perform or
breaches, in any material respect, any term or provision of this Agreement,
Orthovita shall notify the Joint Committee of such failure or breach, and the
Joint Committee shall determine reasonable, demonstrable damages actually
suffered or incurred by Orthovita for any such failure or breach. If the Joint
Committee cannot mutually agree upon such determination, or upon whether
Angiotech has failed to perform or has breached, then such dispute shall be
resolved pursuant to Section 4.4. At the time that such damages (if any) are
finally determined, then Orthovita shall have the right to suspend the
Section 7.1 Payments under this Agreement; provided, however, that such
suspension shall be effective only for the period of time sufficient to
compensate for such damages.

11.4 Each Party’s Right to Terminate for Insolvency. Each Party shall have the
absolute right to terminate this Agreement in the event the other Party becomes
insolvent, or if

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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there is instituted by or against the other Party procedures in bankruptcy that
are not dismissed within sixty (60) days, or under insolvency laws or for
reorganization, receivership or dissolution.

11.5 ***

11.6 ***

11.7 Effects of Expiration or Termination. Upon expiration or termination of
this Agreement for any reason, the following provisions shall apply:

(a) subject to this Section 11.7 and Section 11.9, all rights and licenses
granted to either Party hereunder shall terminate;

(b) if Angiotech terminates this Agreement pursuant to Section 7.5, 11.2, 11.4,
11.5 or 11.6:

(i) Orthovita shall promptly negotiate with Angiotech in good faith regarding
commercially reasonable terms and conditions for the grant to Angiotech of
rights and licenses (and sublicenses, if applicable), with a right to further
sublicense, under intellectual property (including, without limitation, patents,
patent applications, know-how, tangible materials, designs, molds, customer
lists, vendor lists, data, manuals, schematics and Confidential Information)
owned or Controlled by Orthovita pertaining to (A) Orthovita Improvements that
have been incorporated into the CoStasis Ingredients, Formulated CoStasis
Ingredients, Products and/or Accessories which are being made, sold or offered
for sale in the Licensed Field under this Agreement at the date of Angiotech’s
termination notice, and (B) all CoStasis Ingredients, Formulated CoStasis
Ingredients, Products and/or Accessories, and all raw materials, components or
intermediates related to any of the foregoing, that are not described by the
preceding clause (A) which are being made, sold or offered for sale in the
Licensed Field under this Agreement at the date of such termination notice, such
that Angiotech and its Affiliates have all necessary rights and licenses under
such intellectual property of Orthovita to manufacture (itself or through Third
Party(ies) contractually bound to Angiotech), use, distribute, promote, market,
sell, offer for sale, export and import all CoStasis Ingredients, Formulated
CoStasis Ingredients, Products or Accessories which are being made, sold or
offered for sale in the Licensed Field under this Agreement at the date of such
termination notice; and

(ii) to the extent that Angiotech obtains such rights and licenses described in
clause (i) above, for a period of *** after the effective date of termination,
Orthovita shall manufacture and supply to Angiotech all CoStasis Ingredients,
Formulated CoStasis Ingredients, Products and Accessories which are being made,
sold or offered for sale in the Licensed Field under this Agreement at the date
of such termination notice, wherein Angiotech’s transfer price for such CoStasis
Ingredients, Formulated CoStasis Ingredients, Products and Accessories shall be
determined in accordance with the method(s) used hereunder to determine the
transfer price for commercial supply of other products provided by Orthovita to
Angiotech hereunder;

(c) upon expiration of this Agreement, Angiotech shall have an option to
negotiate with Orthovita to obtain on commercially reasonable terms a license to
intellectual

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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property owned or Controlled by Orthovita that is (i) related to CoStasis
Ingredients, Formulated CoStasis Ingredients, Products or Accessories (including
any Improvements to any of the foregoing), and (ii) existing as of the date of
such expiration, such that Angiotech has all necessary and useful rights and
licenses under such additional intellectual property of Orthovita to make, use,
distribute, promote, market, sell, offer for sale, export and import CoStasis
Ingredients, Formulated CoStasis Ingredients, Products or Accessories (including
any Improvements to any of the foregoing) which are being made, sold or offered
for sale in the Licensed Field under this Agreement at the date of such
expiration; and

(d) if this Agreement expires or is terminated by Angiotech pursuant to
Section 7.5, 11.2, 11.4, 11.5 or 11.6, Orthovita shall (i) ***, (ii) transfer to
Angiotech advertising or promotional materials and training materials that were
used in conjunction with the Products and Accessories prior to such expiration
or termination, and (iii) ***.

