Document:

exv10w1

 

Exhibit 10.1

PENFORD CORPORATION

2006 LONG-TERM INCENTIVE PLAN

STOCK OPTION GRANT NOTICE

     Penford Corporation (the “Company”) pursuant to its 2006 Long-Term Incentive Plan (the “Plan”)
as of the Grant Date below grants to Participant an option to purchase the number of shares of the
Company’s common stock (“Shares”) set forth below. This nonqualified stock option is subject to all
the terms and conditions set forth in this Stock Option Grant Notice (this “Grant Notice”) and in
the Stock Option Agreement, form of Notice of Exercise, and the Plan. The Stock Option Agreement
and form of Notice of Exercise are attached hereto. Copies of the Plan are available upon request.

	 	 	 
	Participant:
	 	 
	 
	 	 
	Grant Date:
	 	 
	 
	 	 
	Vesting Commencement Date:
	 	 
	 
	 	 
	Number of Shares Subject to Option:
	 	 
	 
	 	 
	Exercise Price (per Share):
	 	 
	 
	 	 
	Expiration Date:
	 	 
	 

	 	(subject to earlier
termination in accordance
with the terms of the Plan
and the Stock Option
Agreement)

Vesting
and Exercisability Schedule:

Additional Terms/Acknowledgement: The undersigned Participant
acknowledges receipt of, and understands and agrees to, this Grant
Notice, the Stock Option Agreement, and Notice of Exercise, and
understands that a copy of the Plan is available upon request.
Participant further acknowledges that as of the Grant Date, this Grant
Notice, the Stock Option Agreement and the Plan set forth the entire
understanding between Participant and the Company regarding the Option
and supersede all prior oral and written agreements on the subject.

	 	 	 	 	 	 
	PENFORD CORPORATION	 	PARTICIPANT	 
	 
	 	 	 	 	 
	By:
	 	 	 	 	 
	 

	 	 	 	 
	Its:
	 	 	 	 	 
	 

	 
	 	 	 
	 

	 	 	 	Signature	 

Attachments:

1. Stock
Option Agreement

2. Notice
of Exercise

 

 

ATTACHMENT 1

PENFORD CORPORATION

2006 LONG-TERM INCENTIVE PLAN

STOCK OPTION AGREEMENT

     Pursuant to your Stock Option Grant Notice (the “Grant Notice”) and this Stock Option
Agreement, Penford Corporation (the “Company”) has granted you an option (the “Option”) under its
2006 Long-Term Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common
Stock (the “Shares”) indicated in your Grant Notice at the exercise price indicated in your Grant
Notice. Capitalized terms not explicitly defined in this Stock Option Agreement but defined in the
Plan shall have the same definitions as in the Plan.

     The details of the Option are as follows:

     1. Vesting and Exercisability. Subject to the limitations contained herein, the Option will
vest as provided in your Grant Notice, provided that vesting will cease upon the cessation of your
Continuous Status as a Participant.

     2. Number of Shares and Exercise Price. The number of Shares subject to your Option and your
exercise price per share referenced in your Grant Notice may be adjusted from time to time for
changes in the Company’s capital structure at the Board’s sole discretion, as provided in the Plan.

     3. Method of Exercise. You may exercise the vested portion of your Option during its term by
delivering a Notice of Exercise (in a form designated by the Company) together with the exercise
price to the Secretary of the Company, or to such other Person (as defined in Section 7(b) below)
as the Company may designate, during regular business hours, together with such additional
documents as the Company may then require.

     4. Whole Shares. You may exercise your Option only for whole Shares.

     5. Method of Payment. Payment of the exercise price is due in full upon exercise of all or
any part of your Option. You may elect to make payment of the exercise price in cash or by check,
or in any other manner acceptable to the Company, which may include one or more of the following:

          (a) Payment pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board that, prior to the issuance of Shares, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise
price to the Company from the sales proceeds (sometimes referred to as a “cashless exercise”).
This payment method would be in the Company’s sole discretion at the time your Option is exercised
and would be on condition that, at the time of exercise, the Shares are publicly traded and quoted
regularly in The Wall Street Journal.

