Document:

Exhibit 10.1

 

FIRST
AMENDMENT

TO

AMENDED
AND RESTATED NOTE PURCHASE AGREEMENT

 

THIS FIRST AMENDMENT TO AMENDED AND RESTATED NOTE PURCHASE
AGREEMENT (the “Amendment”), dated and effective as of August 10, 2009, by
and between INTERLEUKIN GENETICS, INC., a Delaware corporation (the “Company”),
and PYXIS INNOVATIONS INC., a Delaware corporation (“Pyxis”).

 

WHEREAS, the Company and Pyxis are parties to an Amended
and Restated Note Purchase Agreement dated as of March 10, 2009 (the “Agreement”),
pursuant to which Pyxis extended the Company a credit facility (the “Credit
Facility”) in an amount (following applicable adjustments) not to exceed
Fourteen Million Three Hundred Sixteen Thousand Two Hundred Fifty-Five Dollars
and No/100 ($14,316,255.00) on which the parties may draw down until March 31,
2010 (the “Credit Facility Termination Date”);

 

WHEREAS, Pyxis purchased, and the Company sold and issued
to Pyxis, (i) a promissory note in the principal amount of Four Million
Dollars and No/100 ($4,000,000.00) on June 10, 2008, and (ii) a
promissory note in the principal amount of One Million Dollars and No/100
($1,000,000.00) on May 29, 2009, both under the terms of the Credit
Facility, leaving Nine Million Three Hundred Sixteen Thousand Two Hundred
Fifty-Five Dollars and No/100 ($9,316,255.00) available for loan under the
Credit Facility as of the date of this Amendment;

 

WHEREAS, the parties now wish to extend the period of time
under which the Company may draw down on available funds under the Credit
Facility.

 

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

 

1.             Capitalized terms not otherwise
defined in this Amendment shall have the meanings given to them in the
Agreement.

 

2.             The Credit Facility Termination
Date shall be amended to be January 1, 2011.

 

3.             Except as amended hereby, all of the terms and
conditions of the Agreement shall remain in full force and effect.

 

4.             This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

 

IN WITNESS WHEREOF, the
parties have executed this First Amendment to Amended and Restated Note
Purchase Agreement as of the date first written above.

	
   

  	
   

  
	
   

  	
  INTERLEUKIN GENETICS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lewis H. Bender

  
	
   

  	
   

  	
   

  
	
   

  	
  Typed Name:

  	
  Lewis Bender

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PYXIS INNOVATIONS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kim S. Mitchell

  
	
   

  	
   

  	
   

  
	
   

  	
  Typed Name:

  	
  Kim S. Mitchell

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant SecretaryExhibit 10.1

 

 

Confidential
Materials omitted and filed separately with the

Securities
and Exchange Commission. Asterisks denote omissions.

 

INTERNATIONAL DISTRIBUTION AGREEMENT

 

THIS INTERNATIONAL DISTRIBUTION AGREEMENT is made
and entered into as of this day 16th of April, 2009 (the “Effective Date”) by and between BioSphere Medical, Inc.
(hereinafter referred to as “Manufacturer”), a corporation having its
offices in Rockland, Massachusetts, United States, existing under the laws of
Delaware (United States) and Nippon Kayaku Co., Ltd., a company having its
offices at 11-2, Fujimi 1-chome, Chiyoda-ku, Tokyo, Japan, existing
under the laws of Japan (hereinafter referred to as “Distributor”).  Each of Manufacturer and Distributor is a “Party,”
and together they are the “Parties.”

 

WITNESSETH:

 

In consideration of the mutual covenants and
conditions herein contained, and intending to be legally bound hereby, the
Parties mutually agree as follows:

 

1.                                       Definitions; Interpretation.

 

(a)                                  In addition to the terms defined
elsewhere herein, as used in this Agreement, the following terms have the
meanings specified below when used in this Agreement:

 

“Affiliates” means all companies, natural
persons, partnerships, and other business entities controlled by, under common
control with, or controlling a person.

 

“Applicable Law” means applicable U.S.,
Japanese, and foreign laws, rules, regulations, guidelines, and standards,
including those of the PMDA, MHLW, and comparable foreign governmental and
Regulatory Authorities.

 

“Confidential Information” means confidential
or proprietary information of one Party disclosed to the other Party in
connection with this Agreement.  “Confidential
Information” includes know-how, scientific information, clinical data, efficacy
and safety data, adverse event information, formulas, methods and processes,
specifications, pricing information (including discounts, rebates, and other
price adjustments), and other terms and conditions of sales, customer
information, business plans, and all other intellectual property.  For the avoidance of doubt,
all Data generated by Distributor or its Affiliates hereunder
and all Development Intellectual  Property shall
be deemed Manufacturer’s and Distributor’s Confidential
Information.

 

“Data” means any and all research,
pharmacology, medicinal chemistry, preclinical, clinical and other data,
statistical analyses, expert opinions and reports, safety data, in each case,
specifically directed to, or used in the development of, a Product.

 

“Distributor Know-How” means all scientific
and technical information and know-how, trade secrets, Data, and technology
existing as of the Effective Date or generated during the term of this
Agreement (whether patented, patentable, or not) owned, developed, or acquired
by or on behalf of Distributor or any of its Affiliates, which 

 

 

directly relate to the
Products, including: (a) medical, clinical, toxicological, or other
scientific Data; and (b) processes and analytical methodology useful in
the development, testing, analysis, manufacture, or packaging of the Products.

 

“Distributor Patent Improvements” means all
improvements to the Products or Manufacturer’s intellectual property owned,
made, created, developed, conceived, or reduced to practice by or on behalf of
Distributor or an Affiliate of Distributor  during the term
of this Agreement.

 

“ICH GCP” means the then-current good
clinical practice for the performance of clinical studies for pharmaceutical
products promulgated by the International Conference on Harmonisation.

 

“Indication” means the treatment of
hypervascular tumors, including hepatocellular carcinoma, uterine fibroids, and
arteriovenous malformations (AVM).

 

“MHLW” means the Ministry of Health, Labour
and Welfare of Japan and any successor agency with similar responsibilities.

 

“Patent” means any of the following, whether
existing now or in the future anywhere in the world: (a) patents and
patent applications; (b) continuations, continuations-in-part,
divisionals, and substitute applications with respect to any such patent
application; (c) any patents issued based on or claiming priority to any
such patent applications; (d) any reissue, reexamination, renewal, or
extension (including any supplemental patent certificate) of any such patents;
and (e) any confirmation patent or registration patent or patent of
addition based on any such patents.

 

“PMDA” means the Pharmaceuticals and Medical
Devices Agency of Japan and any successor agency with similar responsibilities.

 

“Products” means the microembolic products
HepaSphere Microspheres and Embosphere Microspheres developed and manufactured
by Manufacturer, which Products shall solely be used for the Indications.

 

“Regulatory Approvals” means, with respect to
a particular Product in the  Territory, all
approvals, licenses, registrations, or authorizations necessary for the sale or
marketing of such Product in the Territory, including reimbursement
approvals.  Regulatory Approval shall be
deemed to have been received upon first receipt by a Party or its designee of notice from the applicable Regulatory Authority
that the sale and marketing of such Product has been approved in the Territory.

 

“Regulatory Authority” means the MHLW, PMDA,
or other national, supra-national, regional, state, or local regulatory agency,
department, bureau, commission, council, or other governmental entity with
authority over the distribution, importation, exportation, manufacture,
production, use, storage, transport, or clinical testing, pricing, or sale of a
product (including a Product), including any device incorporating the product,
in the Territory.

 

2

 

“Territory” means Japan.

 

“Third Party” means any entity other than
Distributor or Manufacturer, or their respective Affiliates.

 

(b)                                 When a reference is made in this
Agreement to Articles, Sections, Exhibits, or Schedules, such reference will be
to an Article or Section of or Exhibit or Schedule to this
Agreement unless otherwise indicated. 
The headings contained in this Agreement are for reference purposes only
and will not affect in any way the meaning or interpretation of this
Agreement.  Whenever the words “include,”
“includes,” or “including” are used in this Agreement, they will be deemed to
be followed by the words “without limitation.”  Unless the context otherwise requires, (i) “or”
is disjunctive but not necessarily exclusive, (ii) words in the singular
include the plural and vice versa, and (iii) the use in this Agreement of
a pronoun in reference to a party hereto includes the masculine, feminine, or
neuter, as the context may require.  The
Schedules and Exhibits hereto will be deemed part of this Agreement and
included in any reference to this Agreement. 
This Agreement will not be interpreted or construed to require any
person to take any action, or fail to take any action, if to do so would
violate any Applicable Law.  Whenever
this Agreement refers to a number of days, such number shall refer to calendar
days unless business days are specified; and business days means any day except
Saturday and Sunday on which commercial banking institutions in Boston,
Massachusetts, USA and Tokyo, Japan are open for business.

 

2.                                       Regulatory
Approval.

 

(a)                                  General.  Distributor,
at its sole cost and expense, shall be responsible for filing, obtaining, and
maintaining all Regulatory Approvals for the development and commercialization
of the Products in the Territory, including performing any clinical trial with
protocols accepted by the PMDA, submitting all applications to, and receiving
approval from, the MHLW and PMDA for any Product labeling, promotional
materials, and Product pricing and reimbursement.  Manufacturer shall cooperate with Distributor
in the preparation of all filings and correspondence with any Regulatory
Authority with respect to the Products in the Territory.  Distributor shall implement
Manufacturer’s reasonable comments with respect thereto.  Distributor
may use Manufacturer’s Confidential Information disclosed to Distributor or
generated under this Agreement in any applications submitted to any Regulatory Authority without the prior approval of Manufacturer.  Unless required by Applicable Law, all
Regulatory Approvals shall be applied for and granted in the name of
Distributor.

 

(b)                                 Filings and Correspondence. 
Distributor shall inform Manufacturer of the content of Manufacturer’s Confidential Information disclosed in the filings with
Regulatory Authorities when the development report is provided to Manufacturer
pursuant to Section 2(e).

 

3

 

(c)                                  Transfer of Data and Regulatory Approvals.