11.8 Manufacturing Technology Transfer. Upon expiration or termination of this
Agreement for any reason, Orthovita shall discontinue any manufacturing of
Products, Supplied Products, R&D Products and Existing Accessories. Orthovita
shall immediately grant Angiotech the right to cross-reference and access
Regulatory Filings and Regulatory Approvals owned or Controlled by Orthovita
that are related to the manufacture, use and/or sale of Products, Supplied
Products, R&D Products and/or Accessories (as applicable), and shall transfer to
Angiotech within *** after the date of expiration or termination to facilitate
Angiotech’s manufacture of Products and Existing Accessories (and to the extent
Angiotech has rights to New Accessories under Section 11.7(b) and/or (c), to
facilitate Angiotech’s manufacture of New Accessories) *** relating to the
Products, Supplied Products, R&D Products and/or Accessories (as applicable).
Notwithstanding the foregoing, if this Agreement expires or is terminated by
Angiotech pursuant to Section 7.5, 11.2, 11.4, 11.5 or 11.6, for a period not to
exceed *** after the date of expiration or termination of this Agreement,
Orthovita shall continue to manufacture and supply to Angiotech on commercially
reasonable terms those Products, Supplied Products, R&D Products and Accessories
that Orthovita (or its Third-Party manufacturer) was manufacturing for and
supplying to Angiotech as of the date of expiration or termination of this
Agreement.

11.9 Post-Termination Sale of Inventory. During the *** period following
expiration or termination of this Agreement, any inventory of Products held by
Orthovita at such expiration or termination may be sold by Orthovita to
customers in the Licensed Field in the Territory in the ordinary course;
provided, however, that for the period required to liquidate such inventory, all
of the provisions contained herein governing Orthovita’s performance obligations
and Angiotech’s rights shall remain in effect. In order to accelerate the
liquidation of any such inventory, Angiotech has the right, but not the
obligation, to purchase all or any part of such remaining inventory of Products
***.

11.10 Survival. The expiration or termination of this Agreement shall not affect
(i) the rights or obligations of either Party hereto which shall have accrued
hereunder prior to such expiration or termination, and (ii) the rights and
obligations of the Parties at law or in equity which, from the context thereof,
are intended to survive termination or expiration of this Agreement. Without
limiting the foregoing sentence, the provisions of Article 1, to the extent
definitions are embodied in the following listed Articles and Sections of this
Agreement; Sections 2.3(a)(i); 2.3(b)(i); 2.3(c) (first sentence); 2.4; 2.6;
2.7; 4.4 (with respect to disputes

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

 

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arising during the Term that have not been resolved); 5.4; 7.4; 7.7; 7.8; 8.4;
8.5; 9.2 (to the extent that Orthovita manufactures Products for Angiotech after
expiration or termination pursuant to Section 11.7 or 11.8); 9.5; 9.7; 9.8; 9.9;
9.10; 9.11; 9.12; 9.13; 11.7; 11.8; 11.9 (and for so long as 11.9 survives, the
following Sections survive: 3.3; 3.4; 3.5; 7.1; 7.2; 7.3; 9.3); 11.10 and 12.1;
and Articles 13-25, and the rights and obligations of the Parties thereunder
shall survive the expiration or termination of this Agreement.

Article 12.

Trademarks

12.1 Ownership; Permitted and Required Uses. All Orthovita Trademarks used in
connection with the Products and Accessories sold by or on behalf of Orthovita
to Third Parties, and the goodwill associated with such Orthovita Trademarks,
are and shall remain the sole and exclusive property of Orthovita and/or its
Affiliates. All Angiotech Trademarks used in connection with the Products
(including Angiotech-Branded CoStasis Products) and Accessories, and the
goodwill associated with such Angiotech Trademarks, are and shall remain the
sole and exclusive property of Angiotech.

