Document:

exv10w25

 

EXHIBIT 10.25

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed
with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. Such portions are marked by a series of asterisks.

MICRO-NEEDLE LICENSE, JOINT DEVELOPMENT,

AND MANUFACTURING ASSISTANCE AGREEMENT

Recitals.

	   	Parties. This Agreement is entered into as of October 29, 2004 between
Debiotech S.A., a Swiss company having a place of business at 28 Avenue de Sevelin, CH-1004
Lausanne, Switzerland, and Animas Corporation, a Delaware corporation having a place of
business at 200 Lawrence Drive, West Chester, PA 19380, USA.
	 
	   	Development Funding and License. Debiotech is prepared to undertake the
development of one amongst more families of needles based upon Debiotech’s Micro
Electro-Mechanical Systems technology and related know-how, the specifications of which have
not been developed yet. Animas desires to have exclusive rights to make, use sell and/or
import any and all families of such needles and to obtain exclusive license rights to all of
Debiotech Intellectual Property useful for such purpose for all uses relating to the
administration of insulin .
	 
	   	Confidentiality Agreement. Debiotech and Animas entered into a confidential
disclosure agreement dated July 6, 2004. Upon execution of this Agreement, the
Confidentiality Agreement shall be terminated and replaced with the terms of this Agreement.
	 
	   	Term Sheet. Debiotech and Animas signed on August 31, 2004 a Term Sheet
containing most of the material terms upon which they intended to agree and providing a
basis for this Agreement. Upon execution of this Agreement, the Term Sheet shall be
terminated and replaced with the terms of this Agreement.
	 
	   	Parallel Agreement. Debiotech and Animas enter into a parallel License, Joint
Development and Manufacturing Assistance Agreement in connection with an externally worn
micro-pump for the delivery of insulin.
	 
	   	Due-Diligence Prior to Agreement Signed. Prior to signature of this Agreement,
Animas has conducted a due diligence review of Debiotech’s relevant technology and related
manufacturing, Debiotech having provided all information requested by Animas, as well as a
further due diligence relating to such relevant technology, including the
intellectual property.

 

 

	   	Consideration. In consideration of the mutual promises and obligations
contained herein the parties agree as set forth in this Agreement.

	******	 	- Material has been omitted and filed separately with the Commission.

 

 

	1.  	Definitions

     The following capitalized terms are used in this Agreement with the meanings indicated or
referred to below.

	 	1.1  	Affiliate: any corporation, partnership, limited liability company or other
enterprise or organization that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with a party,
where “control” means beneficial ownership of at least fifty percent (50%) of the then
outstanding voting shares or equity interests in the party in question or the power to
direct or otherwise cause the direction of the management and policy of the party in
question (for the avoidance of doubt, Existing Shareholders listed under Exhibit D
shall not be considered Affiliates given their current ownership of Animas).
	 
	 	1.2  	Agreement: this MICRO-NEEDLE LICENSE, JOINT DEVELOPMENT, AND MANUFACTURING
ASSITANCE AGREEMENT and all attached exhibits, together with any future amendments
entered into in accordance with Section 16.13 of this Agreement.
	 
	 	1.3  	Agreement Date: the date on which this Agreement is entered into by the
Parties.
	 
	 	1.4  	Animas: Animas Corporation, a Delaware corporation having a place of business
at 200 Lawrence Drive, West Chester, PA 19380, USA.
	 
	 	1.5  	Animas Group: Animas and its Affiliates.
	 
	 	1.6  	Change of Control: a change of control of Animas Group shall be deemed to have
occurred at such time as any third party, other than an Existing Shareholder listed
under Exhibit D, acquires more than 50% of the voting stock of Animas or Animas merges
with a third party except where Animas is the surviving entity. A Change of Control
will be deemed to have occurred if this Agreement is assigned directly or indirectly to
a third party, excluding an Animas Affiliate, including without limitation the sale of
substantially all of the assets of Animas in accordance with Section 16.6 of this
Agreement.

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	 	1.7  	Commercial Launch: the date at which the first Debiotech Micro-Needle Product
is sold to an end-user in any country, directly or indirectly, by a Licensee.
	 
	 	1.8  	Debiotech: Debiotech S.A., a Swiss company having a place of business at 28
Avenue de Sevelin, CH-1004 Lausanne, Switzerland (together with successors and assigns,
and those Affiliates who (i) own Debiotech Intellectual Property, or (ii) have license
rights therein in the Field, or (iii) employ any personnel having been involved as an
employee of Debiotech (including successors and assigns) or an Affiliate in the
development of Micro-Needles utilizing MEMS technology).
	 
	 	1.9  	Debiotech Intellectual Property: all patents, copyrights, trade secrets,
know-how and other intellectual property related to or useful for a Micro-Needle based
on MEMS technology owned by, developed by or licensed to Debiotech, now or until such
time as the license granted pursuant to this Agreement is terminated in accordance with
Section 15 of this Agreement or becomes a fully paid-up license in accordance with
Section 2.2 of this Agreement (including, without limitation, the intellectual
property described more specifically in Exhibit A). Debiotech Intellectual Property
includes, without limitation, all ideas, methods, concepts, design features, diagrams,
schematics, flowcharts, specifications, code (source and object) and any other
intellectual property necessary or useful for Animas to fully exercise its rights and
perform its obligations under this Agreement or otherwise commercialize Debiotech
Micro-Needle Products in the Field. Notwithstanding the foregoing, Debiotech
Intellectual Property shall include intellectual property developed jointly by
Debiotech and a third party unless Debiotech is prohibited by contractual agreement
with such third party to license such intellectual property to another party.
	 
	 	1.10  	Debiotech Micro-Needle Products: one or more families of micro-needle
products, using MEMS Micro-Needle (the specifications of such Debiotech Micro-Needle
Products shall be mutually agreed by the parties).
	 
	 	1.11  	Debiotech Micro-Needle: one specific Debiotech Micro-Needle Product to be
developed by Debiotech and Animas under the Development Program pursuant to this
Agreement, in accordance with the Micro-Needle Specifications.
	 
	 	1.12  	Development Program: the development program described more fully in Article 5
of this Agreement pursuant to which Debiotech is to use commercially reasonable

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	 	   	efforts
to develop fully functional prototypes of the Debiotech Micro-Needle which meet the
Micro-Needle Specifications.
	 
	 	1.13  	Distributors: Third parties (outside Animas Group) that distribute Debiotech
Micro-Needle Products sold to them by a Licensee.
	 
	 	1.14  	FDA Approval: 510(k) clearance or such other approvals as may be necessary
from the Food and Drug Administration (FDA) for sale in the United States of the
Debiotech Micro-Needle.
	 
	 	1.15  	FDA Submission: filing for FDA Approval.
	 
	 	1.16  	Field: All uses relating to the external administration of insulin, alone or
in combination with other medications, and/or sensing of glucose.
	 
	 	1.17  	Interface: interface of the MEMS Micro-Needle with the rest of Debiotech
Micro-Needle (tubing, connector, patch, etc.), to be developed by Animas under the
Development Program.
	 
	 	1.18  	Knowledge: “to the best knowledge of Debiotech” shall mean to the actual or
implied knowledge, as of the Agreement Date, of the officers, directors, owners and
management of Debiotech; provided that, “implied knowledge” shall mean only the
knowledge readily obtainable from all information available in the books, records and
files of Debiotech.
	 
	 	1.19  	License: the exclusive license granted to Animas pursuant to Section 2.1 of
this Agreement.
	 
	 	1.20  	Licensed Patents: all patents, patent applications and patent rights included
in Debiotech Intellectual Property, as well as patents, patent applications and patent
rights resulting from joint inventions under Section 13.1 of this Agreement. A
comprehensive list of such Licensed Patents, as of the Agreement Date, is described in
Exhibit A.
	 
	 	1.21  	Licensees: Animas, Affiliates of Animas and Sub-licensees.

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	 	1.22  	Major Countries: France, Germany, United Kingdom and United States.
	 
	 	1.23  	Manufacturing Program: The manufacturing program as defined in Section 7.3 of
this Agreement.
	 
	 	1.24  	MEMS: Micro Electromechanical Systems using fabrication techniques similar to
those utilized in the micro-electronics industry.
	 
	 	1.25  	MEMS Micro-Needle: A Micro-Needle based on MEMS technology based upon
Debiotech Intellectual Property.
	 
	 	1.26  	MEMS Micro-Needle Business: the business of Debiotech relating specifically to
the design, development and production of micro-needle devices consisting of an array
of micro-needles not exceeding ****** in depth utilizing MEMS technology and all
licensing, consulting and investment activities and operations relating thereto,
whether in the Field or outside the Field.
	 
	 	1.27  	Micro-Needle: any micro-needle device consisting of an array of micro-needles
not exceeding ****** in depth.
	 
	 	1.28  	Micro-Needle Specifications: the specifications of Debiotech Micro-Needle,
including specifications of MEMS Micro-Needle, to be developed pursuant to this
Agreement between the parties.
	 
	 	1.29  	Net Revenue: gross revenue of Animas Group on a consolidated basis (excluding
all revenue from Sub-licensees) from the sale of Debiotech Micro-Needle Products to
distributors and end-users minus contractual allowances and discounts, as calculated in
accordance with US Generally Accepted Accounting Principles, as such principles are in
effect at that time, and as recognized in accordance with Animas’ standard accounting
practices in effect for the relevant period, consistently applied ( “GAAP”).
	 
	 	1.30  	Quarterly Royalties Statement: a statement prepared by Animas at the end of
each calendar quarter in accordance with Section 4.6 of this Agreement, setting
forth the Net Revenue relating to Debiotech Micro-Needle Products subject to a
royalty in that quarter. The Quarterly Royalty Statement shall set forth (i) the
number of Debiotech Micro-Needle Products placed or sold to end-users, by product
and by country, and

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	 	   	the Net Revenue, by product and by country, associated with such
Debiotech Micro-Needle Products, (ii) the number of Debiotech Micro-Needle Products
placed or sold to distributors, by product and by country, and the Net Revenue, by
product and by country, associated with such Debiotech Micro-Needle Products, (iii)
the number of Debiotech Micro-Needle Products placed or sold by Sub-licensees, by
product and by country, and Net Payments received by Animas from Sub-licensees
associated with such Debiotech Micro-Needle Products, and (iv) the royalties payable
by Animas with respect to such Net Revenue for that quarter and the Sublicense Fees
payable by Animas with respect to such Net Payments from Sub-licensees for that
quarter, if any.
	 
	 	1.31  	Pump Agreement: a parallel agreement entered into between Debiotech and Animas
in connection with an externally worn micro-pump product of Debiotech, entitled
License, Joint Development and Manufacturing Assistance Agreement and all attached
exhibits, together with any future amendments entered into in accordance with such
parallel agreement.
	 
	 	1.32  	Royalties Term: the period during which at least one Licensed Patent is Valid
in at least one Major Country.
	 
	 	1.33  	Steering Group: a six person committee, composed of three senior employees of
each party, but not their CEOs, which shall review in accordance with Section 5.5 of
this Agreement all the developmental, logistical and technical aspects of the
Development Program.
	 
	 	1.34  	Sub-licensees: third party (outside Animas Group) sub-licensees appointed by
Animas in accordance with Section 2.3 of this Agreement and distributing Debiotech
Micro-Needle Products which have not been sold to them by Animas Group or a
Sub-licensee (so that such Debiotech Micro-Needle Products have not yet been taken into
account for determining royalties due to Debiotech). Sub-licensees do no include (i)
parties that manufacture Debiotech Micro-Needle Products, or components therein, on
behalf of Animas, but do not distribute such
Debiotech Micro-Needle Products or components therein, or (ii) Distributors.
However, the same person might be a Distributor in connection with certain Debiotech
Micro-Needle Products (bought from Animas Group or a Sub-licensee) and a
Sub-licensee in connection with certain other Debiotech Micro-Needle Products (not
bought from Animas Group or a Sub-licensee).

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	 	1.35  	Valid: qualifier for a patent in a determined country, meaning that such
patent in such country is valid, not expired and has not been declared unenforceable by
a competent body of such country (such as a United States Federal District Court) for
any defect related to the patent (such as a failure from patentee to make relevant
disclosures) and affecting its validity lato sensu, but not making the patent
technically invalid. Whether the validity of the patent is challenged and infringers
can effectively be prevented is irrelevant to determine whether any patent is Valid.
	 
	 	1.36  	Year: a calendar year, from January 1 to December 31.

	2.  	License to Animas.

	 	2.1  	Exclusive License. Debiotech hereby grants to Animas an exclusive, even as to
Debiotech, worldwide license, with the right to sublicense in accordance with Section
2.3 of this Agreement, under all Debiotech Intellectual Property, excluding
intellectual property jointly developed by Debiotech and a third party, and a
non-exclusive sub-license under Debiotech Intellectual Property jointly developed by
Debiotech and a third party to make, have made, use, sell, offer for sale, or import
Debiotech Micro-Needle Products in the Field.
	 
