Exhibit 10.1

 

[****] Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 24B-2 under the Securities Exchange Act
of 1934, as amended.

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (the “Agreement”) dated the 16th day of December 2003
(The Effective Date), is made by and between Kyosei Pharmaceutical Co. Ltd.
(“KYOSEI”), a subsidiary of the Sakai Group organized under the laws of Japan,
having its principal place of business at 1-25-18 Okusawa, Otaru, Hokkaido,
047-0013, Japan and IMCOR, a division of Photogen Technologies, Inc. (“IMCOR”),
a Nevada corporation having its principal place of business at 6175 Lusk
Boulevard, San Diego, California 92121.

 

R E C I T A L S

 

WHEREAS, IMCOR owns Imagent® (perflexane lipid microspheres) and related imaging
assets and intellectual property;

 

WHEREAS, KYOSEI desires to secure the exclusive right and license to use,
develop, distribute, market and sell Imagent in the Territory and the right to
negotiate to obtain manufacturing rights of Imagent in the future;

 

NOW, THEREFORE, in consideration of the promises and covenants contained herein
and intending to be legally bound hereby, the parties agree as follows:

 

1.                                       DEFINITIONS.

 

“Affiliate” of an entity means a person or other entity that controls, is
controlled by or is under common control with such entity, whether by stock
ownership or otherwise.

 

“Bankruptcy Event” means voluntary or involuntary proceedings by or against an
Entity are instituted in bankruptcy or under any insolvency law, or a receiver
or custodian is appointed for such Entity, or proceedings are instituted by or
against such Entity for corporate reorganization or the dissolution of such
Entity, which proceedings, if involuntary, shall not have been dismissed within
60 days after the date of filing, or such Entity makes an assignment for the
benefit or creditors, or substantially all of the assets of such Entity are
seized or attached and not released within 60 days thereafter.

 

“Calendar Quarter” means each three-month period, or any portion thereof,
beginning on January 1, April 1, July 1 and October 1.

 

“Calendar Year” means a period of 12 months beginning on January 1 and ending on
December 31.

 

“Completion of Trial” means the completion of the clinical trial endpoint
analysis final report.

 

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“Confidential Information” means and includes all Technical Information,
inventions, trade secrets, developments, discoveries, software, know-how,
methods, techniques, formulae, data, processes and other proprietary ideas,
whether or not patentable or copyrightable, that a party identifies as
confidential or proprietary at the time it is delivered or communicated to the
other party or that is not generally known to the public or in the industry.

 

“Entity” means a corporation, an association, a joint venture, a partnership, a
trust, a business, an individual, a government or political subdivision thereof,
including an agency, or any other organization which can exercise independent
legal standing.

 

“Field of Use” means echocardiology and ultrasound radiology

 

“FDA” means the United States Food and Drug Administration.

 

“cGMP” means current Good Manufacturing Practices under applicable ICH
guidelines.

 

“ICH” means International Conference for Harmonization.

 

“IMCOR” shall mean a division of Photogen Technologies Inc. and its Affiliates.

 

“Imagent” means perflexane lipid microspheres used as a contrast agent in
conjunction with ultrasound, and detailed in NDA #21-191.

 

“Initiation of Clinical Study” shall mean the acceptance of the study plan by
MHLW.

 

“Licensed Product(s)” means Imagent and any products, components or kits with
which it may be packaged and sold.

 

“MHLW” means the Japanese Ministry of Health, Labor and Welfare.

 

“Net Sales” means the transfer of ownership of units of Licensed Product(s) at
the Yakka price in a bona fide non-affiliate third party transaction for the
sale, use, lease, transfer or other disposition of Licensed Product(s)

 

“NDA” shall mean a New Drug Application and all supplements filed pursuant to
the requirements of the MHLW, including all documents, data and other
information concerning Licensed Product(s) which are necessary for MHLW approval
to market Licensed Product(s).

 

“Patent Rights” means those United States patent applications listed in
Exhibit “A,” hereto, as may be amended from time to time, and foreign
counterparts including continuation, divisional and re-issue applications
thereof and continuation-in-part applications thereof “SAE” means a serious
adverse event.

 

“SAKAI group” shall include but not be limited to SAKAI Chemical Industry Co.
Ltd., Kyosei Pharmaceutical Co. Ltd., and Kaigen Co. Ltd.

 

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“Technical Information” means research and development information, unpatented
inventions, know-how, trade secrets, manufacturing and technical data in the
possession of IMCOR on the Effective Date of this Agreement or developed
thereafter to produce the Licensed Product(s).

 

“Territory” shall mean the country of Japan.

 

“Yakka Pricing” means the realized price received for the sale of Licensed
Product(s) as set by the Japan National Health Insurance.

 

2.                                       LICENSE GRANT.  IMCOR GRANTS TO KYOSEI
FOR THE TERM OF THIS AGREEMENT AN EXCLUSIVE, RIGHT AND LICENSE, IN THE FIELD OF
USE WITH THE RIGHT TO GRANT SUBLICENSES, TO CLINICALLY DEVELOP, PACKAGE,
DISTRIBUTE, PROMOTE, MARKET AND SELL LICENSED PRODUCT(S) IN THE TERRITORY.

 

A.                                   NOTWITHSTANDING THE GRANTING OF A
SUBLICENSE TO A THIRD PARTY OR AN AFFILIATE,  KYOSEI SHALL REMAIN RESPONSIBLE TO
IMCOR FOR ALL OBLIGATIONS CONTAINED IN THIS AGREEMENT AND THE SUBLICENSEE MUST
BE BOUND IN WRITING, FOR THE BENEFIT OF IMCOR, TO ALL THE LIMITATIONS AND
RESTRICTION UNDER THIS AGREEMENT AND NO SUCH SUBLICENSE SHALL BE FURTHER
SUBLICENSABLE.  FURTHER, THE WRITTEN AGREEMENT OF THE SUBLICENSEE MUST BE FILED
WITH IMCOR BEFORE THE SUBLICENSE IS EFFECTIVE.

 

B.                                     NOTHING HEREIN SHALL PRECLUDE KYOSEI FROM
USING A DISTRIBUTOR TO PROMOTE AND DISTRIBUTE THE LICENSED PRODUCT(S) IN THE
TERRITORY; PROVIDED, HOWEVER, NO LICENSED PRODUCT(S) WILL BE DIRECTLY OR
INDIRECTLY MARKETED, PROMOTED OR DISTRIBUTED TO ANY ENTITY OUTSIDE THE
TERRITORY.

 

3.                                       LICENSE FEES, MILESTONES AND ROYALTIES.

 

A.                                   IN PARTIAL CONSIDERATION OF THE EXCLUSIVE
LICENSE AND SERVICES GRANTED HEREIN, KYOSEI SHALL PAY TO IMCOR AN AMOUNT EQUAL
TO TEN MILLION DOLLARS ($10,000,000), WHICH AMOUNTS SHALL NOT BE SUBJECT TO
OFFSET [****] (LICENSE FEE) IS DUE UPON [****].

 

B.                                     IN FURTHER CONSIDERATION OF THE EXCLUSIVE
LICENSE GRANTED HEREIN, KYOSEI SHALL PAY IMCOR MILESTONE PAYMENTS AS FOLLOWS:

 

(I)                                    ON [****] A PAYMENT OF [****] IS DUE TO
COINCIDE WITH [****].

 

(II)                                 AT THE EARLIER OCCURRENCE OF THE FOLLOWING
EVENTS: [****]:  [****] MILESTONE, IN CONSIDERATION FOR SERVICES AND ASSISTANCE
PROVIDED BY IMCOR TO REACH THE MILESTONE.

 

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(III)                              AT THE EARLIER OCCURRENCE OF THE FOLLOWING
EVENTS: [****]:  [****] MILESTONE, IN CONSIDERATION FOR SERVICES AND ASSISTANCE
PROVIDED BY IMCOR TO REACH THE MILESTONE.

 

(IV)                             AT THE EARLIER OCCURRENCE OF THE FOLLOWING
EVENTS: [****]:  [****] MILESTONE, IN CONSIDERATION FOR SERVICES AND ASSISTANCE
PROVIDED BY IMCOR TO REACH THE MILESTONE.

 

(V)                                AT THE [****]:  [****] MILESTONE, IN
CONSIDERATION FOR SERVICES AND ASSISTANCE PROVIDED BY IMCOR TO REACH THE
MILESTONE.

 

C.                                     PAYMENTS TO IMCOR SHALL BE MADE WITHOUT
DEDUCTION OTHER THAN SUCH AN AMOUNT (IF ANY) KYOSEI IS REQUIRED BY LAW TO DEDUCT
AND WITHHOLD. KYOSEI SHALL OBTAIN A RECEIPT FROM THE RELEVANT TAXING AUTHORITIES
FOR ALL WITHHOLDING TAXES PAID AND FORWARD SUCH RECEIPTS TO IMCOR TO ENABLE
IMCOR TO CLAIM ANY AND ALL TAX CREDITS FOR WHICH IT MAY BE ELIGIBLE. KYOSEI
SHALL USE REASONABLE COMMERCIAL EFFORTS TO ENABLE OR ASSIST IMCOR TO CLAIM
EXEMPTION FROM SUCH DEDUCTIONS OR WITHHOLDINGS UNDER ANY DOUBLE TAXATION OR
SIMILAR AGREEMENT OR TREATY BETWEEN JAPAN AND THE UNITED STATES, WHICH MAY BE IN
FORCE.