12.2 Right to Review and Approve Trademark Usage. Each Party retains the right
to review and approve all intended uses of the Trademarks of such Party in any
packaging, inserts, labels, promotional or other materials relating to the
Products prior to the other Party’s actual use thereof. To the extent permitted
by applicable laws, regulations and rules, all Product promotional materials and
labeling affixed to the Products shall contain the Angiotech Trademark
ANGIOTECHKNOWLEDGY® (or another Angiotech Trademark substituted therefor in
Angiotech’s sole discretion), in a position of equivalent prominence and
emphasis as the Orthovita Trademarks.

12.3 Use of Other Party’s Trademarks. Each Party agrees to use the Trademarks of
the other Party in full compliance with the rules prescribed from time to time
by such other Party. The Trademarks of the other Party shall always be used
together with the symbol “®“ or the symbol “™“, as appropriate. Neither Party
may use any Trademark of the other Party as part of any corporate name or with
any prefix, suffix or other modifying word, term, design or symbol, except as
approved in advance by the owning Party. In addition, neither Party may use any
Trademark of the other Party in connection with the sale of any unauthorized
product or service or in any other manner not explicitly authorized in writing
by the owning Party. Certain authorized Trademark uses are set forth in
Section 3.4.

12.4 Infringement. Orthovita shall notify Angiotech immediately upon learning of
any infringement of, or threatened or presumed infringement of, or challenge to
Orthovita’s use of, any Angiotech Trademark. Angiotech shall investigate any
alleged violation of the Angiotech Trademarks and, if necessary, shall take the
appropriate legal action to resolve the issue and to prevent other competitors
from infringing on said intellectual property rights within the Territory.
Angiotech shall have sole and absolute discretion to take such action with
respect to the Angiotech Trademarks as it deems appropriate. Angiotech shall
notify Orthovita immediately upon learning of any infringement of, or threatened
or presumed infringement of, or challenge to Angiotech’s use of, any Orthovita
Trademark. Orthovita shall investigate any

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alleged violation of the Orthovita Trademarks and, if necessary, shall take the
appropriate legal action to resolve the issue and to prevent other competitors
from infringing on said intellectual property rights within the Territory.
Orthovita shall have sole and absolute discretion to take such action with
respect to the Orthovita Trademarks as it deems appropriate.

12.5 Remedies. In the event of a breach or threatened breach by either Party of
the provisions of this Article 12, the non-breaching Party is entitled to an
injunction or injunctions to prevent such breaches. Nothing herein shall be
construed as prohibiting the non-breaching from pursuing other remedies
available to it for such breach or threatened breach of this Article 12,
including the recovery of damages from the breaching Party.

Article 13.

Confidential Information

13.1 General. All disclosures of Confidential Information related to the subject
matter of this Agreement made after the Effective Date shall be governed by this
Agreement, and all disclosures of Confidential Information related to the
subject matter of this Agreement, made before the Effective Date shall be
governed by the Mutual Confidentiality Agreement between the Parties, dated
February 9, 2004, or the Distribution Agreement. Both Parties recognize and
acknowledge that each will have access to confidential information and trade
secrets, including know-how, of the other and other entities doing business with
each Party relating to research, development, manufacturing, marketing,
financial and other business-related activities (“Confidential Information”).
Such Confidential Information constitutes valuable, special and unique property
of each Party and/or other entities doing business with each Party. Other than
as is necessary to perform the terms of this Agreement, neither Party shall,
during and after the Term, make any use of such Confidential Information, or
disclose any of such Confidential Information to any person or firm,
corporation, association or other entity, for any reason or purpose whatsoever,
except as specifically allowed in writing by an authorized representative of the
other. In the event of a breach or threatened breach by either Party of the
provisions of this Article 13, each Party shall be entitled to an injunction
restraining the other from disclosing and/or using, in whole or in part, such
Confidential Information. Nothing herein shall be construed as prohibiting
either Party from pursuing other remedies available to it for such breach or
threatened breach of this Article 13, including the recovery of damages from the
other. The above does not apply to information or material that (a) was known to
the public or generally available to the public prior to the date it was
received by either Party; (b) is rightfully acquired by the receiving Party from
a Third Party that is not under a confidentiality restriction on disclosure or
use; (c) was already known to the receiving Party prior to receipt from the
disclosing Party as evidenced by written records; or (d) is required to be
disclosed by law or court order or in periodic reports to the Securities and
Exchange Commission or to any Regulatory Authority, provided that notice of the
disclosure requirement is promptly delivered to the disclosing Party in order to
provide the disclosing Party with an opportunity to challenge or limit the
disclosure obligations. With respect to disclosures required under
Section 13.1(d), the receiving Party, to the extent legally permissible, also
shall provide the disclosing Party, in advance of any such disclosure, with a
list of any Confidential Information the receiving Party intends to disclose
(and, if applicable, the text of the disclosure language itself) and to
reasonably cooperate with the disclosing Party to the extent it may seek to
limit such disclosure, including, if requested, taking reasonable steps to
resist or avoid any such disclosure.