	 	2.2  	Duration. The License shall be perpetual (subject to Article 15 of this
Agreement). After the Royalties Term, the License shall become a fully paid-up,
royalty free, irrevocable, non exclusive worldwide license.
	 
	 	2.3  	Sublicense. The License shall include the right for Animas to sublicense the
licensed rights; provided that Animas obtains Debiotech’s written consent which consent
shall not be unreasonably withheld or delayed. Animas’ sub-licensees shall conform to
the applicable material terms of this Agreement and Animas shall remain directly liable
to Debiotech with regard to any breach of the terms of this
Agreement by Animas’ sub-licensees remaining uncured after a 90 day period following
a default notice; provided that, Animas shall no longer be considered in breach of
this Section 2.3 in the event Animas terminates the sublicense agreement within a
reasonable period after the breach.

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	 	2.4  	Limitation to the Field. Licensees shall not make, use, sell, offer for sale,
or import Debiotech Micro-Needle Products outside the Field.
	 
	 	2.5  	Further Documents. Debiotech hereby agrees to execute, or cause its employees,
partners, licensors, agents, or consultants to execute all documents and shall take all
actions necessary or desirable to effect, confirm and perfect the rights granted to
Animas pursuant to the License, including without limitation, assignment to Debiotech
of inventions past, present and future from its employees and consultants.
	 
	 	2.6  	Promotion. Animas shall use reasonable commercial efforts to commercialize the
Debiotech Micro-Needle Products, independent of the economic attractiveness of other
competing Animas products.
	 
	 	2.7  	Sales, Marketing and Distribution. All sales, marketing, and distribution
activities for Debiotech Micro-Needle Products shall be the responsibility of Animas.
Animas shall give Debiotech periodic updates on the progress of Animas marketing
activities.

	3.  	License Fees.

	 	3.1  	Initial License Fee. Animas shall not pay to Debiotech any initial license fee
in connection with this Agreement.
	 
	 	3.2  	License Fee. Animas shall pay to Debiotech a license fee of up to Two Million
Five Hundred Thousand Dollars ($2,500,000), payable within 30 days after the following
milestones are reached : (a) $500,000 upon sale of 500,000th Debiotech
Micro-Needle Product ; (b) $2.0 million upon sale of 2,000,000th Debiotech Micro-Needle
Product. Above payments are payable only once. Quantity thresholds are determined in
aggregate for all Debiotech Micro-Needle Products.
	 
	 	3.3  	Sublicense Fees. Except to the extent a Sub-licensee Royalty Rate is
applicable, Animas shall pay to Debiotech ****** of any Net Payments Animas receives
from Sub-licensees and Distributors (“Base Sub-licensee Rate”). Net Payments equal the
gross cash (including royalties) received by Animas Group from Sub-licensees pursuant
to any sub-license agreement between Animas Group and such Sub-licensee

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	 	   	relating to
Debiotech Intellectual Property and the gross cash received by Animas Group from
Distributors pursuant to any agreement between Animas Group and such Distributor
relating to Debiotech Intellectual Property but excluding any cash received by Animas
Group from sales of Debiotech Micro-Needle Products to such Distributors (provided
that, to the extent Debiotech can demonstrate that a substantial portion of the sales
price of Debiotech Micro-Needle Products sold by Animas Group to Distributors includes
what should be characterized as a sublicense fee or royalties due to Animas Group,
Debiotech may require that such part of the sales price be included in the Net Payments
instead of in the Net Revenue), minus applicable import, export and excise duties and
sales tax (including VAT), and minus any taxes withheld from the gross cash (excluding
any taxes that were withheld after the gross cash payable to Animas Group was increased
to provide that after the withholding of the taxes Animas Group was to receive the same
amount of payment it would have received but for the withholding) to the
extent not recoverable by Animas Group within two years of the receipt of the gross
cash. In the event the total aggregate number of Debiotech Micro-Needle Products sold
by all Sub-licensees and sold by Animas Group to Distributors for resale outside the
USA in a Year exceeds ****** of all Debiotech Micro-Needle Products sold by Animas
Group (including those to Distributors) and its Sub-licensees in such Year, Animas
shall pay to Debiotech a Sub License Fee equal to the greater of (i) a royalty equal to
****** of net revenues of Debiotech Micro-Needle Products sold by all Sub-licensees
(“Sub-licensee Royalty Rate”), or (ii) Base Sub-licensee Rate.
	 
	 	3.4  	Currency. All payments under this Agreement shall be made in US Dollars, and
all references in this Agreement to “Dollars” shall mean “US Dollars”. Payments to be
made to Debiotech shall be made by bank transfer to Debiotech’s bank account.

	4.  	Royalties.

	 	4.1  	Base Royalties. Animas agrees to pay Debiotech a royalty equal to a percentage
of Net Revenue of Debiotech Micro-Needle Products sold or placed to end-users by Animas
Group. The royalty rate shall be in accordance with Exhibit B.
	 
	 	4.2  	Allocation of Net Revenues. For the purposes of royalty calculations, any
product sold in same sterile pack as Debiotech Micro-Needle Product will be included as
part

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	 	  	of Debiotech Micro-Needle Product. Also any tubing used for the delivery of
insulin or measurement of glucose along with Debiotech Micro-Needle Product will also
be included as part of Debiotech Micro-Needle Product.
	 
	 	4.3  	Pump Agreement Royalties. To the extent royalties payable under the Pump
Agreement relate to the same product sold hereunder, such amounts shall be deducted
from any royalty amounts due under this Agreement.
	 
	 	4.4  	Net Revenue Adjustment. In the event that less than ****** of Debiotech
Micro-Needle Products placed or sold by Animas Group in any given Year are placed or
sold through its direct sales force, the parties shall negotiate in good faith an
appropriate correction factor of the Net Revenue for that Year, which correction factor
shall increase royalty payments payable to Debiotech to compensate, in part, for the
reduced average selling prices of Debiotech Micro-Needle Products, and hence royalties
to Debiotech, as a result of the lower percentage of direct sales. The parties in such
negotiation shall consider a correction factor to provide for what the average selling
price of Debiotech Micro-Needle Products would have been had Animas Group sold at least
****** of Debiotech Micro-Needle Products through its direct sales force; provided that
the gross margin percentage of Debiotech Micro-Needle Products, in aggregate, sold by
Animas Group after the increased royalties does not fall below customary gross margin
percentages for manufacturers in the med-tech industry providing similar levels of
customer service, have similar mix of direct versus indirect sales, and perform similar
levels of R&D activities. Following any Change of Control, the correction factor shall
apply without regard to its impact on gross margin. If the parties are unable to agree
on a correction, either party may require that the matter be determined by binding
baseball arbitration pursuant to Section 16.2 of this Agreement.
	 
	 	4.5  	Royalties reduction. During the Royalties Term, if none of the Licensed
Patents covering any Debiotech Micro-Needle Product is Valid in any Major Country, the
royalty rate set forth in Exhibit H shall be reduced to ****** of above rate in those
countries in which Debiotech Micro-Needle Products are sold, but Licensed Patents are
not Valid, provided that such reduction in royalty rates shall only occur if (i) there
is another competing Micro-Needle product utilizing MEMS technology being sold in such
country and, (ii) the Debiotech Micro-Needle Products sold in such country are not
manufactured in a country where a Licensed Patent covering any Debiotech

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	 	   	Micro-Needle Product is Valid.
	 
	 	4.6  	Quarterly Calculation and Payment of Royalties. Royalties shall be due and
payable with respect to the Net Revenue made in each calendar quarter on the date which
is forty-five (45) days following the end of such calendar quarter (each such payment
date, a “Payment Date”). On or before each Payment Date on which royalties are due,
Animas shall prepare and deliver to Debiotech a Quarterly Royalties Statement.
	 
	 	4.7  	Records and Audits. Licensees shall maintain detailed books and records
containing information sufficient to verify the completeness and accuracy of the
information presented in each Royalty Statement for a period of at least five years
after the period to which such Royalty Statement relates.
	 
	 	   	Debiotech shall have the right, not more than once each Year, on reasonable advance
notice to Animas, during usual business hours, to cause the examination of relevant
records of Licensees for the period since the last period covered by any previous
examination (including records which are more than five years old, if then
available) and ending with the calendar quarter covered by the most recent Payment
Date for the sole purpose of verifying the completeness and accuracy of the
Quarterly Royalty Statements, including any specific calculation relevant under this
Agreement (such as with regard to Sections 3.3 and 4.4 of this Agreement). At
Debiotech’s election, any such examination shall be conducted by Animas’ auditors,
if allowed by law and agreeable to such auditors, or by independent public
accountants selected by Debiotech and reasonably acceptable to Animas.
	 
	 	   	As a condition to such examination, Animas may require such independent public
accountants to execute a confidentiality agreement in form and substance reasonably
satisfactory to Animas pursuant to which such independent public accountants will
agree to retain in confidence all information learned by them in the course of such
examination, except that any discrepancy in any information included in a Quarterly
Royalty Statement, or being a relevant information under this Agreement, may be
disclosed to Debiotech.
	 
	 	   	Debiotech shall pay the costs of conducting such audit unless the final results of
an audit reveal an underpayment by Animas of five percent (5%) or more during the

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	 	   	audited period, in which case Animas shall pay the costs of conducting such audit.
	 
	 	4.8  	Duration. Royalties are to be paid on the sale of all Debiotech Micro-Needle
Products sold by Licensees throughout the world during the Royalties Term. Following
the Royalties Term, the provisions of Section 2.2 of this Agreement shall apply.

	5.  	The Development Program and MEMS Micro-Needle.

	 	5.1  	Responsibilities of Debiotech. Debiotech shall use reasonable commercial
efforts to complete the Development Program, pursuant to which Debiotech shall be
responsible for development of MEMS Micro-Needle and process to manufacture MEMS
Micro-Needle , both in accordance with Micro-Needle Specifications, and provide to
Animas fully functional prototypes of the MEMS Micro-Needle, which meet the
Micro-Needle Specifications, are sufficient for FDA Submission, and are in a form which
in fact permits redesign for manufacturing and scaling up for large scale industrial
manufacturing.
	 
	 	   	To the extent that such prototypes of the MEMS Micro-Needle fail to meet the
requirements set forth above, Debiotech shall, at its sole expense, use reasonable
commercial efforts to continue development work to satisfy such requirements;
provided that, Debiotech shall not be required to continue development if Animas has
commenced marketing of the Debiotech Micro-Needle.
	 
	 	5.2  	Responsibilities of Animas. Animas shall use reasonable commercial efforts to
complete the Development Program, pursuant to which Animas shall be
responsible for development of Debiotech Micro-Needle in accordance with
Micro-Needle Specifications to be developed.
	 
	 	   	Animas shall be responsible for establishing the large scale manufacturing and
Debiotech shall propose appropriate materials to be used to manufacture the
Debiotech Micro-Needle and shall assist by supplying engineering support necessary
to facilitate production of the Debiotech Micro-Needle in large scale by Animas or
suppliers designated by Animas.

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	 	5.3  	Development Expenses. Each party shall be responsible for bearing its own
costs of the Development Program. Debiotech shall be solely responsible for all
expenditures of any nature required to complete the development of the MEMS
Micro-Needle in a form which in fact permits scaling up for large scale industrial
manufacturing and which satisfies the requirements set forth in Section 5.1 above.
Animas shall be solely responsible for all expenditures of any nature required to
complete the development of the Debiotech Micro-Needle in a form which in fact permits
scaling up for large scale industrial manufacturing and which satisfies the
requirements set forth in Section 5.2 above. Animas shall be responsible for the costs
of any tooling and equipment for manufacturing of the Debiotech Micro-Needle as well as
for the cost of all required redesign for manufacturing.
	 
	 	   	However, if (a) development costs incurred by Debiotech solely to satisfy Interface
requirements in aggregate exceed ******, or (b) Debiotech Micro-Needle Products
(other than Debiotech Micro-Needle) require modification of MEMS Micro-Needle,
Animas shall reimburse Debiotech at rates as provided for in Exhibit C plus
out-of-pocket expenses.
	 
	 	   	Animas agrees to spend not less than ****** to develop Debiotech Micro-Needle prior
to January 2007 unless both parties agree, in good faith, that the Debiotech
Micro-Needle is not feasible as a commercial product.
	 
	 	5.4  	Reports. Debiotech shall keep Animas fully informed with regard to the
progress of the development of the MEMS Micro-Needle.
	 