 

i.                                          Following the Effective Date,
Manufacturer will provide Distributor with such Data that is in Manufacturer’s
possession or control as of the Effective Date; provided that Manufacturer shall have no obligation to translate any such Data  from the language in which it currently exists except that, if such language is not English or
Japanese and so long Distributor pays [**]% of the costs of translation,
Manufacturer will translate into English such Data as agreed upon by
Manufacturer and Distributor.  All Data generated under this
Agreement shall be jointly owned by Manufacturer and Distributor.  Distributor hereby grants Manufacturer an
exclusive (even as to Distributor), worldwide license, with the right to
sublicense, in, to, and under all such Data outside the Territory.  Without limiting the foregoing, Manufacturer
shall have the right to reference, access and use  all such Data
and Regulatory Approvals (A) outside of the Territory and (B) after the termination (except due to the material breach by Manufacturer of this Agreement,
unless Manufacturer makes the payment described in Section 23(h)) or expiration of this Agreement, in the
Territory, in either case, for purposes of development, manufacture, and
commercialization of Products, including the right to file such items with
Regulatory Authorities outside of the Territory.  From time to time during the term of this
Agreement, including upon Manufacturer’s request, Distributor shall transfer to
Manufacturer all Data generated by Distributor; provided that, except to the
extent provided in Section 2(b), Distributor shall have no obligation to
translate such Data into English or to guarantee the
reliability of such Data. 
Distributor shall provide Manufacturer with such assistance as
Manufacturer reasonably requests from time to time, to enable Manufacturer to
fully understand and implement the Data transferred under this Section 2(c)(i).  Notwithstanding anything
herein to the contrary, in all agreements with Third Parties or Affiliates
involving Data, Distributor shall require that such Third Parties and
Affiliates agree to assign all Data developed under such agreements jointly to
Distributor and Manufacturer and provide Manufacturer with access to all such
Data.

 

ii.                                       Promptly upon the termination  of this Agreement, Distributor shall transfer all previously
undisclosed Data to Manufacturer and (except in the case of termination of this Agreement due to the material
breach by Manufacturer, unless Manufacturer makes the payment described in Section 23(h))
shall assign to
Manufacturer all of Distributor’s rights in, to, and under all Data and any
Regulatory Approvals relating to the Products that are in Distributor’s
possession or control.

 

(d)                                 Clinical Trials. 
Without limiting any other provisions herein, Distributor shall, prior
to the initiation of any clinical trial involving a Product, provide
Manufacturer for its review and comment a copy of the protocol and any investigator’s
brochures therefor.  

 

4

 

Each such clinical trial shall be conducted in strict
conformance with all ICH GCP guidelines.  Manufacturer shall provide
Distributor with reasonable quantities of the Products necessary for such
clinical trials and other necessary tests as follows:  [**] of Embosphere Microspheres and [**] of HepaSphere
Microspheres will be
provided at [**]; and any additional quantities will be provided at [**].

 

(e)                                  Development Reports. 
Within [**] days after the end of each calendar quarter, Distributor
shall prepare and provide to Manufacturer a written report that (i) summarizes
the progress of the development activities performed by Distributor and provides copies of all filings and correspondence with Regulatory Authorities
in the Territory (including minutes of any meetings, telephone conferences, or
discussions with such Regulatory Authority) hereunder
during the preceding calendar quarter, (ii) identifies any issues or
circumstances of which Distributor is aware that may prevent or adversely
affect in a material manner its development activities hereunder in the
then-current calendar quarter, and (iii) to the extent reasonably
practicable, identifies steps that may be taken, or changes that may be made,
to resolve such issues; provided that Distributor notifies Manufacturer of any
adverse event promptly after learning or becoming aware of such event.  Distributor shall maintain records in
sufficient detail as will properly reflect all work done in the performance of
activities arising out of, in conducting, or otherwise in connection with its
Product development activities.

 

(f)                                    Access.  Distributor
agrees to make its personnel reasonably available, upon reasonable notice to
Distributor, at their places of employment to consult with Manufacturer on
issues arising related to the activities conducted in accordance with this
Agreement or otherwise relating to regulatory matters involving the Products in
the Territory, including any request from any Regulatory Authority, including
regulatory, scientific, technical, and clinical testing issues, or otherwise.

 

(g)                                 Milestone Dates. 
Distributor shall achieve the following milestones by the dates set
forth below, which dates the Parties agree are reasonable for Distributor to
achieve given the Parties’ expectations of the timing involved in the
development process.

 

i.                                          Embosphere Microspheres
(hypervascularized tumors and arteriovenous malformations) Milestones:

 

	
  Milestone

  	
   

  	
  Date if a clinical trial
  is 

  not required by the 

  Regulatory Authorities

  	
   

  	
  Date if a clinical trial  

  ([**] patients) is 

  required by the 

  Regulatory Authorities

  	
   

  
	
  Initiation of clinical trial

  	
   

  	
  N/A

  	
   

  	
  [**]

  	
   

  
	
  Completion of clinical trial

  	
   

  	
  N/A

  	
   

  	
  [**]

  	
   

  
	
  Filing for Regulatory Approval

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  Receipt of Regulatory Approval

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  First Sale

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  

 

5

 

ii.                                     HepaSphere Microspheres, as embolic
product (bland), Milestones:

 

	
  Milestone

  	
   

  	
  Date if a clinical trial
  is 

  not required by the 

  Regulatory Authorities

  	
   

  	
  Date if a clinical trial  

  ([**] patients) is 

  required by the 

  Regulatory Authorities

  	
   

  
	
  Initiation of clinical trial

  	
   

  	
  N/A

  	
   

  	
  [**]

  	
   

  
	
  Completion of clinical trial

  	
   

  	
  N/A

  	
   

  	
  [**]

  	
   

  
	
  Filing for Regulatory Approval

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  Receipt of Regulatory Approval

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  First Sale

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  

 

The Parties agree that a failure to achieve the
foregoing milestones shall be a material breach of this Agreement; provided
that, if the failure to achieve a milestone with respect to a Product is caused by reasons that are beyond the
reasonable control of Distributor (an “Excused Delay”), then Distributor
shall immediately notify Manufacturer of such event.  If Manufacturer is reasonably satisfied that
such failure is an Excused Delay, Manufacturer shall extend the deadline for
achieving the milestone that is subject to the Excused Delay for a reasonable
period, and each successive milestone with respect to such Product shall also
be appropriately extended to reflect the extension of the earlier milestone.

 

(h)                                 Use of Sub-Contractors. 
Upon Manufacturer’s prior written consent and subject to the terms of
this Agreement, Distributor shall have the right to use the services of Third
Party sub-contractors, including contract research organizations and the like,
to assist Distributor in fulfilling its obligations hereunder; provided that no
consent of Manufacturer will be required with respect to Distributor’s use of
contract research organizations; and provided further that any Third Party
sub-contractor, including contract research organizations, is bound by a
written agreement that is consistent with terms hereof, including
confidentiality and intellectual property ownership provisions 

 

6

 

consistent with those set forth herein, and Distributor shall use reasonable efforts to name Manufacturer in such agreement as
an intended third party beneficiary under each such agreement with the express
right to enforce each such agreement in accordance with its terms.  If, despite Distributor’s reasonable efforts,
Distributor is unable to name Manufacturer as an intended third party
beneficiary, then Distributor will enforce the confidentiality and intellectual
property ownership provisions against such Third Party in accordance with
Manufacturer’s reasonable instructions.

 

(i)                                     Diligent Efforts. 
Distributor shall use diligent efforts to comply with its obligations
hereunder.  For this purpose, “diligent
efforts” means a commitment by or on behalf of Distributor of a  level of resources, efforts, and urgency to perform its obligations
consistent with Distributor’s practices in diligently and actively pursuing the
discovery, research, and development of its other pharmaceutical products at a
similar stage of product life, safety, efficacy, and commercial potential, but
in no event less than the high professional standards and level of resources,
efforts, and urgency for discovery, research, and development commonly applied
by other pharmaceutical companies to their pharmaceutical products at a similar
stage of product life, safety, efficacy and commercial potential.

 

(j)                                     Audit Rights. 
Manufacturer shall have the right, directly or through its designees, to
inspect Distributor’s relevant books and records and Distributor’s facilities
for the Products upon reasonable advance notice and during normal business
hours [**] for the purpose of confirming Distributor’s compliance
with its obligations hereunder, subject to the obligations of confidentiality
set forth in this Agreement.  Distributor
shall have the right to audit, not
more than [**]-month period, Manufacturer’s facilities manufacturing the
Products for Distributor hereunder upon reasonable advance notice and during
normal business hours for the purpose of confirming Manufacturer’s compliance with
its obligations hereunder, subject to the obligations of confidentiality set
forth in this Agreement.  If Distributor believes that a serious situation has
occurred that would require an urgent audit by Distributor of Manufacturer’s facilities manufacturing
the Product, Distributor shall report such
situation and the circumstances surrounding it to Manufacturer, and Manufacturer and Distributor will
discuss how to address the situation, including whether an urgent audit by
Distributor is warranted, which audit will be upon advance notice during normal business hours.

 

3.                                       Products and
Territory.

 

(a)                                  Subject to obtaining Regulatory Approval
in the Territory, Manufacturer hereby appoints Distributor on an exclusive
basis (subject to Section 11) as its sole distributor for the sale of the
Products in the Territory during the term of this Agreement.  Distributor shall not, without the prior
written consent of Manufacturer, sell, market, or distribute any Product other than
Product in the form Manufacturer shall designate from time to time as its most
current.  Distributor shall use its reasonable best efforts to promote and sell the Products to the
maximum number of responsible customers in the Territory and to otherwise carry
out its obligations pursuant to this Agreement, consistent with all applicable
laws and highest industry standards. 
Without limiting the 

 

7

 

foregoing, Distributor shall promote the Products to
members of those organizations set forth in an annual marketing plan and
forecast mutually agreed upon by the Parties. 
For the avoidance of doubt, the
provisions of this Section 3(a) shall not be construed as preventing
Distributor from distributing and commercializing the embolic products permitted
pursuant to Section 19.

 

(b)                                 Manufacturer is appointing Distributor
hereunder with respect to the resale of Products to any purchasers whose place
of business is located in the Territory.