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13.2 Terms of this Agreement. Except as permitted pursuant to Section 13.1,
neither Party shall disclose any of the terms or conditions set forth in this
Agreement without the prior written consent of the other Party.

Article 14.

Force Majeure

14.1 Event of Force Majeure. Neither Orthovita nor Angiotech shall have any
liability hereunder if either is prevented from performing any of its
obligations hereunder by reason of any factor beyond its control, including,
without limitation, fire, explosion, accident, riot, flood, drought, storm,
earthquake, lightning, frost, civil commotion, sabotage, vandalism, smoke, hail,
embargo, act of God or the public enemy, other casualty, strike or lockout, or
interference, prohibition or restriction imposed by any government or any
officer or agent thereof (“Force Majeure”). Such affected Party shall give to
the other Party prompt notice of any such Force Majeure, the date of
commencement thereof and its probable duration and shall give a further notice
in like manner upon the termination thereof. Each Party hereto shall endeavor
with due diligence to resume compliance with its obligations hereunder at the
earliest date and shall do all that it reasonably can to overcome or mitigate
the effects of any such Force Majeure upon both Party’s obligations under this
Agreement. Should the Force Majeure continue for more than six (6) months, then
the other Party shall have the right to cancel this Agreement and the Parties
shall seek an equitable agreement on the Parties’ reward of interests.

14.2 Monetary Payments Not Excused. The Parties agree that any obligation to pay
money under this Agreement is never excused by Force Majeure.

Article 15.

Amendment

15.1 Executed in Writing. No oral explanation or oral information by either
Party hereto shall alter the meaning or interpretation of this Agreement. No
modification, alteration, addition or change in the terms hereof shall be
binding on either Party hereto unless reduced to writing and executed by the
duly authorized representative of each Party.

Article 16.

Entire Agreement

16.1 Entire Agreement. Except for the Distribution Agreement and the Mutual
Confidentiality Agreement between the Parties, dated February 9, 2004, all of
which shall continue to be governed by their terms and shall govern disclosures
of confidential information and other matters related or unrelated to the
subject matter of this Agreement (as applicable), this Agreement and all
exhibits attached hereto represent the entire agreement between the Parties and
shall supersede any and all prior agreements, understandings, arrangements,
promises, representations, warranties, and/or any contracts of any form or
nature whatsoever, whether oral or in writing and whether explicit or implicit,
which may have been entered into prior to the execution hereof between the
Parties, their officers, directors or employees as to the subject matter hereof.
Neither of the Parties hereto has relied upon any oral representation or oral
information given to it by any representative of the other Party.

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16.2 Invalid or Unenforceable Provision. Should any provision of this Agreement
be rendered invalid or unenforceable, it shall not affect the validity or
enforceability of the remainder of this Agreement. To the extent practicable,
the Parties shall replace an invalid provision or fill any gap with valid
provisions which most closely approximate the purpose and economic effect of the
invalid provision or, in case of a gap, the Parties’ presumed intentions.
Nothing in this Agreement shall be interpreted so as to require either Party to
violate any applicable laws, rules or regulations.

Article 17.