 

D.                                    IN FURTHER CONSIDERATION OF THE EXCLUSIVE
LICENSE GRANTED HEREIN, KYOSEI SHALL PAY IMCOR A ROYALTY OF [****] OF THE NET
SALES, BASED ON YAKKA PRICING OF LICENSED PRODUCT(S) SOLD IN THE TERRITORY;
PROVIDED, HOWEVER, THAT, IN THE EVENT THAT IMCOR’S PATENT APPLICATIONS PENDING
IN JAPAN, AS SET FORTH IN EXHIBIT A ARE DENIED SO THAT IMCOR CANNOT PROVIDE
PATENT COVERAGE FOR THE IMAGENT® TECHNOLOGY, THEN THE [****] ROYALTY SHALL BE
REDUCED TO [****]. ROYALTIES ARE PAYABLE BEGINNING THE FIRST QUARTER AFTER THE
FIRST COMMERCIAL SALE OF LICENSED PRODUCT(S) AND QUARTERLY THEREAFTER.

 

4.                                       RESEARCH AND DEVELOPMENT.

 

A.                                   KYOSEI WILL BE RESPONSIBLE FOR DEVELOPING A
CLINICAL AND REGULATORY DEVELOPMENT WORK PLAN TO BE PRESENTED TO IMCOR,
OUTLINING TIMELINES AND BUDGETS FOR THE DEVELOPMENT OF LICENSED PRODUCT(S). 
KYOSEI WILL ENTER INTO A DEVELOPMENT AGREEMENT WITH SAKAI CHEMICAL TO SUPPORT
PRODUCT DEVELOPMENT TO INCLUDE BUT NOT BE LIMITED TO TOXICOLOGY, PRE-CLINICAL
STUDIES, CLINICAL STUDIES AND REGULATORY SUBMISSIONS.  IMCOR AND KYOSEI SHALL
REVIEW THE DEVELOPMENT PLAN ON A YEARLY BASIS. ALL FINAL PLANS, STRATEGIES AND
DECISIONS REGARDING LICENSED PRODUCT(S), PRECLINICAL, CLINICAL AND REGULATORY
DEVELOPMENT SHALL BE MADE BY KYOSEI, HOWEVER, KYOSEI WILL TAKE INTO
CONSIDERATION RECOMMENDATIONS FROM IMCOR. KYOSEI SHALL BE RESPONSIBLE FOR
EXPENSES ASSOCIATED WITH REGULATORY AND CLINICAL RESEARCH INTENDED FOR
APPROVALS, LABEL EXPANSION AND/OR NEW INDICATIONS.  KYOSEI SHALL BE RESPONSIBLE
FOR ALL EXPENSES CLINICAL RESEARCH INTENDED FOR MARKETING AND PROMOTION.

 

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B.                                     IMCOR WILL BE RESPONSIBLE FOR PROVIDING
PRE-CLINICAL, CLINICAL AND REGULATORY DOCUMENTATION NEEDED BY KYOSEI TO SUBMIT
OR SUPPLEMENT THE SUBMISSION OF PROTOCOLS, REGULATORY DOCUMENTATION TO SUPPORT
THE CLINICAL DEVELOPMENT AND REGULATORY APPROVAL IN THE TERRITORY. KYOSEI WILL
BE RESPONSIBLE FOR TRANSLATION OF THE DOCUMENTATION INTO JAPANESE.

 

C.                                     IMCOR WILL BE RESPONSIBLE FOR PROVIDING
TO KYOSEI, IMAGENT FOR PRE-CLINICAL AND CLINICAL DEVELOPMENT OF IMAGENT [****]
UNTIL LICENSED PRODUCT(S) IS APPROVED IN THE TERRITORY. IMAGENT WILL BE SHIPPED,
FOB ORIGIN, TO KYOSEI’S SINGLE DESIGNATED SHIPPING POINT WITHIN 30 DAYS OF THE
RECEIPT BY IMCOR OF A PURCHASE ORDER FROM KYOSEI. IMAGENT SHIPMENTS FOR
PRE-CLINICAL AND CLINICAL USE WILL BE PROVIDED IN THE U.S. LABELED AND FINISHED
KIT PRODUCT.  PRODUCT WILL BE MANUFACTURED AND SUPPLIED UNDER CGMP GUIDELINES.

 

D.                                    IMCOR SHALL MAKE ITS PERSONNEL AVAILABLE
AT REASONABLE TIMES FOR ORIENTATION AND TRAINING WITH RESPECT TO THE USE OF
IMAGENT IN PRECLINICAL AND CLINICAL TESTING. EACH PARTY SHALL BEAR IT’S OWN
RESPECTIVE EXPENSES FOR TRAINING.

 

E.                                      KYOSEI WILL PROVIDE TO IMCOR THE 6-MONTH
PRE-CLINICAL AND CLINICAL DEMAND FOR LICENSED PRODUCT(S) TWO (2) MONTHS IN
ADVANCE.  THE FIRST TWO MONTHS OF WHICH WILL BE CONSIDERED BY IMCOR AS A FIRM
ORDER. KYOSEI MAY UPON WRITTEN REQUEST ADJUST THE SECOND THREE MONTHS WITHIN 60
DAYS OF THE FIRST SHIPMENT.

 

F.                                      KYOSEI WILL USE ITS REASONABLE BEST
EFFORTS TO CLINICALLY DEVELOP IMAGENT IN THE TERRITORY, TO INCLUDE THE
DEVELOPMENT OF INDICATIONS IN THE FIELD OF USE OF MEDICINE.

 

G.                                     EACH PARTY WILL USE ITS REASONABLE BEST
EFFORTS TO PROVIDE ADVERSE EVENTS REPORTING FOR IMAGENT AS OUTLINED IN EXHIBIT
B.

 

H.                                    KYOSEI WILL MAINTAIN AND CAUSE ITS
SUBLICENSEES TO MAINTAIN, COMPLETE AND ACCURATE BOOKS AND RECORDS, AS REQUIRED
BY JAPANESE AUTHORITIES WHICH ENABLE THE APPROVAL AND SALE OF LICENSED
PRODUCT(S).  THE RECORDS SHALL BE MAINTAINED FOR TEN YEARS AFTER THE SUBMISSION
OF EACH REPORT UNDER SECTION [4] HEREOF.  UPON REASONABLE PRIOR NOTICE TO
KYOSEI, IMCOR AND ITS CLINICAL AND REGULATORY CONSULTANTS SHALL HAVE ACCESS TO
ALL BOOKS AND RECORDS RELATING TO THE CLINICAL AND REGULATORY DEVELOPMENT OF
IMAGENT BY KYOSEI AND ITS SUBLICENSEES TO CONDUCT A REVIEW OR AUDIT THEREOF. 
SUCH ACCESS SHALL BE AVAILABLE NOT MORE THAN ONCE EACH YEAR, DURING NORMAL
BUSINESS HOURS, AND FOR FIVE YEARS AFTER THE EXPIRATION OR TERMINATION OF THIS
AGREEMENT.

 

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I.                                         ANY MODIFICATION OR IMPROVEMENT TO
TECHNICAL INFORMATION USED TO PRODUCE LICENSED PRODUCT(S) MADE BY IMCOR BEFORE
THE TERMINATION OF THIS AGREEMENT SHALL BE INCLUDED IN THE LICENSE GRANTED
WITHOUT ADDITIONAL CHARGE TO KYOSEI.  IN ADDITION, KYOSEI WILL PROMPTLY DISCLOSE
AND HEREBY GRANTS BACK TO IMCOR A WORLDWIDE (EXCEPT FOR JAPAN), ROYALTY-FREE,
EXCLUSIVE, SUBLICENSABLE LICENSE TO FULLY EXPLOIT ANY MODIFICATIONS OR
IMPROVEMENTS MADE BY OR FOR KYOSEI DURING THE SAME PERIOD.  THE FOREGOING SHALL
BE DEEMED TO INCLUDE, WITHOUT LIMITATION, (A) ANY PATENT COVERING AN INVENTION
THE MANUFACTURE, USE OR SALE OF WHICH WOULD BE COVERED BY OR WITHIN THE SCOPE OF
A CLAIM OF A PATENT LICENSED TO KYOSEI HEREUNDER AND (B) ANY PATENT THAT (ALONE
OR TOGETHER WITH OTHERS) TENDS TO DEFINE, DESCRIBE OR SURROUND ANY PART OF
IMCOR’S TECHNICAL INFORMATION OR ANY INVENTION CLAIMED IN A PATENT LICENSED TO
KYOSEI HEREUNDER) AND KYOSEI SHALL NOT, EXCEPT IN JAPAN, LICENSE TO THIRD
PARTIES THE MODIFICATIONS OR IMPROVEMENTS DERIVED FROM OR BASED ON ANY OF
IMCOR’S TECHNICAL INFORMATION. THE PARTIES AGREE TO PROMPTLY DISCLOSE SUCH
MODIFICATIONS AND IMPROVEMENTS TO EACH OTHER.