 

(c)                                  Distributor shall not solicit orders for
any Product from any prospective purchaser with its place of business located
outside the Territory.  If Distributor
receives an order for any Product from a prospective purchaser whose place of
business is located outside the Territory, Distributor shall immediately refer
that order to Manufacturer.  Distributor
shall not accept any such orders. 
Distributor may not deliver or tender (or cause to be delivered or
tendered) any Product outside of the Territory. 
Distributor shall not sell any Product to a purchaser if Distributor
knows or has reason to believe that such purchaser intends to remove that
Product from the Territory.  Distributor
shall not appoint any sub-distributors or other intermediate parties  to distribute the Products without Manufacturer’s prior written consent.  For the avoidance of doubt, Distributor shall have the right to sell
Products to wholesalers in the Territory.

 

(d)                                 If Manufacturer intends to
modify or improve any
Product, Manufacturer  shall inform Distributor of such modification
or improvement at least
[**] prior to planned implementation of such modification or improvement so that Distributor can obtain the necessary approval
for such modification or improvement from Regulatory Authority in a timely
manner and can continue the distribution of the Product in the Territory
without interruption.

 

(e)                                  Distributor acknowledges that it is not
granted any right to manufacture the Products. 
Manufacturer may terminate this Agreement with respect to any
Product after 18 months’ prior written notice to Distributor, if
Manufacturer desires to cease the manufacture of such Product under this
Agreement; provided that, if Distributor desires to continue distributing such
Product for the remainder of the term of this Agreement,

 

i.                                          Manufacturer will negotiate in good faith
with Distributor with respect to granting Distributor a limited license to
manufacture or have manufactured such Product(s) in the Territory  for distribution in the Territory in accordance with
the terms of this Agreement;

 

ii.                                       Any license granted by Manufacturer
pursuant to this Section 3(e) shall be royalty-bearing; and

 

iii.                                    In connection with the license grant,
Manufacturer will provide Distributor with the reasonable assistance in
Distributor’s assumption of manufacturing obligations.

 

8

 

4.                                       Prices and Payment.

 

(a)                                  Milestone Payments. 
In consideration for Manufacturer granting Distributor the exclusive
right to distribute the Products in the Territory pursuant to the terms and
conditions of this Agreement, Distributor shall make the non-refundable
payments to Manufacturer set forth below not later than [**] days after the
earliest date on which the corresponding milestone event set forth below is
achieved; provided, however, that, with
respect to the first milestone
payment, such payment shall be made within [**] business days after Distributor’s receipt of Form 6166 from Manufacturer:

 

	
  Milestone
  Event

  	
   

  	
  Payment

  	
   

  
	
  Effective Date

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Receipt of Regulatory Approval for Embosphere
  Microspheres, including receipt of determination of Japanese reimbursement
  price of Embosphere Microspheres by MHLW

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Receipt of Regulatory Approval for HepaSphere
  Microspheres as embolic product (bland), including receipt of determination
  of Japanese reimbursement price of HepaSphere Microspheres by MHLW

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Aggregate gross sales of all Products in the
  Territory reaches [**]

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Aggregate gross sales of all Products in the
  Territory reaches [**]

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Aggregate gross sales of all Products in the
  Territory reaches [**]

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Aggregate gross sales of all Products in the
  Territory reaches [**]

  	
   

  	
  $

  	
  [**]

  	
   

  

 

(b)                                 Forecasts for
Products.

 

i.                                          Distributor shall provide Manufacturer
with a non-binding [**]-month forecast at least [**] months before the expected
date of Regulatory Approval for each Product within the Territory, and
Distributor shall provide Manufacturer with a non-binding [**]-month forecast
within [**] days after receipt of Regulatory Approval for a Product.  Neither of the foregoing forecasts shall be
binding.

 

9

 

ii.                                       Distributor shall provide Manufacturer
with a forecast within [**] days after receipt of Regulatory Approval for a
Product, which forecast shall cover the remaining months [**].  Furthermore, after receipt of Regulatory
Approval for a Product, Distributor shall provide Manufacturer with a
[**]-month forecast no later than [**], which forecast shall cover [**] (with respect to the forecast [**] in which
Regulatory Approval is obtained,  a
[**]-month forecast
no later than [**] in which
Regulatory Approval is obtained  and a
[**]-month forecast
no later than [**], each shall cover [**] months and [**] months of such [**] respectively). 
Each of the forecasts to be delivered pursuant to this Section 4(b)(ii) shall
constitute binding commitments of Distributor to purchase [**]% of Product
reflected therein pursuant to purchase orders issued in accordance with Section 4(c).

 

iii.                                    Each of Distributor’s forecasts shall
specify the quantities of and delivery dates for the applicable Product within
the Territory and include such other information agreed upon by the Parties.

 

(c)                                  Placing Orders. 
Distributor shall order Products from Manufacturer by submitting a
written purchase order identifying the Products ordered, requested delivery
date(s) (which delivery dates may be no less than [**] days following
acceptance of the purchase order by Manufacturer), and any export/import
information required to enable Manufacturer to fill the order.  No orders for Products are binding on Manufacturer
until accepted in writing by Manufacturer’s Order Desk at Manufacturer’s office
at 1050 Hingham Street, Rockland, Massachusetts 02370, with the confirmation of
the date of shipment.  Manufacturer will
use commercially reasonable efforts to accept or reject an order within [**] business days after Manufacturer’s receipt
of such purchase order from Distributor.  Manufacturer
shall have no liability to Distributor with respect to purchase orders that are
not accepted; provided, however, that Manufacturer will not unreasonably reject
any purchase order for Products (i) that do not require any modifications
or additions in order to meet the packaging, labeling, or other requirements of
Distributor or its customers, and (ii) in quantities that are not more
than [**]% of the forecast for the applicable period to which such order
relates.

 

(d)                                 Prices for Product. 
If a purchase order is accepted in accordance with Section 4(c) above,
the prices for Products covered by such purchase order shall be as follows:

 

	
  Product

  	
   

  	
  Purchase Price

  	
   

  
	
  Embosphere
  Microspheres

  	
   

  	
  [**]%
  of the reimbursement price approved by the applicable Regulatory Authority

  	
   

  
	
  bland
  HepaSphere Microspheres

  	
   

  	
  [**]%
  of the reimbursement price approved by the applicable Regulatory Authority

  	
   

  

 

10

 

Upon Distributor’s receipt of the Regulatory
Authority’s reimbursement price for a Product, Distributor shall immediately
notify Manufacturer.  Notwithstanding the
foregoing, if the reimbursement price approved by the applicable Regulatory
Authority for a particular Product is such that the purchase price paid to
Manufacturer would be [**] (the “Product Minimum Price”), then the
Parties shall negotiate in good faith with respect to the appropriate purchase
price to be paid for such Product.  In
the event the Parties are unable to agree upon an appropriate purchase price  within [**] days, then either Party may terminate this Agreement with
respect to such Product in accordance with Section 23(c); provided that,
notwithstanding Section 23(h), Distributor shall only be obligated to
transfer to Manufacturer any Regulatory Approvals for such Product that are
registered solely in Distributor’s name, if Manufacturer pays Distributor [**]% of Distributor’s out-of-pocket costs of obtaining such Regulatory
Approval, not to exceed $[**] in the aggregate for Regulatory Approvals for all
Products. If Manufacturer elects not to pay such amount, Distributor may retain
its sole ownership to the applicable Regulatory Approval; provided that such
ownership shall not entitle Distributor to any right to obtain or distribute
the Products or use any intellectual property of the Manufacturer, including
the Trademarks.

 

(e)                                  Distributor’s Pricing. 
Distributor shall be free to establish its own pricing for Products that
it sells.  Distributor
shall notify Manufacturer of its pricing, as in effect from time to time.

 

(f)                                    Permits.  The ultimate
shipment of orders to Distributor shall be subject to the right and ability of
Manufacturer to make such sales, and obtain required licenses and permits,
under all decrees, statutes, rules, and regulations of the government of the
United States and agencies or instrumentalities thereof presently in effect or
which may be in effect hereafter.  Any
order that has been accepted by Manufacturer but that cannot be fulfilled due
to such decrees, statutes, rules, and regulations shall be considered to have
been rejected when submitted to Manufacturer for acceptance or rejection.

 

(g)                                 Distributor Obligations.  Distributor hereby agrees: (i) to assist
Manufacturer in obtaining any such required licenses or permits by supplying
such documentation or information as may be requested by Manufacturer; (ii) to
comply with such decrees, statutes, rules, and regulations of the government of
the United States and agencies or instrumentalities thereof; (iii) to
maintain the necessary records to comply with such decrees, statutes, rules,
and regulations; (iv) not to export any Products except in compliance with
such decrees, statutes, rules, and regulations; (v) to obtain (at
Distributor’s sole expense) all governmental approvals and licenses necessary
to import the Products into any country in the Territory; (vi) not to
sell, transfer, or otherwise dispose of Products in violation of the export
laws of the United States; and (vii) to indemnify and hold harmless
Manufacturer from any and all fines, damages, losses, costs, and expenses
(including reasonable attorneys’ fees) incurred by Manufacturer as a result of
any breach of this subsection (g) by Distributor.

 

11

 

(h)                                 Shipment.  All Product
delivered hereunder shall be F.O.B. Manufacturer’s designated facility.  Distributor shall be responsible for all
shipping costs.  Unless Distributor
requests otherwise, all Products ordered by Distributor shall be packed for
shipment and storage in accordance with Manufacturer’s standard commercial
practices.  It is Distributor’s
obligation to notify Manufacturer of any special packaging requirements (which
shall be at Distributor’s expense). 
Distributor is solely responsible for ensuring that the packaging and
labeling of the Products distributed in the Territory comply with the relevant
regulations in the Territory, including any requirements to label the Products
in the local language of the Territory. 
Any materials required to be in such local language will be provided
free of charge by Distributor to Manufacturer and verified by Manufacturer
pursuant to Section 5(a). 
Manufacturer shall deliver Products into the possession of a common
carrier designated by Distributor at Manufacturer’s designated facility no
later than the date specified for such delivery on the relevant purchase order
for such Products.  Risk of loss and
damage to a Product shall pass to Distributor upon the delivery of such
Products to the common carrier designated by Distributor.  All claims for non-conforming shipments (i.e., incorrect Product shipped,
quantitative shortcomings, improper labeling or packaging, or similar
non-conforming defects) must be made in writing to Manufacturer within [**] days after  the passing of
risk of loss and damage, as described above. 
Any such claims not made within such period shall be deemed waived and
released.