Attachment
1 — Page 1

 

 

          (b) Payment by delivery of Shares owned by you that you have held for the period required to
avoid a charge to the Company’s reported earnings (generally six months) or that you did not
acquire directly or indirectly from the Company, that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of
exercise. This payment method would be on condition that, at the time of exercise, the Shares are
publicly traded and quoted regularly in The Wall Street Journal. “Delivery” for these purposes
shall include delivery to the Company of your attestation of ownership of such Shares in a form
approved by the Company. Notwithstanding the foregoing, you may not exercise your Option by tender
to the Company of Shares to the extent such tender would violate the provisions of any law,
regulation or agreement restricting the redemption of the Company’s stock.

     6. Treatment Upon Termination of Continuous Status as a Participant. The term of your Option
commences on the Grant Date and expires upon the earliest of the following:

          (a) three (3) months after the date of termination of your Continuous Status as a Participant;

          (b) immediately upon termination of your Continuous Status as a Participant for Cause;

          (c) twelve (12) months after the date on which you ceased performing services as a result of
your Disability;

          (d) twelve (12) months after the date of your death; and

          (e) the Option expiration date (as referenced in your Grant Notice).

     It is your responsibility to be aware of the date the Option terminates.

     7. Effect of Change in Control. Notwithstanding any other provision in the Plan to the
contrary, the following provisions shall apply unless otherwise prohibited under applicable laws,
or by the rules and regulations of any applicable governmental agencies or national securities
exchanges or quotation systems. This Option shall be Accelerated (as defined in Section 7(b) below)
immediately prior to a Change in Control described in Section 7(c).

          (a) “Accelerated” shall mean that the Option shall become fully vested and immediately
exercisable, and shall remain exercisable throughout its entire term.

          (b) “Change in Control” shall mean any of the following events:

Attachment
1 — Page 2

 

 

          (i) The Company is merged, consolidated, or reorganized (“Reorganization”) with another entity
and as a result of which less than 50% of the outstanding voting interests or securities of the
surviving or resulting entity immediately after the Reorganization are owned in the aggregate by
the former shareholders of the Company, as the same shall have existed immediately prior to such
Reorganization, in substantially the same proportions as their ownership before such
Reorganization;

          (ii) The Company sells all or “Substantially All” of its assets to another entity that is not
a wholly-owned subsidiary or affiliate of the Company, provided that a sale shall constitute
Substantially All of the Company’s assets only if the fair market value of the consideration
received for such assets exceeds 50% of the fair market value of the Company’s average total market
capitalization during the twenty (20) trading days ending twenty (20) trading days prior to the
first public announcement of such sale; provided further that the fair market value of the
consideration received and the total market capitalization of the Company shall be as reasonably
determined by the Board in good faith and that both the Company’s stock and any publicly traded
consideration received in a sale shall be valued using the closing price for such security (y) for
the period referenced above in the case of the Company’s stock and (z) the average closing prices
for the first twenty (20) trading days after the closing of any sale or other transaction in which
any publicly traded consideration is received;

          (iii) Any person, within the meaning of Sections 3(a)(9), 13(d), or 14(d) (as in effect on the
date hereof) of the Exchange Act (“Person”), other than any employee benefit plan then maintained
by the Company, acquires more than 40% of the outstanding voting securities of the Company
(whether, directly, indirectly, beneficially or of record). For purposes hereof, ownership of
voting securities shall take into account and shall include ownership as determined by applying the
provisions of Rule 13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Exchange Act;
or

          (iv) During any twenty-four (24) month period individuals who constitute the Board at the
beginning of such period cease for any reason to constitute at least a majority thereof, unless the
election, or nomination for election by the Company’s shareholders, of each new director was
approved by the vote of at least two-thirds of the directors then still in office who were
directors of the Company at the beginning of such period; provided that no individual shall be
considered so approved if such individual initially assumed office as a result of or in connection
with an actual or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board.