 

5.                                       MANUFACTURING AND PACKAGING.

 

A.                                   IMCOR WILL ENTER INTO A SUPPLY AGREEMENT
FOR IMAGENT WITH KYOSEI.  PRODUCT WILL BE MANUFACTURED AND SUPPLIED UNDER CGMP
GUIDELINES.  LABELING AND PACKAGING RESPONSIBILITIES WILL BE NEGOTIATED IN THE
SUPPLY AGREEMENT.  THE DEFINITIVE SUPPLY AGREEMENT WILL BE NEGOTIATED BETWEEN
THE PARTIES A TIME TO BE DETERMINED IN THE DISCRETION OF KYOSEI, BUT NO LATER
THAN THE INITIATION OF PHASE 3 CLINICAL TRIALS SUBJECT TO THE FOLLOWING TERMS:

 

B.                                     THE RIGHT TO TRANSFER MANUFACTURING TO
KYOSEI WILL BE NEGOTIATED IN THE FUTURE. KYOSEI WILL GIVE IMCOR WRITTEN
NOTIFICATION 6 MONTHS IN ADVANCE OF ITS DESIRE TO MANUFACTURE IN THE TERRITORY.
TRANSFER FEES, COSTS OF TECHNICAL TRANSFER, AND COST OF GOODS AFTER TRANSFER
WILL BE NEGOTIATED IN GOOD FAITH BY BOTH PARTIES DURING THE 6-MONTH PERIOD.

 

C.                                     UPON REASONABLE PRIOR NOTICE TO IMCOR,
KYOSEI AND ITS CONSULTANTS SHALL HAVE ACCESS TO ALL BOOKS AND RECORDS RELATING
TO THE MANUFACTURE AND SUPPLY OF IMAGENT BY IMCOR AND ITS SUBLICENSEES TO
CONDUCT A REVIEW OR AUDIT THEREOF.  SUCH ACCESS SHALL BE AVAILABLE NOT MORE THAN
ONCE EACH YEAR, DURING NORMAL BUSINESS HOURS, AND FOR FIVE YEARS AFTER THE
EXPIRATION OR TERMINATION OF THIS AGREEMENT.

 

D.                                    UPON APPROVAL BY MHLW IN THE TERRITORY,
KYOSEI WILL PAY IMCOR AN AMOUNT EQUAL TO [****] OF THE YAKKA PRICE OF LICENSED
PRODUCT(S) FOR COMMERCIAL SHIPMENTS. IMCOR AND KYOSEI AGREE TO NEGOTIATE THE
TRANSFER COST, IF THE COST OF IMAGENT EXCEEDS AN ACCEPTABLE TRANSFER PRICE IN
THE FUTURE TO INCLUDE ANY CHANGES IN CURRENCY EXCHANGE RATES.

 

E.                                      KYOSEI WILL SUPPLY IMCOR A WRITTEN
PURCHASE ORDER FOR A 6-MONTH DEMAND FORECAST FOR IMAGENT. THE FIRST 3 MONTHS OF
THE DEMAND FORECAST WILL BE CONSIDERED BY IMCOR AS A FIRM ORDER. KYOSEI MAY
ADJUST THE SECOND 3 MONTHS OF THE DEMAND FORECAST WITH 60 DAYS WRITTEN NOTICE.

 

F.                                      IMCOR WILL NOTIFY KYOSEI OF ANY CHANGE
TO MANUFACTURING SITE, RAW MATERIALS, PACKAGING MATERIALS, OR PROCESSES TO THE
PRODUCT.

 

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G.                                     THE SUPPLY AGREEMENT WILL PROVIDE FOR THE
ABILITY OF IMCOR TO CONTINUE TO PROVIDE PRODUCT TO KYOSEI FOLLOWING THE
TERMINATION OF THIS AGREEMENT.

 

6.                                       MARKETING AND SALES.

 

A.                                   A SEPARATE AND DEFINITIVE MARKETING AND
SALES AGREEMENT WILL BE NEGOTIATED BETWEEN THE PARTIES, AT THE DISCRETION OF
KYOSEI BUT NOT LATER THAN THE SUBMISSION OF THE NDA, SUBJECT TO THE FOLLOWING
TERMS.

 

B.                                     KYOSEI SHALL USE ITS REASONABLE BEST
EFFORTS TO DEVELOP FOR COMMERCIAL USE AND TO MARKET AND SELL LICENSED PRODUCT(S)
IN THE TERRITORY AS SOON AS PRACTICAL, CONSISTENT WITH SOUND AND REASONABLE
BUSINESS PRACTICES.

 

C.                                     KYOSEI WILL PRESENT TO IMCOR THE
MARKETING AND SALES PLAN AND BUDGET. IMCOR AND KYOSEI SHALL REVIEW THE MARKETING
PLAN ON A YEARLY BASIS IN ORDER TO OPTIMIZE CUSTOMER ACCEPTANCE AND EFFECTIVE
PROMOTION OF LICENSED PRODUCT(S). ALL FINAL PLANS, STRATEGIES AND DECISIONS
REGARDING LICENSED PRODUCT(S) MARKETING, SALES DISTRIBUTION AND PRICING SHALL BE
MADE BY KYOSEI, HOWEVER, KYOSEI WILL TAKE INTO CONSIDERATION RECOMMENDATIONS
FROM IMCOR.

 

D.                                    KYOSEI WILL BE RESPONSIBLE FOR THE SALES
AND MARKETING EXPENSES FOR LICENSED PRODUCT(S) IN THE TERRITORY.

 

E.                                      KYOSEI SHALL MARKET AND DISTRIBUTE
LICENSED PRODUCT(S) ON THEIR OWN MERIT AND NOT IN A MANNER INTENDED TO PROMOTE
OTHER PRODUCTS OR SERVICES.

 

7.                                       REPORTS AND RECORDS.

 

A.                                   IMCOR AND KYOSEI WILL NOMINATE A PROJECT
TEAM CONSISTING OF 2 MEMBERS OF SENIOR MANAGEMENT FROM EACH PARTY TO OVERSEE THE
PROGRESS OF THE DEVELOPMENT AND MARKETING PLANS. THE TEAM WILL MEET AT LEAST
TWICE A YEAR TO REVIEW PROGRESS AND REPORT TO EACH OF THEIR RESPECTIVE
MANAGEMENT BOARDS.

 

B.                                     KYOSEI SHALL DELIVER TO IMCOR WITHIN 30
DAYS AFTER THE END OF EACH CALENDAR QUARTER A REPORT, CERTIFIED BY THE CHIEF
FINANCIAL OFFICER OF KYOSEI SETTING FORTH IN REASONABLE DETAIL THE CALCULATION
OF THE ROYALTIES DUE TO IMCOR FOR SUCH CALENDAR QUARTER.

 

C.                                     ROYALTIES PAYABLE UNDER
SECTIONS [3.B(IV)] HEREOF SHALL BE PAID WITHIN 30 DAYS FOLLOWING THE LAST DAY OF
THE CALENDAR QUARTER IN WHICH THE ROYALTIES ACCRUE.

 

D.                                    KYOSEI SHALL MAINTAIN AND CAUSE ITS
SUBLICENSEES TO MAINTAIN, COMPLETE AND ACCURATE BOOKS AND RECORDS, WHICH ENABLE
THE ROYALTIES PAYABLE HEREUNDER TO BE VERIFIED.  THE RECORDS FOR EACH CALENDAR
QUARTER SHALL BE MAINTAINED FOR THREE YEARS AFTER THE SUBMISSION OF EACH REPORT
UNDER SECTION [3] HEREOF.  UPON REASONABLE PRIOR NOTICE TO KYOSEI, IMCOR AND ITS
ACCOUNTANTS SHALL HAVE ACCESS TO ALL BOOKS AND RECORDS RELATING TO THE SALES OF
LICENSED PRODUCT(S) BY KYOSEI AND ITS SUBLICENSEES TO CONDUCT A REVIEW OR AUDIT
THEREOF.  SUCH ACCESS SHALL BE AVAILABLE NOT MORE THAN ONCE EACH CALENDAR YEAR,
DURING NORMAL BUSINESS HOURS, AND FOR EACH OF THREE YEARS AFTER THE EXPIRATION
OR TERMINATION OF THIS AGREEMENT.

 

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8.                                       CURRENCY, PLACE OF PAYMENT.  ALL DOLLAR
AMOUNTS REFERRED TO IN THIS AGREEMENT ARE EXPRESSED IN UNITED STATES DOLLARS. 
ALL PAYMENTS TO IMCOR UNDER THIS AGREEMENT SHALL BE MADE IN UNITED STATES
DOLLARS BY WIRE TRANSFER TO A FINANCIAL INSTITUTION AND ACCOUNT DESIGNATED BY
IMCOR.  ALL COMPUTATIONS FOR PURPOSES OF DETERMINING NET SALES SHALL BE
CONVERTED INTO UNITED STATES DOLLARS AT THE CONVERSION RATE FOR THE FOREIGN
CURRENCY AS PUBLISHED IN THE EASTERN EDITION OF THE WALL STREET JOURNAL AS OF
THE LAST BUSINESS DAY OF THE APPLICABLE CALENDAR QUARTER.  PAYMENTS ARE DUE
IMCOR IN FULL WITHIN 30 DAYS, EXCEPT FOR THE INITIAL LICENSE FEE PAYMENT, WHICH
IS DUE UPON SIGNING OF THIS AGREEMENT.