 

(i)                                     Payment Provisions. 
All payments by Distributor to Manufacturer shall be made in the
currency of the United States of America and within [**] days after Distributor’s receipt
of the invoice for the relevant Product from Manufacturer. 
With respect to payments for Products based on the reimbursement price
set by the applicable Regulatory Authority, such amounts shall be converted
from Japanese Yen to US Dollars using the average monthly rate of exchange
listed in the New York edition of The Wall Street Journal for the business day
immediately prior to the date of the relevant invoice.  If Distributor fails to pay any amounts by
the due date, it must pay Manufacturer a late payment charge equal to the
lesser of 1.5% per month on such unpaid amounts, or the maximum amount permitted
by law, together with all costs and expenses, including reasonable attorneys’
fees, incurred by Manufacturer in collecting such overdue amounts.

 

(j)                                     Title.  Manufacturer
shall retain title to the Products until Distributor has paid for the Products
in full.  Products may be resold only in
Distributor’s normal course of business, but until paid in full Distributor
will not pledge or otherwise encumber the Products.  Distributor agrees to immediately report to
Manufacturer (i) any seizure or attachment of the Products by Distributor’s
creditors; (ii) any petition in bankruptcy, insolvency, receivership or
similar proceeding filed by, or against, Distributor; or (iii) any
arrangement, composition or similar agreement for the benefit of Distributor’s
creditors.

 

(k)                                  Conflict.  In the event
of any discrepancy between any purchase order accepted by Manufacturer and this
Agreement, the terms of this Agreement shall govern.

 

12

 

(l)            Active
Drugs.  Manufacturer shall have no
responsibility for supplying any active drugs for use with the Products.

 

5.                                       Other
Obligations of Distributor.

 

(a)                                  Distributor shall translate, at its own
expense, all user and technical manuals and instructions for use (IFUs), and
advertising and marketing information with respect to the Products into the
languages of its customers and provide Manufacturer with advance copies of all
such materials for approval by Manufacturer. 
Distributor shall assign, and hereby does assign, all copyrights in such
translations to Manufacturer. 
Distributor shall have a non-exclusive right during the term of this
Agreement, in connection with its activities pursuant to this Agreement, (i) to
use such translations, and (ii) to incorporate such translations into its
own manuals, advertising, and marketing information.  Manufacturer shall not be liable for
translation errors made by Distributor or at Distributor’s direction or for the
non-conformance of such translated materials with laws and regulations in force
from time to time in the Territory.

 

(b)                                 Distributor shall indemnify and hold
Manufacturer harmless to the extent that a third party brings claims against
Manufacturer based on such errors or non-conformance.

 

(c)                                  Distributor shall store all Products in a
temperature-controlled environment in accordance with Manufacturer’s
specifications.

 

(d)                                 Distributor shall:

 

i.                                          Retain records of distribution of
Products to final user/facility for a minimum of [**] years.

 

·                                          Records will contain, at a minimum,
product number, lot number, expiration date, quantity shipped, date of
shipment, and facility shipped to.

 

·                                          Records are to include all distributions,
including sales, free product, clinical trial supplies, etc.

 

ii.                                       Provide copies of distribution records to
Manufacturer at the end of [**] years or the end of Distributor’s chosen
storage time, whichever is later, in a mutually agreed upon format.

 

iii.                                    Upon expiration or termination of this
Agreement, all records will be provided to Manufacturer in a mutually agreed upon
format.

 

iv.                                   Make available the information above to
Manufacturer upon request.

 

(e)                                  Distributor shall promptly notify
Manufacturer’s customer service of any Product complaints due to quality
deficiencies or patient injury.  For
prompt reporting activities, 

 

13

 

Distributor
shall fully cooperate with Manufacturer regarding potential reportable events
for Product sold by Distributor, based on alleged Product complaints and will
assist Manufacturer with respect to any recalls of the Products.  Upon the request of Manufacturer, Distributor
and Manufacturer shall agree upon a more detailed procedure for sharing
information regarding, and reporting, adverse events, including entering into a
pharmacovigilance agreement.

 

(f)                                    Distributor shall provide Manufacturer
with quarterly reports as to Distributor’s inventory levels of each Product and
the market demand for each Product in the Territory.

 

(g)                                 Distributor acknowledges and agrees that
its rights to develop and distribute hereunder are limited to the Products
specified for use for the Indications and that Distributor is granted no rights
to any Products outside such use. 
Distributor shall not seek Regulatory Approval for use of the Products
outside the Indications or solicit orders for any Product for use outside the
Indications.  Distributor shall not sell
any Product to any person if Distributor knows or has reason to believe that
such person or any other person in such person’s distribution chain (including
any final user/facility) intends to use the Product other than
for the Indications.

 

6.                                       Manufacturer’s
Obligations.

 

(a)                                  Manufacturer may provide Distributor,
without charge, such marketing and technical literature and Product samples  as Manufacturer may in its sole discretion consider necessary to assist
with the promotion of the Products; provided that any translations into the
local language of the Territory shall be Distributor’s responsibility pursuant
to Section 5(a).

 

(b)                                 Manufacturer shall provide [**] to
Distributor (except with respect to expenses, as provided herein) training to
Distributor’s personnel at a mutually agreed location in connection with the
marketing, sale, and support of the Products in a duration determined in
Manufacturer’s reasonable discretion.  If necessary, Distributor may obtain training from Manufacturer in
excess of such duration at Manufacturer’s then-current training rates.  All out-of-pocket expenses incurred by
Manufacturer in connection with providing such training to Distributor,
including all reasonable travel, lodging, and entertainment expenses, shall be
borne by Distributor.

 

7.                                       Compliance With
Laws.

 

Each of Distributor and Manufacturer covenants that
all of its activities under or pursuant to this Agreement shall comply with all
applicable laws, rules and regulations, including those set forth on Exhibit C;
provided that Distributor acknowledges and agrees that it shall be solely
responsible for ensuring that the Product conforms to applicable laws, rules,
and regulations in the Territory.  In
particular, but without limitation, Distributor shall be responsible for
obtaining all licenses, permits, and approvals that are necessary or advisable
for sales of Products in the Territory and for the performance of its duties
hereunder (“Permits”).

 

14

 

8.                                       Representations &
Warranties.

 

(a)                                  By Manufacturer. 
Manufacturer represents and warrants to Distributor that:

 

i.                                          the execution, delivery, and performance
of this Agreement by Manufacturer does not conflict with, or constitute a
breach of or under, any order, judgment, agreement, or instrument to which
Manufacturer is a party;

 

ii.                                       the execution, delivery, and performance
of this Agreement by Manufacturer does not require the consent of any person or
the authorization of (by notice or otherwise) any governmental or regulatory
authority; and

 

iii.                                    this Agreement is a legal, valid, and
binding obligation of Manufacturer enforceable against it in accordance with
its terms and conditions, except as enforceability may be limited by
bankruptcy, insolvency, or other laws affecting the enforcement of creditors’
rights generally, and except that the availability of the remedy of specific
performance or other equitable relief is subject to the discretion of the court
before which any proceeding therefor may be brought.

 

(b)                                 By Distributor. 
Distributor represents and warrants to Manufacturer that:

 

i.                                          the execution, delivery, and performance
of this Agreement by Distributor does not conflict with, or constitute a breach
of or under, any order, judgment, agreement, or instrument to which Distributor
is a party;

 

ii.                                       the execution, delivery, and performance
of this Agreement by Distributor does not require the consent of any person or
the authorization of (by notice or otherwise) any governmental or regulatory
authority;

 

iii.                                    this Agreement is a legal, valid, and
binding obligation of Distributor enforceable against it in accordance with its
terms and conditions, except as enforceability may be limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors’ rights
generally, and except that the availability of the remedy of specific
performance or other equitable relief is subject to the discretion of the court
before which any proceeding therefor may be brought; and

 

iv.                                   as of the Effective Date, neither
Distributor nor any of its employees or agents, in their capacity as such, have
been disqualified or debarred by the FDA, pursuant to 21 U.S.C. §§ 335(a) or
(b), or been charged with or convicted under United States law for conduct
relating to the development or approval, or otherwise relating to the
regulation of any Product under the Generic Drug Enforcement Act of 1992, or
any other relevant law, rule, 

 

15

 

or regulation or been
disbarred, disqualified, or convicted under or for any equivalent or similar
applicable foreign law, rule, or regulation.

 

9.                                       Manufacturer
Marketing Office in the Territory.

 

Manufacturer may from time to time maintain a
marketing office at one or more locations in or near the Territory.  Personnel associated with such office or
offices shall be authorized to and may, from time to time, act on behalf of Manufacturer
and shall be entitled to exercise all of the rights of Manufacturer under this
Agreement.  Such personnel shall be
entitled to all information with respect to all matters relevant to Distributor’s
performance under the Agreement, and Distributor shall at all times cooperate
with such personnel with respect to all such matters.

 

10.                                 Relationship of
the Parties.

 

(a)                                  Distributor shall be considered to be an
independent contractor.  The relationship
between Manufacturer and Distributor shall not be construed to be that of
employer and employee, nor to constitute a partnership, joint venture, or
agency of any kind.

 

(b)                                 Distributor shall pay all of its
expenses, including all travel, lodging, and entertainment expenses, incurred
in connection with its services hereunder. 
Manufacturer shall not reimburse Distributor for any of those expenses.

 

(c)                                  Distributor shall have no right to enter
into any contracts or commitments in the name of, or on behalf of,
Manufacturer, or to bind Manufacturer in any respect whatsoever.

 

(d)                                 In addition, Distributor shall not
obligate or purport to obligate Manufacturer by issuing or making any
affirmations, representations, warranties, or guaranties with respect to
Products to any third party.

 

11.                                 Minimum
Purchase Requirements.

 

Distributor shall purchase a sufficient amount of
Products from Manufacturer so as to meet or exceed the minimum purchase
requirements to be agreed upon by the Parties immediately following Regulatory
Approval of each Product and set forth on the attached Exhibit A.  For the purposes of this provision, a “purchase”
of Products within a specified time period shall mean paying Manufacturer for
such Products on or before the last day of such period.  Failure to meet such minimum requirements
shall constitute a material breach of this Agreement for the purposes of Section 23
hereof; provided, however, that in lieu of terminating this Agreement pursuant
to Section 23 based on such breach, Manufacturer may instead elect in its
sole discretion to change the exclusive rights granted to Distributor under Section 3
hereof to non-exclusive rights, in which case Manufacturer shall then have the
right to appoint additional non-exclusive distributors in the Territory and the
right to sell the Products itself in the Territory, either directly (including
with the assistance of sales representatives) or through one or more of its
Affiliates.

