exv10w10



 





Exhibit 10.10




LICENSE AGREEMENT




     This License Agreement (this “Agreement”) is made as of Dec 6, 1999 by and between Biocoat,
Incorporated (“Biocoat”), a Pennsylvania corporation with its principal place of business at 455
Pennsylvania Ave., Fort Washington, PA 19034 and Concentric Medical Inc., (“Licensee”), a Delaware
corporation with its principal place of business at 2585 Leghorn Street, Mountain View, CA 94043.



     WHEREAS, Biocoat owns patent rights and is licensed under patent rights of others with the
right to sublicense, and possesses know-how and technical information relating to lubricious
hydrophilic coatings, for application to medical devices, such as catheters and guidewires, and



     WHEREAS, Licensee desires to obtain a license from Biocoat under such patent rights and to
have access to Biocoat know-how and technical information to enable Licensee to apply such
coatings, to be furnished by Biocoat, to certain products and Biocoat is agreeable to granting such
a license pursuant to the terms of this Agreement,



     NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth below, the
parties hereby agree as follows:



     1.0 Definitions. For purposes of this Agreement, the following definitions shall apply:



          1.1 “Affiliate” means, with respect to any party, its




 









 







respective direct or indirect ultimate parent company, if any, and any company, firm or other
entity more than fifty percent (50%) of whose issued and voting capital or share participation is
owned or controlled, directly or indirectly, by such party or by its parent company, but only for
so long as such ownership or control shall continue.




          1.2 “Product” means any of the products described in Schedule A, which is attached to
and made part of this Agreement. Licensee reserves the right to add and/or modify Schedule A for
newly developed products, subject to approval by Biocoat, which approval will not be withheld
unless the change conflicts with contractual obligations to a third party.




          1.3 “Net Sales” means the net billings of Licensee and its Affiliates from sales of
Licensed Products to unaffiliated (i.e., other than Affiliate) third parties, after deducting
normal and customary cash and trade discounts, returns, allowances and commissions to agents, and
any excise, sales or use or other similar taxes.




          1.4 “Field” means all actual or potential applications in the human vascular system.




          1.5 “Medical Device Company” means a company which manufactures and markets finished
medical devices as that term is defined in the Current Good Manufacturing Practice regulation of
the Food and Drug Administration.




          1.6 “Patents” means the patents and patent application described in Schedule B, which
is attached to and made a part of this Agreement.




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          1.7 “Technology” means any process for applying a coating of hyaluronan to medical
devices utilizing any adhesive layer consisting of acrylic copolymers.




          1.8 “Proprietary Information” means all know-how, trade secrets, inventions, data,
technology, and information, owned, acquired, developed or controlled by, or licensed to, Biocoat
relating to the Patents or the Technology which is used or useful with respect to Licensed
Products, including the composition and process for producing the acrylic copolymers.




          1.9 “Licensed Product” means any Product indicated for use in the Field which is
processed with a coating of hyaluronan using the Patents or the Proprietary Information.




          1.10 “Territory” means all countries of the world.




     2.0  Grant.



          2.1 Subject to the terms of this Agreement, Biocoat hereby grants to Licensee non-exclusive
licenses in the Territory under the Patents and the Proprietary Information, to make, have made,
use and sell Licensed Products with respect to those Products identified in Schedule A. The
foregoing non-exclusive license does not include the right to grant sublicenses.




          2.2 Biocoat hereby retains the right to develop coatings for, supply coatings to, and enter
into coatings license and supply agreements with third parties so long as such agreements do not
conflict with the rights of Licensee pursuant to this Agreement.




          2.3 Biocoat hereby grants to Licensee a fully paid,





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royalty-free license to use the trademark HYDAK in connection with the Licensed Products made or
sold pursuant to this Agreement. This trademark license shall be in effect only during the term of
this Agreement. Licensee agrees that Biocoat shall have full control over the manner in which
Licensee uses this licensed mark, and shall permit representatives of Biocoat to make inspections
of the facilities of Licensee during normal business hours and with reasonable notice, to insure
that the requirements of this license are fulfilled. All use of the licensed mark, by Licensee,
shall inure to the benefit of Biocoat and Licensee shall not acquire any ownership rights in the
mark by reason of such use.