 

9.                                       TRADEMARKS.  IMCOR GRANTS AN EXCLUSIVE
ROYALTY-FREE LICENSE FOR THE USE OF IMCOR’S REGISTERED TRADEMARK, IMAGENT
THROUGHOUT THE TERRITORY.  IMAGENT OR LICENSED PRODUCT(S) CANNOT BE ALTERED
EXCEPT AS PROVIDED TO TRANSLATE IN JAPANESE.  IF REQUESTED IN WRITING BY IMCOR,
ALL PROMOTIONAL MATERIALS, LICENSED PRODUCT(S), AND PRODUCT PACKAGING WILL
INCLUDE (IN EASILY READABLE, NON-OBSCURED TYPE THAT IS OF REASONABLE SIZE IN
LIGHT OF THE OTHER NAMES AND NOTICES) THE MARK “IMAGENT,” A LEGEND THAT IMCOR
OWNS SUCH MARK AND ANY REASONABLE PATENT, PATENT APPLICATION OR OTHER
PROPRIETARY MARKINGS AND NOTICES OF IMCOR.  USE OF SUCH MARK AND RELATED
GOODWILL WILL INURE TO IMCOR’S BENEFIT.  IMCOR WILL HAVE THE RIGHT OF PRIOR
APPROVAL WITH RESPECT TO ANY PROMOTIONAL MATERIALS, PACKAGING OR STATEMENTS
REGARDING LICENSED PRODUCT(S) OR THE MARK “IMAGENT” AND THE RIGHT TO MAKE
QUALITY INSPECTIONS OF KYOSEI’S PLANTS AND PRODUCTS.  EXCEPT AS EXPRESSLY
PROVIDE HEREIN, (I) KYOSEI WILL NOT USE OR REGISTER THE MARK “IMAGENT” OR THE
NAME OR ANY SIMILAR MARK OR NAME ANYWHERE IN THE WORLD, AND (II) KYOSEI HAS NO
RIGHT OR LICENSE WITH RESPECT TO ANY MARK, NAME OR DESIGNATION OF OR USED BY
IMCOR.

 

10.                                 CONFIDENTIALITY.

 

A.                                   THE PARTIES AGREE TO MAINTAIN IN
CONFIDENCE, NOT TO DISCLOSE TO ANY THIRD PARTY AND NOT TO USE FOR ANY PURPOSE
OTHER THAN TO FULFILL OBLIGATIONS UNDER THIS AGREEMENT, ANY CONFIDENTIAL
INFORMATION OF THE OTHER PARTY RECEIVED PURSUANT TO THIS AGREEMENT.  EACH PARTY
AGREES TO ENSURE THAT ITS EMPLOYEES AND CONSULTANTS HAVE ACCESS TO CONFIDENTIAL
INFORMATION ONLY ON A NEED-TO-KNOW BASIS AND ARE OBLIGATED IN WRITING TO ABIDE
BY THE OBLIGATIONS HEREUNDER.  THE FOREGOING OBLIGATION SHALL NOT APPLY TO:

 

(I)                                    INFORMATION THAT IS KNOWN TO OR
INDEPENDENTLY DEVELOPED BY THE RECEIVING PARTY PRIOR TO THE TIME OF DISCLOSURE,
IN EACH CASE, TO THE EXTENT EVIDENCED BY WRITTEN RECORDS PROMPTLY DISCLOSED TO
THE DISCLOSING PARTY UPON RECEIPT OF THE CONFIDENTIAL INFORMATION;

 

(II)                                 INFORMATION DISCLOSED TO THE RECEIVING
PARTY BY A THIRD PARTY THAT HAS A RIGHT TO MAKE SUCH DISCLOSURE;

 

(III)                              INFORMATION THAT BECOMES PATENTED, PUBLISHED
OR OTHERWISE PART OF THE PUBLIC DOMAIN AS A RESULT OF ACTS BY THE DISCLOSING
PARTY OR A THIRD PERSON OBTAINING SUCH INFORMATION AS A MATTER OF RIGHT; OR

 

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(IV)                             INFORMATION THAT IS REQUIRED TO BE DISCLOSED BY
ORDER OF A GOVERNMENTAL AUTHORITY OR A COURT OF COMPETENT JURISDICTION; PROVIDED
THAT THE DISCLOSING PARTY SHALL USE ITS BEST EFFORTS TO OBTAIN CONFIDENTIAL
TREATMENT OF SUCH INFORMATION BY THE AGENCY OR COURT.

 

B.                                     THE PLACEMENT OF A COPYRIGHT NOTICE ON
ANY CONFIDENTIAL INFORMATION SHALL NOT BE CONSTRUED TO MEAN THAT SUCH
INFORMATION HAS BEEN PUBLISHED AND WILL NOT RELEASE EITHER PARTY FROM ITS
OBLIGATION OF CONFIDENCE HEREUNDER.

 

11.                                 TERM AND TERMINATION.

 

A.                                   THIS AGREEMENT, UNLESS SOONER TERMINATED AS
PROVIDED HEREIN, SHALL TERMINATE UPON THE EXPIRATION OF THE LAST TO EXPIRE
PATENT RIGHTS, OR 10 YEARS FROM THE LAUNCH OF THE LICENSED PRODUCT, WHICHEVER IS
LONGER. UPON THE NATURAL EXPIRATION OF THE TERM OF THIS AGREEMENT, KYOSEI SHALL
HAVE A FULLY PAID-UP, IRREVOCABLE EXCLUSIVE LICENSE TO USE, MARKET, SELL, AND
DISTRIBUTE LICENSED PRODUCT(S) IN THE TERRITORY.

 

B.                                     IMCOR MAY, AT ITS OPTION, TERMINATE THIS
AGREEMENT UPON THIRTY (30) DAYS WRITTEN NOTICE IN THE EVENT OF ANY OF THE
FOLLOWING:

 

(I)                                    BY CEASING TO MAKE, OR HAVE MADE,
IMAGENT;

 

(II)                                 KYOSEI BECOMES MORE THAN 60 DAYS IN ARREARS
IN PAYMENT OF ROYALTIES OR EXPENSES DUE PURSUANT TO THIS AGREEMENT AND KYOSEI
DOES NOT PROVIDE FULL PAYMENT WITHIN 20 BUSINESS DAYS AFTER WRITTEN NOTICE
THEREOF;

 

(III)                              KYOSEI BECOMES SUBJECT TO A BANKRUPTCY EVENT;
OR

 

(IV)                             KYOSEI BREACHES THIS AGREEMENT AND DOES NOT
CURE SUCH BREACH WITHIN THIRTY (30) DAYS WRITTEN NOTICE THEREOF.

 

C.                                     KYOSEI MAY TERMINATE THIS AGREEMENT IF
ANY OF THE FOLLOWING OCCUR:

 

(I)                                    IMCOR BECOMES SUBJECT TO A BANKRUPTCY
EVENT; OR

 

(II)                                 IMCOR BREACHES THIS AGREEMENT AND DOES NOT
CURE SUCH BREACH OR HAVE IN PROGRESS A GOOD FAITH EFFORT TO CURE WITHIN SIXTY
(60) DAYS AFTER WRITTEN NOTICE THEREOF.

 

(III)                              CLINICAL RESULTS FAIL TO ALLOW KYOSEI TO FILE
FOR REGISTRATION OF THE LICENSED PRODUCT.

 

(IV)                             A SAE, AS DEFINED IN ICH GUIDELINES, OCCURS IN
THE CLINICAL DEVELOPMENT OF THE LICENSED PRODUCT RESULTING IN THE INABILITY TO
CONTINUE CLINICAL DEVELOPMENT.

 

9

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D.                                    IN ADDITION TO PARAGRAPH B, IMCOR MAY, AT
THIS OPTION, TEMPORARILY SUSPEND SHIPMENTS OF LICENSED PRODUCT(S) IF IT
REASONABLY BELIEVES THAT HUMAN HEALTH OR SAFETY WOULD BE HARMED.

 

E.                                      UPON TERMINATION OF THIS AGREEMENT, THE
PARTIES SHALL, UPON REQUEST, RETURN TO THE OTHER PARTY ALL CONFIDENTIAL
INFORMATION OF SUCH REQUESTING PARTY FIXED IN ANY TANGIBLE MEDIUM OF EXPRESSION
AS WELL AS ANY DATA GENERATED DURING THE TERM OF THIS AGREEMENT WHICH WILL
FACILITATE THE DEVELOPMENT OF THE TECHNOLOGY LICENSED HEREUNDER.

 

F.                                      KYOSEI’S OBLIGATION TO PAY LICENSE FEES
ROYALTIES OR MILESTONE PAYMENTS ACCRUED UNDER SECTION [3] HEREOF SHALL SURVIVE
TERMINATION OF THIS AGREEMENT.  IN ADDITION, THE PROVISIONS OF SECTIONS [10],
[11], [12], [13.D], [18], [19.C], [19.E] SHALL SURVIVE SUCH TERMINATION.