	 	   	Not later than fifteen (15) days prior to the meetings with CEOs contemplated by
Section 5.5, Debiotech shall submit to Animas a written report including all
information regarding progress on the Development Program, disclosing any inventions
or other improvements in technology, whether or not patentable, discovered or
created in the course of the Development Program. The reports will also include a
confirmation from Debiotech that Debiotech believes that the Development Program can
be completed consistent with the schedule contemplated, or Debiotech shall submit to
Animas a revised schedule setting forth the revised estimated time to complete the
Development Program.
	 
	 	   	If reasonably necessary in addition to the above, and to the extent it would not be

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	 	   	unreasonably burdensome on Debiotech, upon request from Animas, Debiotech shall
allow Animas’ representatives and, where Animas shows a reasonable business purpose,
third party guests (subject to appropriate confidentiality agreements with
Debiotech), to visit the development facilities where the Development Program is
conducted, to attend presentations by Debiotech representatives of the current state
of the Development Program and to receive additional written reports addressing
specific issues.
	 
	 	   	All contents of this Section 5.4 and of Section 5.5 below shall be reviewed and
modified by the parties as necessary to adequately reflect the actual needs
associated with the Development Program and the associated process.
	 
	 	5.5  	Program Management. Each party shall appoint three senior employees, but not
their CEOs, to form the Steering Group, which shall review all the developmental,
logistical and technical aspects of the Development Program. In addition, major
financial issues shall be discussed when they arise. To the extent possible the
Steering Group should be the same as the steering group under the Pump Agreement.
	 
	 	   	At least two members of the Steering Group from each side shall meet in person at
least once every two months. Each party may invite additional participants from its
own party to attend. Minutes of the meetings shall be prepared by Debiotech,
indicating in particular the steps believed to be satisfactorily performed by the
parties and the next steps to be performed. Minutes shall be reviewed and approved
or rejected and amended at the next meeting of the Steering Group. Minutes of the
Steering Group shall not constitute amendments of this Agreement or the Micro-Needle
Specifications even if signed by representatives of the parties
or the CEOs of each Party.
	 
	 	   	The Steering Group shall be charged with managing the Development Program with a
view to completing development of the Debiotech Micro-Needle as rapidly as possible.
In addition, the Steering Group shall insure that such development be completed in
accordance with the Micro-Needle Specifications and that the manufacturing cost of
the Debiotech Micro-Needle be consistent with the levels set forth in the
Micro-Needle Specifications. The Steering Group shall make recommendations to
either Party regarding design and engineering issues and shall

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	 	   	make recommendations
to Animas regarding the most appropriate supplier(s) to manufacture the Debiotech
Micro-Needle or any part thereof. Debiotech employees shall be primarily
responsible for issues relating to design, engineering and intellectual property
with regard to the MEMS Micro-Needle. Animas employees shall be primarily
responsible for issues relating to design, engineering and intellectual property
with regard to other parts of the Debiotech Micro-Needle as well as manufacturing
and selection of suppliers. Animas shall also be responsible for facilitating any
incorporation of Animas’ technology, if any, in the Debiotech Micro-Needle.
	 
	 	   	Either Party’s members on the Steering Group may recommend modifications to the
Micro-Needle Specifications and the Development Program by submitting a written
request to the other Party’s members on the Steering Group detailing the nature of
the modification, the reason for the modification and the anticipated costs
associated with implementing the modification. Any modification must be approved in
writing by each CEO. Each Party agrees not to unreasonably withhold their approval
to a modification suggested by the other Party so long as the consenting Party
cannot demonstrate with written documentation that the modification (i) adversely
affect the marketability and desirability of the Debiotech Micro-Needle, (ii)
materially affects the cost of the development effort, or (iii) materially affects
the timing of the availability on the market of the Debiotech Micro-Needle.
	 
	 	   	Each Party’s members on the Steering Group shall keep their respective CEOs
informed as necessary. The Steering Group shall meet in person with the CEOs as a
group of eight at least once every 4 months. The Steering Group shall attempt to
resolve issues without the involvement of the CEOs; provided, that, in the event
the parties cannot agree, the issue shall be put before the CEOs who shall use
commercially reasonable efforts to resolve the issue.
	 
	 	   	Meetings of the Steering Group (other than those to attended by the CEOs) shall
be held at the location where the most active development work is being conducted,
which the parties anticipate will be in Lausanne Switzerland through the early and
middle stages of the Development Program, and may be the site of anticipated
manufacturing facilities later in the Development Program. Meetings of the Steering
Group attended by the CEOs shall alternate between locations designated by the CEO
of Animas and the CEO of Debiotech.

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	 	5.6  	Obligations to develop Product. Debiotech agrees that it will devote the
resources as reasonably necessary to ensure development of the MEMS Micro-Needle by the
deadline to be mutually agreed by the parties.
	 
	 	   	Animas agrees that it will devote the resources as reasonably necessary to ensure
development of the Debiotech Micro-Needle in time for Debiotech to complete the
Development Program by the deadline to be mutually agreed by the parties.
	 
	 	5.7  	Failure to complete Development Program. Because of the uncertainties
associated with the development work, neither party warrants that it will successfully
complete the Development Program.
	 
	 	5.8  	Choice of Suppliers under Development Program. Debiotech and Animas must
jointly agree on choice of suppliers for any part or process of the Development Program
if Non-recurring Engineering Expense (NRE) or tooling charge exceeds $20,000.

	6.  	Regulatory Responsibility.

	 	6.1  	Regulatory Filings. Animas shall use commercially reasonable efforts to file
regulatory approvals, including to the Food and Drug Administration, pending completion
of test results and other documentation required for such submission.
	 
	 	6.2  	Documentation for regulatory submission. In connection with preparation by
Animas of the FDA Submission and during the review by FDA of the FDA Submission,
Debiotech shall: a) furnish all test results and documentation on MEMS Micro-Needle
required by FDA and, b) remain available for responding to questions by FDA relating
to such FDA Submission.
	 
	 	6.3  	Clinical Studies. Animas shall be responsible for oversight of clinical
studies, if any, necessary to obtain FDA Approval, and shall be responsible for the
cost of any such studies. Protocol of clinical studies must be approved by Debiotech
in advance.
	 
	 	6.4  	Material for Clinical Studies. Notwithstanding the provisions of Section 7.1
of this

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	 	   	Agreement, Debiotech shall furnish MEMS Micro-Needle & Interface, in accordance
with Micro-Needle Specifications, needed for clinical studies as required in Section
6.3 of this Agreement. The cost of all such deliverables shall be borne solely by
Debiotech, provided that, Animas shall be responsible for any investments necessary for
manufacturing and redesign for manufacturing, to the extent required.
	 
	 	6.5  	Regulatory Obligations. Animas and Debiotech shall cooperate in the
preparation of, and shall execute, as part of the Development Program, a Quality
Agreement in order to meet the requirements of ISO13485, European MDD and FDA QSR (21
CFR 820) requirements for medical devices, to the extent applicable.

	7.  	Manufacturing Program of MEMS Micro-Needle.

	 	7.1  	Manufacturing Responsibility. Animas shall be responsible for all aspects of
manufacturing of Debiotech Micro-Needle Products, and shall bear all corresponding
costs, except to the extent specifically stated otherwise.
	 
	 	7.2  	Choice of Initial Manufacturer. Debiotech shall recommend not less than three
candidates of initial manufacturer for the MEMS Micro-Needle. Animas may choose
between one of three candidates to be the initial manufacturer. If for whatever
reason, Animas finds the three candidates unacceptable, Animas may recommend other
candidates, whose endorsement by Debiotech may not be
unreasonably withheld.
	 
	 	7.3  	Debiotech Assistance. Debiotech, at its own cost, shall provide (i) all
documentation of all processes, materials, testing, and assembly instructions necessary
for the initial manufacturer to manufacture the MEMS Micro-Needle in small-scale
manufacturing and further enter into a redesign for manufacturing for large-scale
production, (ii) any training required of personnel of the initial manufacturer to
manufacture the MEMS Micro-Needle, (iii) any additional technical support including for
re-design/ revalidation of processes necessary for large-scale manufacturing ((i) to
(iii) constituting the Manufacturing Program), and (iv) continued technical support
including for re-design/ revalidation of processes, until the initial manufacturer has
delivered to Animas 500,000 MEMS Micro-Needles to be placed on the market.

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	 	7.4  	Cost. The cost of all required manufacturing tools and equipments as well as
for the redesign for manufacturing shall be borne by Animas.
	 
	 	7.5  	Support after Manufacturing Program. Debiotech shall provide employees as
reasonably requested by Animas from time to time to support manufacturing and technical
issues, as they may arise of MEMS Micro-Needle after completion of Manufacturing
Program. Animas shall reimburse Debiotech at rates as provided for in Exhibit C, plus
out-of-pocket expenses.
	 
	 	7.6  	Access to MEMS Micro-Needle Manufacturer. Subject to the terms and conditions
of this Section 7.6 and Section 12.1 of this Agreement, Debiotech shall have the right
to buy directly from the manufacturer (the “MEMS Manufacturer”) the MEMS Micro-Needle
for use outside the Field.
	 
	 	   	To the extent Debiotech requires MEMS Manufacturer to use substantially the same
tooling and equipment which is either (a) used by and has been specifically paid for
by Animas, or (b) is owned by Animas (the “Tooling”), then (i) Debiotech must
reimburse Animas for its pro rata share of any non-recurring engineering costs
(excluding Animas personnel) and tooling costs incurred by Animas for the
manufacture of such MEMS Micro-Needle, irrespective of when such costs were incurred
(provided such reimbursement shall not apply to prototypes and small series in an
amount less than 251 wafers requested by Debiotech for development,
clinical evaluation and registration purposes so long as the manufacture of such
prototypes and small series do not cause delays to Animas deliveries); (ii) Animas
shall have priority in the supply of MEMS Micro-Needle over Debiotech in the event
that (i) the MEMS Manufacturer is unable to provide all quantities of MEMS
Micro-Needle requested by both Debiotech and Animas unless Animas has failed to
provide MEMS Manufacturer an adequate forecast of such requirements as set forth in
the agreement between the MEMS Manufacturer and Animas; (iii) any request for a
change by Debiotech in the design or manufacturing of Tooling must be approved by
Animas prior to any discussion with MEMS Manufacturer, and further any such
discussions between MEMS Manufacturer and Debiotech, after such approval by Animas
for such discussions, may only be done in the presence of Animas personnel; (iv) in
no case, may any change in the design or manufacturing of such Tooling be made
without the explicit approval in writing by Animas, and further Animas is under no

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	 	  	obligation to approve a change in the design or manufacture of such Tooling, even if
Debiotech believes that Animas is unreasonably withholding its approval.
	 
	 	   	All rights and obligations of Debiotech in this Section 7.6 shall inure to
Debiotech’s licensees outside the Field, provided that, such licensees agree to
indemnify Animas from any third party claims in connection with their using of the
Tooling as per this Section 7.6, and further provided, that the prior written
approval by Animas is obtained, which approval shall not be unreasonably withheld.
Debiotech shall indemnify and hold harmless Animas, its successors and assigns,
Affiliates, and their respective agents, officers, employees, representatives and
directors from any third party claims in connection with Debiotech using the Tooling
as per this Section 7.6. In the event Debiotech or its licensees sell product in
the Field in a manner which is under the reasonable control of Debiotech or its
licensee, in addition to any remedies that may exist under this Agreement, all
rights of Debiotech under this Section 7.6 may be terminated, provided (i) sales
were made willfully in the Field, or (ii) sales were made negligently in the Field
and are materially harmful to Animas. Such termination rights shall not apply to
the extent Debiotech or its licensee, following notice from Animas, fails to cure
the breach within 90 days.

	8.  	Representations, Warranties and Covenants.

	 	8.1  	Authorization. Each party represents that it is duly organized, validly
existing and in good standing under the laws of the state of its organization, that it
has full power to execute, deliver and perform this Agreement, that this Agreement has
been duly authorized, executed and delivered by such party and is the legal, valid and
binding obligation of such party, enforceable against such party in accordance with its
terms, subject as to enforcement, to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors’ rights generally and general
principles of equity.
	 
	 	8.2  	No Conflict. Each party represents that the execution, delivery and
performance of this Agreement do not require any approval, license, qualification,
consent or filing or exemption therefrom, or other action by any court, governmental
authority or other person, and do not contravene or constitute a default under any
legal requirement binding on such party, any agreement binding on such party or any of
its assets, or any judgment, injunction or order or decree binding on such party or any
of its

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	 	   	properties.
	 
	 	8.3  	No Litigation. Each Party represents that there is no actual, pending or, to
the best knowledge of such Party, threatened action, suit, proceeding or investigation
against or affecting it or any of its assets (including, with respect to Debiotech,
Debiotech Intellectual Property) before or by any court or arbiter or any governmental
authority which would prohibit or interfere with such Party performance of its duties
under this Agreement.
	 