          2.4 Licensee agrees to include relevant numbers of the Patents in the labeling or other
written information supplied with Licensed Products.




          2.5 Biocoat agrees to supply the proprietary acrylic copolymers needed to produce the Licensed
Products, as set forth in Schedule C, which is attached to and made a part of this Agreement.




     In the event that Biocoat is not, or believes it will not be, able to produce or deliver the
acrylic copolymers for a period of thirty (30) days or more, it will promptly advise Licensee of
such fact and provide the formulas and process description for producing the acrylic copolymers to
Licensee, in sufficient detail to enable Licensee (or a third party of Licensee’s choice) to
manufacture the acrylic copolymers; and will grant to Licensee a royalty-free non-exclusive right
under Biocoat’s intellectual property rights, to make, have made, and use such acrylic
copolymers.



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     In order to ensure that the formulas and process description are delivered, Biocoat will,
within thirty (30) days of the date of this Agreement, and within thirty (30) days of
implementation of any material formula or process change, deliver in escrow the formulas and
process description to William H. Eilberg, Esq., 420 Old York Road, Jenkintown, PA 19046, with
instructions to deliver such to Licensee in the event above stated, or in case Biocoat ceases to
exist without there being a rightful Assignee under Section 13.1 of this Agreement.



          2.6 If Biocoat makes any developments or improvements to the Technology, whether or not such
are patented, Biocoat shall notify Licensee of the existence of such development or improvement,
including sufficient technical detail so that Licensee can understand the significance of the
development or improvement, and will offer Licensee an opportunity to license such development or
improvement on terms to be negotiated. Notwithstanding the preceding sentence, Biocoat shall have
no obligation to notify Licensee of improvements or developments if such notification would violate
an agreement between Biocoat and a third party. If Licensee chooses not to license such
development or improvement, Biocoat shall have no further obligation to Licensee with respect to
such development or improvement.




     3.0 Payments. In consideration of the licenses and other rights granted to Licensee
herein and the disclosure to Licensee of Proprietary Information, Licensee shall make payments to
Biocoat as follows:



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          3.1 Licensee hereby agrees to pay [*] to Biocoat with the signing of this Agreement creditable
against running royalties under Sections 3.2 and 8.2.




          3.2 Except as modified by Sections 3.3 and 8.2, for each three (3) months period ending on the
last day of March, June, September or December after Licensee executes this Agreement, Licensee
shall pay to Biocoat, in U.S. dollars, a royalty amount in accordance with the rates set forth in
Schedule D which is attached to and made part of this Agreement. Quarterly royalty payments shall
be made within forty five (45) days after the end of such three (3) month period. The first
quarterly payment shall include royalties on Net Sales which took place in any preceding quarters.




          3.3 If, for any Licensed Product, in any calendar year, the number of units of such Licensed
Product sold to any and all unaffiliated (i.e., other than an Affiliate) Medical Device Companies
(“OEM” sales or units) exceeds [*]% of the total units sold of such Licensed Product, Licensee
shall adjust the calculation of Net Sales for such Licensed Product by applying the average per
unit price for non-OEM sales (instead of the average per unit price for OEM sales) to the OEM units
sold.




     If it is not possible to determine the average unit price for non-OEM sales, it shall be
assumed that the average unit price for non-OEM sales it [*] times the average unit price for OEM
sales.



CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
[*], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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          3.4 Overdue payments to Biocoat shall accrue interest, which Licensee shall pay to
Biocoat, at [*]% above the prime rate posted by Chase Manhattan Bank, New York, NY.




          3.5 The payment of royalties as set forth in this Article and in Schedule D is in addition to
the purchase price of the copolymers as set forth in Schedule C.




