Document:

Exhibit 10.1

REDACTED COPY

Confidential Treatment Requested(1)

LICENSE AND
DEVELOPMENT AGREEMENT

between

ANIKA
THERAPEUTICS, INC.

and

GALDERMA
PHARMA S.A.

(1) Redacted portions have been marked with brackets
containing asterisks ([***]).  The redacted portions are subject to a
request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

Confidential
Treatment Requested

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article I - DEFINITIONS

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article II - PRODUCT
  DEVELOPMENT

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article III - COMMERCIALIZATION

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article IV - INTELLECTUAL
  PROPERTY LICENSE GRANTS

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article V - ASSIGNMENT
  OF RIGHTS IN TRADEMARK APPLICATIONS

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article VI - PAYMENTS

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article VII - PUBLICATIONS;
  TRANSFER OF DATA; CONFIDENTIALITY; COOPERATION

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article VIII - PATENT
  RIGHTS

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article IX - CREATION,
  REGISTRATION, MAINTENANCE AND PROTECTION OF TRADEMARK PORTFOLIO

  	
   

  	
  25

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article X - REPRESENTATIONS
  AND WARRANTIES.

  	
   

  	
  26

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XI - ANIKA’S
  GENERAL OBLIGATIONS AND COVENANTS

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XII - GALDERMA’S
  GENERAL OBLIGATIONS AND COVENANTS

  	
   

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XIII - TERM
  AND TERMINATION

  	
   

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XIV - INDEMNIFICATION

  	
   

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XV - STEERING
  COMMITTEE

  	
   

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XVI - DISPUTE
  RESOLUTION

  	
   

  	
  42

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XVII - MISCELLANEOUS

  	
   

  	
  43

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A:  ANIKA PATENTS AND ANIKA PATENT APPLICATIONS

  	
   

  	
   

  	
   

  
	
  EXHIBIT B:  TRADEMARK APPLICATIONS

  	
   

  	
   

  	
   

  
	
  EXHIBIT C:  SPECIFICATIONS

  	
   

  	
   

  	
   

  
	
  EXHIBIT D:  COUNTRIES FOR ADDITIONAL ANIKA PATENT
  APPLICATIONS

  	
   

  	
   

  	
   

  
	
  EXHIBIT E:  ARBITRATION

  	
   

  	
   

  	
   

  

 

Confidential Treatment Requested

LICENSE AND DEVELOPMENT AGREEMENT

THIS
LICENSE AND DEVELOPMENT AGREEMENT (this “Agreement”) is made effective
as of June 30, 2006 (the “Effective Date”) by and between ANIKA
THERAPEUTICS, INC., a Massachusetts corporation having a place of business at
160 New Boston Street, Woburn, Massachusetts 01801 (“ANIKA”), and
GALDERMA PHARMA S.A., a Swiss corporation having a place of business at
Zugerstrasse 8, Cham CH-6330, Switzerland (“GALDERMA”).  ANIKA and GALDERMA are each referred to by
name or as a “Party,” or collectively as the “Parties.”

RECITALS

1.                     ANIKA develops, manufactures and commercializes
therapeutic products and devices. 
Furthermore, ANIKA has been developing a proprietary product intended
for use in cosmetic-dermatological procedures, including cosmetic-tissue
augmentation.

2.                     On September 2, 2005, ANIKA submitted a PMA to
the FDA for a cosmetic-tissue augmentation product.

3.                     On January 30, 2006, ANIKA received CE Mark
approval in the European Union for a cosmetic-tissue augmentation
product.

4.                     GALDERMA possesses commercialization
capabilities in the dermatological and cosmetic fields.

5.                     ANIKA desires to supply the Current Licensed
Product to GALDERMA and GALDERMA desires to purchase the Current Licensed
Product from ANIKA and to commercialize, distribute and sell it within the
Field and in the Territory pursuant to this Agreement and a Supply Agreement
entered into concurrently herewith and intended to be coterminous herewith (the
“Supply Agreement”).

NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows:

ARTICLE I
- DEFINITIONS

When
used in this Agreement, each of the following terms shall have the meaning set
forth below.  The term shall have the
same meaning whether the singular or plural form is used.

“Acquisition Entity” shall
have the meaning set forth in Section 12.1(j).

“Additional ANIKA Patent
Applications” means the patent applications relating to the Licensed
Products and the Field that are contemplated to be filed by ANIKA during the
Term in the countries identified in Exhibit D after the Effective Date.

 

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“Affiliate” of a Person means
any company or entity which controls, is controlled by or is under common
control with such Person, where control, for purposes of this definition, means
(i) the possession, directly or indirectly, of the power to direct the
management or policies of a Person or to veto any material decision relating to
the management or policies of a Person or a majority of the composition of the
board of directors (or similar governing body), in each case, whether through
the ownership of voting securities, by contract or otherwise, or (ii) the
Beneficial Ownership, directly or indirectly, of at least 50% of the voting
securities of a Person.  “Beneficial
Ownership” shall be determined in compliance with Rule 13d-3 of the Securities
Exchange Act of 1934.

“Agreement” shall have the
meaning set forth in the preamble.

“ANIKA” shall have the meaning
set forth in the preamble.

“ANIKA IP” means ANIKA
Know-How, ANIKA Patents, ANIKA Patent Applications, and Trademark Applications.

“ANIKA Know-How” means
Information in ANIKA’s Control, including but not limited to Specifications,
which is developed or acquired by ANIKA, either as of the Effective Date or at
any time during the Term, which relates to the manufacturing of the Licensed
Product in the Field.  Notwithstanding
anything herein to the contrary, ANIKA Know-How excludes ANIKA Patents.

“ANIKA Patents” means any
patents relating to the Licensed Product and the Field that are Controlled by
ANIKA during the Term, including without limitation the Joint Patents.  A list of current ANIKA Patents is recited in
Exhibit A, which may be updated from time to time.

“ANIKA
Patent Applications” means the patent applications filed by ANIKA
identified in Exhibit A.

“Applicable Law” means, with
respect to Licensed Product in any country in the Territory, all domestic,
foreign, national, federal, state, local, governmental, judicial, arbitral and
other laws, statutes, codes, treaties, conventions, rules, regulations,
judgments, awards, orders, directives and other pronouncements having the
effect of law or similar binding effect, governing the activities contemplated
by this Agreement and the Supply Agreement.

“Audit” shall have the meaning
set forth in Section 6.5(c).

“Back-up Trademark” means any
trademark to be applied for or already registered and/or used in connection
with the Licensed Product in any country of the Territory where the Main
Trademark is not available.

“Bankruptcy Code” shall have
the meaning set forth in Section 17.16.

“Business Day” means a day on
which banking institutions in New York, New York are open for business.

“Calendar Quarter” means a
quarter in a calendar year.

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“CE Mark” means the procedure
defined by the Directive 93/42, dated June 14, 1993, as amended from time to
time.

“cGMP” means “Good
Manufacturing Practices” as such term is generally understood in the medical
device industry, as in effect from time to time.

“Claiming Party” shall have
the meaning set forth in Section 14.6.

“Clinical Development” means
all activities directly related to human clinical studies.

“Commercialization”
means to make a bona fide offering of the Current Licensed Product to the
market of which ANIKA is promptly notified in writing by GALDERMA; provided
that such notification is not a condition to any such offering.

“Competing
Product” shall have the meaning set forth in Section 12.1(j).

“Condition Precedent to Commercial
Sale” means, with respect to a given Licensed Product and a given country
in the Territory, a Regulatory Approval shall have been issued in such country
contemplating at least a 12-month shelf life for such Licensed Product.