	 	8.4  	No Intellectual Property of Third Parties. Debiotech represents that, to the
best knowledge of Debiotech, there is no Valid intellectual property owned by any third
party which would restrict Animas from making, using and selling Debiotech Micro-Needle
(as defined in the Micro-Needle Specifications) in the Field throughout the world under
the License in accordance with the terms of this Agreement without payment to third
parties. Debiotech further warrants that it did not receive any communication from
third parties (i) notifying it that the Debiotech Micro-Needle might infringe
intellectual property rights of any third party or (ii) questioning the ability of
Debiotech Intellectual Property to adequately prevent third parties from duplicating
the Debiotech Micro-Needle without infringing.
	 
	 	8.5  	Ownership of Intellectual Property. Debiotech represents that it owns (whether
by ownership directly or through licensed rights) the Licensed Patents described in
Exhibit A, free and clear of any claims of any third party. Debiotech represents that,
to the best knowledge of Debiotech, it owns (whether by ownership directly or through
licensed rights) all of the intellectual property necessary or useful for the
development of the Debiotech Micro-Needle under the Development Program, including
without limitation, the Debiotech Intellectual Property, free and clear of any claims
of any third party. Debiotech represents, (i) that, to the best knowledge of
Debiotech, none of such intellectual property infringes or misappropriates any
intellectual property rights or other property rights of any third party other than
third parties identified in (v) below that have licensed relevant technology to
Debiotech; (ii) that no intentional misrepresentations were made in any applications
for patents included within Debiotech Intellectual Property; (iii) that all such patent
applications have been made in good faith and (iv) that Debiotech does not have any
knowledge of any factors which would compromise the validity of any of the Licensed
Patents; and (v) that, to the best knowledge of Debiotech, Debiotech does not possess,
nor does it

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	 	   	currently require, any third party license(s) other that referred to in
Section 8.6 of this Agreement to make, sell, use and/or import the Debiotech
Micro-Needle.
	 
	 	8.6  	Authorization to License. Debiotech represents that Debiotech is legally
authorized to license, on a worldwide basis, all Licensed Patents, including those
identified as “Goran Stemme patents” and covenants to protect Animas from any recourse
made by Goran Stemme and Patrick Griss (the patents owners) as evidenced by the
agreement between the patents owners and Debiotech described in Section 8.7 of this
Agreement.
	 
	 	8.7  	Patent Owners Intellectual Property. Debiotech represents that Debiotech and
patent owners have executed an agreement which ensures that Animas may use the License
without obligation to pay any royalties to the patent owners or any third party and
that such patent owners will look solely to Debiotech for payment of any royalties
owing to them as a result of Animas’ exploitation of the License.
	 
	 	8.8  	Feasibility of Development Program. Debiotech represents that it reasonably
believes that the Development Program can be successfully completed within the
timeframes set forth in this Agreement.
	 
	 	8.9  	Indemnification. Debiotech shall indemnify, defend and hold harmless
Licensees, their respective successors and assigns, and their respective agents,
officers, employees, representatives and directors from and against claims made against
them by third parties, including any and all actions, suits, damages, claims, loss or
liabilities (including, without limitation, reasonable attorneys’ fees and costs of
collection) arising out of or caused by a breach by Debiotech of any of its
representations made in this Article 8. Notwithstanding the foregoing, Debiotech’s
indemnification obligations set forth in this Section shall not apply with respect to
any claims by Licensees that Debiotech Intellectual Property infringes the intellectual
property of such Licensee.
	 
	 	   	Licensee shall promptly notify Debiotech of such claim. Debiotech shall have the
right to assume and control the defense, direct the investigation, and control the
settlement of each such claim, provided that, Debiotech shall not settle the claim
or otherwise consent to a judgment relating to such claim without the prior written

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	 	   	consent of the Licensee (such consent not to be unreasonably withheld or delayed).
Licensee shall be permitted to participate to any proceedings at its own expense.
	 
	 	   	Debiotech and Licensee shall fully cooperate with each other in connection with the
defense of such claim, including by furnishing all available documentary or other
evidence as is reasonably requested by the other.
	 
	 	   	If Debiotech elects not to settle or defend such claim, the Licensee shall (at the
expense of Debiotech) have the right to assume the defense of such claim and shall
have the right to settle (with the prior written consent of Debiotech, such consent
not to be unreasonably withheld or delayed).

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	9.  	Limitations of Liability

	 	9.1  	EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, ORAL OR WRITTEN, EXPRESS OR IMPLIED, ARISING FROM COURSE
OF DEALING, COUSE OF PERFORMANCE, USAGE OF TRADE, OR OTHERWISE, INCLUDING IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR TITLE.
	 
	 	9.2  	EACH PARTY’S TOTAL AGGREGATE LIABILITY FOR DAMAGES UNDER THIS AGREEMENT SHALL

UNDER NO CIRCUMSTANCES EXCEED $ 500,000 EXCEPT AS PROVIDED BELOW. UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OTHER PERSON FOR LOST
REVENUES, LOST PROFITS, LOSS OF BUSINESS, OR ANY INCIDENTAL, INDIRECT, EXEMPLARY,
CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES OF ANY KIND, WHETHER OR NOT FORESEEABLE,
EVEN IF ONE PARTY HAS BEEN ADVISED OR WAS AWARE OF THE POSSIBILITY OF SUCH LOSS OR
DAMAGE. THE FOREGOING LIMITATIONS SET FORTH IN THE TWO PREVIOUS SENTENCES SHALL NOT
APPLY WITH RESPECT TO (i) EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS
AGREEMENT, (ii) BREACHES BY EITHER PARTY OF THE OTHER PARTY’S INTELLECTUAL PROPERTY
RIGHTS, (iii) BREACHES BY DEBIOTECH OF THE LICENSE GRANTED ANIMAS IN THIS AGREEMENT,
(iv) BREACHES BY ANIMAS OF SECTION 2.4 OF THIS AGREEMENT, OR (V) FRAUDULENT
MISREPRESENTATIONS.
	 
	 	9.3  	The representations made by each Party under this Agreement and the obligations
of each Party under this Agreement, run only to the other Party, and not to any
Affiliate, sublicensee, customer or any other Person. Under no circumstances shall any
Affiliate of the other Party, its customers, or any other Person be considered a third
party beneficiary of this Agreement or otherwise entitled to any rights or remedies
under this Agreement.

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	10.  	Lawsuits by Others Alleging Infringement of Debiotech Micro-Needle Products .

	 	10.1  	Infringement Claims by Third Parties. In the event that a third party, other
than a Licensee, asserts any claim or cause of action alleging that the Debiotech
Micro-Needle Products in the Field (i) infringe of a patent or copyright of another
person, or (ii) unlawfully discloses or uses or misappropriates a trade secret or other
intellectual property right of a third person, Animas shall have the right to assume
control and direct the investigation, defense and settlement of each such claim.
	 
	 	   	Animas shall keep Debiotech fully informed of all developments of the case,
including any counterclaims made by Animas. Animas shall, to the extent legally
permissible and without waiving attorney client privilege, (a) provide Debiotech
with copies of all pleadings, discoveries and other relevant material (including
discussion papers, submissions, opinions, technical evaluations, expert or witness
statements and any other material contemplated to be used in the proceedings or
otherwise relevant to the proceedings, whether in draft or final form), and (b)
allow, except to the extent it would prove impracticable, participation in defense
strategy discussions; provided that, Debiotech shall agree to appropriate
confidentiality undertakings. Debiotech and its agents, representatives and
employees shall at all times have the right, at its own cost, to participate in the
defense (and assume the defense if Animas does not act in good faith in defending
the claim).
	 
	 	   	The Parties shall fully cooperate with each other in connection with the defense of
such claim, including by furnishing all available documentary or other evidence as
is reasonably requested by the other.
	 
	 	   	Animas shall not, to the extent reasonably practicable, settle the claim or
otherwise consent to an adverse judgment in such claim without the express written
consent of Debiotech, which consent shall not be unreasonably withheld or delayed.
In the event that Debiotech reasonably withholds its consent, whether such consent
is requested before or after the settlement is reached, the provisions of Section
10.3 of this Agreement shall not apply.

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	 	10.2  	Claims by Licensees. In the event that a Licensee asserts any claim or cause
of action for patent, copyright infringement, unlawful disclosure or use or
misappropriation of a trade secret or other intellectual property right against another
Licensee or Debiotech in connection with the Debiotech Micro-Needle Products in the
Field, Animas shall be solely responsible in connection with such claim and the
provisions of Section 10.3 shall not apply.
	 
	 	10.3  	Royalty Offset. Subject to the limitations below in
this Section 10.3,
Debiotech shall reimburse Animas for the lesser of (i) fifty percent (50%) of all
license fees, costs, settlement fees, expenses, damages and liabilities, including
reasonable counsel fees and expenses , incurred by Licensees as a result of any third
party claim under Section 10.1 of this Agreement or (ii) 50% of the aggregate royalties
received pursuant to Article 4 and of the estimated future royalties to be received of
the date of the assessment of such Infringement Costs. Such payment shall be referred
to as “Infringement Payment” and shall be credited in full against 50% of all royalties
falling due to Debiotech under this Agreement thereafter. Debiotech shall have no
obligation to make an Infringement Payment if the claims are based on technology
sourced from or developed by Licensees. To the extent the Parties resolve differences
regarding this Section 10.3, the Parties shall submit the matter to baseball
arbitration pursuant to Section 16.2 of this Agreement.
	 
	 	10.4  	Cooperation. If, prior to Commercial Launch, either party finds intellectual
property of a third party that could potentially prevent or restrict commercialization
of the Debiotech Micro-Needle in accordance with the Micro-Needle Specifications, the
parties shall work together to develop an alternate design or a solution not to
infringe the third party intellectual property rights.

	11.  	Product Liability.

	 	11.1  	Indemnification by Animas. Animas shall indemnify, defend and hold harmless
Debiotech, its agents, officers, employees, representatives and directors from and
against claims made against them by third parties, including any and all third party
actions, suits, damages, claims, losses or liabilities (including, without limitation,
reasonable attorneys’ fees and costs of collection), arising out of or caused by
allegedly defective product. Animas shall have no obligation under this Section 11.1
to the extent such claim arises out of or is caused by the dishonesty or wanton

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	 	   	carelessness of Debiotech.
	 
	 	   	Debiotech shall promptly notify Animas of such claim. Animas shall have the right
to assume and control the defense, direct the investigation, and control the
settlement of each such claim. Debiotech shall be permitted to participate to any
proceedings at its own expense.
	 
	 	   	The Parties shall fully cooperate with each other in connection with the defense of
such claim, including by furnishing all available documentary or other evidence as
is reasonably requested by the other, and shall use reasonable commercial efforts to
defend such claim.
	 
	 	   	If Animas elects not to settle or defend such claim, Debiotech shall (at the expense
of Animas) have the right to assume the defense of such claim and shall have the
right to settle (with the prior written consent of Animas, such consent not to be
unreasonably withheld or delayed).
	 
	 	11.2  	Insurance Requirements. Animas agrees that it will maintain the levels of
insurance it has as of the Agreement Date and Debiotech agrees (except to the extent
that purchasing such levels of insurance would be unreasonable from a commercial point
of view) that it will maintain at least ****** in insurance coverage, in each case at
such party’s sole cost and expense. Commencing with the clinical testing of
the Debiotech Micro-Needle Products on human patients, Animas agrees to maintain in
effect and deliver to Debiotech a certificate regarding a comprehensive general
liability insurance in which Debiotech is an additional insured in an aggregate amount
of at least ******, except to the extent that purchasing such levels of insurance would
be unreasonable from a commercial point of view.

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12. Indemnification Outside the Field of Use.

	 	12.1  	Notwithstanding the provisions of Sections 10.1 and 11.1 of this Agreement,
Animas shall have no obligation to defend or indemnify Debiotech, Debiotech’s
sub-licensees or any third party and Debiotech shall indemnify and hold harmless
Licensees, their respective successors and assigns and their respective agents,
representatives, officers, directors and employees from and against claims made against
them by third parties, including any and all actions, suits, claims, losses, damages,
costs and expenses, arising out of or caused by (i) the licensing by Debiotech of
Debiotech Intellectual Property to third parties, (ii) the licensing of jointly
developed intellectual property to third parties, (iii) any use by Debiotech and
Debiotech’s sub-licensees of the Debiotech Intellectual property, any jointly developed
intellectual property by Debiotech, or any future inventions outside the Field of Use.
Liabilities include, but are not limited to: (x) any product liability or other claim
of any kind related to use by a third party of a Debiotech Intellectual Property or any
jointly developed intellectual property; (y) a claim by a third party that the Debiotech
Intellectual Property or jointly developed intellectual property infringes or violates
any patent, copyright, trade secret, trademark or other intellectual property right of
such third party; and (z) claims arising from clinical trials or studies conducted by or
on behalf of Debiotech, its Affiliates, sublicensees, assignees or vendors or third
parties relating to the Debiotech Intellectual Property or jointly developed
intellectual property rights, such as claims by or on behalf of a human subject of any
such trial or study. 