 

16

 

12.                                 Reporting.

 

Following Regulatory Approval, Distributor shall
provide Manufacturer with written quarterly reports,  which shall
include final user/facility call reports, business
trends in the Territory, market forecasts, and other reports requested by Manufacturer and available to Distributor.

 

13.                                 Field Assistance.

 

Manufacturer shall provide, in its discretion,
appropriate field technical assistance to Distributor and Distributor’s
customers.

 

14.                                 Intellectual Property
Development.

 

(a)                                  Assignment.  All patent,
copyright, trademark, trade secret, and other intellectual property rights that
arise out of the performance of Distributor’s obligations under this Agreement
with respect to the Products, including the Distributor Know-How and the
Distributor Patent Improvements (collectively, the “Development Intellectual
Property”) will be owned (A) jointly by Distributor and Manufacturer
inside the Territory and (B) solely by Manufacturer outside the Territory;
provided that all trademarks will be owned jointly by Manufacturer inside and
outside the Territory.  To the extent any
intellectual property rights in or to the Development Intellectual Property
vest in Distributor, Distributor hereby does irrevocably assign all such right,
title, and interest in and to such Development Intellectual Property to
Manufacturer (jointly or solely, as applicable) in accordance with the
foregoing, as well as any causes of action for the infringement of such
proprietary rights.  Distributor further
agrees to execute and deliver such additional documents and take such other
action as may be reasonably necessary to continue, secure, defend, register,
confirm, evidence, and otherwise give full effect to and to perfect the rights
of Manufacturer (jointly or solely, as applicable) under this Agreement, and
hereby authorizes and appoints and grants Manufacturer full power of attorney
to execute, in the name and on behalf of Distributor and its Affiliates, all
such documents necessary to perfect, affirm, record, and maintain title in Manufacturer
(jointly or solely, as applicable), its successors, assigns, or other legal
representatives to any of the Development Intellectual Property, including all
documents necessary to register in the name of Manufacturer (jointly or solely,
as applicable) the assignment of (i) each Patent in the appropriate
country or countries, and (ii) each trademark registration and application
and trade name. Distributor
shall not be liable for any results arising out of any act by Manufacturer in
the name and on behalf of Distributor based on the power of attorney described
in this Section 14(a).

 

(b)                                 Disclosure.  Distributor
shall notify Manufacturer in writing of any and all Development Intellectual
Property (including the Distributor Patent Improvements) promptly upon
discovery.  Distributor’s written
notification in accordance with the foregoing shall include a written report in
sufficiently complete technical detail to convey a clear understanding of the
nature, purposes, operation, and characteristic of the Development Intellectual
Property.

 

17

 

(c)                                  Patent Matters. 
Manufacturer shall have the first right to file, in the name of Manufacturer and Distributor, applications for and prosecute and
maintain with reasonable diligence the Distributor Patent Improvements in the
Territory and the sole right to do so, in the name of Manufacturer, outside the
Territory.  If Manufacturer elects not to
file, prosecute, or maintain the Distributor Patent Improvements in the
Territory, Distributor may do so.  Each
Party will cooperate, at its own expense, with the prosecuting Party in
connection with such filing, prosecution, and maintenance of such Patents.  The Parties will share equally all reasonable
costs and expenses relating to the filing, prosecution, and maintenance of all
Distributor Patent Improvements in the Territory; provided that, at any time,
either Party may cease sharing such costs and expenses upon [**] days’ notice
to the other Party and assignment of all of such first Party’s rights in and to
the applicable Distributor Patent Improvement to the other Party.

 

15.                                 Trademarks, Service Marks
and Trade Names; Promotion on Internet.

 

(a)                                  Right to Use. 
Distributor acknowledges and agrees that Manufacturer will have the sole
right to select the trademarks, service marks, and trade names for use in
connection with the Products, which shall initially, subject to Applicable Law,
be Manufacturer’s trademarks, service marks, and trade names listed on Exhibit B
(hereinafter referred to as the “Trademarks”).  Manufacturer hereby grants Distributor a
royalty-free right to use the Trademarks on a non-exclusive basis in the
Territory only for the duration of this Agreement and solely for labeling Product, promotion, display or advertising purposes in
connection with selling and distributing the Products in accordance with this
Agreement.  Distributor shall not at any
time do, or permit any act to be done, which may in any way impair the rights
of Manufacturer in the Trademarks.

 

(b)                                 Quality Control. 
Distributor shall maintain quality standards for all of its uses of the
Trademarks in connection with the Products that are substantially equivalent to
or, at Manufacturer’s option, stricter than those standards used by Manufacturer
in connection with its promotion of the Product outside the Territory, which
standards Manufacturer may modify from time to time.  In order to comply with Manufacturer’s
quality control standards, Distributor shall: (i) use the Trademarks in
compliance with all relevant United States and Territory laws and regulations; (ii) accord
Manufacturer the right to inspect during normal business hours, with prior
advance notice, Distributor’s facilities used in connection with efforts to
sell Products in order to confirm that Distributor’s use of such Trademarks is
in compliance with this Section; (iii) upon Manufacturer’s request,
provide Manufacturer with samples of Distributor’s use of the Trademarks; and (iv) not
modify any of the Trademarks in any way and not use any of the Trademarks on or
in connection with any goods or services other than the Products.

 

(c)                                  Internet Use. 
Distributor shall follow Manufacturer’s instructions with respect to
each of the following: (i) use of any information about Manufacturer or
the Products available on the Internet; (ii) linking of any site on the
Internet to any site on the Internet established, operated, or sponsored by
Manufacturer; and (iii) use of any of the Trademarks on any site on the
Internet.  Distributor acknowledges that
it shall promptly cease the activities described in (i), (ii), and/or (iii) above,
if so instructed by 

 

18

 

Manufacturer. 
In no event shall Distributor establish, operate, sponsor, or contribute
content to any site on the Internet which incorporates the word “biosphere” as
its URL address or any part of such address.

 

(d)                                 Promotion on Internet. 
Distributor shall not engage in active sales outside the Territory via
the Internet.  Without limiting the
generality of the foregoing, the Parties agree that each of the following
behaviors shall constitute a breach of this Section 15(d) in
connection with the promotion or sale of the Products:  (i) the use on the Internet of a
language other than any official language of the Territory; (ii) the use
on the Internet of banners or links specifically available to customers other
than customers in the Territory; (iii) the use on the Internet of any
other symbol or denomination of any currency than those for the currency of the
Territory; (iv) the use on the Internet of any other trademarks for the
Product other than the Trademarks; or (v) the use on the Internet of any
package of the Product other than the package of the Product for the Territory.

 

(e)                                  Domain Names, Marks, Corporate Names, and
Meta-Tags.  In no event shall Distributor:  (i) establish, operate, sponsor, or
contribute content to any site on the Internet which incorporates the words “biosphere”
or “biospheremed,” any trademarks, service marks, or trade names (collectively,
the “Marks”) of Manufacturer, including those listed on Exhibit B,
or any variation or part of such word or Mark as its URL address or any part of
such address; (ii) register any domain name which incorporates the words “biosphere”
or “biospheremed” or Manufacturer’s Marks (and Distributor hereby agrees to
transfer such domain name to Manufacturer if it breaches this provision); (iii) register
any of the words “biosphere” or “biospheremed,” Manufacturer’s Marks, or any
Marks that are confusingly similar to any of the words “biosphere” or “biospheremed”
or Manufacturer’s Marks; (iv) form (or change the name of) any corporation
or other entity under or to a name which incorporates any of the words “biosphere”
or “biospheremed,” Manufacturer’s Marks, or any Marks that are confusingly
similar to them; (v) use (except as specifically permitted hereunder) any
of the words “biosphere” or “biospheremed,” Manufacturer’s Marks, or any Marks
that are confusingly similar to any of them; or (vi) at any time during or
after the term of this Agreement, in order to attract visitors to any site on
the Internet, (A) use “biosphere” or “biospheremed”, any of Manufacturer’s
Marks, or any variation or part thereof as a meta-tag or invisible text or on
any unused frame or bridge page, (B) purchase “biosphere” or “biospheremed,”
any of Manufacturer’s Marks, or any variation or part thereof as a search term
from any search engine; or (C) engage in any other practice designed to
direct web browsers using search engines to different web pages or
versions of web pages than the pages corresponding to search terms
entered by the user (including “bridge pages,” “cloaking,” or “pagejacking”).

 

16.                                 Confidentiality; Publicity.

 

(a)                                  Confidential Information. 
Each Party acknowledges that it may receive Confidential Information of
the other Party in the performance of this Agreement.  Each Party will hold confidential and will
not, directly or indirectly, disclose, publish, or use for 

 

19

 

the benefit of any Third Party or itself, except in
carrying out its duties or exercising its rights under this Agreement, any
Confidential Information of the other Party or confidential Information jointly
developed by the Parties, without first having obtained the furnishing Party’s
written consent to such disclosure or use. 
The restrictions in this Section 16 will not apply to any
information that:

 

i.                                          is or becomes part of the public domain
other than by unauthorized acts of the receiving Party or its Affiliates,
employees, representatives, and agents;

 

ii.                                       can be shown by written documentation to
have been disclosed to the receiving Party or its Affiliates by a Third Party
who was not otherwise prohibited from transmitting the information to the
receiving Party by a contractual, legal, or fiduciary obligation of confidence
to the disclosing Party;

 

iii.                                    prior to disclosure under this Agreement,
was already in the possession of the receiving Party or its Affiliates;
provided such information was not obtained directly or indirectly from the
other Party hereto pursuant to a confidentiality agreement;

 

iv.                                   can be shown by written documentation to
have been independently developed by the receiving Party or its Affiliates
without breach of any of the provisions of this Agreement, including without
reference to the Confidential Information of the disclosing Party;

 

v.                                      is disclosed by the receiving Party
pursuant to oral questions, interrogatories, requests for information or
documents, subpoena, or a civil investigative demand of a court or governmental
agency; provided, however, that the receiving Party notifies the other Party
promptly following receipt thereof so that the other may seek a protective
order or other appropriate remedy to prevent or limit such disclosure; and
provided further that the receiving Party furnishes only that portion of the
information that it is advised by counsel is legally required and imposes such
obligations of secrecy as are possible in that regard; or

 

vi.                                   is required or permitted to be disclosed
by the receiving Party under any statutory, regulatory, or similar legislative
requirement or any rule of any stock exchange to which it or any Affiliate
is subject; provided, however, that the disclosing Party will be allowed to
review the proposed disclosure and the receiving Party agrees to consider in
good faith any proposed revisions thereof provided to the receiving Party
within [**] business days of the disclosing Party’s receipt of the proposed
disclosure, and the Parties will seek confidential treatment for such
disclosure as permitted by Applicable Law.