 

12.                                 PATENT MAINTENANCE AND REIMBURSEMENT.  IMCOR
SHALL CONTROL AND PAY COSTS OF AND DILIGENTLY PROSECUTE AND MAINTAIN PATENT
RIGHTS LICENSED HEREUNDER.  IMCOR MAY BY WRITTEN NOTICE ELECT TO STOP PAYING FOR
THE PREPARATION AND MAINTENANCE OF PATENT RIGHTS PERTAINING TO LICENSED
PRODUCT(S) IN THE TERRITORY IN WHICH EVENT, KYOSEI MAY ASSUME THE OBLIGATION OF
MAINTAINING FOR ITS OWN BENEFIT ANY SUCH PATENT OR PATENT APPLICATION.  WHEN
KYOSEI ASSUMES THE OBLIGATION OF MAINTAINING A PATENT OR PATENT APPLICATION
UNDER THIS SECTION, KYOSEI’S LICENSE HEREUNDER IN SUCH COUNTRY SHALL TERMINATE,
EXCEPT WHERE IMCOR’S DECISION TO STOP PAYING IS BASED ON A GOOD FAITH
DETERMINATION AS INDICATED BY PATENT COUNSEL OF UNPATENTABILITY IN SUCH COUNTRY,
WITH TIMELY NOTICE OF SUCH DETERMINATION TO IMCOR.

 

13.                                 INFRINGEMENT AND LITIGATION.

 

A.                                   IMCOR AND KYOSEI ARE RESPONSIBLE FOR
NOTIFYING EACH OTHER PROMPTLY OF ANY INFRINGEMENT OF PATENT RIGHTS WHICH MAY
COME TO THEIR ATTENTION, INCLUDING NOTICE TO THE OTHER OF ANY CERTIFICATION
FILED UNDER THE UNITED STATES “DRUG PRICE COMPETITION AND PATENT TERM
RESTORATION ACT OF 1984.”  IMCOR AND KYOSEI SHALL CONSULT ONE ANOTHER IN A
TIMELY MANNER CONCERNING ANY APPROPRIATE RESPONSE THERETO.

 

B.                                     IMCOR SHALL HAVE THE FIRST RIGHT, BUT NOT
THE OBLIGATION TO PROSECUTE SUCH INFRINGEMENT AT ITS OWN EXPENSE.  IMCOR SHALL
NOT SETTLE OR COMPROMISE ANY SUCH SUIT IN A MANNER THAT IMPOSES ANY OBLIGATIONS
OR RESTRICTIONS ON KYOSEI OR GRANTS ANY RIGHTS TO THE TECHNICAL INFORMATION OR
THE PATENT RIGHTS, IN THE TERRITORY WITHOUT KYOSEI’S WRITTEN PERMISSION WHICH
CONSENT WILL NOT BE UNREASONABLY WITHHELD AFTER DUE CONSIDERATION OF IMCOR’S
POLICIES PERTAINING TO INTELLECTUAL PROPERTY.  FINANCIAL RECOVERIES FROM ANY
SUCH LITIGATION WILL BE ENTIRELY RETAINED BY IMCOR.

 

C.                                     IF IMCOR FAILS TO PROSECUTE SUCH
INFRINGEMENT, KYOSEI SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO PROSECUTE
SUCH INFRINGEMENT AT ITS OWN EXPENSE.  IN SUCH AN EVENT IMCOR SHALL RETAIN THE
RIGHTS TO REPRESENTED BY AT ITS OWN COUNSEL AT IT’S OWN EXPENSE.  IN SUCH EVENT,
FINANCIAL RECOVERIES WILL BE ENTIRELY RETAINED BY KYOSEI.

 

10

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D.                                    IN ANY ACTION TO ENFORCE ANY OF THE PATENT
RIGHTS, EITHER PARTY, AT THE REQUEST AND EXPENSE OF THE OTHER PARTY SHALL
COOPERATE TO THE FULLEST EXTENT REASONABLY POSSIBLE.  THIS PROVISION SHALL NOT
BE CONSTRUED TO REQUIRE EITHER PARTY TO UNDERTAKE ANY ACTIVITIES, INCLUDING
LEGAL DISCOVERY, AT THE REQUEST OF ANY THIRD PARTY EXCEPT AS MAY BE REQUIRED BY
LAWFUL PROCESS OF A COURT OF COMPETENT JURISDICTION.

 

14.                                 REPRESENTATIONS AND DISCLAIMER OF WARRANTY.

 

A.                                   IMCOR REPRESENTS AND WARRANTS TO KYOSEI
THAT IT HAS THE RIGHT TO ENTER INTO THIS AGREEMENT AND GRANT THE LICENSES
DESCRIBED HEREIN.  IMCOR REPRESENTS THAT TO ITS KNOWLEDGE THE PATENT RIGHTS WILL
NOT INFRINGE ON ANY RIGHTS OF ANY OTHER PARTY WITH RESPECT TO ITS USE,
MANUFACTURE OR SALE OF IMAGENT AS OF THE DATE OF THIS AGREEMENT.

 

B.                                     EXCEPT AS SET FORTH ABOVE, ALL TECHNOLOGY
LICENSED UNDER THIS AGREEMENT IS PROVIDED ON AN “AS IS” BASIS AND IMCOR MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT THERETO.  ALL
LICENSED PRODUCT(S) ARE COVERED BY IMCOR’S STANDARD PUBLISHED WARRANTY (COPIES
OF WHICH ARE AVAILABLE FROM IMCOR).  KYOSEI SHALL MAKE NO REPRESENTATIONS OR
WARRANTIES WITH RESPECT TO THE LICENSED PRODUCT(S) OTHER THAN THOSE SPECIFICALLY
SET FORTH IN SAID WARRANTY.

 

THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTIES
ARISING OUT OF A COURSE OF DEALING, CUSTOM OR TRADE USAGE, AND SETS FORTH
KYOSEI’S AND KYOSEI’S CUSTOMERS’ SOLE REMEDIES IN CONNECTION WITH SUCH
WARRANTY.  IN NO EVENT SHALL IMCOR BE LIABLE TO KYOSEI, KYOSEI’S CUSTOMERS OR
ANYONE IN ANY MANNER OR TO ANY EXTENT WITH RESPECT TO THE LICENSED PRODUCT(S)
EXCEPT AS EXPRESSLY STATED HEREIN.

 

C.                                     KYOSEI SHALL NOTIFY IMCOR OF ANY
PROCEEDING OR CLAIM RELATING TO THE LICENSED PRODUCT(S) IN THE TERRITORY AND
SHALL PROMPTLY FURNISH IMCOR WITH COPIES OF ALL DOCUMENTS FILED IN CONNECTION
WITH SUCH PROCEEDING OR CLAIM.

 

11

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D.                                    IN NO EVENT SHALL IMCOR BE LIABLE TO
KYOSEI, OR TO ANY PERSON OR ENTITY CLAIMING THROUGH, ON BEHALF OR AGAINST
KYOSEI, FOR CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES (INCLUDING WITHOUT
LIMITATION, LOST PROFITS, REVENUES, ANTICIPATED SALES, BUSINESS OPPORTUNITIES,
GOODWILL OR INTERRUPTION OF BUSINESS), OR PUNITIVE OR EXEMPLARY DAMAGES, WHETHER
IN TORT OR CONTRACT OR PURSUANT TO STATUTE, REGULATION OR OTHERWISE.  KYOSEI
AGREES THAT ANY AMOUNTS IT MAY SPEND IN THE PERFORMANCE OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION THE ESTABLISHMENT AND MAINTENANCE OF ADDITIONAL OR
EXISTING SALES, MANAGEMENT, WAREHOUSE, DELIVERY, ADMINISTRATIVE OR OTHER
PERSONNEL, OR OTHER EQUIPMENT OR FACILITIES, ADVERTING AND PROMOTION COSTS, OR
FOR ANY OTHER PURPOSE, SHALL BE SPENT AND INCURRED VOLUNTARILY BY KYOSEI WITH
THE KNOWLEDGE THAT THIS AGREEMENT MAY BE TERMINATED AS PROVIDED IN THIS
AGREEMENT, AND THUS KYOSEI SHALL MAKE NO CLAIM AGAINST IMCOR, AND IMCOR SHALL
NOT BE LIABLE, WITH RESPECT TO ANY INVESTMENT OR EXPENDITURES INCURRED BY KYOSEI
IN ANTICIPATION OF THE CONTINUANCE OF THIS AGREEMENT.