“Confidential Information”
shall have the meaning set forth in Section 7.1.

“Control” or “Controlling”
means, with respect to ANIKA, owned by or possesses the right to grant a
license or sublicense without violating the terms of any agreement of ANIKA
with any Third Party.

“Current Licensed Product”
means a product in finished packaged form [********************]
and conforming to the Specifications, but shall not include any Line
Extensions.

“Date of First Sale” means,
with respect to a country, the date on which a GALDERMA Seller first sells a
Licensed Product, in such country within the Territory, to a Third Party in an
arms-length commercial transaction in conjunction with a commercial launch of
such Licensed Product pursuant to a launch plan reviewed by the Steering
Committee.

“Develop” or “Development”
means all activities related to developing a product for Clinical Development,
and if no Clinical Development is required, obtaining Regulatory Approval,
including but not limited to generating any Information in this respect,
chemical and analytical development, pre-clinical testing, toxicology,
formulation, manufacturing process development, quality assurance and quality
control, pharmacokinetics and the development of any assays requested by health
authorities; provided that Develop or Development shall not include Clinical
Development.

“Dollars” or “$” means
lawful money of the United States in immediately available funds.

“Effective Date” shall have
the meaning set forth in the preamble.

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“Europe” means, from time to
time, the member states of the European Union, including any successor states
thereto; provided, however, that from and after June 30, 2006,
Europe shall mean those member states of the European Union as of June 30,
2006.

“FDA” means the United States
Food and Drug Administration or any successor agency.

“Field” means injectable
products for use solely in cosmetic dermatology procedures in humans, including
but not limited to the correction of soft tissue contour deficiencies such as
wrinkles, folds, and scars, and the enlargement and/or smoothing of the
appearance of lips.

“GALDERMA” shall have the
meaning set forth in the preamble.

“GALDERMA Seller(s)” means
GALDERMA and its permitted sublicensees under Section 4.1.

“HA” means a hyaluronic acid
from any source whether as an acid, a pharmaceutically acceptable salt, or a
mixture thereof, in any solid or solution phase form thereof or cross-linked or
chemically modified hyaluronic acid derivatives [********************].

“HA Product” means a product
for use in the Field, one principal component of which is HA.

“Information” means technical
information, techniques and data, whether in writing or not, relating to the
Licensed Product and its use in the Field and including Product Information,
techniques and data, including, but not limited to, screens, models,
inventions, practices, methods, knowledge, know-how, skill, experience, test
data including pharmacological, toxicological and clinical test data,
analytical and quality control data, marketing, pricing, distribution, sales,
manufacturing data, processes necessary and sufficient to manufacture the
Licensed Product in finished packaged form, Specifications, and patent and
legal data or descriptions.

“Initial Marketing Territory”
shall have the meaning set forth in Section 3.2.

“Initial Term” shall have the
meaning set forth in Section 13.1(a).

“Joint Patents” means the
patents jointly owned by ANIKA and the Joint Patent Holder identified in Exhibit
A.

“Joint Patent Holder” means [********************]
or any related Person.

“Knowledge” means the facts
and circumstances that [*********************************

*************************] actually know after
reasonable inquiry and investigation.

“Licensed Product(s)” means
the Current Licensed Product and any Line Extension developed pursuant to
Article II of this Agreement.

“Line Extension(s)” means
either (i) a change in the indication(s) for use set forth in the PMA for the
Current Licensed Product that expands the applications of the Current Licensed
Product or (ii) [************************************************

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*************************].  For avoidance of doubt, a mutually-agreed
change in Specifications that satisfies either clause (i) or clause (ii) in the
immediately preceding sentence shall, for all purposes under this Agreement, be
considered a Line Extension and not solely a change in Specifications, unless
the Parties otherwise agree in writing at the time such change is made.  Any variation in the Licensed Product which
modifies a Licensed Product to the extent that the Licensed Product does not
conform to the definition of Line Extension shall be considered a Next
Generation Product to the extent it satisfies the definition thereof.

“Main Trademark” means [********************]
or any other trademark designated in writing by GALDERMA on or before [********************]
for use in connection with the Licensed Products in the majority of the
countries in the Territory.

“Net Sales” means, for sales
of Licensed Product in the Territory, the amount invoiced by GALDERMA Sellers to customers, less
credits taken and actual payments made for: 
(i) discounts, including cash discounts, unit discounts, rebates
paid and retroactive price reductions or allowances actually allowed or granted
from the billed amount, and (ii) credits or allowances actually granted
upon claims, rejections or returns of such sales of Licensed Products,
including recalls (provided such recalls are in accordance with Section  of the Supply Agreement and except to
the extent ANIKA has otherwise paid for such recall such that GALDERMA receives
full payment for the recalled Licensed Products and does not have to refund any
portion thereof).  For purposes of
calculating “Net Sales,” (a) amounts invoiced are for product sales only
and exclude non-product line items such as taxes and shipping charges;
(b) a Licensed Product shall be considered “sold” upon the invoicing of
such Licensed Product by GALDERMA Sellers to Third Parties; and (c) Samples are
to be excluded from both the Dollars and unit count.  The determination of Net Sales shall be
consistent with GALDERMA’s recordkeeping for its sales transactions, in
particular with the definition of “sale of goods” under IAS 18.14.

“Net Sales Threshold,” [********************

	
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“Next Generation Product” means any HA Product
for use in the Field anywhere in the Territory, the specifications of which
differ from the Licensed Product in such a way that it is not covered by the
definition of Licensed Product.  For
avoidance of doubt, a mutually-agreed change in Specifications that satisfies
the conditions in the immediately preceding sentence shall, for all purposes
under this Agreement, be considered a Next Generation Product and not solely a
change in Specifications, unless the Parties agree in writing otherwise at the
time such change is made.

“North America” means the
United States and Canada.

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“Party” or “Parties”
shall have the meaning set forth in the preamble.

“Patent Costs” means the
reasonable fees and expenses paid to outside legal counsel and other Third
Parties and preparation, filing, prosecution and maintenance expenses incurred
in connection with the establishment and maintenance of Patent Rights.

“Patent Rights” means (i)
valid and enforceable patents, including any extension, registration, confirmation,
reissue, continuation, divisional, continuation-in-part, re-examination or
renewal thereof, and (ii) pending applications for letters patents, in any
jurisdiction within the Territory.

“Per Unit Price” means the
amount set forth in Exhibit A to the Supply Agreement.

“Person” shall mean any
natural person, corporation, firm, limited liability corporation, limited
liability partnership, business trust, joint venture, association,
organization, company, partnership or other business entity, or any government
or any agency or political subdivision thereof.

“Phase IV Studies” means studies
requested by health authorities as a condition to obtaining and maintaining any
Regulatory Approval in the United States.

“PMA” means a premarket
approval application filed with the FDA as defined in 21 CFR Part 814 or
any successor provision.

“Price Per Sample” means the
amount set forth in Exhibit A to the Supply Agreement.

“Product Development” means
the combination of activities defined as Development and Clinical Development.

“Product Information” means
any Information in ANIKA’s Control regarding any Licensed Product that is
useful or necessary to GALDERMA in connection with the performance of its
obligations under Section 3.1.

“Regulatory Approval” means,
with respect to a Licensed Product in any country in the Territory, all
unrestricted approvals, clearances, registrations and permits required under
Applicable Law for first use or sale of such product, whether a medical device
and/or drug.

“Regulatory Approval Application”
means an application for Regulatory Approval required before commercial sale or
use of a Licensed Product as a drug or a medical device in any jurisdiction.

“Samples” means samples of the
Licensed Products labeled as such and provided by ANIKA to GALDERMA under
Section 2.4 of the Supply Agreement.