     4.0 Accounting and Audit.



          4.1 The rate of exchange to be used in computing the amount of the U.S. Dollar equivalent of
the currency in which non-U.S. sales may be expressed shall be the commercial exchange rate in
effect in New York, New York, on the date on which payment for such Net Sales is due.




          4.2 Accompanying each quarterly royalty payment, Licensee will provide Biocoat with a
statement which itemizes the amount of royalty due, by Product. Licensee shall keep accurate
records in sufficient detail to enable the aforesaid payments to be determined, for five (5) years
following the close of the relevant quarter.




          4.3 At Biocoat’s request and expense, Licensee shall permit an independent certified public
accountant, reasonably acceptable to Licensee, to have access once in each royalty year, during
regular business hours and upon reasonable notice to Licensee, to such of the records of Licensee
as may be necessary to verify the accuracy of the reports required under this Agreement. If, in
any royalty year a deficiency in excess of [*] ([*]%) percent exists, Licensee shall reimburse
Biocoat for the reasonable fee and




CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
[*], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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expenses of such audit; Licensee shall pay any such deficiency with interest thereon as set
forth in Article 3.3.




     5.0 Confidentiality.



          5.1 During the Term and for a period of five (5) years following its expiration or
termination, each party undertakes to keep secret and confidential and not to disclose to any third
party (except as provided in Section 5.2) any Proprietary Information disclosed to it by the other
party or learned by it from the other party in the course of implementing this Agreement except:




               (a) Information which at the time of disclosure is in the public domain or publicly known or
available;



               (b) Information which, after disclosure, becomes part of the public domain or publicly known
or available by publication or otherwise, except by breach of this Agreement by the receiving
party;



               (c) Information which the receiver receives from a third party; provided, however, that such
information was not illegally or improperly obtained by such third party from the other party; and



               (d) Information which the receiver derives independently of such disclosure.



          5.2 Licensee is allowed to disclose Proprietary Information disclosed to it by Biocoat to a
third-party vendor who needs to know the information in order to apply the Technology on Licensee’s
behalf if such third-party vendor has entered into a non-disclosure agreement approved by Biocoat.




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          5.3 Notwithstanding the above, it shall not be a breach of this Agreement for a party to
disclose the existence of this Agreement or the identity of the other party.




     6.0 Technical Assistance. Following the execution of this Agreement, upon the request
of Licensee, Biocoat shall furnish personnel having knowledge of the Proprietary Information to
consult with Licensee technical personnel concerning the applications of the Technology to the
Licensed Products, provided that Licensee shall (a) reimburse Biocoat for the reasonable travel and
living expenses incurred by such personnel for travel requested by Licensee hereunder, and (b) pay
Biocoat a charge of $[*] per person per day. Biocoat may increase this per person per day charge
from time to time but the rate of such increase shall not exceed increases in the Consumer Price
Index.



     7.0 Warranty.



          7.1 Biocoat warrants that it is the owner of the trademark Hydak and all right, title and
interest in and to the Patents listed in the top section of Schedule B and has licensed the
Biomatrix patents listed in the bottom section of Schedule B and has the unrestricted power and
authority to grant the licenses and give access to the Proprietary Information as provided herein.
Biocoat represents that as of the date of this Agreement it has no knowledge of any pending or
threatened litigation against Biocoat which might impair the rights licensed hereunder, nor does it
have knowledge of any dominant patents or patent rights which might reasonably be infringed by
Licensee manufacture, use and sale of the Licensed Products.




CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
[*], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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     8.0 Term.



          8.1 This Agreement, unless earlier terminated as provided for in Section 8.4 hereof,
terminates upon the later of: (1) the expiration of the last to expire of the Patents; or (2) ten
(10) years after the date of this Agreement.




          8.2 After the expiration of the last to expire of the Patents, this Agreement converts from a
patent license to a license of know-how at that point and the royalty amounts payable in accordance
with Section 3.2 shall be calculated in accordance with the rates set forth in Schedule D to this
Agreement.