     8. Golden Parachute Taxes. Subject to the terms of an applicable change in control agreement
executed by you and the Company, in the event that any amounts paid or deemed paid to you pursuant
to this Stock Option Agreement are deemed to constitute “excess parachute payments” as defined in
Section 280G of the Code (taking into account any other payments made to you under the Plan and any
other compensation paid or deemed paid to you), or if you are deemed to receive an “excess
parachute payment” by reason of the acceleration of vesting of your Option granted under the Plan
due to a Change in Control, the

Attachment
1 — Page 3

 

 

amount of such payments or deemed payments shall be reduced (or, alternatively, the number of
options that become 100% vested shall be reduced), so that no such payments or deemed payments
shall constitute excess parachute payments. The determination of whether a payment or deemed
payment constitutes an excess parachute payment shall be in the sole discretion of the Board.

     9. Securities Law Compliance and Other Restrictions. Notwithstanding any other provision of
this Agreement, you may not exercise your Option unless the Shares issuable upon exercise are
registered under the Securities Act of 1933, as amended (“Securities Act”) or, if such Shares are
not then so registered, the Company has determined that such exercise and issuance would be exempt
from the registration requirements of the Securities Act. The exercise of the Option must also
comply with other applicable laws and regulations governing the Option, and you may not exercise
the Option if the Company determines that such exercise would not be in material compliance with
such laws and regulations.

     10. Limited Transferability. Your Option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you.

     11. Withholding Taxes.

          (a) At the time you exercise your Option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” to the extent permitted by the Company), any sums required to satisfy federal,
state, local or foreign withholding tax obligations of the Company that may arise in connection
with such exercise.

          (b) Upon your request and subject to approval by the Company and compliance with any
applicable conditions or restrictions of law, the Company may withhold from fully vested Shares
otherwise issuable to you upon the exercise of your Option a number of whole Shares having a Fair
Market Value, determined by the Company as of the date of exercise, not in excess of the minimum
amount of tax required to be withheld by law.

          (c) You may not exercise your Option unless the tax withholding obligations of the Company are
satisfied. Accordingly, you may not be able to exercise your Option when desired even though your
Option is vested.

     12. Option Not an Employment or Service Contract. Your Option is not an employment or service
contract and nothing in your Option will be deemed to constitute an employment or service contract
or confer or be deemed to confer any right for you to continue in the employ or service of, or to
continue any other relationship with, the Company or any Subsidiary or limit in any way the right
of the Company or any Subsidiary to terminate your employment, service or other relationship at any
time, with or without Cause.

Attachment
1 — Page 4

 

 

     13. Governing Plan Document. Your Option is subject to all the provisions of the Plan, the
provisions of which are hereby made a part of your Option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your Option
and those of the Plan, the provisions of the Plan shall control.

     14. Employee Data Privacy. By entering this Agreement, you (a) authorize the Company and any
agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose
to the Company or any of its affiliates any information and data the Company requests in order to
facilitate the grant of the Option and the administration of the Plan; (b) waive any data privacy
rights you may have with respect to such information; and (c) authorize the Company and its agents
to store and transmit such information in electronic form.

     15. Binding Effect. This Agreement will inure to the benefit of the successors and assigns of
the Employer and be binding upon you and your heirs, executors, administrators, successors and
assigns.

Attachment
1 — Page 5

 

 

ATTACHMENT 2

PENFORD CORPORATION

Notice of Exercise of

Stock Option

TO: Penford Corporation (the “Company”)

The
undersigned hereby exercises Stock Option dated
                       granted by the Company pursuant to its 2006
Long-Term Equity Incentive Plan and related Stock Option Agreement, to purchase
                                        
 Shares of common stock of the Company (the “Option Shares”) at a price of $                                         per Share, for
a total purchase price of $                                         .

Payment method (Choose one or a combination of the following methods). See Section 5 of your
Stock Option Agreement and notify the Company’s Secretary, or to such other
person as the Company may designate, if you wish to pay by other than cash or check since these
alternatives may be subject to special conditions or not available under certain circumstances.

	 	 	 	o cash or check
	 
	 	 	 	o By Regulation T Program (“cashless exercise”)
	 
	 	 	 	o Delivery of already-owned shares

Details:

By this exercise, the undersigned agrees to provide for the payment by the undersigned to the
Company (in the manner designated by the Company) of applicable tax withholding obligation, if
any, relating to the exercise of the foregoing Stock Option.