“SKU” means each unique
packaging configuration for a Licensed Product.

“Specifications” means the
specifications attached hereto as Exhibit C  for the
Current Licensed Product, as amended from time to time by the Steering
Committee pursuant to Section 15.4(ii) of this Agreement.

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“Steering Committee” shall
have the meaning set forth in Section 15.1 of this Agreement.

 “Supply Agreement” shall have the
meaning set forth in the recitals.

“Term” shall have the meaning
set forth in Section 13.1(b).

“Territory” initially means
the world and thereafter those countries that remain after the loss of
countries from the Territory pursuant to Section 5.3 of the Supply Agreement.

“Third Party(ies)” means any
entity other than ANIKA, GALDERMA, GALDERMA Sellers, or any Affiliates of ANIKA
or GALDERMA.

“Trademark Applications” means
the applications filed by ANIKA to register the marks listed in Exhibit B.

“Trademark Clearance Process”
means the process of verifying that filing an application for or use of the
Main Trademark or Back-up Trademark does not raise the risk of infringing the
trademark rights of a Third Party.

“Trademark Creation Process”
means the process of creating or otherwise acquiring trademarks for use in
connection with the marketing and sale of Licensed Products hereunder.

“Trademark Portfolio” means
the Trademark Applications and all other trademarks that have been created by
GALDERMA and for which GALDERMA has filed applications or otherwise secured or
maintained protection for use in connection with the marketing and sale of
Licensed Products hereunder.

“Trademark Registration Process”
means the process consisting of the registration of the Main Trademark or
Back-up Trademark in any country within the Initial Marketing Territory or any
country approved for Product Development by the Steering Committee.

“Unit” means each syringe
containing Licensed Product.

“United States” means the
United States of America.

“Validity Challenge Claim”
shall have the meaning set forth in Section 8.5(a).

ARTICLE II
- PRODUCT DEVELOPMENT

2.1.          Product Development of the Current
Licensed Product.

(a)           ANIKA shall be responsible for and
shall use commercially reasonable efforts to conduct the Product Development of
the Current Licensed Product in connection with the obtaining of Regulatory
Approval of the Current Licensed Product in the Initial Marketing Territory and
in any country approved for Product Development by the Steering Committee
pursuant to applicable Product Development plan(s) and budget(s) that shall be
prepared by ANIKA.  Such plan(s) and
budget(s) shall address the Specifications and timing and shall be agreed to,
and adjusted from time to time, as appropriate, by the Steering Committee.

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GALDERMA, at the
request of ANIKA, shall provide reasonable assistance to ANIKA in conducting
such Product Development for the Current Licensed Product, including without
limitation reviewing clinical trials, Regulatory Applications and proposed
labeling for the Current Licensed Product.

(b)           All reasonable and reasonably
documented costs and expenses associated with the Clinical Development of the
Current Licensed Product commenced after the Effective Date that either are
required for any Regulatory Approval or are otherwise approved by the Steering
Committee, including without limitation ANIKA’s reasonable internal and
out-of-pocket expenses associated with such Clinical Development, costs of
hiring contract research organizations and all fees and expenses associated
with any Regulatory Approval for the Current Licensed Product shall be paid by
GALDERMA, except for all costs and expenses related to the PMA and the CE Mark
for the Current Licensed Product, which shall be paid by ANIKA.  The costs and expense relating to any [********************], however, shall
be shared equally between ANIKA and GALDERMA. 
If Clinical Development costs for the Current Licensed Product exceed
the budget approved by the Steering Committee for such Clinical Development,
then such excess shall be borne by (i) GALDERMA, if such excess resulted from a
change in Specifications or a change in the agreed Clinical Development plan
requested by GALDERMA or the Steering Committee, required by the FDA or any
other regulatory authority or requested by ANIKA and agreed to by GALDERMA, but
in each case only to the extent GALDERMA is responsible for such costs pursuant
to the preceding sentence or (ii) ANIKA, if such excess resulted from any
mismanagement of the agreed upon budget.

(c)           [********************************************************************************
*************************************************************************].

2.2.          Development of Line Extensions.

(a)           Should the Steering Committee decide
to pursue any Line Extension, ANIKA shall be responsible for and shall use
commercially reasonable efforts to conduct the Product  Development of such Line Extensions pursuant
to applicable Product Development plan(s) and budget(s) that shall be prepared
by ANIKA, which plan(s) and budget(s) shall address specifications and timing
and shall be agreed to, and adjusted from time to time, as appropriate,  by the Steering Committee; provided, however,
that GALDERMA shall provide reasonable assistance to ANIKA with such Product
Development efforts.  The Parties
currently intend that one of the Line Extensions to be pursued will be a [********************] product.  GALDERMA shall bear all reasonable and
reasonably documented costs and expenses associated with Clinical Development
of any such Line Extension, including without limitation ANIKA’s reasonable
internal and out-of-pocket expenses associated with such Clinical Development,
costs of hiring contract research organizations and all fees and expenses
associated with any Regulatory Approval for any such Line Extension.  If such costs and expenses exceed the budget
for such Clinical Development approved by the Steering Committee, then such
excess shall be borne by (i) GALDERMA, if such excess resulted from a change in
Specifications or a change in the agreed Clinical Development plan requested by
GALDERMA or required by the FDA or any other regulatory authority, or requested
by ANIKA and agreed to by GALDERMA, or (ii) ANIKA, if such excess resulted
from any mismanagement of the agreed upon budget.

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Notwithstanding the
foregoing, if the Steering Committee has approved a Line Extension pursuant to
Section 2.2(b) and if GALDERMA decides not to proceed with the further
Product Development of such Line Extension for any reason, then GALDERMA shall
reimburse to ANIKA all of ANIKA’s reasonable and reasonably documented internal
and out-of-pocket expenses associated with such Product Development that were
not previously reimbursed, such reimbursement not to exceed the estimate of
total Product Development costs presented to the Steering Committee pursuant to
Section 2.2(b), as adjusted from time to time by the Steering Committee,
and provided that, if ANIKA has commenced a clinical trial for any such
Line Extension with respect to which GALDERMA decides not to proceed, such
reimbursement shall include all of ANIKA’s reasonable and reasonably documented
internal and out-of-pocket expenses associated with the completion in full of
such clinical trial, unless the Steering Committee determines to terminate such
clinical trial prior to completion.

(b)           The Product Development of Line
Extensions contemplated by Section 2.2(a) shall be approved by and guided
by the Steering Committee pursuant to Product Development plan(s) and budget(s)
approved in accordance with Article XV hereof. 
Any such Product Development plan(s) shall address design inputs,
budgets, an estimate of total Development costs, clinical trial protocols and
timing, Product Development timetables, Product Development stages and
milestones, the Per Unit Price, the Price Per Sample, sampling plan, pricing
pursuant to Section 6.2 and such other issues as the Steering Committee
determines are necessary.  In addition,
the Parties shall agree to the term of the arrangements with respect to each
Line Extension.  To the extent such
agreed term is longer than the Initial Term, the Parties shall amend this
Agreement as appropriate.