13. Ownership of Inventions and Protection of Trade Secrets.

	 	13.1  	Future Inventions Inventions made by Debiotech employees and consultants shall
be the sole property of Debiotech. Such inventions made during the Royalties Term shall
be included within Debiotech Intellectual Property, so as to subject them to the
License, with no additional consideration payable by any Licensee.
	 
	 	   	Inventions made by Animas Group employees and consultants shall be the sole property
of Animas Group. Animas hereby grants to Debiotech a royalty-free exclusive
worldwide license for use outside of the Field, including the right to

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	 	   	sublicense, under any such invention made during the Royalties Term specifically
relating to the design or manufacture MEMS chips, but no license is granted to
inventions relating to Micro-Needle irrespective of whether or not such Micro-Needle
utilize a MEMS Chip.
	 
	 	   	Inventions made by employees and consultants of both Animas Group and Debiotech
shall be the joint property of both parties with such inventions being part of the
Licensed Patents, Animas Group having an exclusive right, even as to Debiotech, to
such joint inventions in the Field with no further consideration, and Debiotech
having an exclusive right, even as to Animas, to such joint inventions for use
outside of Field worldwide with no further consideration. If such joint invention
specifically involves MEMS technology, Debiotech shall be responsible for
prosecution and maintenance of patents; otherwise Animas shall be responsible for
prosecution and maintenance of patents.
	 
	 	13.2  	Future Developments. Debiotech shall keep Animas regularly informed of any
future development beyond that set forth in the Development Program of the MEMS
Micro-Needle made by Debiotech during the Royalties Term and such development shall be
included in Debiotech Intellectual Property so as to subject such development to the
License, with no additional consideration payable by Licensees. However, to the extent
such future development is requested by Animas, Animas shall reimburse Debiotech for
the actual cost incurred to develop such future development to the extent such
development is beyond the parameters and scope of the Development Program or the costs
necessary to transfer the technology requested by Animas.
	 
	 	   	Animas shall keep Debiotech regularly informed of (i) any developments of the MEMS
Micro-Needle made by Animas Group employees and consultants during the Royalties
Term and (ii) any developments to the then-current manufacturing processes made
during the Royalties Term. Debiotech shall have non-exclusive rights outside of the
Field to use any developments of the MEMS Micro-Needle made by Animas Group during
the Royalties Term, with the right to sublicense. The rights of Debiotech set forth
in this paragraph shall be referred to as “Section 13.2 Rights”.

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	 	13.3  	Animas Rights. Provided that no Change of Control has occurred, Debiotech
shall give Animas a right of first refusal with regard to any proposed license or
transfer of rights by Debiotech to any new technology related to Micro-Needles in the
Field (not included within Debiotech Intellectual Property as Animas already has
exclusive rights to the Debiotech Intellectual Property) (“Transfer”) on terms at
least as favorable as those offered to any third party, if applicable. Notwithstanding
the foregoing, such right of first refusal shall not apply to the extent any Transfer
is solely related to a reorganization of Debiotech, the end result of which (after the
closing of all such transactions) is no change in the ultimate ownership or control of
such new technology.

               (a) Notice. Debiotech shall provide Animas with written notice of a
Transfer opportunity. Such notice shall include the terms of the proposed Transfer,
including proposed scope, consideration, and other material terms, but not the third
party with whom a Transfer would be contemplated (the “ROFR Notice”). There shall
be no increase in royalty rates (as compared with the rates provided for in Article
4 of this Agreement) for additional use. Animas shall pay to Debiotech the
reasonable costs of any development or transfer of technology requested by Animas,
if any, at rates as provided for in Exhibit C, plus out-of-pocket expenses.

               (b) Animas Answer. Animas shall respond to Debiotech within thirty
(30) days following receipt of the ROFR Notice, indicating either (i) declination of
the proposed Transfer; or (ii) Animas’ interest to the proposed Transfer on the
material terms contained in the ROFR Notice. In the event that Animas fails to
provide Debiotech with written notice of any kind, such silence shall be deemed a
declination of the proposed Transfer.

               (c) Negotiations. Animas and Debiotech shall, for a period not less
than forty-five (45) days from Debiotech’s receipt of the Animas notice indicating
interest, negotiate in good faith to reach agreement and finalize mutually
satisfactory documentation (whether a full agreement or a binding term sheet)
relating to the proposed Transfer.

               (d) Third Parties. In the event that Animas declines the proposed
Transfer, or if Debiotech and Animas cannot agree on the terms of a definitive

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	 	   	transaction, then Debiotech shall be allowed to enter into definitive
agreements with any third party and consummate the proposed Transfer, provided that
the terms and conditions (including financial) contained in the definitive agreement
are not less favorable to Debiotech than those contained in the latest ROFR Notice.
	 
	 	13.4  	Application for and Prosecution of Patents. At its sole expense, Debiotech
shall diligently, file and prosecute applications for Licensed Patents in the Major
Countries, Japan and Canada (collectively, the “Group A Countries”) and in such other
countries (the “Group B Countries”) as Animas may request, and, except as provided
below in this Section 13.4, and shall maintain any patents issued thereon by payment of
all required renewal or maintenance fees or taxes. Debiotech will make all initial
Group A Country filings using a Patent Cooperative Treaty filing and will use the same
Patent Cooperative Treaty filing for the Group B Countries to the extent available.
	 
	 	   	If Debiotech determines that the costs of maintaining a patent in any of the Group B
countries exceeds the value of doing so Debiotech may, not later than 60 days prior
to the last date on which payment must be made to maintain the patent, give written
notice to Animas enclosing a copy of the patent, stating the amount required to be
paid periodically to maintain such patent, and offering to assign such patent to
Animas. If Animas elects to accept Debiotech’s offer to assign such a patent,
Debiotech shall execute such documentation of such assignment as Animas may
reasonably require and Animas shall grant to Debiotech a worldwide, non-exclusive,
perpetual and royalty-free license under such patent outside of the Field. If
Animas elects not to accept Debiotech’s offer to assign such patent, Debiotech may
abandon such patent.
	 
	 	   	Debiotech will interact directly with patent agents and law firms on all patent
prosecution and patent maintenance matters related to the Licensed Patents and will
copy Animas on all material correspondence related thereto. Debiotech shall
instruct the patent agents and law firms to provide Animas directly with any
information reasonably requested by Animas. With respect to any matter involving
Licensed Patents, Debiotech agrees to use all reasonable efforts to notify Animas
in writing at

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	 	   	least thirty (30) days prior to the due date or deadline for any
action which could jeopardize maintenance of any patent in any country.
	 
	 	   	Debiotech shall inform Animas of the patent agents and law firms providing
legal services relating to the Licensed Patents and jointly developed intellectual
property which will be performed on behalf of Animas. Debiotech will authorize such
patent agents and law firms to inform Animas, at any time upon request and at the
cost of Animas, of the status of each such patent and/or patent application. The
designated patent agents and law firms shall invoice Debiotech directly for all work
relating to the filing, prosecution and maintenance of the Licensed Patents.
Debiotech is responsible for the payment of all charges and fees so invoiced by
patent agents and law firms. In the event Debiotech would fail to make the
necessary payment, Animas shall have the right to make any such payment directly to
the patent agents and law firms, which shall be off-set against any payments
otherwise due to Debiotech under this Agreement.
	 
	 	13.5  	Infringement of Debiotech Intellectual Property. In the event that Debiotech
or a Licensee knows or suspects that a third party infringes Debiotech Intellectual
Property in the Field, it shall notify Animas or Debiotech about such infringement.
	 
	 	   	Animas may, in its sole discretion, pursue parties that it believes in good faith
infringe upon Debiotech Intellectual Property and control and direct the
investigation, prosecution and settlement of each such claim. In such case, any
amounts recovered from an infringer of Debiotech Intellectual Property in the Field,
including settlements for past-infringement, damages, and judgments against the
infringing party, shall be applied first to pay or reimburse the costs incurred by
Animas and Debiotech for proceeding against such infringer, and then shall be split
between the parties, ****** for Debiotech and ****** for Animas. If Animas and
infringing party agree to sublicense of Debiotech Intellectual Property, Debiotech
shall receive ****** of all sublicense fees (in accordance with Section 3.3 of this
Agreement) after reimbursement for costs incurred by Animas and Debiotech for
proceeding against such infringer, if not already paid by settlement fees, if any.
	 
	 	   	If Animas elects not to pursue such party that infringes, Debiotech may do so, at
its sole expense. In such case, any amounts recovered from an infringer of Debiotech

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	   	Intellectual Property in the Field, including settlements for past-infringement,
damages, and judgments against the infringing party, shall be applied first to pay
or
reimburse the costs incurred by Debiotech and Animas for proceeding against such
infringer, and then shall paid 100% for Debiotech. If Debiotech, Animas, and
infringing party agree to sublicense Debiotech Intellectual Property to a third
party, Debiotech shall receive ****** of all sublicense fees (in derogation to
Section 3.3 of this Agreement) after reimbursement for costs incurred by Animas and
Debiotech for proceeding against such infringer, if not already paid by settlement
fees, if any.
	 
	   	Debiotech and Animas shall fully cooperate with each other in connection with any
such proceeding.

14. Confidentiality and Nonsolicitation.

	 	14.1  	Identified Information. For purposes of this Agreement, “Confidential
Information” shall mean information, data or material deemed proprietary by disclosing
party and which may be marked, or, if orally transmitted, designated as “Confidential”
by disclosing party and not generally known by the public. Confidential Information
also includes any information described above which disclosing party obtains from
another party and which disclosing party treats as proprietary or designates in writing
as Confidential Information, whether or not owned or developed by disclosing party.
Confidential Information includes, but is not limited to, the following types of
information and other information of a similar nature (whether or not reduced to
writing): discoveries, ideas, concepts, software in various stages of development,
techniques, models, data, documentation, user manuals, diagrams, flow charts,
consulting methods and techniques, research, development, processes, procedures,
“know-how”, marketing techniques and materials, marketing and development plans,
customer names and other information related to customers, price lists, pricing
policies and financial information, methods of production, and specialized recovery
equipment and techniques. Confidential Information shall further include data
regarding business practices, pricing, product philosophy, and position relative to
competitors. For the avoidance of doubt Confidential Information shall include
information deemed confidential under the confidentiality agreement between the parties
dated July 6, 2004.

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	 	14.2  	Standard of Care. Each Party will use the same efforts to protect such
Confidential Information of disclosing party as they use to protect its own proprietary
information
and data. Disclosure of the Confidential Information shall be restricted to those
individuals who are participating in the proposed transaction solely on a “need to
know” basis and who are advised of this Agreement and agree to be bound by its
terms, or as otherwise may be required by law. Such obligation shall continue for
so long as disclosing party treats the Confidential Information as confidential.
This provision shall not restrict disclosure of information for the purpose of
obtaining patents or meeting regulatory requirements, or the disclosure of
information otherwise required to be disclosed by law. A recipient of information
shall have no obligation of confidentiality with respect to information that (i) was
in the possession of the recipient before receipt from the disclosing party, (ii) is
or becomes publicly available through no fault of the recipient, or (iii) is
lawfully acquired by the recipient from a third party having the right to disclose
such information.
	 
	 	   	Each party shall require that its employees, agents and consultants who receive
confidential information of the other party shall not disclose such information
except as the recipient is entitled to, or to other employees, agents and
consultants of the recipient who have a need to know for a business purpose of the
recipient and are under a similar confidentiality obligation.
	 
	 	14.3  	Disclosure of Agreement. This Agreement shall remain confidential, except as
required by law, including US securities laws. Both parties agree to make a press
release, upon signing this Agreement. Any press release or public disclosure by one
party relating to this Agreement shall require the prior consent of the other party,
not to be unreasonably withheld, except as required by law, including US securities
laws, and except to the extent such public disclosure would be limited to information
previously publicly disclosed by the other party or cleared for disclosure by the other
party, provided that, neither party shall use quoted statements of the other without
prior consent.
	 
	 	   	To the extent it is reasonably necessary for one party to give access to this
Agreement to a third party which needs it in connection with a proposed business or
legal transaction, such party shall have the right to make it available to said
third party provided a strict confidentiality agreement has been secured prior
thereto.