	 	 	 	 
	 
	 

	 	 	 
	DATE

	 	SIGNATURE	 
	 
	 
	 

	 	 	 
	 

	 	PRINT NAME	 

Attachment
2 — Page 1exv10w26

 

Exhibit 10.26

DISTRIBUTION AGREEMENT 

THIS DISTRIBUTION AGREEMENT (the “Agreement”) is made and entered into as of the 15th day of
February, 2006 2005, by and between Uroplasty, Inc., 2718 Summer Street N.E., Minneapolis,
Minnesota 55413 (“Uroplasty”), and CL Medical SARL, Le Pré Center 2, 28 avenue Général de Gaulle,
F-69110 Sainte Foy Les Lyon, France (“CL”).

R E C I T A L:

WHEREAS, Uroplasty manufactures and currently markets in the United States a family of
injectable implant products used for soft-tissue augmentation for specific indications in urology,
urogynecology, colon and rectal, otolaryngology and plastic surgery markets;

WHEREAS, CL has obtained regulatory clearance from the FDA (510(k) Application Number K051533, with
regulatory clearance date of August 11, 2005) to introduce into commerce its tension-free vaginal
tape for the treatment of female urinary incontinence, currently being marketed in Europe under the
brand name “I-Stop” (the “CL Product”);

WHEREAS, subject to FDA rules and regulations, Uroplasty desires to market the CL Product in the
United States and purchase its requirements of the CL Product from CL, and CL desires to
manufacture the CL Product for Uroplasty and make it the exclusive distributor of the CL Product in
the United States;

WHEREAS, on September 2, 2004, Uroplasty and CL entered a Manufacturing and Distribution Agreement
setting forth each party’s responsibilities with respect to the manufacturing and marketing of the
CL Product for distribution in the United States (the “Manufacturing Agreement”), the parties
desire to terminate the Manufacturing Agreement of September 2, 2004 and have this Agreement govern
all of the terms and conditions of the parties’ relationship with respect to the CL Product;

THEREFORE, IT IS AGREED AS FOLLOWS:

1. Exclusive Distributorship. During the term of this Agreement, CL appoints Uroplasty as
CL’s exclusive distributor in the United States of the CL Product. In return, Uroplasty agrees
during the term of this Agreement to purchase its entire requirements of CL Product components from
CL, as further detailed below.

2. CL’s Responsibilities. During the term of this Agreement, CL will:

(a) Regulatory Compliance. Supply Uroplasty with (i) worldwide regulatory status
changes relative to the CL Product market clearances, (ii) worldwide clinical adverse event
experience (including investigational notes), (iii) all FDA correspondence, inspection
results, enforcement action information and other regulatory information concerning the CL
Product or the quality system used to manufacture the CL Product, (iv) assistance as
Uroplasty requests to investigate and resolve CL Product complaints and/or clinical adverse
events and (v) assistance in responding to FDA requests for information about the CL
Product;

(b) Supply of CL Product. Supply Uroplasty in a timely manner with its entire
requirements, sterilized, packaged, labeled and ready for sale, all as manufactured in
accordance with FDA laws and regulations.

(c) Marketing Assistance. Use its best efforts to assist Uroplasty in the marketing
of the CL Product by sharing (without cost) all of CL’s current and future marketing
materials, including product photographs and graphics, I-Stop trademark logos and designs,
brochures and website designs and information.

(d) Device Changes. Inform Uroplasty in advance of any changes to the CL Product
(including design, manufacturing, packaging or labeling) to ensure accurate marketing
programs, claims, and representations in the U.S. market. CL will provide previous
generation product at Uroplasty’s request for a maximum of 3 months to allow adequate time
to transition to the new design (i.e., marketing preparation, training, etc.).