2.3.          Next Generation Products.

(a)           Notwithstanding any provision in this
Agreement to the contrary, this Agreement confers no rights to GALDERMA in any
Next Generation Product; provided, however, that, if ANIKA wishes
to commercialize any Next Generation Product during the Term in any country in
the Territory and seeks to outsource such commercialization to a Third Party
(it being understood that the engagement of a third party contract sales
organization shall not be deemed to be an outsourcing for purposes hereof,
provided that such organization specializes in providing marketing and sales
support to its customers on a contract basis), then ANIKA shall notify GALDERMA
in writing of such intent and provide such information about such Next
Generation Product as GALDERMA may reasonably request.  In such case, GALDERMA shall have until the
thirtieth (30th)
day after actual receipt of such written notice from ANIKA to notify ANIKA in
writing whether or not GALDERMA desires to negotiate commercial arrangements
concerning such Next Generation Product in one or more countries in the
Territory.  If GALDERMA desires to
negotiate a commercial arrangement concerning such Next Generation Product,
then for sixty (60) days following the actual receipt of such written notice by
GALDERMA, GALDERMA and ANIKA shall use commercially reasonable efforts to
negotiate such arrangement, provided, however, that neither Party
shall be obligated to accept any offer concerning such Next Generation Product
or be required to enter into any agreement. 
After the termination of such sixty (60) day period, ANIKA may pursue
negotiations with Third Parties concerning commercial arrangements regarding
the same Next Generation Product and shall be free to enter into any agreements
with Third Parties concerning such Next Generation Product on any terms.

 

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(b)           Notwithstanding any provision in this
Agreement to the contrary, this Agreement confers no rights to ANIKA in any
Next Generation Product; provided, however, that, if GALDERMA
wishes to undertake the development or manufacture of any Next Generation
Product during the Term in any country in the Territory and seeks to outsource
such development or manufacture to a Third Party, then GALDERMA shall notify
ANIKA in writing of such intent and provide such information about such Next
Generation Product as ANIKA may reasonably request.  In such case, ANIKA shall have until the
thirtieth (30th)
day after actual receipt of such written notice from GALDERMA to notify
GALDERMA in writing whether or not ANIKA desires to negotiate commercial
arrangements concerning such Next Generation Product in one or more countries
in the Territory.  If ANIKA desires to
negotiate a commercial arrangement concerning such Next Generation Product,
then for sixty (60) days following the actual receipt of such written notice by
ANIKA, ANIKA and GALDERMA shall use commercially reasonable efforts to
negotiate such arrangement, provided, however, that neither Party
shall be obligated to accept any offer concerning such Next Generation Product
or be required to enter into any agreement. 
After the termination of such sixty (60) day period, GALDERMA may pursue
negotiations with Third Parties concerning commercial arrangements regarding
such Next Generation Product and shall be free to enter into any agreements with
Third Parties concerning such Next Generation Product on any terms.

(c)           For the avoidance of doubt, this
Section 2.3 shall not apply to any Next Generation Product owned or
licensed by any Person that acquires or is acquired by GALDERMA or ANIKA or is
merged or otherwise combined with either GALDERMA or ANIKA, as the case may be,
at the time of such acquisition, merger or combination.

2.4.          Ownership, Filing of Regulatory
Approval Applications and Obtaining Regulatory Approvals.

(a)           ANIKA (i) shall be responsible for
and shall use commercially reasonable efforts in filing Regulatory Approval
Applications and obtaining and maintaining Regulatory Approvals for Licensed
Products in the Initial Marketing Territory and in any country approved for
Product Development by the Steering Committee, (ii) shall determine in
consultation with the Steering Committee when such Regulatory Approval
Applications shall be filed, (iii) shall own all Regulatory Approval
Applications and Regulatory Approvals (unless prohibited by Applicable Law),
and (iv) shall inform GALDERMA of any action taken in connection
therewith.  ANIKA shall bear all costs
and expenses associated with Regulatory Approval Applications and Regulatory
Approvals for the Current Licensed Product in the United States and in
Europe.  GALDERMA shall bear all
reasonable and reasonably documented costs and expenses associated with
Regulatory Approval Applications and with Regulatory Approvals (x) for the
Current Licensed Product in all other countries and (y) for Line
Extensions in any country in the Territory.

(b)           Unless prohibited by Applicable Law,
all Regulatory Approvals for Licensed Products will be issued under ANIKA’s
name and ANIKA will own all relevant documents associated with such Regulatory
Approvals and corresponding Regulatory Approval Application materials.  If Applicable Law prohibits the issuance of
any Regulatory Approval for Licensed Products under ANIKA’s name, then
ownership of such Regulatory Approvals shall be assigned to ANIKA or its
designated assignees, to the extent permissible under Applicable Law, upon any 

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termination or
expiration of this Agreement or earlier if permitted.  ANIKA shall provide GALDERMA with access to
an electronic copy of all Regulatory Approvals and Regulatory Approval
Applications for Licensed Products.

(c)           ANIKA shall be responsible for all
communications with any governmental authority or agency concerning the
Licensed Product; provided, however, that if the Applicable Law
of a local jurisdiction requires that GALDERMA be responsible for
communications with any governmental authority or agency concerning the
Licensed Product within such jurisdiction, then this responsibility shall be
assigned by ANIKA to GALDERMA within such jurisdiction, and GALDERMA will
promptly notify ANIKA of the receipt of any such communication and consult with
ANIKA in formulating a response.  ANIKA
shall keep GALDERMA closely informed of the contacts with such authorities,
forward to GALDERMA any significant written correspondence therewith and allow
GALDERMA the opportunity to participate in the portion of any meeting
pertaining to any Licensed Product (whether in person, telephonic or
otherwise); provided, however, that, if it is not practicable for
ANIKA to provide GALDERMA the opportunity to participate in any such meeting,
then ANIKA within a reasonable period of time shall update GALDERMA on any
significant developments from such meeting concerning the Licensed
Products.  GALDERMA agrees and
acknowledges that, in fulfilling its obligations under this
Section 2.4(c), ANIKA shall be permitted to take reasonable precautions to
preserve the confidentiality of trade secrets or commercially sensitive
information of ANIKA or Third Parties, including without limitation redacting
from any applicable correspondence or documents information that does not
pertain to a Licensed Product.

(d)           If ANIKA fails to obtain a Regulatory
Approval for a Licensed Product in a country in the Initial Marketing Territory
or in any country approved for Product Development by the Steering Committee
within a reasonable period of time, as determined by the Steering Committee,
GALDERMA shall be relieved of its obligations under Section 12.1(j) solely
for such Licensed Product and solely in the country with respect to which such
Regulatory Approval failure occurred.

ARTICLE III - COMMERCIALIZATION

3.1.          GALDERMA’s Commercialization
Obligations For Licensed Products. 
GALDERMA shall be responsible for and shall use commercially reasonable
efforts to conduct the Commercialization, sale, offering for sale, advertising,
marketing, and/or promotion of all Licensed Products under this Agreement and
the Commercialization of any particular Licensed Product in a particular
country in the Initial Marketing Territory and in any country approved for
Commercialization by the Steering Committee.  As provided in Article XV, the
Steering Committee shall review and approve the relevant marketing, sales and
other commercialization activities including, at a minimum, a semi-annual
review of the global sales and marketing plan.

3.2.          Commencement of Commercialization
of the Current Licensed Product.  A
GALDERMA Seller shall cause Commercialization to occur on a country by country
basis in the following countries: [**************************  **********************************************]
(the “Initial Marketing Territory”) within [********************] of the satisfaction
of the Condition Precedent to Commercial 

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Sale with respect to such country, provided
that in no event shall GALDERMA be required to cause such Commercialization to
occur prior to [*********************************].

3.3.          Right to Accompany.  Subject to GALDERMA’s reasonable approval,
ANIKA, at its expense and upon reasonable notice to GALDERMA, shall have the
right to accompany GALDERMA or GALDERMA’s Sellers on any sales or marketing
calls to customers or prospective customers; to any conventions and any other
marketing events; and to any meetings with any regulatory authorities or any
governmental or reimbursement agency or carrier, in each case including without
limitation in-person calls and calls facilitated by telephonic or electronic
means.