 

20

 

(b)                                 Non-Disclosure. 
The receiving Party agrees that it will disclose the Confidential
Information only to its employees and consultants who need to know such
Confidential Information for such Party to perform its obligations
hereunder.  The receiving Party agrees (i) to
inform all of its employees and consultants who receive Confidential
Information of the confidential nature thereof and to direct all such employees
and consultants to treat the Confidential Information confidentially in
accordance with this Agreement; (ii) to be responsible for any breach of
the Agreement by any of its employees and consultants; and (iii) to make
all reasonable, necessary, and appropriate efforts to safeguard the
Confidential Information from disclosure other than as permitted hereby, which
will include requiring all employees and consultants who have access to
Confidential Information of the disclosing Party to execute  written obligations (or to
abide by existing obligations in writing) to maintain the same in confidence and not to use
such information except as expressly permitted under this Agreement.  Each Party agrees to enforce confidentiality
obligations to which its employees and consultants are obligated.

 

(c)                                  Return of Information. 
Upon the expiration or termination of this Agreement or upon request of
the disclosing Party, the receiving Party will return to the disclosing Party
any and all Confidential Information of the disclosing Party and any
reproductions thereof.

 

(d)                                 Survival of Obligations. 
The obligations set forth in this Section 16
will survive the termination or expiration of this Agreement for a period of [**] (or, in the case of any Confidential Information identified as a trade
secret by the disclosing Party at the time of disclosure, for so long as such
trade secret Confidential Information remains a trade secret).

 

(e)                                  Public Announcements. 
The form and content of any public announcement to be made by one Party
regarding this Agreement or the subject matter contained in this Agreement will
be subject to the prior written consent of the other Party (which consent will
not be unreasonably withheld), except as may be required by applicable law
(including disclosure requirements of the Securities and Exchange Commission,
the New York Stock Exchange, NASDAQ, or any other stock exchange), in which
event such Party will endeavor to give the other Party reasonable advance
notice and review of any such disclosure.

 

Notwithstanding the provisions
of this Section 16, Distributor may disclose
Manufacturer’s Confidential Information
received or generated under this Agreement to MHLW and PMDA for the purpose of
filing for Regulatory Approvals and related procedures without the prior
consent of Manufacturer.

 

17.                                 Publications.

 

(a)                                  Oversight.  Prior to
communicating or disclosing any publications, abstracts, scientific
presentations, websites, press releases, or other disclosures relating to the
development or Regulatory Approval of each Product in the Territory,
Distributor shall 

 

21

 

submit Manufacturer a copy of such communication or
disclosure for review in accordance with this Agreement, reasonably in advance
of disclosure to allow sufficient time for review, including the preparation of
a communications calendar that anticipates disclosures expected to be made
during the following calendar quarter. 
If the Parties are unable to agree upon the acceptability of a public
disclosure after endeavoring to do so in good faith, Manufacturer shall have
the right to make the ultimate decision.

 

(b)                                 Prior Review. 
Distributor may disclose results and significant developments regarding
the development or Regulatory Approval of each Product in the Territory and
other activities in connection herewith from time to time with the approval of
Manufacturer, which approval shall not be unreasonably withheld, conditioned,
or delayed.  When Distributor elects to
make any such public disclosure under this Section 17(b), it will give
Manufacturer a copy of any such statement and at least [**] business days to
review and comment on such statement, it being understood that if Manufacturer
does not notify Distributor in writing within such [**] business day period of
any objections, such disclosure shall be deemed approved, and in any event
Manufacturer shall work diligently and reasonably to agree on the text of any
proposed disclosure in an expeditious manner. 
The principles to be observed in such disclosures shall be accuracy,
compliance with Applicable Law and regulatory guidance documents, and
reasonable sensitivity to potential negative reactions of Regulatory Authorities
(both within and outside the Territory).

 

(c)                                  Scientific Publications. 
Except as required by Applicable Law or court order, any publication or
presentation by Distributor of Confidential Information, including studies or
clinical trials carried out by Distributor hereunder, shall be subject to the
provisions of this Section 17.  The
Parties shall establish, promptly after the Effective Date, guidelines that (i) allow
for Manufacturer’s timely review of all such publications or presentations, (ii) provide
for protection of Confidential Information and any protectable subject matter,
and (iii) ensure that all such publications and presentations are
consistent with good scientific practice and accurately reflect work done and
the contributions of the Parties.  Unless
otherwise mutually agreed upon by the Parties, (A) Distributor shall
transmit to Manufacturer for review and comment a copy of the proposed
publication or presentation, at least [**] days prior to the submission of the
proposed publication or presentation to any Third Party; (B) Distributor
shall postpone the publication or presentation for up to an additional [**]
days upon request by Manufacturer in order to allow the filing of appropriate
patent applications or other protection to be filed on information contained in
the publication or presentation; (C) upon request of Manufacturer,
Distributor shall remove all Confidential Information of Manufacturer from the
information intended to be published or presented; and (D) Distributor
shall consider all reasonable comments made by Manufacturer to the proposed
publication or presentation.

 

18.                                 Modification of Products.

 

Distributor may not customize, modify, or have
customized or modified any Product.  Any
unauthorized customizing or modification of any Product by Distributor or 

 

22

 

any third party shall
relieve Manufacturer from any obligation it would otherwise have had with
respect to such Product under the warranties described in Section 20
below.

 

19.                                 Covenant Not To Compete.

 

During the term of this Agreement and for [**]
thereafter, Distributor will not distribute, seek Regulatory Approval for, or
otherwise commercialize any embolic product other than the Products except (a) an
embolic medical material produced from gelatin, and (b) the ethyl ester of iodinated poppy-seed oil fatty acid known as Lipiodol.

 

20.                                 Limited Warranty.

 

(a)                                  For a period of [**] days following the
date of delivery to the possession of a common carrier designated by
Distributor (“Warranty Period”), Manufacturer warrants solely to
Distributor that (i) reasonable care has been used in the design and
manufacture of the Products, (ii) the Product supplied to Distributor shall
meet the specifications and quality standards required by ISO 13485, and (iii) the Product, at the time of delivery
to the possession of a common carrier designated by Distributor, shall have a
minimum remaining shelf life of [**] months. 
In the event of a breach of this warranty, Manufacturer shall, at its
option, repair or provide a replacement of the non-conforming Product (which
replacement may be supplied at the same time as a normal delivery of Product to
Distributor) free of
charge; provided that
Distributor notifies Manufacturer of the breach within [**] days after
discovery of the breach, but in no event after the expiration of the Warranty
Period.  The remedies set forth in this Section 20
shall constitute Manufacturer’s sole obligation and Distributor’s sole remedy
for any such breach of warranty by Manufacturer.

 

(b)                                 Under no circumstances shall the warranty
set forth in this Section 20 apply to (i) any Product which
has been customized, modified, damaged after the delivery F.O.B. to Manufacturer’s designated facility, or misused, or (ii) any
Product which has failed due to Distributor’s failure to use the storage or
operating procedures set forth in Manufacturer’s instructions for use and other
materials provided to Distributor.

 

(c)                                  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PRODUCTS AND ANY OTHER MATERIALS PROVIDED BY
MANUFACTURER UNDER THIS AGREEMENT ARE PROVIDED AS IS, AND MANUFACTURER
DISCLAIMS ALL WARRANTIES.  EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, MANUFACTURER MAKES NO OTHER WARRANTIES,
WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL (INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NONINFRINGEMENT).

 

21.                                 Limitations on Liability.

 

(a)                                  MANUFACTURER’S LIABILITY ARISING OUT OF
THE DEVELOPMENT, MANUFACTURE, SALE, SUPPLYING, OR FAILURE OR DELAY IN SUPPLYING
OF THE PRODUCTS OR THEIR USE OR DISPOSITION, WHETHER BASED UPON 

 

23

 

WARRANTY, CONTRACT, TORT, STRICT LIABILITY, OR
OTHERWISE, SHALL NOT EXCEED THE ACTUAL PURCHASE PRICE PAID BY DISTRIBUTOR FOR
THE PRODUCTS.

 

(b)                                 IN NO EVENT SHALL MANUFACTURER BE LIABLE
TO DISTRIBUTOR OR ANY OTHER PERSON OR ENTITY FOR SPECIAL, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY, PUNITIVE, MULTIPLE, OR OTHER INDIRECT DAMAGES OR FOR
LOSS OF PROFITS, LOSS OF DATA, OR LOSS OF USE DAMAGES ARISING OUT OF THE
DEVELOPMENT, MANUFACTURE, SALE , SUPPLYING, FAILURE, OR DELAY IN SUPPLYING OF
THE PRODUCTS OR SERVICES RELATED THERETO, WHETHER BASED UPON WARRANTY,
CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, EVEN IF MANUFACTURER HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES.

 

22.                                 Indemnifications.

 

(a)                                  Distributor hereby agrees to indemnify,
defend, and hold harmless Manufacturer, its Affiliates, and all officers,
directors, employees and agents thereof from all Third Party liabilities,
claims, damages, losses, costs, expenses, demands, suits and actions (including
reasonable attorneys’ fees, expenses and settlement costs) (collectively, “Third
Party Damages”) arising out of (i) Distributor’s making
representations and warranties with respect to the Product which are not
authorized by Manufacturer hereunder; (ii) Distributor’s breach of any
representations, warranties, or covenants contained in this Agreement; (iii) the
negligence or willful misconduct of Distributor, its Affiliates, or their
respective employees or agents in the performance of any obligation under this
Agreement; and (iv) Distributor’s use of its name or marks in the offer
for sale and sale of the Product infringing on the intellectual property rights
of Third Parties.