          8.3 The provisions of Sections 4.0, 5.0, and 10.0 shall survive the expiration or termination
of this Agreement.




          8.4 If either party hereto shall commit any breach of any material provision of this
Agreement, and shall not, within thirty (30) days written notice of such breach by the other party,
correct such breach, then such other party shall have the right to terminate this Agreement upon a
further fifteen (15) days notice to the breaching party. The right of either party to take such
action shall not be affected in any way by its failure to take any action with respect to any
previous breach.




          8.5 Upon any termination of this Agreement by Licensee under Section 8.4 hereof, all rights
granted herein to Licensee shall terminate. Termination of this Agreement for any reason shall be
without prejudice to Biocoat’s right to receive all payments accrued under Section 3.0 hereof prior
to the effective


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date of such termination and any other remedies which any party may otherwise have.




          8.6 No party shall be liable for failure of or delay in performing any obligation set forth in
this Agreement, and no party shall be deemed in breach of its obligations hereunder, if such
failure or delay is due to natural disasters or any causes reasonably beyond the control of such
party.




          8.7 Termination of this Agreement under Section 8.4 hereof shall not relieve either party of
obligations incurred prior to termination.




     9.0 Infringement. If at any time during the term of this Agreement either Licensee or
Biocoat (a “party”) shall become aware of any third party infringement or threatened infringement
in the Field of any Patent claim or claims embracing a Licensed Product sold by Licensee the
following provisions shall apply:




          9.1 The party having such knowledge shall forthwith give notice to the other party. If there
is disagreement between the parties as to whether the act complained of is in fact an infringement
of any Patent claim or claims, the parties shall refer such issue to a mutually acceptable
independent patent counsel. The opinion of such counsel shall be final and binding on the parties
and costs incurred in that regard shall be shared [*] percent ([*]%) by Licensee and [*] percent
([*]%) by Biocoat.




          9.2 If within ninety (90) days following receipt of notice from Licensee to Biocoat of any
such infringement or ninety (90) days after receipt of the opinion of independent patent




CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
[*], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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counsel concluding existence of such infringement, Biocoat fails to halt such infringement or
to initiate litigation to do so, Licensee shall have the right to initiate such litigation in its
own name or in the name of Biocoat as it deems necessary or appropriate. Biocoat shall cooperate
with Licensee as is reasonably necessary in any such litigation brought by Licensee in its own name
or in Biocoat’s name. In addition, Biocoat shall have the right to determine what proportion, if
any, of the expenses of such litigation it will bear by providing written notice thereof to
Licensee within thirty (30) days of the date of receipt by Biocoat of notice that Licensee has
initiated litigation. (It is understood by the parties that the proportion of expenses borne by
Biocoat shall determine Biocoat’s share of monetary recovery as provided in Section 9.3 below.)




          9.3 In the event any monetary recovery in connection with such litigation is obtained
(regardless of whether Licensee or Biocoat brought such litigation), such monetary recovery shall
be applied in the following priority: first, to the reimbursement of Biocoat and Licensee for their
out-of-pocket expenses (including reasonable attorneys fees) in connection with such litigation;
second, the balance to be shared by Biocoat and Licensee in proportion to the amounts spent by the
parties in conducting the litigation as

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provided in Section 9.2 above. If the monetary recovery is less than the out-of-pocket expenses of
Biocoat and Licensee, reimbursement of these expenses shall be in proportion to the amounts spent
by the parties in conducting the litigation as provided herein.




     10.0 Indemnification.



          10.1 Licensee shall indemnify and hold Biocoat (as well as its Directors and Officers)
harmless from and against any and all expenses (including any and all attorneys fees), claims,
demands, liabilities or money judgments for death or bodily injury incurred by or rendered against
Biocoat which arise out of or are related to the use, manufacturing, sale or distribution of a
Licensed Product by Licensee.




     11.0 Third Party Infringement Claims.



          11.1 The parties shall notify each other promptly in writing of any claim, suit or proceeding
threatened or initiated by any third party relating to the use by Licensee of the Patents, the
Technology or the Proprietary Information as permitted under this Agreement (a “Third Party
Infringement Claim”).