3.4.          Determination Not to Commercialize.  If during the Term GALDERMA decides not to
Commercialize a country in the Territory that is in the Initial Marketing
Territory or that has been approved for Commercialization by the Steering
Committee and provides written notice of such decision to ANIKA, GALDERMA’s
right to market and distribute Licensed Products in such country shall
immediately terminate for use in such country, all trademarks assigned to
GALDERMA pursuant to Article V shall be reassigned to ANIKA at no cost, and
ANIKA shall be free to market and distribute Licensed Products in such country
or to license such rights to do so to any Third Party.  The termination of marketing and distribution
rights pursuant to this Section 3.4 shall not be ANIKA’s exclusive remedy
for GALDERMA’s failure to Commercialize any such country.

ARTICLE IV
- INTELLECTUAL PROPERTY LICENSE GRANTS

4.1.          ANIKA hereby grants to GALDERMA, for
the Term, an exclusive (except as set forth in this Agreement or the Supply
Agreement and except as to ANIKA), non-transferable and, upon ANIKA’s receipt
of the payment contemplated by Section 6.1(a) below, paid-up license under
the ANIKA Patents and Product Information, solely to use, promote, sell, offer
to sell, and distribute the Licensed Products in the Field in the Territory and
for no other purpose, with a right to grant sublicenses, provided, however,
(a) in the United States, GALDERMA may only grant sublicenses to Affiliates or,
if approved in advance in writing by ANIKA, such approval not to be
unreasonably withheld, to Third Parties and (b) GALDERMA may grant
sublicenses in countries other than the United States to its Affiliates or to
Third Party distributors (to the extent such Third Party distributors are
GALDERMA’s or an Affiliate’s (as the case may be) customary, historical, normal
course distributors consistent with past practice) without prior notice or
approval by ANIKA, and to other Third Party distributors only upon prior
written notice and approval by ANIKA, not to be unreasonably withheld.  With respect to any such sublicensee,
GALDERMA shall be responsible for making any payments due under this Agreement
to ANIKA resulting from sales made by such sublicensee and the compliance by
sublicensee with all applicable terms of this Agreement. GALDERMA shall ensure
that any such sublicensee agrees in writing to comply with the provisions of
Section 7.1.

4.2.          Notwithstanding anything herein to the
contrary, ANIKA shall retain all rights necessary including all such rights
under the ANIKA Patents and Product Information in order to fulfill its
obligations under this Agreement (including but not limited to its obligation
to manufacture and sell Licensed Product to GALDERMA).

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4.3.          Subject only to the rights granted to
GALDERMA under this Agreement and the Supply Agreement and the obligations of
ANIKA under Sections 2.3 and 11.1(c) hereof, ANIKA maintains all right, title
and interest in, to and under the ANIKA Know-How, ANIKA Patents, ANIKA Patent
Applications, Additional ANIKA Patent Applications and all Licensed Products.

ARTICLE V
- ASSIGNMENT OF RIGHTS IN TRADEMARK APPLICATIONS

5.1.          Trademark Assignment.  ANIKA shall assign each Trademark Application to GALDERMA as soon as is
permitted under applicable trademark law, but in any event as promptly as
practicable after filing a Statement of Use or an Amendment to Allege Use for
such Trademark Application; [***************************************************
 *******************************************].  GALDERMA shall have the right to record such
assignment with the United States Patent and Trademark Office.

5.2.          Further Actions.  ANIKA hereby agrees that any time after the
Effective Date it shall, upon GALDERMA’s request, execute, acknowledge and
deliver or cause to be executed, acknowledged and delivered all such further assignments,
transfers, conveyances and assurances as may be required for assigning all of
ANIKA’s right, title and interest in and to the Trademark Applications to
GALDERMA.

5.3.          Trademark Documentation.  ANIKA shall provide GALDERMA all of the
trademark-clearance reports prepared in connection with the Trademark
Applications.  Within five (5) Business
Days after the Effective Date, ANIKA shall notify its trademark agent in the
United States of the assignment of the Trademark Applications hereunder, and
shall instruct such trademark agent to cooperate with GALDERMA in connection
therewith, including without limitation transferring to GALDERMA (or a Person
designated by GALDERMA) all of the documents pertaining to the Trademark
Applications.

ARTICLE VI
- PAYMENTS

6.1.          Payments.  In consideration of the rights and licenses
granted under this Agreement, GALDERMA agrees to pay ANIKA the following
non-refundable amounts:

(a)           Up-Front Fee.  In consideration of the license grant set
forth in Section 4.1 above, GALDERMA agrees to pay to ANIKA a
non-refundable upfront payment of one million Dollars ($1,000,000) on the
Effective Date.

(b)           Milestone Payments.  GALDERMA agrees to make the following non-refundable,
one-time payments to ANIKA upon the occurrence of any of the events specified
in Sections 6.1(b)(i)-(iii) below, in each case within thirty (30) days
following receipt from ANIKA of a notice and invoice regarding the achievement
of each of the following events.

(i)            With
respect to the Current Licensed Product, [****************************],
payable as follows:

(A)          [****************************************************];

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(B)           [***********************************************];

(C)           [***********************************************];

(D)          [***********************************************];

(ii)           With
respect to each Line Extension,

(A)          [****************************************************];

(B)           [****************************************************];

(iii)          With
respect to the Licensed Products,

(A)          [****************************************************];

(B)           [****************************************************];

(C)           [****************************************************];

For the avoidance of doubt, GALDERMA shall be required
to make each payment contemplated by this Section 6.1(b) only once; it
being understood, however, that achievement of multiple milestones in any one
instance by ANIKA shall obligate GALDERMA to make payments that are equal in
the aggregate to all milestones achieved in such instance, and the payments
contemplated by Section 6.1(b)(ii) shall be made with respect to each new
Line Extension.

(c)           Licensed Product Royalties.

(i)            Within
forty-five (45) days following the completion of each Calendar Quarter during
the Term, GALDERMA will pay to ANIKA a quarterly royalty equal to the
difference of:

(A)          [****************************************************];

(B)           [****************************************************].

(ii)           [*****************************************************************************
****************************************************].

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(iii)          Royalties shall be
paid in respect of all sales of Licensed Products in the Territory for the
entire Term of this Agreement and the Supply Agreement, including extensions or
renewals thereof.

(iv)          For the avoidance of
doubt, GALDERMA shall only be obligated to make the payments under this
Section 6.1(c) with respect to Licensed Products supplied by ANIKA or any
of its sublicensees pursuant to the terms of the Supply Agreement.

6.2.          Line Extensions.  At the time of approval of any Line
Extension, the Steering Committee shall also in good faith establish the Per
Unit Price and the pricing under Section 6.1(c) for such Line Extension.  Upon each such approval, the Parties will
amend this Agreement and the Supply Agreement to reflect such agreed upon Per
Unit Price and pricing.

6.3.          Payment Methods.  All payments under this Agreement shall be
paid in Dollars.  Each Party will make
all payments to the other under this Agreement without deduction or withholding
for taxes except to the extent that any such deduction or withholding is
required by law in effect at the time of payment.

6.4.          Payment Terms.  Any past due amounts for any overdue payment
under any provision of this Agreement will be subject to a late fee of one
percent (1%) per month, or the highest rate allowed by the law governing this
Agreement, whichever is less, with such interest accrual commencing on the
thirtieth (30th)
day after the due date.  All costs of
enforcing or collecting payment hereunder, including attorneys’ fees and court
costs, shall be paid by the non-prevailing Party.  Breach for non-payment commences on the
forty-sixth (46th) day
following the due date.