 

(b)                                 Manufacturer hereby agrees to indemnify,
defend, and hold harmless Distributor, its Affiliates, and all officers,
directors, employees and agents thereof from all Third Party Damages arising
out of (i) injuries to third parties resulting from any Product resold by
Distributor in accordance with the terms of this Agreement; and (ii) Distributor’s
reselling of the Products infringing on the intellectual property rights of
third parties or constituting a misappropriation of any third party’s trade
secrets; provided, however, that with respect to part (ii) above:

 

i.                                          In the event that any Product is held in
a suit or proceeding to infringe any intellectual property rights of a third
party (or constitute the misappropriation of a trade secret of a third party)
and the use or reselling of such Product is enjoined, or Manufacturer
reasonably believes that it is likely to be found to infringe or constitute
misappropriation or likely to be enjoined, then Manufacturer shall, at its sole
cost and expense, at its sole option, either (A) procure for Distributor
the right to continue reselling such Product; or (B) modify such Product
so that it becomes noninfringing or no longer constitutes
misappropriation.  If neither (A) nor
(B) is practicable, then Manufacturer may, in its sole discretion, remove
such Product from 

 

24

 

this Agreement
upon repurchasing Distributor’s inventory of such Product which is saleable and
in the original packages and unaltered from their original form and design,
subject to Manufacturer’s inspection, test, and acceptance.  Any such repurchase of Distributor’s
inventory of Products shall be at the price paid by Distributor for such
Products.  Such repurchased inventory
shall be shipped by Distributor freight prepaid, according to Manufacturer’s
instructions.  Manufacturer shall pay
Distributor for such repurchased Products within [**] days after Manufacturer
receives those Products in its designated facility.

 

ii.                                       Manufacturer shall have no obligation for
any claim of infringement arising from: (A) any combination of Products
with products not supplied or approved in writing by Manufacturer, where such
infringement would not have occurred but for such combination; (B) the
adaptation or modification of Products, where such infringement would not have
occurred but for such adaptation or modification; (C) the use of a Product
in an application for which it was not designed or intended, where such
infringement would not have occurred but for such use; or (D) a claim based
on intellectual property rights owned by Manufacturer or any of its
Affiliates.  If Manufacturer is not
required to indemnify Distributor for a claim pursuant to subsections (A), (B),
(C) and (D) above, Distributor agrees to indemnify, defend, and hold
harmless Manufacturer and its Affiliates, officers, directors, employees, and
agents from and against all Third Party Damages of any kind whatsoever, arising
directly or indirectly out of such claims.

 

iii.                                    This Section 22(b) states
Distributor’s sole and exclusive remedy in the event that a Product provided by
Manufacturer infringes on the intellectual property right of any third party.

 

(c)                                  The indemnified Party (be it Manufacturer
under Section 22(a) above or Distributor under Section 22(b) above)
hereby agrees that: (i) the other Party (the “indemnifying Party”)
shall have sole control and authority with respect to the defense or settlement
of any such claim; and (ii) the indemnified Party shall cooperate fully
with the indemnifying Party, at the indemnifying Party’s sole cost and expense,
in the defense of any such claim.  Any
settlement of any such claims that imposes any liability or limitation on the
indemnified Party shall not be entered into without the prior written consent
of the indemnified Party.  The
indemnified Party shall provide the indemnifying Party with prompt written
notice of such claim.

 

(d)                                 In the event a claim is based partially
on an indemnified claim described in Sections 22(a) and/or 22(b) above
and partially on a non-indemnified claim, or is based partially on a claim
described in Section 22(a) above and partially on a claim described
in Section 22(b) above, any payments and reasonable attorneys’ fees
incurred in connection with such claims are to be apportioned between the Parties
in accordance with the degree of cause attributable to each Party.

 

25

 

23.                                 Termination and Term.

 

(a)                                  Upon the occurrence of a material breach
or default as to any obligation hereunder by either Party and the failure of
the breaching Party to cure such material breach or default within [**] days of
receipt of written notice of such breach or default, this Agreement may be
terminated by the non-breaching Party by giving written notice of termination
to the breaching Party, such termination being immediately effective upon the
date of such notice of termination.

 

(b)                                 Upon the filing of a petition in
bankruptcy, insolvency, or reorganization against or by either Party, or either
Party becoming subject to a composition for creditors, whether by law or
agreement, or either Party going into receivership or otherwise becoming
insolvent (such Party hereinafter referred to as the “insolvent Party”),
this Agreement may be terminated by the other Party by giving written notice of
termination to the insolvent Party, such termination being immediately
effective upon the giving of such notice of termination.

 

(c)                                  If the Parties are unable to agree upon a
purchase price for a particular Product as provided in Section 4(d), this
Agreement may be terminated with respect to such Product by either Party upon
prior written notice (not to be delivered prior to the [**]-day period referred
to in Section 4(d)).  Further, if Distributor reasonably determines
that distribution of the Product by Distributor infringes or is likely to
infringe any intellectual property right of a third party, Distributor may
remove such Product from this Agreement.

 

(d)                                 Manufacturer may terminate this Agreement with respect
to any Product as provided in Section 3(e) above, unless Distributor
desires to continue distributing such Product as provided in such Section.

 

(e)                                  The term of this Agreement shall begin on
the Effective Date.  The term of this
Agreement shall expire on the 13th anniversary of
the Effective Date, unless terminated earlier pursuant to the terms of this
Agreement, including this Section 23. 
This Agreement may be renewed upon agreement of the Parties for such an
additional period of time as they agree upon.

 

(f)                                    In the event of a termination (in whole
or in part) or expiration of this Agreement pursuant to this Section 23,
Manufacturer shall not have any obligation to Distributor, or to any employee
of Distributor, for compensation or for damages of any kind, whether on account
of the loss by Distributor or such employee of present or prospective sales,
investments, compensation, or goodwill or otherwise.  Distributor, for itself and on behalf of each
of its employees, hereby waives any rights which may be granted to it or them
under the laws and regulations of the Territory or otherwise which are not
granted to it or them by this Agreement. 
Distributor hereby indemnifies and holds Manufacturer harmless from and
against any and all Third Party Damages whatsoever asserted by any employee, agent,
or representative of Distributor under any applicable termination, labor,
social security, or other similar laws or regulations.

 

26

 

(g)                                 Termination of this Agreement (in whole
or in part) shall not affect the obligation of Distributor to pay Manufacturer
all amounts owing or to become owing as a result of Products tendered or
delivered to Distributor on or before the date of such termination, as well as
interest thereon to the extent any such amounts are paid after the date they
became or will become due pursuant to this Agreement.

 

(h)                                 Upon the expiration or the termination of
this Agreement, except where prohibited by Applicable Law or as provided in Section 4(d),
with respect to any Regulatory Approvals that are registered solely in
Distributor’s name, then upon expiration or termination of this Agreement for
any reason, Distributor, without compensation therefor, will cooperate to take
such actions as may be necessary to transfer those Regulatory Approvals to
Manufacturer or Manufacturer’s designee. 
Distributor acknowledges and agrees that the provisions of this Section constitute
a valid and binding assignment to Manufacturer of any rights Distributor may
have in the Regulatory Approvals and that the rights of Distributor under this
Agreement during the term are sufficient consideration for such
assignment.  Notwithstanding the foregoing, if this Agreement is terminated due to material
breach by Manufacturer, the provisions of this Section 23(h) shall
only apply if Manufacturer pays Distributor [**]% of Distributor’s
out-of-pocket costs of obtaining the Regulatory Approvals to be transferred,
not to exceed $[**] in the aggregate for Regulatory Approvals for all Products.

 

(i)                                     Notwithstanding anything else in this
Agreement to the contrary, the Parties agree that Sections 2(c), 4 (to the
extent payment obligations remain outstanding), 5(b), 5(d), 5(e), 10, 14, 15,
16, 17, 18, 19, 20(c), 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, and
34 shall survive the termination or expiration of this Agreement.

 

24.                                 Modification.

 

No
modification or change may be made in this Agreement except by written
instrument duly signed by a duly authorized representative of each Party.

 

25.                                 Assignment.

 

This Agreement and the rights and obligations
hereunder may not be assigned, delegated, or transferred by Distributor without
the prior written consent of Manufacturer; provided that such consent shall not
be required for a sale or merger of Distributor (whether by operation of law or
otherwise), the transfer of substantially all of Distributor’s business assets,
or the sale of a majority of the capital stock of Distributor so long as the
assignee or successor to Distributor is not an entity that sells or markets
products that compete with Manufacturer’s products.  This Agreement shall be binding upon and inure to the benefit of the successors and assigns
of Manufacturer.

 

26.                                 Notice.

 

All notices given under this Agreement shall be in
writing and shall be addressed to the Parties at their respective addresses set
forth below:

 

27

 

If to Distributor:

 

Nippon Kayaku Co., Ltd. 

11-2, Fujimi 1-chome

Chiyoda-ku, Tokyo, Japan

Attention: Head of Licensing Division 

Telephone Number: +81-3-3237-5154

Facsimile Number: +81-3-3237-5920

 

If to Manufacturer:

 

BioSphere Medical, Inc. 

1050 Hingham Street

Rockland, Massachusetts  02370

United States

Attention: Chief Executive Officer 

Telephone Number:  (781) 681-7920

Facsimile Number: (781) 982-3028

 

With a copy to:

 

Jones Day

222 E. 41st Street

New York, NY  10017

United States

Attention:  Ann L. Gisolfi, Esq. 

Telephone Number:  (212) 326-3594

Facsimile Number:  (212) 755-7308

 

Either Party may change its address or its
facsimile number for purposes of this Agreement by giving the other Party
written notice of its new address or facsimile number.  Notices shall be made by personal delivery or
sent by registered or certified mail, international courier, or facsimile (with
a hard copy sent by one of the other means of delivery).  Notices shall be effective upon receipt.