Assignment

17.1 Rights and Limitations. Neither this Agreement nor any of the rights or
obligations of either Party hereunder shall be transferred or assigned by such
Party without the prior written consent of the other Party, executed by a duly
authorized officer of such Other Party. Notwithstanding the foregoing,
(a) Angiotech may assign this Agreement, without the consent of Orthovita,
(i) in part or in whole to any of its Affiliates, if Angiotech remains liable
for the full performance of its Affiliates’ obligations hereunder, and (ii) in
connection with the transfer or sale of all or substantially all of its assets
or business to which this Agreement relates, or in the event of its merger or
consolidation with, acquisition by, or sale to another company (including an
Affiliate of Angiotech); and (b) subject to Orthovita’s compliance with Article
7, Orthovita may assign this Agreement, without the consent of Angiotech, (i) in
part or in whole to any of its Affiliates, if Orthovita remains liable for the
full performance of its Affiliates’ obligations hereunder, and (ii) in
connection with the transfer or sale of all or substantially all of its assets
or business to which this Agreement relates, or in the event of its merger or
consolidation with, acquisition by, or sale to another company (including an
Affiliate of Orthovita).

Article 18.

Governing Law

18.1 New York Law. It is expressly agreed that the validity, performance and
construction of this Agreement shall be governed by the laws and jurisdiction of
the state of New York, without regard to its conflicts of laws provisions.

Article 19.

Notices

19.1 Notice Requirements. Any notice required or permitted to be given under
this Agreement by one of the Parties to the other shall be given for all
purposes by delivery in person, registered air-mail, commercial courier
services, postage prepaid, return receipt requested, or by fax addressed to:

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If to Angiotech:    Angiotech Pharmaceuticals (US), Inc.    101 W. North Bend
Way, Suite 201    PO Box 2840    North Bend, WA, U.S.A. 98045    Fax No. (425)
831-3091    Attention:        General Counsel With a copy to:    Angiotech
Pharmaceuticals, Inc.    1618 Station Street    Vancouver, BC, Canada V6A 1B6   
Fax No. (604) 221-2330    Attention:        General Counsel   
Attention:        Vice President, Business Development If to Orthovita:   
Orthovita, Inc.    45 Great Valley Parkway    Malvern, PA, U.S.A. 19355    Fax
No. (610) 640-2603    Attention:        President and CEO

Article 20.

Waiver

20.1 No Waiver. Neither Orthovita’s nor Angiotech’s failure to enforce at any
time any of the provisions of this Agreement or any right with respect thereto,
shall be considered a waiver of such provisions or rights or in any way affect
the validity of same. Neither Orthovita’s nor Angiotech’s exercise of any of its
rights shall preclude or prejudice either Party thereafter from exercising the
same or any other right it may have, irrespective of any previous action by
either Party.

Article 21.

Arbitration

21.1 Arbitration Procedure. Except as expressly provided otherwise herein, any
dispute, controversy or claim arising out of or in relation to or in connection
with this Agreement, the operations carried out under this Agreement or the
relationship of the Parties created under this Agreement, shall be exclusively
and finally settled by confidential arbitration, and any Party may submit such a
dispute, controversy or claim to arbitration. The arbitration proceeding shall
be held at the location of the non-instituting Party in the English language and
shall be governed by the rules of the American Arbitration Association (the
“AAA”) as amended from time to time. Any procedural rule not determined under
the rules of the AAA shall be determined by the laws of New York, other than
those laws that would refer the matter to another jurisdiction. Notwithstanding
any other provision to the contrary contained herein, any disputes or claims
relating to the validity, construction, scope, enforceability, or infringement
of any Licensed Patent covered by this Agreement, and any disputes, claims or
legal actions arising under Article 13 (Confidential Information), are not
required to be submitted to arbitration pursuant to this Section 21.1, and may
be resolved by a court of competent jurisdiction located in New York, New York.

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21.2 Arbitrator. A single arbitrator shall be appointed by unanimous consent of
the Parties. If the Parties cannot reach agreement on an arbitrator within
forty-five (45) days of the submission of a notice of arbitration, the
appointing authority for the implementation of such procedure shall be the AAA,
who shall appoint an independent arbitrator who does not have any financial or
conflicting interest in the dispute, controversy or claim. If the AAA is unable
to appoint, or fails to appoint, an arbitrator within ninety (90) days of being
requested to do so, then the arbitration shall be heard by three
(3) arbitrators, one selected by each Party within thirty (30) days of being
required to do so, and the third promptly selected by the two arbitrators
selected by the Parties.