6.5.          Reports and Records.

(a)           During the Term and commencing with
the Date of First Sale of a Licensed Product, GALDERMA shall furnish, or cause
to be furnished to ANIKA, written reports within fifteen (15) days following
the end of each month, showing:

(i)            the Net Sales of each Licensed
Product sold during such month and the total for all months of the current
calendar year, itemized by each country in the Territory and by each GALDERMA
Seller; and

(ii)           the Units of each Licensed Product
sold by each of GALDERMA Seller in each country of the Territory, during such
month and the total for all months of the current calendar year.

(b)           In the case of sales outside the
United States, such sales shall be reported in both local currency as well as
Dollars, and for the purposes of this Article VI, shall be converted to Dollars
using GALDERMA’s standard, corporate currency conversion methodology and
policies.

(c)           GALDERMA shall maintain complete and
accurate records, in accordance with IFRS (International Financial Reporting
Standards) practices, which are relevant to costs, expenses and payments under
this Agreement and such records shall be open during reasonable 

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business hours for
a period of five (5) years from creation of individual records for reasonable
examination at ANIKA’s expense, but not more often than once each year, by a
certified public accountant or other representative selected by ANIKA and
acceptable to GALDERMA for the sole purpose of verifying the correctness of
calculations or such costs, expenses or payments made under this Agreement (the
“Audit”).  If GALDERMA disagrees
with the calculation of the Audit, the Parties will try to resolve the
disagreement in good faith.  In the
absence of material discrepancies (in excess of five percent (5%) of the
disputed amount) in any request for reimbursement resulting from such Audit,
the accounting expense shall be paid by ANIKA. 
If material discrepancies do result, GALDERMA shall bear the portion of
the reasonable audit expense allocable to such material discrepancies.  Any records or accounting information
received from GALDERMA shall be Confidential Information for purposes of
Article VII.

(d)           GALDERMA shall provide ANIKA with a
preliminary and unaudited report containing the Net Sales for each Calendar
Quarter, which shall be divided into aggregate Net Sales in North America and
aggregate Net Sales in the rest of the countries in the Territory, within five
(5) Business Days following the end of each Calendar Quarter.  These preliminary and unaudited reports will
be superseded by the reports furnished under Section 6.5(e).

(e)           GALDERMA shall provide ANIKA with a
final report containing the Net Sales country by country for each Calendar
Quarter within thirty (30) days following the end of each Calendar
Quarter.  Such final reports will be the
basis for GALDERMA’s payments to ANIKA under Section 6.1(c).

ARTICLE VII - PUBLICATIONS; TRANSFER OF DATA;

CONFIDENTIALITY; COOPERATION

7.1.          Confidentiality; Exceptions.  The Parties acknowledge that discussions
between ANIKA and GALDERMA will necessarily require the exchange of information
(including detailed financial and product information) that is considered
confidential and proprietary by the disclosing Party.  The Parties agree for themselves and their direct
and indirect subsidiaries that any information relating to the business of the
disclosing Party which such Party discloses to the other Party pursuant to this
Agreement or the Supply Agreement shall be considered “Confidential
Information” and shall include, without limitation, (i) the ANIKA Know-How;
(ii) earnings, costs, and other financial information; (iii) drawings,
formulations, samples, technical data, photographs, specifications,
manufacturing methods, testing procedures; (iv) marketing, sales and customer
information relating to the disclosing Party’s business; (v) all clinical
studies and data developed by either Party in connection with this Agreement or
the Supply Agreement; and (vi) all other Information related to Licensed
Products.  Except to the extent
authorized by this Agreement, or the Supply Agreement or otherwise agreed in
writing, the Parties agree that from the Effective Date, subject to and except
as permitted by Section 7.4 of this Agreement, each Party shall keep
confidential (and shall cause the directors, officers, employees and agents of
such Party or its Affiliates and sublicensees to
keep confidential) and shall not publish or otherwise disclose or use for any
purpose, other than as provided for in this Agreement or the Supply Agreement,
the Confidential Information, except to the extent the receiving Party’s
(and their Affiliates and sublicensees) employees and/or agents (including
consultants) need to know such Confidential Information in order to discharge
such Party’s 

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obligations and exercise its rights hereunder or
thereunder and provided, that in the event any Party uses such
Confidential Information for any purpose other than as provided for in this
Agreement or the Supply Agreement such use shall constitute a breach of this
Agreement or the Supply Agreement, as the case may be.  Each Party will protect the other Party’s
Confidential Information from unauthorized use, access or disclosure in the
same manner that it protects it own similar Confidential Information.  Confidential Information shall not include
information which:

(i)            was in the lawful knowledge and
possession of the receiving Party prior to the time it was disclosed to, or
learned by, the receiving Party, or was otherwise developed independently by
the receiving Party, as evidenced by written records kept in the ordinary
course of business, or other documentary proof of actual use by the receiving
Party;

(ii)           was available to the public or
otherwise part of the public domain at the time of its disclosure to the
receiving Party;

(iii)          became available to the public or
otherwise part of the public domain after its disclosure other than through any
act or omission of the receiving Party in breach of this Agreement;

(iv)          was disclosed to the receiving Party,
other than under an obligation of confidentiality, by a Third Party who had no
obligation to the disclosing Party not to disclose such information to others;
or

(v)           was or is requested by a governmental
authority or required to be disclosed as a result of a judicial order or decree
or applicable law or regulation; provided, however, that the
Party whose Confidential Information is the subject of such request or judicial
order or decree is given the opportunity (to the extent not violative of
applicable law) to contest the request or judicial order or decree prior to any
disclosure.

Each Party will be
responsible and liable for all breaches of the confidentiality provisions of
this Agreement by its directors, officers, employees, agents, sublicensees and
Affiliates.

7.2.          Authorized Disclosure; Protective
Measures.  Except as provided
otherwise in this Agreement or the Supply Agreement, each Party may disclose
Confidential Information to Third Parties (including without limitation
investors and potential investors, Affiliates, sublicensees, distributors and
suppliers) under appropriate terms and conditions that include confidentiality
provisions substantially equivalent to those in this Agreement as is necessary
to exercise the rights granted, and perform the obligations contained, herein
and in the Supply Agreement. 
Notwithstanding anything contained herein or in the Supply Agreement to
the contrary, each Party agrees and acknowledges that, in fulfilling its
obligations under this Agreement or the Supply Agreement, the other Party shall
be permitted to take reasonable precautions to preserve the confidentiality of
trade secrets or commercially sensitive information of such other Party or
Third Parties, including without limitation redacting from any such
correspondence or documents information that does not pertain to a Licensed
Product.

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7.3.          Publications.  Notwithstanding any other provision of this
Agreement, including, but not limited to the provisions of Section 7.4,
ANIKA may publish the results of any Product Development activities relating to
Licensed Products, with the approval of the Steering Committee.

7.4.          Public Announcements.

(a)           Neither Party shall originate any
written publicity, press release or written public announcements whether to the
public or press, relating to this Agreement or the Supply Agreement, their
existence, the subject matter to which they relate or to any amendment hereto
or thereto without the prior written consent of the other Party (not to be
unreasonably withheld, conditioned or delayed), save only such announcements
that are required by or advisable to be made under Applicable Law or the rules
of any securities exchange or Nasdaq, in which case the other Party shall at
least be provided with a copy of such announcement prior to its release.  Notwithstanding the foregoing prior written
consent requirement, each Party is hereby granted the right to issue a press
release (i) with respect to this Agreement and the Supply Agreement without the
prior written consent of the other Party in connection with statements in
quarterly or annual press releases reporting the Party’s quarterly or yearly
financial or operating results to the extent they relate to such financial or
operating results, and (ii) upon the happening of the following events:  execution of this Agreement and the Supply
Agreement, the filing of any Regulatory Approval Applications, the receipt of
any Regulatory Approvals, any significant clinical trial development (including
initiation and/or completion of a clinical trial) and Commercialization in any
country or region, provided that in the case of clause (ii) the content of such
release is reasonably satisfactory to the other Party.