 

27.                                 Waiver.

 

None of the conditions or provisions of this
Agreement shall be held to have been waived by any act or knowledge on the part
of either Party, except by an instrument in writing signed by a duly authorized
officer or representative of such Party. 
Further, the waiver by either Party of any right hereunder or the
failure to enforce at any time any of the provisions of this Agreement, or any
rights with respect thereto, shall not be deemed to be a waiver of any other
rights hereunder or any breach or failure of performance of the other Party.

 

28

 

28.                                 Construction of Agreement
and Resolution of Disputes.

 

(a)                                  This Agreement, which is in English,
shall be interpreted in accordance with the commonly understood meaning of the
words and phrases hereof in the United States of America, and it and performance
of the Parties hereto shall be construed and governed according to the laws of
the Commonwealth of Massachusetts (in the United States) applicable to
contracts made and to be fully performed therein, excluding the United Nations
Convention on Contracts for the International Sale of Goods, and also excluding
the 1974 Convention on the Limitation Period in the International Sale of Goods
(the “1974 Convention”) and the Protocol amending the 1974 Convention,
done at Vienna April 11, 1980.

 

(b)                                 Any dispute, controversy or claim arising
out of or relating to this Agreement or to a breach hereof, including its
interpretation, performance, or termination, shall be finally resolved by
arbitration.  The arbitration shall be conducted
by one arbitrator selected jointly by Manufacturer and Distributor or, if they
cannot agree on an arbitrator within [**] days after the request or demand for
arbitration is filed with the United Nations Commission on International Trade
Law, by the President of the American Arbitration Association.

 

The arbitration shall be conducted in English
and in accordance with the commercial arbitration rules of the United
Nations Commission on International Trade Law. 
The arbitration, including the rendering of the award, shall take place
in Rockland, Massachusetts, United States, and shall be the exclusive forum for
resolving such dispute, controversy, or claim. 
For the purposes of this arbitration, the provisions of this Agreement
and all rights and obligations thereunder shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts (in the United
States).  Disputes about arbitration
procedure shall be resolved by the arbitrator. 
The arbitrator may proceed to an award notwithstanding the failure of
the other Party to participate in the proceedings.  Discovery shall be limited to mutual exchange
of documents relevant to the dispute, controversy, or claim; depositions shall
not be permitted unless agreed to by both Parties.  The arbitrator shall be authorized to grant
interim relief, including to  prevent the
destruction of goods or documents involved in the dispute, protect trade
secrets, and provide for security for a prospective monetary award.  In no event shall punitive damages (including
multiple damages and other damages disclaimed in Section 21(b)) be
assessed against either Party.  The
decision of the arbitrator shall be binding upon the Parties hereto, and the
expense of the arbitration (including the award of attorneys’ fees to the
prevailing Party) shall be paid as the arbitrator determines.  The decision of the arbitrator shall be the
sole and exclusive remedy of the Parties and shall be enforceable in any court
of competent jurisdiction, subject only to revocation on grounds of fraud or
clear bias on the part of the arbitrator.

 

(c)                                  Notwithstanding anything contained in
this Section 28 to the contrary, each Party shall have the right to
institute judicial proceedings against the other Party or anyone acting by,
through or under such other Party, in order to apply for interim relief,
pending 

 

29

 

resolution under the above described arbitration
procedures, to enforce the instituting Party’s rights hereunder through
specific performance, injunction or similar equitable relief.

 

29.                                 Entire Agreement.

 

This Agreement supersedes and cancels any previous
agreements or understandings, whether oral, written or implied, heretofore in
effect and sets forth the entire agreement between Manufacturer and Distributor
with respect to the subject matter hereof.

 

30.                                 No Rights by Implication.

 

No rights or licenses with respect to the Products
or the Trademarks are granted or deemed granted hereunder or in connection
herewith, other than those rights expressly granted in this Agreement.

 

31.                                 Responsibility for Taxes.

 

Taxes, whether in the Territory or any other
country, now or hereafter imposed with respect to the transactions contemplated
hereunder (with the exception of income taxes or other taxes imposed upon net
income of Manufacturer) shall be the responsibility of Distributor, and, if
paid or required to be paid by Manufacturer, the amount thereof shall be added
to and become a part of the amounts payable by Distributor hereunder.

 

32.                                 Force Majeure.

 

(a)                                  Neither Manufacturer nor Distributor
shall be liable for damages, or shall be subject to termination of this
Agreement by the other Party, for any delay or default in performing any
obligation hereunder (excluding payment obligations) if that delay or default
is due to any cause beyond the reasonable control and without fault or
negligence of that Party; provided that, in order to excuse its delay or
default hereunder, a Party shall notify the other of the occurrence or the
cause, specifying the nature and particulars thereof and the expected duration
thereof; and provided, further, that within 15 calendar days after the
termination of such occurrence or cause, such Party shall give notice to the
other Party specifying the date of termination thereof.  All obligations of both Parties shall return
to being in full force and effect upon the termination of such occurrence or
cause (including any payments which became due and payable hereunder prior to
the termination of such occurrence or cause).

 

(b)                                 For the purposes of this Section 32,
a “cause beyond the reasonable control” of a Party shall include, without
limiting the generality of the phrase, any act of God, act of any government or
other authority or statutory undertaking, industrial dispute, fire, explosion,
accident, power failure, flood, riot or war (declared or undeclared).

 

30

 

33.                                 Severability.

 

If any provision of this Agreement is declared
invalid or unenforceable by a court having competent jurisdiction, it is mutually
agreed that this Agreement shall endure except for the part declared invalid or
unenforceable by order of such court. 
The Parties shall consult and use their best efforts to agree upon a
valid and enforceable provision which shall be a reasonable substitute for such
invalid or unenforceable provision in light of the intent of this Agreement.

 

34.                                 Counterparts.

 

This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

[Remainder of Page Intentionally Left Blank]

 

31

 

IN WITNESS WHEREOF, the Parties hereto have
signed this International Distribution Agreement.

 

 

NIPPON
KAYAKU CO., LTD., as Distributor

 

 

	
  By

  	
  /s/
  Akira Mandai 

  	
   

  
	
  Name:
  Akira Mandai

  	
   

  
	
  Title:
  Managing Director, Head of Pharmaceuticals Group

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  4/16/2009
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  BIOSPHERE
  MEDICAL, INC., as Manufacturer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Richard J. Faleschini 

  	
   

  
	
  Name:
  Richard J. Faleschini

  	
   

  
	
  Title:
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  4/13/2009
  

  	
   

  
				

 

32

 

EXHIBIT
A — MINIMUM PURCHASE REQUIREMENTS

EXHIBIT
B — TRADEMARKS

EXHIBIT
C — UNITED STATES FOREIGN CORRUPT PRACTICES ACT

 

33

 

EXHIBIT
A

 

MINIMUM PURCHASE REQUIREMENTS

 

Nippon Kayaku Co., Ltd. (Distributor)

 

Period:

 

[*********]

 

Minimum
combined purchase requirement of Distributor: 
[*********]

 

34

 

EXHIBIT
B

 

TRADEMARKS

 

 

Embosphere®
microspheres

 

HepaSphereTM
microspheres

 

35

 

EXHIBIT
C

 

UNITED
STATES FOREIGN CORRUPT PRACTICES ACT

 

Nippon Kayaku Co., Ltd. (Distributor)

 

BioSphere Medical, Inc. (“BioSphere”)
takes pride in its relationships with government agencies and officials and
with political parties, leaders and candidates around the world.  Therefore, all transactions relating to
BioSphere products must be conducted in a manner reflecting well upon the
reputation, integrity and good business practices of BioSphere.

 

To that end, BioSphere’s Code of Business
Conduct and Ethics requires compliance with all applicable laws.  In particular, this includes compliance with
the U.S. Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery
laws.  Generally speaking, the FCPA is a
criminal law that prohibits bribery of foreign (i.e., non-U.S.) officials —
that is, corrupt payments to government officials made to affect a decision or
improperly secure an advantage.  The FCPA
and other U.S. laws also require adequate record keeping that accurately and
fairly reflects all transactions.

 

The FCPA is aimed at ensuring that U.S.
companies and their business partners that are competing in foreign territories
succeed on the basis of merit rather than through corrupt payments or other
benefits to government officials.  The
activities intended to be prevented under the FCPA usually are in the nature of
kickbacks, bribes or payoffs involving government officials.  Government officials may include doctors and
others who are affiliated with state-owned or operated hospitals and similar
institutions.  Although payments to
officials or their agents may be customary and even expected within some
countries, such payments may nevertheless violate the FCPA.  Furthermore, please note that any form of
bribery—even one that does not involve a government official and would not
contravene the FCPA—is improper and inconsistent with BioSphere’s standards for
always doing business ethically.

 

BioSphere has always enjoyed good working
relationships with its distributors in competing successfully in markets around
the world.  The foundation of such a
successful relationship is an assurance that independent third parties
conducting business on BioSphere’s behalf will represent BioSphere in a manner
that is consistent with our commitment to integrity and the law.  While your distributor agreement with
BioSphere already requires compliance with all laws, I wanted to remind you in
particular of the FCPA and similar laws, as BioSphere could be held liable
under U.S. or other similar laws if an independent third party acting on
BioSphere’s behalf makes an improper payment or provides some other improper
benefit.

 

36

 

BIOSPHERE MEDICAL FOREIGN
CORRUPT PRACTICES ACT POLICY

 

General Standards:  The Foreign Corrupt Practices Act is a
criminal bribery law.  It was enacted
into law to (i) prohibit bribery and (ii) impose accounting and
recordkeeping requirements.  The FCPA
makes it illegal to pay, authorize, promise or offer a corrupt payment (or
anything of value) to a “foreign government official” for the purpose of
causing the foreign government official to act or fail to act or otherwise use
his or her influence to assist BioSphere in obtaining, retaining or directing
business.  The FCPA is a complex law that
is interpreted quite broadly.  There are
significant US criminal penalties for individuals and companies that violate
the FCPA and foreign countries may impose additional sanctions.

 

Without the advance written approval of
BioSphere’s chief financial officer, employees are not permitted to promise,
authorize, offer or make any payment, including for travel, lodging or
entertainment, in money, products or services, directly or indirectly, to any “foreign
government official” (defined broadly). 
In addition, the chief financial officer should be consulted before
BioSphere hires any foreign agent, representative or consultant.

 

37

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