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3. Uroplasty’s Responsibilities. During the term of this Agreement, Uroplasty will:

(a) Appointment as US Agent. Accept appointment as US Agent for CL, the duties of
“US Agent” being limited to those described in FDA regulations and 21 USC 360(i) and 21 CFR
807.40 as including responsibility for facilitating, as needed, communications between CL
and the FDA, responding to questions concerning the CL Product, and scheduling inspections
of CL by FDA auditors;

(b) Regulatory Compliance. Comply with all applicable national, state, regional and
local laws and regulations in performing its duties hereunder, apprise CL with respect to
any changes in such laws and regulations as may affect the CL Product, and promptly notify
CL of any complaints and/or reported adverse health effects potentially related to the use
of the CL Product, or any regulatory developments in the United States regarding CL Product;

(c) Marketing. Use its best efforts to market and sell the CL Product in the United
States at such prices, and on such terms, as Uroplasty shall determine in its sole
discretion, and aid CL in obtaining a U.S. trademark for the CL Product brand name to be
used; and

(d) Customer Support. Uroplasty will provide prompt pre- and post-sales service and
support for all units of the CL Product in the United States, including timely response to
customers’ general questions, customer assistance in the diagnosis and correction of
problems encountered in using the CL Product, and, only upon request by CL, will return a CL
Product to CL for investigation of an alleged problem.

4. Forecasting, Order Acceptance, and Product Delivery. At minimum, Uroplasty will provide
CL with rolling forecasts, quarterly, beginning January 1, 2006, for expected orders over the next
ninety (90) days, and with a preliminary forecast for one hundred eighty (180) days thereafter. CL
will make reasonable good faith efforts to meet the projected ninety (90) day forecasts of demand
in each quarter. ON or before January 1 of each subsequent year, Uroplasty also shall confer with
CL and provide what it reasonably believes is a month-by-month forecast for CL Product for the
calendar year. All purchase orders issued by Uroplasty to CL shall be subject to written acceptance
by CL at CL’s corporate offices. All CL Product shall be shipped to Uroplasty at its designated
location ExWorks (Incoterms 2000) from CL’s production facility. If for any reason CL is
prohibited from exporting CL Product from France into the United States, CL agrees this Agreement
is hereby terminated. CL will cease manufacturing the CL Product and Uroplasty will begin
manufacturing the CL Product for the US market. CL shall supply to Uroplasty components necessary
to manufacture, package, and label the CL Product, under the applicable terms and conditions of the
previous September 2, 2004 Manufacturing Agreement, as amended and agreed to reflect outdated terms
and conditions.

5. Product Pricing and Payment. Exhibit B is a schedule of CL’s pricing in Euros to
Uroplasty for CL Products. Uroplasty will pay 30% of the purchase price for CL Products in Euros,
at the time Uroplasty places its purchase order. As to products that Uroplasty does not reject for
defects, Uroplasty shall pay CL, in Euros, the remaining 70% balance, net of returns, in net 60
days after receipt. For defects other than those in packaging and labeling discovered by Uroplasty
after full payment has been made, Uroplasty shall be entitled to a credit or refund in the amount
of the purchase price, shipping expenses and all applicable other costs paid by Uroplasty under
this Agreement.

6. Minimum Purchase Requirements. Despite the above provisions, Uroplasty agrees during the
term of this Agreement to purchase a minimum number of CL Products as described on the attached
Exhibit C.

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7. Intellectual Property Matters.

(a) License Grant. To the extent required, CL hereby grants, and Uroplasty hereby
accepts, an exclusive (subject to the fulfillment of the other provisions), nontransferable
right and license of the specified CL intellectual property to market, demonstrate and
distribute the CL Product to end-users and to use the CL Medical “I-Stop” trademark and
logo, in the United States, during the term of this Agreement, solely for the purpose of
exercising the rights granted herein. This license does not grant, and Uroplasty shall
not have, any right or license to (a) manufacture the CL Product or component
thereof for any purpose, (b) use the CL Product for any purpose other than marketing,
demonstration and/or distribution to end users, (c) modify any unit of the CL Product in any
manner, or (d) possess or retain any rights to CL’s intellectual property.

(b) Patents. Uroplasty agrees to assign and transfer to CL the entire right, title
and interest, for the United States of America and its possessions and territories and for
all foreign countries, in and to any U.S. or foreign patents issued in connection with the
CL Product, including methods of use thereof, or any improvements thereupon, including any
and all additions, alterations, modifications, design changes, and other improvements to the
CL Product, including methods of use thereof, which are jointly developed by CL and
Uroplasty at any time during the term of this Agreement, and regardless whether CL owns or
holds any proprietary rights therein or thereto.