(b)           In the event
of such publication, press release or public announcement described in
Section 7.4(a) for which the prior written consent of the other Party is
required or the content of which must be reasonably satisfactory to the other
Party, the Party making the announcement will give the other Party at least
reasonable advance notice of the text of the announcement so that the other Party
will have an opportunity to comment upon the announcement.  Notwithstanding the foregoing, however, where
urgent, unusual and rare circumstances require immediate disclosure upon the
advice of the Party’s counsel, a Party will, unless impossible or inadvisable
because of legal reasons, provide at least one (1) Business Day’s advance
written notice of such disclosure to the other Party.  Notwithstanding
anything contained in this Agreement to the contrary, GALDERMA acknowledges
that ANIKA is permitted to file this Agreement and the Supply Agreement with
the Securities and Exchange Commission and to disclose the terms of this
Agreement and the Supply Agreement in ANIKA’s reports or registration
statements filed with or furnished to the Securities and Exchange Commission, provided
that ANIKA shall use its commercially reasonable efforts to obtain confidential
treatment with respect to the commercially sensitive terms contained herein;
provided, further, that ANIKA’s ongoing financial reporting of
the transactions contemplated by this Agreement or the Supply Agreement in its
reports or registration statements filed with or furnished to the Securities
and Exchange Commission will be consistent with ANIKA’s past financial
reporting practices as may be modified from time to time by the requirements of
applicable law, regulation or accounting principles generally accepted in the
United States.

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7.5.          Cooperation.  Each
Party agrees to provide the other Party, upon reasonable advance request,
access to documentation related to the Product Development and
commercialization activities being conducted pursuant to this Agreement or the
Supply Agreement, including without limitation, protocols, data and stat plans
of non-clinical and clinical trials, analytical test methods, Regulatory
Applications, proposed labeling for Licensed Products, Third-Party contracts
for related services, marketing plans and proposed advertising, marketing and
promotional materials; provided, however, that to the extent any
such documentation is Confidential Information, the receiving Party shall
comply with the provisions of Section 7.1 with respect thereto.  Each of
the Parties agrees to provide the other Party, by means of communication
through the Steering Committee, with updates as to the Product Development and
Commercialization of the Licensed Products via telephonic or in-person
meetings, it being the intent of the Parties that such meetings occur on a
regular basis.  ANIKA, at its election
and upon reasonable notice to GALDERMA, shall have the right to accompany
GALDERMA, its Affiliates or any of their representatives to any and all
meetings concerning any Licensed Products between GALDERMA or any of its
Affiliates or their representatives, on the one hand, and any third party
payer, governmental authority, reimbursement agency or carrier, on the other
hand.  GALDERMA shall provide ANIKA
sufficient prior notice of all such meetings.

ARTICLE VIII - PATENT RIGHTS

8.1.          Title.  Title to all Patent Rights claiming
inventions (i) based on ANIKA’s existing intellectual property, (ii) based on
any intellectual property created or discovered by ANIKA outside the scope of
this Agreement or (iii) created or discovered by any employee of ANIKA or
GALDERMA (but with respect to GALDERMA employees, only to the extent such
creation or discovery is based on ANIKA’s intellectual property) while
performing Product Development of Licensed Products, shall be the sole and
exclusive property of ANIKA, with the exception of the Joint Patent Holder’s
rights to the Joint Patents.  Title to
any inventions and other intellectual property otherwise created or discovered
by any employee of GALDERMA and to all Patent Rights claiming such inventions
shall be the sole and exclusive property of GALDERMA.

8.2.          Cooperation.

(a)           The Party controlling the filing,
prosecution, maintenance, litigation, settlement discussion or negotiation
related to any of the patents or patent applications contemplated by this
Article VIII shall regularly consult with the other Party and shall keep it
fully informed on the progress and status thereof.  The Parties shall in good faith assist one
another and cooperate in any such filing, prosecution, maintenance, litigation,
settlement discussion or negotiation at the other’s request and at the
reasonable expense of the requesting Party, unless otherwise provided in this
Article VIII.

(b)           Neither Party shall take any action
or enter into any settlement, consent judgment, or any other voluntary final
disposition that may materially adversely affect the scope, validity and/or
enforceability of ANIKA’s Patents, ANIKA Patent Applications or Additional
ANIKA Patent Applications without the prior written consent of the other Party,
which consent shall not be unreasonably withheld, conditioned or delayed.

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8.3.          Patent
Filings.

(a)           ANIKA shall (i) use its commercially reasonable efforts to ensure that
the ANIKA Patent Applications issue into patents, (ii) provide GALDERMA with
copies of filings and significant unprivileged correspondence with respect to
such applications, (iii) use commercially reasonable efforts to maintain
and, in its reasonable discretion, defend the ANIKA Patents against any actions
and/or proceedings initiated at a patent office (e.g.,
reexaminations, oppositions and nullity actions) by Third-Parties during the
Term, and (iv) file and prosecute the Additional ANIKA Patent Applications.

(b)           The Parties agree to cooperate with
each other and with the Steering Committee to determine in which additional
countries it may be necessary or advisable to file, prosecute and maintain one
or more of the ANIKA Patents under this Agreement.  The Steering Committee will make such
determination with sufficient advance notice so as to permit the filing of a
patent application prior to the commercialization of a Licensed Product in the
applicable country or countries. 
GALDERMA shall use commercially reasonable efforts to ensure that such
additional patent applications issue into patents, unless ANIKA elects to
prosecute such additional patent applications pursuant to the third sentence of
Section 8.3(c) below, in which case ANIKA shall, at its sole cost and expense,
use commercially reasonable efforts to ensure that such additional patent
applications issue into patents.

(c)           The Patent Costs incurred during the
Term with respect to any country listed in Exhibit D (including Patent
Costs incurred in connection with PCT patent application [********************], but excluding
any Patent Costs incurred in connection with such patent application in respect
of local filings in countries not listed on Exhibit D) shall be the sole
responsibility of ANIKA.  All Patent
Costs incurred with respect to any other jurisdiction shall be the sole
responsibility of GALDERMA.  ANIKA
retains the right to prepare, file, prosecute and maintain any ANIKA Patent,
ANIKA Patent Application or Additional ANIKA Patent Application, including any
patent and patent applications relating to an invention developed in any
jurisdiction, at ANIKA’s sole cost and expense.

8.4.          Infringement
by Third Parties.

(a)           If any Third Party is reasonably
believed to infringe any ANIKA Patent covering a Licensed Product in connection
with the manufacture, use, sale, offer for sale promotion, distribution or
importation of a Licensed Product in any country, the Party first having
knowledge of such potential infringement shall promptly notify the other in
writing.  The notice shall set forth the
known facts of that infringement in reasonable detail.