          11.2 If Biocoat fails to initiate action to defend any Third Party Infringement Claim within
30 days of such notice, Licensee shall have the right, but not the obligation, to take any action
that it deems necessary or appropriate, in its sole discretion, to defend any Third Party
Infringement Claim. Licensee shall have full control over the defense of any Third Party
Infringement Claim that Biocoat does not defend including, but not limited to, the right to enter
into any settlement with respect to such claim.




          11.3 If any Third Party Infringement Claim is threatened or initiated, the obligation of
Licensee to make royalty payments

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under this Agreement shall cease as of the date such Third Party Infringement Claim is threatened
or initiated; provided, however that all such royalty obligations shall continue to accrue, with
interest at the prime rate posted by Chase Manhattan Bank, New York, NY., until the parties have
settled such Third Party Infringement Claim or a court of competent jurisdiction has entered a
final nonappealable judgment. If such final judgment results in a finding that Licensee’s use of
the Patents, the Technology and the Proprietary Information does not infringe any valid claim of
such third party, Licensee shall promptly pay the amount of accrued and unpaid royalties due
Biocoat, if any, and shall resume payment of royalties otherwise payable under this Agreement. If
such final judgment results in a finding that use of the Patents, the Technology or the Proprietary
Information infringes any valid claim of such third party, Licensee shall have no obligation to pay
any accrued and unpaid royalties or any further royalties to Biocoat. If a threatened Third Party
Infringement Claim does not result in a suit or proceeding being initiated within six (6) months of
the date of such threat, Licensee shall pay promptly the amount of accrued and unpaid royalties due
Biocoat, if any, and shall resume payment of royalties otherwise payable under this Agreement.




          11.4 Licensee shall be entitled to offset against any accrued and unpaid royalties and any
future royalties that would otherwise be payable under this Agreement all damages, losses, costs
and expenses (including reasonable attorneys’ fees and amounts paid in settlement) suffered or
incurred by Licensee in

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connection with any Third Party Infringement Claim.




          11.5 Biocoat agrees to furnish Licensee with full information concerning any Third Party
Infringement Claim, and to render to Licensee full cooperation to facilitate the defense or
settlement of any such claim. If Biocoat does not defend any Third Party Infringement Claim,
Biocoat shall the opportunity to be represented by counsel in any such Third Party Infringement
Claim at its sole option and expense.




     12.0 Insurance. Licensee shall provide Biocoat evidence of product liability coverage
naming Biocoat as an additional insured.



     13.0 General.



          13.1 Assignment. Neither Licensee nor Biocoat shall have the right to assign
(including by sale, merger or, otherwise by operation of law) any or all of its rights and
obligations under this Agreement without the prior written consent of the other party, which
consent shall not be unreasonably withheld, except that consent shall not be required in the event
of a sale by either Licensee or Biocoat of substantially all of its assets to another entity,
provided that such other entity undertakes to accept all terms and conditions hereof and carry out
all obligations hereunder.




     This Agreement and all rights and obligations hereunder shall be binding upon and shall inure
to the benefit of the respective successors, and assignees who rightfully become an Assignee, under
this Section.



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          13.2 Entire Agreement. This Agreement contains the entire agreement between the
parties hereto in respect of the subject matter hereof. This Agreement may not be released,
discharged, abandoned, changed or modified in any manner except by an instrument in writing signed
by a duly authorized officer of each of the parties hereto.




          13.3 Waiver and Severability. The waiver by either of the parties of any breach of
any provision hereof by the other party shall not be construed to be a waiver of any succeeding
breach of such provision or to be a waiver of the enforceability of the provision itself.




          13.4 Governing Law. This Agreement shall be construed and interpreted in accordance
with the laws of the Commonwealth of Pennsylvania whose courts shall, except as limited by the
provisions of the binding arbitration provisions of Section 13.5 below, have jurisdiction over the
parties hereto and all matters arising hereunder.