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	 	14.4  	Nonsolicitation. Each Party agrees that for a period ending three (3) years
after completion of the Manufacturing Program, it will not directly or indirectly on
its own
behalf or on behalf of any Affiliate, employ, endeavor to employ, solicit or induce
to leave any of the other Party’s management, engineers or technicians who are, or
were employed by the other party within two years prior thereto.

15. Termination and Default.

	 	15.1  	Termination by Animas. (a) Termination for Convenience. Animas may, at any
time, give notice to Debiotech electing to terminate its rights under the License.

(b) Default of Debiotech. If Debiotech materially breaches any provision of this
Agreement, Animas may give written notice to Debiotech specifying the nature of such
breach in reasonable detail and Debiotech shall have ninety (90) days (after receipt
of Animas’ written notice) in which to cure such breach. Animas may terminate this
Agreement immediately if such material breach remains uncured after such 90 days
cure period. The parties agree that, except in cases in which the breached
obligation of Debiotech would involve a duty to achieve a specific result, and in
particular with respect to all Debiotech’s obligations pursuant to Section 5.1 of
this Agreement, the resumption of reasonable commercial efforts and not the
achievement of any specific result by Debiotech shall be deemed to be a cure by
Debiotech.

For the avoidance of doubt, the parties acknowledge that if Debiotech is in default
under this Agreement, Animas may seek all remedies available to it under this
Agreement or under the governing law (subject to the limitations contained in this
Agreement), including, without limitation, submitting the matter to the arbitration
provisions of Section 16.1, and is not required to terminate this Agreement.

(c) Termination for Bankruptcy. If Debiotech is adjudicated bankrupt, if bankruptcy,
insolvency, reorganization, debt adjustment or liquidation proceedings, including an
involuntary proceeding, are instituted against Debiotech and not dismissed within
one hundred eighty (180) days after the institution thereof, if a receiver or
trustee is appointed for Debiotech and its assets, or if Debiotech makes a general
assignment for the benefit of its creditors, Animas may terminate this

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	 	   	Agreement immediately.
	 
	 	15.2  	Termination by Debiotech (a) Termination for Default of Animas. If Animas
materially breaches Section 2.4 or 2.6 of this Agreement, Debiotech may give written
notice to Animas specifying the nature of such breach in reasonable detail and Animas
shall have ninety (90) days (after receipt of Debiotech’s written notice) in which to
cure such breach. Debiotech may terminate this Agreement immediately if such material
breach remains uncured after such 90 days cure period. The parties agree that, except
in cases in which the breached obligation of Animas would involve a duty to achieve a
specific result, the resumption of reasonable commercial efforts and not the
achievement of any specific result by Animas shall be deemed to be a cure by Animas.
In the event a Sub-licensee materially breaches Section 2.4 of this Agreement,
Debiotech may give written notice to Animas specifying the nature of such breach in
reasonable detail and Animas shall have ninety (90) days in which to cure such breach
or terminate such sublicense agreement. Debiotech may terminate this Agreement, in
addition to other remedies, if such material breach remains uncured after such 90 days
cure period and the sublicense agreement has not been terminated. For the avoidance of
doubt, for purposes of the previous sentence, if the Sub-licensee’s activities causing
the breach effectively cease, such cessation shall be deemed a cure of the breach. For
the avoidance of doubt, Animas shall not be considered in material breach of Section
2.4 if the actions or activities causing such breach are beyond the reasonable control
of Licensees (which control may require reasonable additional features and/or labeling
to limit use outside the Field, without the need to obtain additional regulatory
approvals).
	 
	 	   	If there is a dispute as to whether this Agreement has in fact been materially
breached, Animas shall be entitled to require that the matter be determined by
binding arbitration in accordance with Section 16.2 of this Agreement, in which
event the ninety (90)-day period for curing such breach shall not commence until a
final decision has been rendered in such arbitration proceeding.

	 	(b)  	Termination for Change of Control. Debiotech may, as its sole
remedy, terminate this Agreement at any time after a Change of Control if
Animas (or its successor) does not spend at least ****** in
developing, marketing and/or selling the Debiotech Micro-Needle Products,
beginning in the first Year

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	 	   	following a Change of Control. For the avoidance
of doubt, the ****** minimum spending requirement is not intended to
provide any indication as to the
level of reasonable commercial efforts to be used under Section 2.6 of this
Agreement.
	 
	 	(c)  	Termination for Bankruptcy. If Animas is adjudicated
bankrupt, if bankruptcy, insolvency, reorganization, Chapter XI, debt
adjustment or liquidation proceedings, including an involuntary proceeding, are
instituted against Animas and not dismissed within one hundred eighty (180)
days after the institution thereof, if a receiver or trustee is appointed for
Animas and its assets, or if Animas makes a general assignment for the benefit
of its creditors, Debiotech may terminate this Agreement immediately.

	 	15.3  	Consequences of Termination. Upon termination of this Agreement under this
Article 15,

(a) Each party shall pay to the other party any amounts actually earned, due
and owing under this Agreement through and including the termination date;
and, without prejudice to Animas’ right to recover damages, any amount paid by
Animas to Debiotech shall be kept by Debiotech (with no restitution to be
made) except to the extent expressly provided otherwise; except Animas shall
be relieved from any obligation to make a payment pursuant to Section 3.2 of
this Agreement unless the License Fee under Section 3.2 fell due prior to the
termination notice.

(b) Debiotech’s audit rights pursuant to Section 4.7 of this Agreement shall
survive for a one-year period following termination. Sections 8.10, 9, 10, 11,
12,14, 15 and 16 of this Agreement shall survive indefinitely following
termination.

(c) Except with respect to a breach pursuant to Section 15.1 (b), the License
and all rights under this Agreement shall become non-exclusive for a period of
180 days following termination.
(d) Following such 180 day transition period, or otherwise immediately
following termination pursuant to Section 15.1 (b)

(i) rights to any joint invention pursuant to Section 13.1 of this Agreement
shall survive and become non-exclusive and non-royalty bearing for both Animas
and Debiotech.

(ii) Debiotech’s perpetual license rights under any patent assigned to
Animas

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pursuant to Section 13.4 of this Agreement shall survive and extend
also in the Field and be non-royalty bearing.

(iii) Each party shall return to the other party all copies of such other
party’s confidential information provided in connection with this Agreement.

(iv) Animas shall deliver a letter to Debiotech confirming expressly that this
Agreement has been terminated and that, except as set forth in Section 13.1,
Animas has no further rights to Debiotech Intellectual Property .

(v) If Animas decides to discontinue selling and/or distributing the
Debiotech Micro-Needle in the USA, Animas shall use reasonable commercial
efforts to transfer to Debiotech, to the extent allowed by law, any FDA
Approval obtained for the Debiotech Micro-Needle, together with the FDA
Submission and correspondence with the FDA related thereto, promptly after the
six months transition period. For the avoidance of doubt, this paragraph is
not intended to extend to Animas any additional rights not otherwise set forth
in this Agreement.

16. Miscellaneous.

	 	16.1  	Mediation and Arbitration Generally. The mediation and arbitration clause
contained in the Pump Agreement shall be applicable.
	 
	 	16.2  	Baseball Arbitration. Notwithstanding anything to the contrary
contained herein, any dispute which this Agreement explicitly specifies shall
be resolved pursuant to this Section 16.2 shall be determined in accordance with
the procedure specified in Section 16.1, superseded by the arbitration procedure
specified in this Section 16.2.
	 
	 	   	There shall be no mediation. The Request for baseball Arbitration may be filed
by either party at any time before, during or after the period of exchange of
proposals described hereunder.
	 
	 	   	If a party desires to resolve a matter which this Agreement
expressly provides shall be determined under this Section 16.2 ,
such party (the “Initiating Party”) shall give written notice to the
other party (the “Responding Party”) containing a complete written
proposal of the resolution for the matter in dispute. Within 10 business
days after receipt of any such notice, the Responding Party shall submit to the
Initiating Party a written counter proposal. The Initiating Party shall
then have 2

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	 	   	business days after receipt of the counterproposal in which to decide
whether to modify its proposal by giving written notice of its revised proposal to
the Responding Party. The Responding Party shall then have 2 business days
after receipt of the revised proposal in which to decide whether to modify its
proposal by giving written notice of its revised proposal to the Initiating Party.
This process shall continue with each party sending alternate proposals to the
other party until such time as the earliest of (1) the parties reach agreement on
how to resolve the dispute, (2) one of the parties fails to respond within 2
business days after receipt of a proposal from the other party, or (3) a party
determines that it is unwilling to change its proposal further. In the event of
clause (2) or (3) of the foregoing sentence, either party may give written notice (a
“Baseball Notice”) to other of its election to require the submission of
their last, best, written proposals (each a “Sealed Proposal”)
within 3 business days after receipt of the Baseball Notice.
Each party shall submit its Sealed Proposal directly to the WIPO and
the WIPO shall not give any Sealed Proposal to the other
party hereto until both such Sealed Proposals have been received
by WIPO. If a party fails timely to submit a Sealed Proposal, it shall be
deemed to have submitted its last written proposal as its Sealed Proposal.
	 
	 	   	There shall be no further exchange of written briefs other than the Request for
baseball Arbitration and the Answer to the Request and the Sealed Proposals, except
with special permission of the arbitral tribunal. Within three weeks after the
appointment of the arbitrators, a hearing shall be held. Each party shall
be afforded such amount of time as is reasonable for the
presentation of its case at the hearing, and the hearing shall be sequenced in such
a manner, as the arbitrators shall determine to be commercially
reasonable. The arbitrators shall select one of the party’s Sealed
Proposals within five (5) business days after conclusion of the hearing. The
arbitrators shall be limited to awarding only one or the other of the two Sealed
Proposals submitted, without modification. The arbitrator shall be guided by
what is equitable under the circumstances and in accordance with the principles set
forth in the relevant provisions of this Agreement. The selected
Sealed Proposal shall become the arbitrator’s final and binding decision
and award, without any modification. Reasons should not be stated in
the award issued within five (5) business days as provide hereabove, but should be
provided subsequently in a separate document, not to be deemed part of the award.
	 
	 	16.3  	Notices. Any notice or election under this Agreement shall be in writing and
shall be given by express commercial delivery service or by fax and by certified mail
to

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the intended recipient at its address as indicated below or as changed by notice to
the other party given pursuant to this Section 16.30. Notices sent by commercial
delivery service for which delivery is refused shall be deemed received as of the
date delivery is refused. Notices sent by fax and by certified mail shall be deemed
received as of the date of receipt by fax (and if the fax is not received, as of the
date of delivery of the certified mail or the refusal thereof). Notices to Animas
shall be addressed to:

Animas Corporation

200 Lawrence Drive

West Chester, PA 19380

Attention: Katherine D. Crothall

fax: 484-568-1407

     with a copy to:

Animas Corporation

200 Lawrence Drive

West Chester, PA 19380

Attention: Deborah Lofton

Fax: 484-356-1742

     Notices to Debiotech shall be addressed to:

Debiotech, S.A.

28 Avenue de Sevelin

CH-1004 Lausanne

Switzerland

Attention: Dr. Frederic Neftel

fax: +41 21 623 6079

     with a copy to:

Laurent Hirsch

8 Rue Eynard

CH-1205 Geneva

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Switzerland

fax: +41 22 318 3010

	 	16.4  	Governing Law. This Agreement shall be governed first by the Unidroit
Principles, International Commercial Contracts 2004. If these Unidroit Principles of
International Commercial Contracts 2004 do not provide for an applicable provision they
shall be supplemented by the laws of Switzerland.
	 
	 	   	However, Articles 3.4 and 3.5 of the Unidroit Principles relating to mistake shall
not apply (as it is expressly provided in Article 3.19 not to be mandatory) and no
party may avoid this Agreement for any mistake.
	 
	 	16.5  	Severability. If any provision of this Agreement is invalid or unenforceable
in whole or in part in a particular context, the balance of this Agreement shall
nevertheless remain in effect and the invalid or unenforceable provision shall be
enforced to the extent permissible in accordance with the intent of the parties.
	 
	 	16.6  	Assignment. This Agreement (including assignment of contractual rights and
transfer of contractual obligations) may not be assigned by Debiotech without Animas’
consent except to Affiliates or to any person who succeeds to all or a substantial
portion of MEMS Micro-Needle Business, as long as Debiotech remains jointly and
severally liable with the assignee until Commercial Launch. For purposes of
clarification, the consent requirements contained in this Section 16.6 shall not be
required in the case of any proposed transaction or series of simultaneous transactions
involving the assets and/or liabilities of Debiotech that are executed in connection
with a reorganization of Debiotech, the end result of which (after the closing of all
such transactions) is no change in ultimate ownership or control of all or
substantially all of the assets relating to the MEMS Micro-Needle Business conducted by
Debiotech as of the Agreement Date, including all components, contracts, and other
assets and liabilities constituting Debiotech Intellectual Property. In the event
Debiotech sells the MEMS Micro-Needle business or sells an Affiliate as described in
Section 1.8 of this Agreement, such sale shall not diminish any rights of Animas to
existing intellectual property prior to that spin-off or be disruptive to the
Development Program.
	 