(c) Use During Agreement. Uroplasty agrees not to attach any additional trademarks,
trade names, logos or designations to the CL Product without the prior written consent of
CL, which shall be conditioned on CL’s approval of location, content and appearance of any
proposed attachment, and further agrees not to use any CL trademark in connection with any
product other than the CL Product.

(d) No Acquired Proprietary Rights. Uroplasty has paid no consideration for the use
of CL’s trademarks, trade names, logos, designations or copyrights, and nothing in this
agreement will give Uroplasty any right, title or interest in any of them.

(e) No Continuing Rights. Upon expiration or termination of this Agreement,
Uroplasty will immediately cease all display, advertising and use of CL trademarks, trade
names, logos and designations and will not thereafter use similar or confusing trademarks,
trade names, logos and designations.

(f) Obligation to Protect. Uroplasty agrees to use reasonable efforts to protect
CL’s proprietary rights and to cooperate in CL’s efforts to protect its proprietary rights.
Uroplasty agrees to promptly notify CL of any known or suspected breach of CL’s proprietary
rights that comes to Uroplasty’s attention.

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8. Indemnification

(a) IP Indemnity. CL will defend, indemnify and hold Uroplasty, Uroplasty’s
customers who have purchased the CL Product, and each of their respective directors,
officers, employees and agents, harmless for any and all losses, claims, damages, awards,
costs and expenses including reasonable attorney’s fees which arise from any claim by any
third party that any of CL Intellectual Property infringes such third party’s patent,
copyright or other intellectual property rights. This indemnity shall survive the
termination of this agreement. NO LIMITATION OF LIABILITY SET FORTH ELSEWHERE IN THIS
AGREEMENT IS APPLICABLE TO THIS INDEMNIFICATION. The provisions of this section set forth
the entire liability of CL and the sole remedies of Uroplasty with respect to infringement
and allegations of infringement of intellectual property rights or other proprietary rights
of any kind in connection with the use of CL Intellectual Property.

(b) By CL. CL shall indemnify, protect, defend, and hold Uroplasty, its
sub-licensees, parents, subsidiaries, and affiliates, and the respective officers,
directors, shareholders, agents, and employees of all of the foregoing, harmless from and
against any and all costs, claims, suits, losses, damages, liabilities, and expenses
(including reasonable attorney’s fees) arising out of or resulting from (i) product, design
and manufacturing defects in the CL Product, (ii) the breach by CL of any representation,
warranty, covenant or obligation contained in this Agreement, (iii) the marketing,
manufacture, distribution or use of the CL Product in the United States, and the activities
of CL related thereto, prior to the Effective Date or (iv) any marketing, manufacture,
distribution or other exploitation of the CL Product by CL outside the United States. NO
LIMITATION OF LIABILITY SET FORTH ELSEWHERE IN THIS AGREEMENT IS APPLICABLE TO CLAIMS
ARISING UNDER ITEMS (i) (iii) (iv) OF THIS SECTION 9.2. AND TO CLAIMS ARISING UNDER ITEM
(ii) OF THIS SECTION 9.2 IF CL’S BREACH WAS WILLFUL OR GROSSLY NEGLIGENT.

(c) By Uroplasty. Uroplasty shall indemnify, protect and save CL, which term
shall include all officers, directors, employees and agents thereof (hereinafter referred to
as “Indemnitees”) harmless from all claims, demands, suits or actions (including attorneys’
fees incurred in connection therewith) arising out of or resulting from the breach by
Uroplasty of any representation, warranty, covenant or obligation contained in this
Agreement.

(d) Product Liability and Property Insurance. During the term of this Agreement,
each party shall maintain product liability insurance covering the CL Product and, including
without limitation, each party’s contractual liability to the other pursuant to the
indemnification provided in this Section 9, with combined single limits of liability in the
amount of Two Million U.S. Dollars ($2,000,000). This insurance coverage must be provided
by a carrier with an A.M. Best rating of A- or better. Prior to, or upon execution of this
Agreement, and at such other times as either party may request during the term of this
Agreement, each party shall provide, as a condition to the other’s obligations under this
Agreement, a certificate of insurance issued by the carrier (admitted to conduct business in
the United States of America), evidencing the insurance required under this Section 9.4.
Property insurance shall be maintained by each party for potential physical damage or loss
of shipment while in transit. This provision is applicable for each shipment until the
transfer of rights under this agreement.