 

15.                                 INDEMNIFICATION.

 

A.                                   EACH PARTY (AN “INDEMNIFYING PARTY”) AGREES
TO DEFEND, INDEMNIFY AND HOLD HARMLESS THE OTHER PARTY AND ITS RESPECTIVE
TRUSTEES, OFFICERS, AGENTS AND EMPLOYEES (INDIVIDUALLY, AN “INDEMNIFIED PARTY”
AND COLLECTIVELY, THE “INDEMNIFIED PARTIES”), FROM AND AGAINST ANY AND ALL
CLAIMS FOR LIABILITY, LOSS, DAMAGE, ACTION OR EXPENSE SUFFERED OR INCURRED BY
THE INDEMNIFIED PARTIES (INCLUDING REASONABLE ATTORNEY’S FEES AND EXPENSES)
(INDIVIDUALLY, A “LIABILITY,” AND COLLECTIVELY, THE “LIABILITIES”) WHICH RESULTS
FROM OR ARISES OUT OF:  (I) CLAIMS RESULTING FROM THE DEVELOPMENT, USE,
MANUFACTURE, PROMOTION, SALE OR OTHER DISPOSITION OF LICENSED PRODUCT(S),
TECHNICAL INFORMATION, AND ALL TECHNOLOGY LICENSED UNDER THIS AGREEMENT BY AN
INDEMNIFIED PARTY, ITS ASSIGNEES, SUBLICENSEES, VENDORS OR OTHER THIRD PARTIES;
AND (II) CLAIMS FOR THE ENFORCEMENT BY AN INDEMNIFIED PARTY OF ITS RIGHTS UNDER
THIS SECTION.  WITHOUT LIMITING THE FOREGOING, AN INDEMNIFYING PARTY WILL
DEFEND, INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTIES FROM AND AGAINST ANY
LIABILITIES RESULTING FROM:

 

(A)                                  CLAIMS FOR PRODUCT LIABILITY, A SAE DUE TO
ADULTERATED PRODUCT OR OTHER CLAIM OF ANY KIND RELATED TO THE USE BY A THIRD
PARTY OF A LICENSED PRODUCT(S) THAT WAS MANUFACTURED, SOLD OR OTHERWISE DISPOSED
BY AN INDEMNIFYING PARTY, ITS ASSIGNEES, SUBLICENSEES, VENDORS OR OTHER THIRD
PARTIES;

 

(B)                                 CLAIMS BY A THIRD PARTY THAT THE PATENT
RIGHTS, TECHNICAL INFORMATION OR ANY TECHNOLOGY LICENSED UNDER THIS AGREEMENT OR
THE DESIGN, COMPOSITION, MANUFACTURE, USE, SALE OR OTHER DISPOSITION OF LICENSED
PRODUCT(S) IN THE TERRITORY INFRINGES OR VIOLATES ANY PATENT, COPYRIGHT,
TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHTS OF SUCH THIRD PARTY EXCLUDING
MATTERS REPRESENTED BY IMCOR IN SECTION [14.A] ABOVE; AND

 

(C)                                  CLAIMS RESULTING FROM CLINICAL TRIALS OR
STUDIES CONDUCTED BY OR ON BEHALF OF AN INDEMNIFYING PARTY, RELATING TO LICENSED
PRODUCT(S), TECHNICAL INFORMATION, OR ANY TECHNOLOGY LICENSED UNDER THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY CLAIM BY OR ON BEHALF OF A HUMAN
SUBJECT OF ANY SUCH CLINICAL TRIAL OR STUDY, ANY CLAIM ARISING FROM THE
PROCEDURES SPECIFIED IN ANY PROTOCOL USED IN ANY SUCH CLINICAL TRIAL OR STUDY,
ANY CLAIM OR DEVIATION, AUTHORIZED OR UNAUTHORIZED,

 

12

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from the protocols of any such clinical trial or study, and any claim resulting
from or arising out of the manufacture or quality control by a third party of
any substance administered in any clinical trial or study, but only to the
extent such claims result from the gross negligence or willful misconduct of the
Indemnifying Party or its employees or agents and only to the extent such claims
do not result from the negligence of the Indemnifying Party.

 

B.                                     AN INDEMNIFIED PARTY ENTITLED TO
INDEMNIFICATION SHALL GIVE WRITTEN NOTICE TO THE INDEMNIFYING PARTY OF ANY
CLAIMS THAT MAY BE SUBJECT TO INDEMNIFICATION, PROMPTLY AFTER LEARNING OF SUCH
CLAIM, AND THE INDEMNIFYING PARTY SHALL ASSUME THE DEFENSE OF SUCH CLAIMS WITH
COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY.  IF SUCH DEFENSE IS
ASSUMED BY THE INDEMNIFYING PARTY WITH COUNSEL SO SELECTED, THE INDEMNIFYING
PARTY WILL NOT BE SUBJECT TO ANY LIABILITY FOR ANY SETTLEMENT OF SUCH CLAIMS
MADE BY THE INDEMNIFIED PARTY WITHOUT ITS CONSENT (BUT SUCH CONSENT WILL NOT BE
UNREASONABLY WITHHELD OR DELAYED), AND WILL NOT BE OBLIGATED TO PAY THE FEES AND
EXPENSE OF ANY SEPARATE COUNSEL RENAMED BY THE INDEMNIFIED PARTY WITH RESPECT TO
SUCH CLAIMS.

 

16.                                 INSURANCE.

 

A.                                   KYOSEI SHALL PROCURE AND MAINTAIN A POLICY
OR POLICIES OF COMPREHENSIVE GENERAL LIABILITY INSURANCE, INCLUDING BROAD FORM
AND CONTRACTUAL LIABILITY, IN A MINIMUM AMOUNT OF $1,000,000 COMBINED SINGLE
LIMIT PER OCCURRENCE AND IN THE AGGREGATE AS RESPECTS PERSONAL INJURY, BODILY
INJURY AND PROPERTY DAMAGE ARISING OUT OF KYOSEI’S PERFORMANCE UNDER THIS
AGREEMENT.

 

B.                                     AS LONG AS IT IS CONSISTENT WITH SOUND
AND REASONABLE BUSINESS PRACTICES, KYOSEI SHALL, UPON COMMENCEMENT OF CLINICAL
TRIALS INVOLVING IMAGENT, PROCURE AND MAINTAIN A POLICY OR POLICIES OF PRODUCT
LIABILITY INSURANCE IN A MINIMUM AMOUNT OF $3,000,000 COMBINED SINGLE LIMIT PER
OCCURRENCE AND IN THE AGGREGATE AS RESPECTS BODILY INJURY AND PROPERTY DAMAGE
ARISING OUT OF KYOSEI’S PERFORMANCE UNDER THIS AGREEMENT.

 

C.                                     THE POLICY OR POLICIES OF INSURANCE
SPECIFIED HEREIN SHALL BE ISSUED BY AN INSURANCE CARRIER WITH AN A.M. BEST
RATING OF “A” OR BETTER AND SHALL NAME IMCOR AS AN ADDITIONAL INSURED WITH
RESPECT TO IMCOR’S PERFORMANCE UNDER THIS AGREEMENT.  KYOSEI SHALL PROVIDE IMCOR
WITH CERTIFICATES EVIDENCING THE INSURANCE COVERAGE REQUIRED HEREIN AND ALL
SUBSEQUENT RENEWALS THEREOF.  SUCH CERTIFICATES SHALL PROVIDE THAT KYOSEI’S
INSURANCE CARRIER(S) NOTIFY IMCOR IN WRITING AT LEAST 30 DAYS PRIOR TO
CANCELLATION OR MATERIAL CHANGE IN COVERAGE.

 

D.                                    IMCOR AND KYOSEI SHALL PERIODICALLY REVIEW
THE ADEQUACY OF THE MINIMUM LIMITS OF LIABILITY SPECIFIED HEREIN.  IF IMCOR AND
KYOSEI AGREE, AND IF ADDITIONAL INSURANCE IS REASONABLY AVAILABLE, ADDITIONAL
INSURANCE WILL BE OBTAINED.  THE SPECIFIED MINIMUM INSURANCE AMOUNTS SHALL NOT
CONSTITUTE A LIMITATION ON KYOSEI’S OBLIGATION TO INDEMNIFY IMCOR UNDER THIS
AGREEMENT.

 

13

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17.                                 INDEPENDENT CONTRACTOR.  NOTHING HEREIN
SHALL BE DEEMED TO ESTABLISH A RELATIONSHIP OF PRINCIPAL AND AGENT BETWEEN IMCOR
AND KYOSEI, NOR ANY OF THEIR AGENTS OR EMPLOYEES FOR ANY PURPOSE WHATSOEVER. 
THIS AGREEMENT SHALL NOT BE CONSTRUED AS CONSTITUTING IMCOR AND KYOSEI AS
PARTNERS, OR AS CREATING ANY OTHER FORM OF LEGAL ASSOCIATION OR ARRANGEMENT
WHICH WOULD IMPOSE LIABILITY UPON ONE PARTY FOR THE ACT OR FAILURE TO ACT OF THE
OTHER PARTY.