	 	   	This Agreement (including assignment of contractual rights and transfer of

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	 	   	contractual obligations) may not be assigned by Animas except to Affiliates or to
any person who succeeds to all or a substantial portion of Animas business.
	 
	 	   	Any attempted assignment of this Agreement in violation of this Section 16.6 without
the prior written consent of the other party (not to be unreasonably withheld) shall
be null and void.
	 
	 	   	In the event of a sale of substantially all the MEMS Micro-Needle Business to a
third party, except as provided in the following sentence, Animas shall not be
entitled to any technology and know how owned by Debiotech’s successor other than
that associated with the transferred MEMS Micro-Needle Business. Any such
intellectual property which Debiotech has incorporated in the Debiotech Micro-Needle
Products shall be subject to the License.
	 
	 	   	Notwithstanding anything to the contrary contained in this Agreement, Debiotech
shall not be entitled to Section 13.2 Rights on any developments made following a
Change of Control; provided, however, Debiotech shall be entitled to Section 13.2
Rights on developments made after a Change of Control only with respect to
developments made solely by individuals who were employees of Animas prior to a
Change of Control and to the extent that such employee did not use, obtain or have
access to any information from Animas’ successor or any new Affiliate of Animas.
	 
	 	16.7  	No Joint Venture. This Agreement is intended to create licenses of certain
patents, trade secrets and copyrights. Nothing herein shall be deemed to constitute a
partnership or joint venture. The Parties are not employees or legal representatives
of the other party for any purpose. Neither Party shall have the authority to enter
into any contracts or agreements in the name of or on behalf of the other party.
	 
	 	16.8  	Waiver. No waiver by either party of any violations or nonperformance by the
other party of any of its obligations under this Agreement shall be deemed to be a
waiver of any subsequent violation or nonperformance of the same or any other covenant,
nor shall any forbearance by any party be deemed a waiver by such party of its rights
or remedies with respect to a violation or nonperformance.
	 
	 	16.9  	Tax Cooperation. All amounts payable by Animas Group under this Agreement
shall be reduced for any taxes that are required to be withheld from the payment, and

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	 	   	Animas Group will pay such amounts promptly to the relevant governmental agency and
provide Debiotech reasonable proof of the payment of such taxes. Each party will
reasonably cooperate with the other to provide such forms or other documentation
that would preclude the withholding of tax from such payments, and will reasonably
cooperate to recover such withheld taxes as appropriate. If any payments to be made
hereunder are subject to the payment of value added tax ( or similar tax) by Animas
Group, such value added tax shall be paid by Animas in addition to the amounts as
stated in this Agreement and each party shall cooperate as reasonably requested by
the other to recuperate any value added or other tax which are normally recoupable
in the international context.
	 
	 	16.10  	Interest. The interest rate applicable to overdue payments shall be 2 points
over the LIBOR (London Interbank Offered Rate for US dollars) at one month for the
first month of delay, 4 points over the LIBOR (London Interbank Offered Rate for US
dollars) at three months for the next three months of delay, and 6 points over the
LIBOR (London Interbank Offered Rate for US dollars) at six months for any period
thereafter; provided that, the interest rate applicable to payments that are subject to
a reasonably arguable dispute shall be 2 points over the LIBOR (London Interbank
Offered Rate for US dollars) at six months for the entire period the payments are
withheld in good faith. Interest shall be due for the whole period from the date
initially due until the date payment is received by the other party, compounded on a
six months basis. However, no interest shall be due to the extent payment is made
within a grace period of fifteen (15) days after special notice specifying the amount
due and requesting payment within the fifteen (15) day period. Interest at such rate
shall not be deemed to constitute damages for the purposes of the limitation set forth
in Section 9.2 of this Agreement.
	 
	 	16.11  	Set-Off. If at any time Animas asserts any claim or cause of action under
Section 16.1 or Section 16.2 of this Agreement, then at Animas’ election, Animas may
set-off any portion or all of the amounts contained in such claim or cause of action
against amounts payable by Animas to Debiotech hereunder, subject to the limitation
below. Upon resolution of such claim or cause of action, if it is determined that
Animas had set-off a greater amount than the actual damages awarded with respect to
such claim or cause of action, Animas shall return such excess amounts, together with
interest calculated as hereabove. Any amounts by which such actual damages awarded
exceed such amounts previously set-off may continue to be set-off in the sole
discretion of

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	 	   	Animas. Notwithstanding the foregoing, Animas’ right to set-off any
claim against royalties due to Debiotech under Section 4.1 of this Agreement shall only
apply to
royalties in excess of ******.
	 
	 	16.12  	Hardship. In the event the conditions upon which the parties rely at the time
of entering into this Agreement are drastically modified, so that any party would
suffer severe consequences from maintaining the terms of this Agreement, which could
not have been reasonably foreseen at the time of entering into this Agreement, the
parties agree to discuss in good faith appropriate modifications to the terms of this
Agreement in view of the new circumstances and to the extent equitable to both parties
(Article 6.2.2 of the Unidroit Principles shall not apply).
	 
	 	16.13  	Entire Agreement. This Agreement, including its exhibits, constitutes the
entire agreement between the parties pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understanding of the parties,
whether written or oral. No amendment or modification of this Agreement shall be valid
or binding unless in writing and executed by the party to be bound.
	 
	 	16.14  	Headings. The headings for each article and section in this Agreement have
been inserted for convenience or reference only and are not intended to limit or expand
on the meaning of the language contained in the particular article or section.

	******	 	- Material has been omitted and filed separately with the Commission.

 

 

	   	IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by
its duly authorized representatives.

	 	 	 	 	 
	 	Debiotech S.A.

 	 
	 	By:  	/s/ Frédéric Neftel  	date: 10/29/04
 
	 	 	Frédéric Neftel , its CEO 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Animas Corporation

 	 
	 	By:  	/s/ Katherine D. Crothall 	 date: 10/29/04
 
	 	 	Katherine D. Crothall, its CEO 	 
	 	 	 	 
	 

	 	 	 
	Exhibit A:

	 	Description of Existing Debiotech Intellectual Property
	Exhibit B

	 	Applicable Rates
	Exhibit C:

	 	Debiotech Research & Engineering Costs
	Exhibit D:

	 	List of Privileged Shareholders

	******	 	- Material has been omitted and filed separately with the Commission.

 

 

Exhibit A

Description of Existing Debiotech Intellectual Property

******

	******	 	- Material has been omitted and filed separately with the Commission.

 

 

Exhibit B

Applicable Rates

******

	******	 	- Material has been omitted and filed separately with the Commission.

 

 

Exhibit C

Debiotech Research & Engineering Costs

******

	******	 	- Material has been omitted and filed separately with the Commission.

 

 

Exhibit D

List of Privileged Shareholders

Katherine D. Crothall

Graeme Crothall

William A. Graham, IVexv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

FOR FIRST SENIOR VICE PRESIDENTS

     THIS AGREEMENT (the “Agreement”), made this 1st day of February, 2005, by and between
YARDVILLE NATIONAL BANK (the “Bank”) and Kathleen O. Blanchard (the “Officer”). References to “the
Company” herein shall refer to YARDVILLE NATIONAL BANCORP, a New Jersey corporation (the “Company”)
and the holding company for the Bank.

W I T N E S S E T H

     WHEREAS, the Bank desires to retain the services of the Officer as an employee of the Bank;
and

     WHEREAS, the Officer and the Bank (desire to enter into an employment agreement setting forth
the terms and conditions of the continuing employment of the Officer and the related rights and
obligations of the parties.

     NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, the
parties hereby agree as follows:

     1. Employment. The Bank shall employ the Officer as a First Senior Vice
President/Risk Management Officer of the Bank. The Officer shall render such administrative and
management services as are customarily provided by persons employed in similar officer capacities
and shall have such other powers and duties as the Chief Executive Officer or the Board may
prescribe from time to time.

     2. Location and Facilities. The Bank will furnish the Officer with the working
facilities and staff customary for officers with the title and duties set forth in Section 1 and as
are necessary for the performance of the Officer’s duties. The location of such facilities and
staff shall be at the principal administrative offices of the Bank, or at such other site or sites
customary for such offices.

     3. Term.

	 	a.  	The term of this Agreement shall be (i) the initial term, consisting of the
period commencing on the date of this Agreement (the “Effective Date”) and ending on
the first anniversary of the Effective Date, plus (ii) any and all extensions of the
initial term made pursuant to this Section 3.
	 
	 	b.  	On each anniversary date of the Effective Date prior to a termination of the
Agreement, the term under this Agreement shall be extended automatically for an
additional one (1) year period without action by any party provided, however, that
neither the Bank nor the Officer shall have given written notice at least sixty (60)
days prior to such anniversary date of their election not to extend the term of the
Agreement.

     4. Base Compensation.

	 	a.  	The Bank agrees to pay the Officer during the term of this Agreement a base
salary at the rate of $127,500.00 per year, payable in accordance with customary
payroll practices.
	 
	 	b.  	The Executive Management Committee of the Bank shall review annually the rate
of the Officer’s base salary based upon factors they deem relevant, and may maintain,
increase or decrease the Officer’s base salary.
	 
	 	c.  	In the absence of action by the Executive Management Committee, the Officer
shall continue to receive base salary at the annual rate specified on the Effective
Date or, if another rate has been

E-5

 

	 	   	established under the provisions of this Section 4, the rate last properly
established by action of the Executive Management Committee under the provisions of
this Section 4.

     5. Bonuses. Officer shall be entitled to participate in any discretionary bonuses or
other incentive compensation programs that may be awarded from time to time to senior management
employees, pursuant to bonus plans or otherwise.

     6. Benefit Plans. The Officer shall be entitled to participate in such life
insurance, medical, dental, pension, profit sharing, and retirement plans, stock compensation plans
and other benefit programs and arrangements as may be approved from time to time for the benefit of
Bank employees.

     7. Vacation and Leave.

	 	a.  	The Officer may take vacations and other leave in accordance with Bank policy
for senior officers, or otherwise as approved by the Board.
	 
	 	b.  	In addition to paid vacations and other leave, the Officer shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of his duties
for such additional periods of time and for such valid and legitimate reasons as the
Bank may determine in its discretion. Further, the Bank may grant to the Officer a
leave or leaves of absence, with or without pay, at such time or times and upon such
terms and conditions as the Bank, in its discretion, may determine.

     8. Expense Payment and Reimbursements. The Officer shall be reimbursed for all
reasonable out-of-pocket business expenses incurred in connection with services performed under
this Agreement upon substantiation of such expenses in accordance with applicable policies of the
Bank.

     9. This Section 9 has been intentionally left blank.

     10. Loyalty and Confidentiality.

	 	a.  	During the term of this Agreement: (i) the Officer shall devote the requisite
time, attention, skill, and efforts to the faithful performance of his duties
hereunder; provided, however, that from time to time, the Officer may serve on the
boards of directors of, and hold any other offices or positions in, companies or
organizations which will not present any conflict of interest with the Bank or any
of its subsidiaries or affiliates, unfavorably affect the performance of the
Officer’s duties pursuant to this Agreement, or violate any applicable statute or
regulation; and (ii) the Officer shall not engage in any business or activity
contrary to the business affairs or interests of the Bank or any of its subsidiaries
or affiliates.
	 
	 	b.  	Nothing contained in this Agreement shall prevent or limit the Officer’s right
to invest in the capital stock or other securities of any business dissimilar from that
of the Bank or any of its subsidiaries or affiliates, or, solely as a passive, minority
investor, in any business.
	 
	 	c.  	The Officer agrees to maintain the confidentiality of any and all information
concerning the operations or financial status of the Bank; the names or addresses of
any borrowers, depositors and other customers; any information concerning or
obtained from such customers; and any other information concerning the Bank to which
the Officer may be exposed during the course of the Officer’s employment with the
Bank. The Officer further agrees that, unless required by law or specifically
permitted by the Board in writing, the Officer will not disclose to any person or
entity, either during or subsequent to employment with the Bank, any of the
above-mentioned information which is not generally known to the public, nor shall
the Officer employ such information in any way other than for the benefit of the
Bank or any of its subsidiaries or affiliates.