9. Warranties and Limited Liabilities

(a) CL Product Warranty. CL warrants to Uroplasty and end-users that the CL Product
Components will be manufactured in accordance with FDA laws and regulations and free of all
defects in workmanship and material. At Uroplasty’s option, CL will, at its sole cost and
expense, repair, replace or accept return for credit of any CL Product Components that
Uroplasty determines not to meet product specifications and this warranty.

(b) Disclaimer of Warranties. CL MAKES NO WARRANTIES OR REPRESENTATIONS AS TO
PERFORMANCE OF THE CL PRODUCT EITHER TO UROPLASTY OR TO END-USERS, AND HEREBY DISCLAIMS ALL
WARRANTIES TO UROPLASTY REGARDING THE CL PRODUCT, EXPRESS AND IMPLIED, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT.

(c) Uroplasty Warranty. Uroplasty will make no warrant, guarantee or representation
whether written or oral, on CL’s behalf.

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(d) Liability Limitations and Exclusions. REGARDLESS OF WHETHER ANY REMEDY
SET FORTH HEREIN OR IN CL’S END-USER WARRANTY FAILS OF ITS ESSENTIAL PURPOSE OR OTHERWISE,
NEITHER PARTY WILL BE LIABLE FOR ANY LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR OTHER SPECIAL DAMAGES SUFFERED BY UROPLASTY, ITS CUSTOMERS OR
OTHERS ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE CL PRODUCT, FOR ALL CAUSES OF
ACTION OF ANY KIND (INCLUDING TORT, BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY AND
BREACH OF WARRANTY) EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

10. Non-competition by Uroplasty. In consideration of the exclusive arrangements provided
in this Agreement, Uroplasty agrees that, during the term of this Agreement and, if this Agreement
expires pursuant to the opening paragraph of Section 12 upon the end of the initial or any
successive term hereof, for one year after such expiration, it will not manufacture its own, or
market any other party’s, tension-free vaginal tape product for the treatment of female SUI.

11. New or Improved CL Products. As further consideration for this Agreement, if CL
develops any improvements or modifications to the CL Product or the CL Product Components during
the term hereof, CL will provide such improvements or modifications to Uroplasty without additional
charge for use under this Agreement as Uroplasty so determines in its discretion, subject to FDA
regulatory approval. In addition, if CL develops any new medical devices or procedures during the
term hereof, it will offer Uroplasty the right of first refusal for the exclusive distribution
rights as to such devices or procedures in the United States.

12. Term and Termination. The initial term of this Agreement runs through six years from
the date of this Agreement. Uroplasty may renew this Agreement for successive five-year terms upon
written notice to CL given not later than six months prior to the end of the initial or any
successive term.

Despite the foregoing, this Agreement may terminate early as follows:

(a) by
mutual written agreement of the parties;

(b) by either party upon written notice to the other of a material breach of this Agreement,

but only if the other party does not cure the breach within 30 days after receipt of such

written notice;

(c) by either party upon written notice to the other if the other party (i) files a

bankruptcy or other similar petition relating to its debts (or has an involuntary petition

filed against it that is not dismissed within 30 days), (ii) becomes insolvent or (iii)

makes an assignment for the benefit of creditors; or

(d) engages in conduct in the marketplace which results in serious criminal charges being

brought against Uroplasty or its principal officers in connection with said conduct, which,

in the reasonable judgment of CL, may harm the economic interests or commercial reputation

of CL.; or

(e) engages in conduct in the marketplace which results in serious criminal charges being

brought against CL or its principal officers in connection with said conduct, which, in the

reasonable judgment of Uroplasty, may harm the economic interests or commercial reputation

of Uroplasty.

(f) by CL at any time, upon CL’s decision to stop the distribution of the CL Products for

more than 12 months in the US.