 

18.                                 ARBITRATION.  UPON FAILURE TO RESOLVE ANY
DISPUTE CONTROVERSY OR CLAIM ARISING OUT OF, RELATING TO OR IN CONNECTION WITH
ANY PROVISION OF THIS AGREEMENT, SUCH CONTROVERSY OR CLAIM SHALL BE FINALLY
SETTLED BY ARBITRATION.  ARBITRATION SHALL BE HELD IN SAN DIEGO, CALIFORNIA IN
THE ENGLISH LANGUAGE AND CONDUCTED IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION
RULES OF THE AMERICAN ARBITRATION ASSOCIATION.  THE DECISION OF SUCH ARBITRATION
SHALL BE CONCLUSIVE AND BINDING UPON BOTH PARTIES.  IF A PARTY COMMENCES ANY
ARBITRATION OR PROCEEDING AGAINST THE OTHER PARTY TO ENFORCE THIS AGREEMENT OR
ANY RIGHTS RELATED THERETO, THE PREVAILING PARTY IN SUCH ACTION SHALL BE
ENTITLED TO RECOVERY FROM THE OTHER PARTY THE REASONABLE ATTORNEYS’ FEES AND
OTHER REASONABLE COSTS AND EXPENSES INCURRED BY THAT PREVAILING PARTY IN
CONNECTION WITH SUCH ACTION AND IN CONNECTION WITH ENFORCING ANY JUDGMENT, AWARD
OR ORDER THEREBY OBTAINED.  JUDGMENT ON THE AWARD MAY BE ENTERED BY ANY COURT OF
COMPETENT JURISDICTION AND ENFORCED BY SUCH COURT.  KYOSEI, AT IT’S EXPENSE,
WILL HIRE IT’S OWN TRANSLATOR.

 

19.                                 ADDITIONAL PROVISIONS.

 

A.                                   NOTICES, PAYMENTS, STATEMENTS, REPORTS AND
OTHER COMMUNICATIONS UNDER THIS AGREEMENT SHALL BE IN WRITING AND SHALL BE
DEEMED TO HAVE BEEN RECEIVED AS OF THE DATE DISPATCHED IF SENT BY PUBLIC
OVERNIGHT COURIER (E.G. FEDERAL EXPRESS) AND ADDRESSED AS FOLLOWS:

 

If for KYOSEI:

 

 

1-25-18, Okusawa, Otaru

 

Hokkaido, 047—0013, Japan

 

Attention:  President

 

If for IMCOR:

 

 

IMCOR, A Division of Photogen Technologies, Inc.

 

6175 Lusk Boulevard

 

 

 

San Diego, California 92121

 

Attention:  President

 

Either party may change its official address upon written notice to the other
party.

 

B.                                     THIS AGREEMENT SHALL BE CONSTRUED AND
GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATES OF NEVADA AND CALIFORNIA AND
OF THE UNITED STATES, AS APPLICABLE, WITHOUT GIVING EFFECT TO CONFLICT OF LAW
PROVISIONS.

 

14

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C.                                     ANY MODIFICATION OF THIS AGREEMENT SHALL
BE IN WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH PARTY.

 

D.                                    IN THE EVENT THAT A PARTY TO THIS
AGREEMENT PERCEIVES THE EXISTENCE OF A DISPUTE WITH THE OTHER PARTY CONCERNING
ANY RIGHT OR DUTY PROVIDED FOR HEREIN, THE PARTIES SHALL, AS SOON AS
PRACTICABLE, CONFER IN AN ATTEMPT TO RESOLVE THE DISPUTE.  IF SUCH DISPUTE IS
NOT RESOLVED IN 30 DAYS, EITHER PARTY MAY CALL FOR ARBITRATION PURSUANT TO
SECTION 18.

 

E.                                      A WAIVER BY EITHER PARTY OF A BREACH OR
VIOLATION OF ANY PROVISION OF THIS AGREEMENT SHALL BE IN WRITING AND WILL NOT
CONSTITUTE OR BE CONSTRUED AS A WAIVER OF ANY SUBSEQUENT BREACH OR VIOLATION OF
THAT PROVISION OR AS A WAIVER OF ANY BREACH OR VIOLATION OF ANY OTHER PROVISION
OF THIS AGREEMENT.

 

F.                                      ANY OF THE PROVISIONS OF THIS AGREEMENT
WHICH ARE DETERMINED TO BE INVALID OR UNENFORCEABLE IN ANY JURISDICTION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY OR UNENFORCEABILITY IN SUCH
JURISDICTION, WITHOUT RENDERING INVALID OR UNENFORCEABLE THE REMAINING
PROVISIONS HEREOF OR AFFECTING THE VALIDITY OR UNENFORCEABILITY OF ANY OF THE
TERMS OF THIS AGREEMENT IN ANY OTHER JURISDICTION.  IN SUCH EVENT, THE PARTIES
WILL NEGOTIATE TO MODIFY THE PROVISION TO ONE THAT IS VALID AND ENFORCEABLE AND
MOST CLOSELY ACHIEVES THEIR INTENT.

 

G.                                     NOTHING IN THIS AGREEMENT, EXPRESS OR
IMPLIED, IS INTENDED TO CONFER ON ANY PERSON OTHER THAN THE PARTIES HERETO OR
THEIR PERMITTED ASSIGNS, ANY BENEFITS, RIGHTS OR REMEDIES.

 

H.                                    THIS AGREEMENT HAS BEEN PREPARED IN THE
ENGLISH LANGUAGE AND SHALL BE CONSTRUED IN THE ENGLISH LANGUAGE.

 

I.                                         IMMEDIATELY FOLLOWING THE EXECUTION
OF THIS AGREEMENT KYOSEI SHALL SUBMIT THIS AGREEMENT AND ANY OTHER NECESSARY
DOCUMENTS TO ALL AUTHORITIES OF THE JAPANESE GOVERNMENT WHOSE APPROVAL MAY BE
NECESSARY TO TENDER THIS AGREEMENT EFFECTIVE AND ENFORCEABLE IN ACCORDANCE WITH
ITS TERMS.  IMCOR WILL COOPERATE WITH KYOSEI IN ALL RESPECTS TO ACCOMPLISH THE
FOREGOING.

 

J.                                        THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT MAY NOT BE ASSIGNED OR TRANSFERRED (AND ANY ATTEMPT
TO DO SO WILL BE VOID) EXCEPT (I) RIGHTS TO RECEIVE MONEY MAY BE ASSIGNED, AND
(II) THIS AGREEMENT AND IMCOR’S RIGHTS AND OBLIGATIONS HEREUNDER MAY BE ASSIGNED
BY IMCOR TO AN ACQUIROR DIRECTLY OR INDIRECTLY OF ALL OR SUBSTANTIALLY ALL THE
IMAGENT ASSETS OR RELATED RIGHTS.

 

K.                                    HEADINGS AND CAPTIONS ARE FOR CONVENIENCE
ONLY AND ARE NOT TO BE USED IN THE INTERPRETATION OF THIS AGREEMENT.

 

L.                                      THIS AGREEMENT CONTAINS THE ENTIRE
AGREEMENT OF THE PARTIES CONCERNING THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL
PROPOSALS, ORAL OR WRITTEN, ALL NEGOTIATIONS, CONVERSATIONS, OR DISCUSSIONS
BETWEEN OR AMONG THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT
AND ALL PAST DEALING OR INDUSTRY CUSTOM.

 

15

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M.                                 NEITHER PARTY HERETO SHALL BE RESPONSIBLE FOR
ANY FAILURE TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN
OBLIGATIONS TO PAY MONEY OR OBLIGATIONS UNDER SECTION 12) IF SUCH FAILURE IS
CAUSED BY ACTS OF GOD, WAR, STRIKES, REVOLUTIONS, LACK OR FAILURE OF
TRANSPORTATION FACILITIES, LAWS OR GOVERNMENTAL REGULATIONS OR OTHER CAUSES THAT
ARE BEYOND THE REASONABLE CONTROL OF SUCH PARTY. OBLIGATIONS HEREUNDER, HOWEVER,
SHALL IN NO EVENT BE EXCUSED BUT SHALL BE SUSPENDED ONLY UNTIL THE CESSATION OF
ANY CAUSE OF SUCH FAILURE. IN THE EVENT THAT SUCH FORCE MAJEURE SHOULD OBSTRUCT
PERFORMANCE OF THIS AGREEMENT FOR MORE THAN SIX (6) MONTHS, THE PARTIES HERETO
SHALL CONSULT WITH EACH OTHER TO DETERMINE WHETHER THIS AGREEMENT SHOULD BE
MODIFIED. THE PARTY FACING AN EVENT OF FORCE MAJEURE SHALL USE ITS BEST
REASONABLE ENDEAVORS IN ORDER TO REMEDY THAT SITUATION AS WELL AS TO MINIMIZE
ITS EFFECTS. A CASE OF FORCE MAJEURE SHALL BE NOTIFIED TO THE OTHER PARTY BY
TELEFAX WITHIN FIVE (5) DAYS AFTER ITS OCCURRENCE AND SHALL BE CONFIRMED BY A
LETTER.

 

N.                                    EACH PARTY SHALL COMPLY WITH ALL
APPLICABLE EXPORT LAWS, RESTRICTIONS, AND REGULATIONS OF THE UNITED STATES AND
JAPAN OR ANY AUTHORITY THEREUNDER AND WILL NOT EXPORT OR RE-EXPORT, ANY PRODUCT,
TECHNOLOGY OR INFORMATION IT OBTAINS OR LEARNS PURSUANT TO THIS AGREEMENT (OR
ANY DIRECT PRODUCT THEREOF) IN VIOLATION OF ANY SUCH LAWS, RESTRICTIONS OR
REGULATIONS.