     11. Termination and Termination Pay. Subject to Section 12 of this Agreement, the
Officer’s employment under this Agreement may be terminated in the following circumstances:

E-6

 

	 	a.  	Death. The Officer’s employment under this Agreement shall terminate
upon the Officer’s death during the term of this Agreement, in which event the
Officer’s estate shall be entitled to receive the compensation due to the Officer
through the last day of the calendar month of death.
	 
	 	b.  	Retirement. Notwithstanding anything in this Agreement to the
contrary, this Agreement shall terminate upon the Officer’s retirement and will be
subject to any retirement benefit plan or plans provided for under Section 6 of this
Agreement or otherwise.
	 
	 	c.  	Disability.

	 	i.  	The Bank or the Officer may terminate the Officer’s employment after
having established the Officer’s Disability. For purposes of this
Agreement, “Disability” means the Officer’s suffering a sickness, accident
or injury which has been determined by the carrier of any individual or
group disability insurance policy covering the Officer, or by the Social
Security Administration, to be a disability rendering the Officer totally
and permanently disabled. The Bank shall determine in good faith whether or
not the Officer is disabled for purposes of this Agreement. As a condition
to any benefits, the Bank may require the Officer to submit proof of the
carrier’s or the Social Security Administration’s determination of
disability.
	 
	 	ii.  	In the event of such Disability, the Officer’s obligation to
perform services under this Agreement will terminate. In the event of such
termination, the Officer shall continue to receive one-hundred percent (100%)
of the Officer’s monthly base salary (at the annual rate in effect on the date
of termination) through the earlier of the date of the Officer’s death, the
date the Officer attains age 65 or the date which is six (6) months after the
Officer’s termination date. Such payments shall be reduced by the amount of
any short- or long-term disability benefits payable to the Officer under any
other disability program sponsored by the Bank.
	 
	 	iii.  	In addition, during any period of Disability for which the
Officer is receiving payments under this Section 11(c), the Officer and the
Officer’s dependents shall, to the greatest extent possible, continue to be
covered under all benefit plans (including, without limitation, retirement
plans and medical, dental and life insurance plans) under which the Officer
participated prior to the Disability, on the same terms as if the Officer were
actively employed through the earlier of the date of the Officer’s death, the
date the Officer attains age 65 or the date which is six (6) months after the
Officer’s termination date.

	 	d.  	Just Cause.

	 	i.  	The Bank may, by written notice to the Officer in the form and
manner specified in this paragraph, immediately terminate the Officer’s
employment with the Company or the Bank, respectively, at any time, for Just
Cause. The Officer shall have no right to receive compensation or other
benefits for any period after termination for Just Cause, except for previously
vested benefits. Termination for “Just Cause” shall mean termination because
of, in the good faith determination of the Bank, the Officer’s:

	 	(1)  	Personal dishonesty;
	 
	 	(2)  	Incompetence;
	 
	 	(3)  	Willful misconduct;
	 
	 	(4)  	Breach of fiduciary duty involving personal profit;

E-7

 

	 	(5)  	Intentional failure to perform duties under this Agreement;
	 
	 	(6)  	Willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) that reflects adversely on
the reputation of the Bank, any felony conviction, any violation of
law involving moral turpitude, or any violation of a final
cease-and-desist order; or
	 
	 	(7)  	Material breach of any provision of this Agreement.

	 	e.  	Voluntary Termination by the Officer. In addition to the Officer’s
other rights to terminate employment under the Agreement, the Officer may voluntarily
terminate employment during the term of this Agreement upon at least sixty (60) days
prior written notice to the Bank, in which case the Officer shall receive only
compensation, vested rights and employee benefits up to the date of termination.
	 
	 	f.  	Without Just Cause.

	 	i.  	In addition to termination pursuant to Sections 11(a) through
11(e), the Bank may, by means of written notice, immediately terminate the
Officer’s employment at any time for a reason other than Just Cause (a
termination “Without Just Cause”).
	 
	 	ii.  	Subject to Section 12 hereof, in the event of termination under
this Section 11(f), the Officer shall be entitled to receive the annual base
salary that would have been paid for the remaining term of the Agreement,
including any renewals or extensions thereof, determined by reference to the
highest annual rate of base salary in effect pursuant to Section 4 of this
Agreement in any of the twelve (12) months immediately preceding the Officer’s
termination date. The sum due under this Section 11(f) shall be paid in one
lump sum within thirty (30) calendar days of the Officer’s termination.
	 
	 	iii.  	Notwithstanding the foregoing, a reduction in base salary or a
reduction or elimination of the Officer’s participation in or benefits under
one or more benefit plans that occurs as part of a good faith, overall
reduction in salary or a reduction or elimination of plans or benefits
provided thereunder, provided such reduction or elimination applies to all
participants in a non-discriminatory manner (except as such discrimination
may be necessary to comply with law), shall not constitute a material breach
of this Agreement, provided that benefits of the same type or to the same
general extent as those offered under the plan prior to reduction or
elimination are not available to other officers of the Bank or its
affiliates, or any company that controls either of them, under a plan or
plans under which the Officer is not entitled to participate.
	 
	 	iv.  	Notwithstanding anything in this Agreement to the contrary, during
the six (6) month period beginning on the effective date of a Change in
Control (as defined in Section 12(a)), the Officer may voluntarily terminate
employment under this Agreement for any reason and such termination shall
constitute termination Without Just Cause.

	 	g.  	Continuing Covenant Not to Compete or Interfere with Relationships.
Regardless of anything herein to the contrary, following a termination by the Bank or
the Officer pursuant to Section 11(f) and continuing until the six (6) month
anniversary of the effective date of such termination, (i) the Officer’s obligations
under Section 10(c) of this Agreement will continue in effect; and (ii) the Officer
shall not interfere with the relationship between the Bank and any of its employees,
agents, customers or representatives.

     12. Termination in Connection with a Change in Control.

E-8

 

	 	a.  	“Change in Control” means any one of the following events occurs:

	 	i.  	Merger: the Company merges into or consolidates with another
corporation, or merges another corporation into the Company and, as a result,
less than a majority of the combined voting power of the resulting corporation
immediately after the merger or consolidation is held by persons who were
stockholders of the Company immediately before the merger or consolidation;
	 
	 	ii.  	Acquisition of Significant Share Ownership: a report on
Schedule 13D or another form or schedule (other than Schedule 13G) is filed or
is required to be filed under Sections 13(d) or 14(d) of the Securities
Exchange Act of 1934, if the schedule discloses that the filing person or
persons acting in concert has or have become the beneficial owner(s) of 25% or
more of a class of the Company’s voting securities, but this clause (ii) shall
not apply to beneficial ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or indirectly beneficially
owns fifty percent (50%) or more of its outstanding voting securities;
	 
	 	iii.  	Change in Board Composition: during any period of two
consecutive years, individuals who constitute the Company’s or the Bank’s Board
of Directors at the beginning of the two-year period cease for any reason to
constitute at least a majority of the Company’s or the Bank’s Board of
Directors; provided, however, that for purposes of this clause (iii), each
director who is first elected by the board (or first nominated by the board for
election by stockholders) by a vote of at least three-fourths (3/4) of the
directors who were directors at the beginning of the period shall be deemed to
have been a director at the beginning of the two-year period; or
	 
	 	iv.  	Sale of Assets: The Company sells to a third party all or
substantially all of its assets.

	 	b.  	If, within the period beginning six (6) months prior to and ending two (2)
years after a Change in Control, the Bank shall terminate the Officer’s employment
Without Just Cause, the Bank shall, within thirty (30) calendar days of the Officer’s
termination of employment, make a lump-sum cash payment to the Officer in an amount
equal to two times the Officer’s highest annual rate of base salary during the two
(2) year period preceding the effective date of the Change in Control. This cash
payment shall be made in lieu of any payment also required under Section 11(f) of this
Agreement because of a termination in such period.

     13. Indemnification and Liability Insurance.

	 	a.  	Indemnification. The Bank agrees to indemnify the Officer (and the
Officer’s heirs, executors, and administrators), and to advance expenses related
thereto, to the fullest extent permitted under applicable law and regulations, against
any and all expenses and liabilities reasonably incurred by the Officer in connection
with or arising out of any action, suit, or proceeding in which the Officer may be
involved by reason of having been a director or Officer of the Bank or any of its
subsidiaries or affiliates (whether or not the Officer continues to be a director or
Officer at the time of incurring any such expenses or liabilities). Such expenses and
liabilities shall include, but shall not be limited to, judgments, court costs,
attorneys’ fees and the costs of reasonable settlements, such settlements to be
approved by the Board, if such action is brought against the Officer in the Officer’s
capacity as an officer or director of the Bank or any of its subsidiaries or
affiliates. Indemnification for expenses shall not extend to matters for which the
Officer has been terminated for Just Cause. Nothing contained herein shall be deemed
to provide indemnification otherwise prohibited by applicable law or regulation.
Notwithstanding anything herein to the contrary, the obligations of this Section 13
shall survive the term of this Agreement by a period of six (6) years.

E-9

 

	 	b.  	Insurance. During the period in which indemnification of the Officer
is required under this Section 13, the Bank shall provide the Officer (and the
Officer’s heirs, executors, and administrators) with coverage under a directors’ and
officers’ liability policy at the expense of the Bank, at least equivalent to the
coverage provided to directors and senior officers of the Bank.

     14. Injunctive Relief. If there is a breach or threatened breach of Section 11(g) of
this Agreement, the Bank and the Officer agree that there is no adequate remedy at law for such
breach, and further, that the Bank shall be entitled to injunctive relief restraining the Officer
from such breach or threatened breach, but such relief shall not be the exclusive remedy hereunder
for such breach. The parties hereto likewise agree that the Officer, without limitation, shall be
entitled to injunctive relief to enforce the obligations of the Bank under Section 12 of this
Agreement.

     15. Successors and Assigns.

	 	a.  	This Agreement shall inure to the benefit of and be binding upon any corporate
or other successor that acquires, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets or stock of the Company
or the Bank.
	 
	 	b.  	Since the Bank is contracting for the Officer’s unique and personal skills, the
Officer shall be precluded from assigning or delegating any rights or duties hereunder
without first obtaining the written consent of the Bank.

     16. No Mitigation. The Officer shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking new employment or otherwise and no such payment
shall be offset or reduced by the amount of any compensation or benefits provided to the Officer in
any subsequent employment.

     17. Notices. All notices, requests, demands and other communications in connection
with this Agreement shall be made in writing and shall be deemed to have been given when delivered
by hand or 48 hours after mailing at any general or branch office of the United States Postal
Service, by registered or certified mail, postage prepaid, addressed to the Bank at its principal
business office and to the Officer at the Officer’s home address as maintained in the records of
the Bank.

     18. Joint and Several Liability; Payments by the Company and the Bank. To the extent
permitted by law, the Company shall be jointly and severally liable with the Bank for the payment
of all amounts due under this Agreement and shall guarantee the performance of the Bank’s
obligations hereunder, provided, however, that the Company shall not be required by this Agreement
to pay the Officer a base salary or any bonuses or any other cash payments, except in the event
that the Bank does not fulfill its obligations to the Officer for such payments.

     19. No Plan Created by this Agreement. The Officer and the Bank expressly declare and
agree that this Agreement was negotiated among them and that no provisions of this Agreement are
intended to, or shall be deemed to, create any “plan” for purposes of the Employee Retirement
Income Security Act of 1974 (ERISA) or any other law or regulation, and each party expressly waives
any right to assert the contrary. Any assertion in any judicial or administrative filing, hearing,
or process that such a plan was created by this Agreement shall be deemed a material breach of this
Agreement by the party making such an assertion.

     20. Amendments. No amendments or additions to this Agreement shall be binding unless
made in writing and signed by all of the parties, except as otherwise specifically provided for
herein.

     21. Applicable Law. Except to the extent preempted by federal law, the laws of the
State of New Jersey shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.

     22. Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the remaining provisions hereof.

E-10

 

     23. Headings. Headings contained herein are for convenience of reference only.

     24. Entire Agreement. This Agreement, together with any understandings or
modifications agreed to in writing by the parties, shall constitute the entire agreement among the
parties with respect to the subject matter hereof, other than written agreements with respect to
specific plans, programs or arrangements described in Sections 5 and 6. This agreement supercedes
and replaces in its entirety any previous employment agreements between or among the Bank, the
Company and the Officer.

E-11

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first set
forth above.

	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	 	 	YARDVILLE NATIONAL BANK
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:
	 	F. Kevin Tylus
	

	 	 	 	 	 	 	 	 
	

	 	Kathleen Fone
	 	 	 	Title:
	 	SEVP & Chief Operating Officer
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	YARDVILLE NATIONAL BANCORP
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:
	 	F. Kevin Tylus
	

	 	 	 	 	 	 	 	 
	

	 	Kathleen Fone
	 	 	 	Title:
	 	Senior Executive Vice President
	 	 	 	 	 	 	 
	Witness:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	Kathleen Fone
	 	 	 	 	 	Kathleen O. Blanchard
	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	Kathleen O. Blanchard
	

	 	 	 	 	 	 	 	First Senior Vice President

E-12

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