21.3 Decision. The arbitrator(s) shall announce the award and the reasons
therefor in writing within six (6) months after the conclusion of the
presentation of evidence and oral or written argument, or within such longer
period as the Parties may agree upon in writing. The decision of the
arbitrator(s) shall be final and binding upon the Parties. Judgment upon the
award rendered may be entered in any court having jurisdiction over the person
or the assets of the Party owing the judgment or application may be made to such
court for a judicial acceptance of the award and an order of enforcement, as the
case may be. Unless otherwise determined by the arbitrator(s), each Party
involved in the arbitration shall bear the expense of its own counsel, experts
and presentation of proof, and the expense of the arbitrator and the AAA (if
any) shall be divided equally among the Parties to the arbitration.

Article 22.

Interpretation

22.1 Headings. The headings in this Agreement are inserted for convenience only
and shall not affect its construction.

22.2 Singular Includes Plural. Where appropriate, the terms defined in Article 1
and denoting a singular number only shall include the plural and vice versa.

22.3 References to Law. References to any law, regulation, statute or statutory
provision includes a reference to the law, regulation, statute or statutory
provision as from time to time amended, extended or re-enacted.

Article 23.

Exhibits

23.1 Integral Part. Any and all schedules or exhibits referred to herein shall
be considered an integral part of this Agreement.

Article 24.

Binding Effect

24.1 Successors. This Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the Parties.

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Article 25.

Counterparts; Facsimile

25.1 Execution of Agreement. This Agreement may be executed by original or
facsimile signature in several counterparts, all of which shall be deemed to be
originals, and all of which shall constitute one and the same Agreement.
Notwithstanding the foregoing, the Parties shall deliver original execution
copies of this Agreement to one another as soon as practicable following
execution thereof.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
March 20, 2006 to be effective as of the Effective Date.

 

ANGIOTECH PHARMACEUTICALS (US), INC.     ORTHOVITA, INC. By:  

/s/ Thomas Bailey

    By:  

/s/ Antony Koblish

Name:   Thomas Bailey     Name:   Antony Koblish Title:   VP Business
Development     Title:   President & CEO

SIGNATURE PAGE TO LICENSE AGREEMENT

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Exhibit A

Description of Products

CoStasis® Surgical Hemostat product

 

Description:   A sterile suspension of bovine collagen and bovine thrombin in
calcium chloride. Indications:   As described in the label and instruction for
use approved by the Regulatory Authority, IFU revision dated as of February
2002, as attached hereto. Administration:   The CoStasis( Surgical Hemostat
product is supplied in one syringe, and at the time of administration is mixed
with an aliquot of plasma obtained from the patient that is contained in a
second syringe. The patient plasma serves as a source of fibrinogen, which in
the presence of collagen and thrombin forms a collagen-reinforced fibrin clot.
Unit Dose Package:   Includes disposable parts consisting of a ported pouch,
sterile delivery set in trays and a CoStasis Surgical Hemostat syringe.

CellPaker® Plasma Collection System

Description:   A needle-less syringe device for drawing blood from a human for
direct placement into a centrifuge for centrifuging to separate plasma from red
and white blood cells.

EXHIBIT A TO LICENSE AGREEMENT

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Exhibit B

Licensed Patents

***

EXHIBIT B TO LICENSE AGREEMENT

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

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Exhibit C

Financials

***

EXHIBIT C TO LICENSE AGREEMENT

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

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Exhibit D

Minimum Sales

 

Calendar Year

 

Minimum Sales

2006

  *** of Net Sales*

2007

  *** of Net Sales

2008

  *** of Net Sales

2009 and thereafter

  As determined by the Joint Committee, but in no event less than ***.

Minimum Sales apply to Net Sales of CoStasis Products and CellPaker Products
anywhere in the Territory.

 

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* For the avoidance of doubt, Net Sales of Products provided by Angiotech or its
Affiliates to Orthovita under the terms of the Distribution Agreement shall be
included solely for purposes of calculating Minimum Sales for Calendar Year
2006.

EXHIBIT D TO LICENSE AGREEMENT

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.

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Exhibit E

Exception to Section 9.6(h)

***

 

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*** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and
230.406.