 

O.                                    EACH PARTY RECOGNIZES THAT IMCOR GRANTS NO
LICENSE, BY IMPLICATION OR OTHERWISE, EXCEPT FOR THE LICENSES EXPRESSLY SET
FORTH AND GRANTED IN THIS AGREEMENT.

 

P.                                      IMCOR SHALL NOT ENTER INTO ANY MERGER OR
ANY TRANSACTION INVOLVING THE SALE] OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS
(INCLUDING IMAGENT) UNLESS THE SURVIVING ENTITY TO SUCH MERGER, OR THE ACQUIRER
OF IMCOR’S ASSETS, AGREES IN WRITING TO ASSUME ALL OF THE OBLIGATIONS OF IMCOR
TO KYOSEI IN THIS AGREEMENT.

 

 

[Signature page follows]

 

16

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IN WITNESS WHEREOF the parties, intending to be legally bound, have caused this
Agreement to be executed by their duly authorized representatives.

 

IMCOR,

KYOSEI PHARMACEUTICAL Co., LTD.

A DIVISION OF PHOTOGEN TECHNOLOGIES, INC.

 

 

 

 

 

By:

/s/ Taffy Williams

 

By:

/s/  Shigeharu Higuchi

 

Name: Taffy Williams

Name: Shigeharu Higuchi

Title: President & Chief Executive Officer

Title: President

 

17

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Exhibit A

 

•                                         Stabilized Microbubble Compositions

 

U.S. Patent No. 5,639,443

 

•                                         Osmotically Stabilized Microbubble
Preparations

 

U.S. Patent No. 6,258,339

U.S. Patent Application Pending

 

•                                         Stabilized Microbubble Compositions
for Ultrasound

 

U.S. Patent No. 5,605,673

Australia Patent No. 694135

Australia Patent No. 731099

Patent Applications pending in Australia, Canada, Europe, Japan, and Hong Kong

 

•                                         Systems for the Formation of
Microbubbles

 

U.S. Patent No. 5,720,938

 

•                                         Ultrasound Imaging Method Using
Microbubbles

 

U.S. Patent No. 5,626,833

 

•                                         Methods of Imaging Using Osmotically
Stabilized Microbubble Preparations

 

U.S. Patent No. 6,287,539

 

•                                         Stable Microbubble Precursors

 

U.S. Patent No. 5,695,741

 

•                                         Ultrasonic Imaging System Utilizing a
Long-Persistence Contrast Agent

 

U.S. Patent No. 6,280,704

U.S. Patent Application Pending

 

•                                         Stabilized Gas Emulsion Containing
Phospholipid for Ultrasound Contrast Enhancement

 

U.S. Patent No. 5,798,091

Hungary Patent No. P9802095

Patent Applications pending in the U.S., Europe, Australia, Canada, China,
Finland, Hong Kong, Japan, Mexico, Norway, Poland, and South Korea

 

•                                         Kits and Systems for Ultrasonic
Imaging

 

U.S. Patent No. 6,280,705

 

18

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•                                         Microbubbles Containing Fluorinated
Gas or Vapor

 

U.S. Patent Application Pending

 

•                                         Mixed Gas Microbubble Compositions

 

U.S. Patent Application Pending

 

•                                         Harmonic Ultrasound Imaging with
Microbubbles

 

U.S. Patent No. 5,540,909

Australia Patent No. 693608

German Utility Patent No. 295 22 119.4

Patent Applications pending in the U.S., Europe, Canada, Australia, Hong Kong,
and Japan

 

•                                         Improved Methods for Harmonic Imaging
with Ultrasound

 

U.S. Patent No. 5,733,527

 

•                                         Systems for Harmonic Ultrasound
Imaging

 

U.S. Patent No. 6,019,960

 

•                                         Methods of Harmonic Imaging Using
Phospholipid Stabilized Microbubbles

 

U.S. Patent No. 6,056,943

 

•                                         Methods of Harmonic Imaging Using
Multiple Frequencies

 

U.S. Patent No. 6,036,644

 

•                                         Gas Emulsions Stabilized with
Fluorinated Ethers Having Low Ostwald Coefficients

 

U.S. Patent No. 5,804,162

U.S. Patent No. 6,193,952

Australia Patent No. 712946

Patent Applications pending in the U.S., Europe, Australia, Canada, Japan,
Poland, Hungary, Israel, Norway, Czechoslovakia, China and South Korea

 

•                                         Methods and Apparatus for Monitoring
and Quantifying the Movement of Fluid

 

U.S. Patent Application Pending

 

•                                         Diagnostic Imaging of Lymph Structures

 

U.S. Patent Application Pending

 

19

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Exhibit “B”

 

(a)                                  Clinical safety data management in the
preclinical stage in Japan.

 

(i)                                    IMCOR shall provide any and all case
reports of ADR related to Licensed Product(s) from any and all sources, which
are obtained during each Calendar Quarter, by written summarized in CIOMS II
format. This report shall be provided for KYOSEI within 30 days following the
end of each Calendar Quarter.

 

(ii)                                 KYOSEI may call for CIOMS I in regard to
the cases, which is reported in said CIOMS II, to be considered as important.
IMCOR shall promptly provide respective CIOMS I for KYOSEI.

 

(iii)                              IMCOR shall inform KYOSEI of the following
research reports on Licensed Product(s) as soon as possible.

 

(1)         Reports which show that a serious disease (such as cancer, hearing
impairment, or loss of eyesight) has occurred or might occur as a result of ADR.

 

(2)         Pronounced change in onset trends including number of cases,
incidence, or onset conditions of ADR.

 

(3)      Reports that Licensed Product(s) is not indicated for the disease
targeted in the study.

 

(iv)                             In the case any and all measures are taken to
discontinue manufacture, import, or sales of Licensed Product(s), or to recall
or discard the Licensed Product(s), or other measures taken to prevent risk to
public health and hygiene, IMCOR shall notify KYOSEI of the information as below
as soon as possible but no later than 7 calendar days after first knowledge by
IMCOR:

 

(1)         Modifications or limitations on indications or dosage and
administration due to problems with efficacy or safety.

 

(2)         Discontinuation of manufacture, import, or sale, and/or
modifications in manufacturing method, duet to insufficient efficacy or problems
with safety.

 

(3)         Product recall or disposal due to problems with efficacy or safety
etc.

 

(4)         Among amendments to the Precautions, major modifications etc.
accompanying the distribution of a Dear Doctor Letter.

 

(5)         Discontinuation or suspension of an entire clinical trial because of
problems with efficacy, safety, or quality.

 

(6)         Intensification etc. of safety measures resulting from the
distribution of a Dear Doctor Letter during a clinical trial.

 

(v)                                 Whenever IMCOR makes reports that is
required in ICH E2C that FDA shall be notified of, IMCOR shall provide KYOSEI
with the said report no later than 30 calendar days after the day of creation.

 

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(b)                                 Clinical safety data management in and after
the clinical development phase in Japan.

 

(i)                                    IMCOR and KYOSEI shall provide each other
any and all case reports of ADR related to Licensed Product(s) from any and all
sources, which are obtained during each Calendar Quarter, by written summarized
in CIOMS II format. This report shall be provided for each other within 30 days
following the end of each Calendar Quarter.

 

(ii)                                 IMCOR and KYOSEI shall notify each other of
any and all serious ADR of Licensed Product(s), in CIOMS I format as soon as
possible but no later than 7 calendar days after first knowledge by IMCOR or
KYOSEI. Follow-up information should be actively sought and submitted as it
becomes available.

 

(iii)                             IMCOR and KYOSEI shall inform each other of
the following research reports on Licensed Product(s) as soon as possible.

 

(1)         Reports which show that a serious disease (such as cancer, hearing
impairment, or loss of eyesight) has occurred or might occur as a result of ADR.

 

(2)         Pronounced change in onset trends including number of cases,
incidence, or onset conditions of ADR.

 

(3)         Reports that Licensed Product(s). is not indicated for the disease
targeted in the study.

 

(iv)                               In the case any and all measures are taken to
discontinue manufacture, import, or sales of Licensed Product(s), or to recall
or discard the Licensed Product(s), or other measures taken to prevent risk to
public health and hygiene, IMCOR and KYOSEI shall notify each other of the
information as below as soon as possible but no later than 7 calendar days after
first knowledge by IMCOR or KYOSEI:

 

(1)         Modifications or limitations on indications or dosage and
administration due to problems with efficacy or safety.

 

(2)         Discontinuation of manufacture, import, or sale, and/or
modifications in manufacturing method, duet to insufficient efficacy or problems
with safety.

 

(3)         Product recall or disposal due to problems with efficacy or safety
etc.

 

(4)         Among amendments to the Precautions, major modifications etc.
accompanying the distribution of a Dear Doctor Letter.

 

(5)         Discontinuation or suspension of an entire clinical trial because of
problems with efficacy, safety, or quality.

 

(6)         Intensification etc. of safety measures resulting from the
distribution of a Dear Doctor Letter during a clinical trial.

 

(v)                                  Whenever IMCOR makes reports that is
required in ICH E2C that FDA shall be notified of, IMCOR shall provide KYOSEI
with the said report no later than 30 calendar days after the day of creation.

 

21

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