          13.5 Arbitration. The parties agree that any disputes arising under this Agreement
that cannot be resolved by the parties shall be submitted to binding arbitration in Philadelphia,
PA. if the arbitration is commenced by Licensee, or in San Francisco, CA if the arbitration is
commenced by Biocoat. Both parties agree to be bound, and to abide by the decision reached in such
arbitration including the entry of judgement upon the award of the arbitrator(s) in such
arbitration.




          13.6 Invalidity. If any of the provisions of this




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Agreement is held to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.




          13.7 Notice. Any notice required or to be given hereunder shall be considered
delivered when deposited, postage prepaid, in the United States mail, certified or registered mail,
or by telecopier, to the address of the other party as specified below or as subsequently modified
in writing by the parties.



If to Biocoat:



455 Pennsylvania Ave.

Fort Washington, PA19034

Attn: President



If to Licensee:



2585 Leghorn Street

Mountain View, CA 94043

Attn: Martin Dieck




     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed effective the
day and year set forth below, under the Licensee signature.



	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Licensee	 	 	 	Biocoat, Incorporated	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Martin Dieck
	 	 	 	By:
	 	/s/ Djoerd Hoekstra	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Martin Dieck
	 	 	 	 	 	Djoerd Hoekstra	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 12/6/99	 	 	 	Date: 11/30/99	 	 






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SCHEDULE A




PRODUCTS




     [*]



CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
[*], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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SCHEDULE B




Patents of Biocoat, Incorporated




	 	 	 
	U.S. Patents	 	Expiration Date
	4,663,233
	 	October 24, 2005
	4,801,475
	 	January 31, 2006
	5,023,114
	 	January 31, 2006
	5,037,677
	 	January 31, 2006






Foreign Patents




	 	 	 
	France
	 	90 08988
	France
	 	85 12625
	Great Britain
	 	2,163,436
	Israel
	 	75729
	Germany
	 	3529758






Patents of Biomatrix, Inc.




	 	 	 
	U.S. Patents	 	Expiration Date
	4,487,865
	 	December 11, 2001
	4,500,676
	 	December 11, 2001






Foreign Patents




	 	 	 	 	 
	Canada
	 	1,223,383
	 	1,218,776
	Australia
	 	551,704
	 	   551,728
	Japan
	 	1,481,361
	 	none
	Great Britain
	 	2,151,247
	 	2,151,246
	France
	 	84-17,955
	 	84-17,954
	Germany
	 	3,434,123
	 	3,434,042
	Italy
	 	1,178,587
	 	1,178,586






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SCHEDULE C



Licensee shall purchase all proprietary acrylic copolymers and Hydak A-14 hyaluronan solution used
to make Licensed Products from Biocoat.



Licensee has no minimum purchase requirement of such polymers.



The form in which such acrylic copolymers will be supplied to Licensee will be a 30% solids
solution in organic solvent.



Biocoat will certify each batch of acrylic copolymer or hyaluronan solution supplied to Licensee
with regard to conformance with agreed upon specifications.



The current (1999) cost for the acrylic copolymer equals $[*] per liter, plus shipping; the current
cost for the Hydak A-14 hyaluronan solution is $[*] per liter, plus shipping.




CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
[*], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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SCHEDULE D




ROYALTY RATE SCHEDULE




     1. ROYALTY RATE — Patent License (until expiration of the last to expire patents on [*]).



          a. For the [*] of Net Sales in a given calendar year, the rate will be [*]%,




          b. For Net Sales between [*] and [*] in a given calendar year, the rate will be [*]%,




          c. For Net Sales over [*] in a given calendar year, the rate will be [*]%.




     2. ROYALTY RATE — Know-How License



          a. For the [*] of Net Sales in a given calendar year, the rate will be [*]%,




          b. For Net Sales between [*] and [*] in a given calendar, the rate will be [*]%,




          c. For Net Sales over [*] in a given calendar year, the rate will be [*]%.



CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
[*], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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