Upon any termination, Uroplasty may dispose of all CL Products and CL Product Components in its
remaining inventory in the normal course of business.

Provided, further, in the event that Uroplasty fails to reach its minimum target for sales in any
one year period commencing on and after the first year of this Agreement, CL shall have the right
to terminate in whole or part CL’s grant to Uroplasty of exclusivity within the United States as
CL’s sole distributor.

13. Force Majeure. Neither party shall not be responsible for any failure to perform due
to unforeseen circumstances or to causes beyond CL’s reasonable control, including but not limited
to acts of God, war, riot, embargoes, acts of civil or military authorities, fire, floods,
accidents, strikes or shortages of transportation,
facilities, fuel, energy, labor or materials. In the event of any such delay, CL may defer the
delivery date of orders for the CL Products, and Uroplasty may stop ordering CL Product, for a
period equal to the time of such delay.

-5-

 

14. Confidentiality. Each party agrees to keep confidential all proprietary and
confidential information (written and oral) concerning the other’s business, financial, operational
and acquisition plans and projections. Each agrees to use this information only to further this
Agreement. Neither party will disclose any of this information to any person, firm or entity,
except on a need-to-know basis to its respective employees, agents, attorneys and advisors who
agree to maintain the confidentiality of this information.

A party is not responsible to keep confidential any information that (i) is or becomes public other
than as a result of acts by or through such party, (ii) it can demonstrate is already known by such
party at the time of the other’s disclosure, (iii) it independently obtains from a third party
having no duty of confidentiality to the other, (iv) it independently develops without using
confidential information from the other or (v) it must disclose pursuant to applicable laws or
court order. CL acknowledges that Uroplasty may be required to disclose regulatory and other data
of CL to the FDA in connection with Uroplasty’s duties as US Agent and that Uroplasty may file this
Agreement with the U.S. Securities and Exchange Commission as part of Uroplasty’s periodic filings.

15. Assignment. This Agreement is binding upon, and will inure to the benefit of, the
parties hereof and their respective permitted successors and assigns. Uroplasty may assign this
Agreement to any person, firm or entity that acquires all or substantially all of Uroplasty’s
assets or acquires Uroplasty by stock acquisition or merger.

16. Entire Agreement. This Agreement constitutes the entire agreement between the parties
with respect to the CL Product and supersedes all prior agreements and understandings between the
parties, whether written or oral, and any other communications between the parties relating to the
CL Product, including the September 2, 2004 Manufacturing Agreement, which is hereby terminated
with this Distribution Agreement.

16. Dispute Resolution. All disputes arising out of or in connection with this Agreement
shall be settled exclusively under the Rules of Arbitration of the International Chamber of
Commerce. The arbitration shall be before three arbitrators to be nominated by the International
Chamber of Commerce. One arbitrator shall be selected by each party and the third arbitrator (who
shall be the Chairperson) shall be selected by the first two arbitrators. The arbitrators shall be
fluent in written and spoken English, with expertise in the field of medical devices, either as
attorneys, accountants or corporate officers of medical device companies. Each party will pay its
own expenses and share all common expenses. Provided further, however, if the dispute in question
has the reasonable likelihood of resulting in a reward of less than US $One Million, the parties
agree that such a dispute will be heard and decided by a single arbitrator meeting the above
expertise and language qualifications, either agreed upon by the parties within fourteen (14) days
of the notice by one party to the other of intent to arbitrate, or selected by the International
Chamber of Commerce. The arbitration shall be in English and held in Lyon, France (or in such other
place as the parties may agree). This Agreement will be governed by the laws of France and
specifically excludes the United Nations Convention on Contracts for the International Sales of
Goods (“CISG”).

IN WITNESS WHEREOF, the undersigned, who warrant and represent that they are duly authorized by
their respective parties to execute this Agreement, hereunto affix their signatures on behalf of
their respective parties as of the date first above written.

	 	 	 	 	 	 	 	 	 
	Uroplasty, Inc.	 	CL Medical SARL	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 

	 	 

Its Duly Authorized Representative
	 	 	 	 

Its Duly Authorized Representative
	 	 

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