(b)           ANIKA shall have the right, but not
the obligation, to institute, prosecute, and control any action or proceeding
with respect to infringement of any ANIKA Patent in any country by counsel of
its own choice and at its own expense; provided, however, that ANIKA
shall reasonably pursue any Third-Party infringement that occurs in a country
listed in Exhibit D that materially interferes with GALDERMA’s ability
to sell the Licensed Products in such country. 
If ANIKA fails to bring an action or proceeding with respect to a
Third-Party infringement that occurs in a country listed in Exhibit D
within ninety (90) days after a written request by GALDERMA to do so (or, after
bringing such an action or proceeding, fails to 

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diligently prosecute the same), GALDERMA shall have
the right, but not the obligation, to bring and control any such action by
counsel of its own choice and at its own expense.  In the event any monetary recovery in connection with an infringement
action is obtained, such recovery shall be applied in the following priority:
first, to reimburse ANIKA and GALDERMA, as applicable, by the proportion and up
to the extent of their out-of-pocket expenses (including reasonable attorneys’
fees and expenses) in prosecuting such infringement; second, 10% of the
balance, if any, shall be paid to the Party prosecuting such enforcement
action; and third, the remaining balance, if any, to be shared one-half by
ANIKA and one-half by GALDERMA.

(c)           If any such Third-Party infringement materially
interferes with GALDERMA’s ability to sell the Licensed Product in a
jurisdiction for a period of more than ninety (90) days, then GALDERMA shall
have the right to elect either (i) to be relieved of its obligations under
Section 12.1(j) of this Agreement and Article V of the Supply Agreement solely
for such jurisdiction or (ii) to terminate all of GALDERMA’s rights and
obligations under this Agreement and the Supply Agreement with respect to such
jurisdiction so that thereafter the definition of Territory shall not include
such jurisdiction for all purposes under this Agreement and the Supply
Agreement.  If such interference has a
material adverse effect on aggregate Net Sales of the Licensed Products in the
Sales Territory (taken as a whole), GALDERMA shall have the further right to
terminate all of its rights and obligations under this Agreement and the Supply
Agreement with respect to such Sales Territory so that thereafter the
definition of Territory shall not include such Sales Territory for all purposes
under this Agreement and the Supply Agreement. 
The Parties agree that the remedies provided under this Section 8.4(c)
are GALDERMA’s sole and exclusive remedies for ANIKA’s failure to bring an
action or proceeding pursuant to Section 8.4(b) after a written request by
GALDERMA to do so.

(d)           In the event that ANIKA elects not to
exercise its rights set forth in the first sentence of Section 8.4(b) (or,
after bringing an action or proceeding, fails to diligently prosecute the
same), GALDERMA shall have the right, but not the obligation, to institute,
prosecute, and control any action or proceeding with respect to any
infringement of the ANIKA Patents, by counsel of its own choice and at its own
expense, in any country not listed on Exhibit D.

8.5.          Validity
Challenge Claims.

(a)           In the event that any Person shall
assert any claim in a legal proceeding that any ANIKA Patent is invalid or
unenforceable in any country, or seeks to limit the scope of enforcement
thereof (each a “Validity Challenge Claim”), whether in defense against
an enforcement action brought by a Party under Section 8.4, by a separate
action for declaratory judgment, or in any other legal proceeding, the Party
receiving notice of such claim shall promptly notify the other Party.  In response to a Validity Challenge Claim,
the Parties and their respective counsel shall cooperate in good faith and
shall use commercially reasonable efforts to prepare and co-ordinate their
defenses and responses to such Validity Challenge Claim so as to maximize the
ability of both Parties to avail themselves of the rights and benefits each has
with respect to the ANIKA Patents.

(b)           ANIKA shall have the right, but not
the obligation, to defend at its cost any action or legal proceeding with
respect to any Validity Challenge Claim relating to any ANIKA Patent; provided,
however, that ANIKA shall reasonably defend in any country listed in Exhibit
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such Validity Challenge Claim that materially
interferes with GALDERMA’s ability to sell the Licensed Products in such
country.  If ANIKA fails to commence such
a defense with respect to a Validity Challenge Claim in any country listed in Exhibit
D within ninety (90) days after a written request by GALDERMA to do so (or,
after commencing such a defense, fails to diligently defend the same), GALDERMA
shall have the right, but not the obligation, to defend and control any such
action by counsel of its own choice and at its own expense.

(c)           If any such Validity Challenge Claim
materially interferes with GALDERMA’s ability to sell the Licensed Product in a
jurisdiction for a period of more than ninety (90) days, then GALDERMA shall
have the right to elect either (i) to be relieved of its obligations under
Section 12.1(j) of this Agreement and Article V of the Supply Agreement solely
for such jurisdiction or (ii) to terminate all of GALDERMA’s rights and
obligations under this Agreement and the Supply Agreement with respect to such
jurisdiction so that thereafter the definition of Territory shall not include
such jurisdiction for all purposes under this Agreement and the Supply
Agreement.  If such interference has a
material adverse effect on aggregate Net Sales of the Licensed Products in the
Sales Territory (taken as a whole), GALDERMA shall have the further right to
terminate all of its rights and obligations under this Agreement and the Supply
Agreement with respect to such Sales Territory so that thereafter the
definition of Territory shall not include such Sales Territory for all purposes
under this Agreement and the Supply Agreement. 
The Parties agree that the remedies provided under this Section 8.5(c)
are GALDERMA’s sole and exclusive remedies for ANIKA’s failure to defend a
Validity Challenge Claim pursuant to Section 8.5(b) after a written request by
GALDERMA to do so.

(d)           In the event that ANIKA elects not to
exercise its rights set forth in the first sentence of Section 8.5(b) (or,
after bringing an action or proceeding, fails to diligently prosecute the
same), GALDERMA shall have the right, but not the obligation, to defend and
control any action or proceeding with respect to any Validity Challenge Claim,
by counsel of its own choice and at its own expense, in any country not listed
on Exhibit D.

8.6.          Defense
and Settlement of Third Party Claims.

(a)           If a Third Party asserts that a
patent owned or licensed by it is infringed by the use, sale, offer for sale,
importation, exportation or manufacture of Licensed Product, the Party
receiving such notice shall promptly notify the other Party.  Upon initial receipt of such notice, the
Parties shall within five (5) Business Days meet to discuss their options for
proceeding, which may include, for example, redesigning the Licensed Product(s)
at issue, taking a license under the asserted patent as described in Section
8.7, or defending against the alleged infringement as described in this Section
8.6.

(b)           If a Third Party asserts that a
United States patent right owned or licensed by it is infringed by the
manufacture, use, offer for sale, importation, exportation or sale of a
Licensed Product in any country listed in Exhibit D, GALDERMA, upon the
reasonable written request of ANIKA, shall as soon as commercially practicable
cease the use or sale of such Licensed Product in such country solely during
the pendency of such assertion of infringement, and each Party shall have the
right, but not the obligation, to defend any action or proceeding with respect
to such alleged infringement of such patent by counsel of its own choice and at
its own expense; provided, however, that ANIKA shall use
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determining whether or not to defend any such action
if such action materially interferes with GALDERMA’s ability to sell the
Licensed Products in such country.  If
ANIKA elects or is required to defend any such action or proceeding, then it
shall bear the cost of any settlement, damages or other monetary relief that is
awarded, including all attorneys’ fees and expenses.  If ANIKA does not defend and GALDERMA elects
to defend any such action or proceeding, then it shall bear the cost of any
settlement, damages or other monetary relief that is awarded, including all
attorneys’ fees and expenses.  If the
Parties elect to jointly defend any such action or proceeding, then they shall
share equally in the cost of any settlement, damages or other monetary relief
that is awarded, including all attorneys’ fees and expenses.  If neither Party elects to defend any such
action or proceeding, ANIKA shall bear all costs related thereto, including
without limitation the costs of any default judgment entered against either
Party or any of their Affiliates.  The
Party bearing the costs of such action or proceeding shall receive the benefit
of any recovery of fees, it being understood that if both Parties share in the
costs of such action or proceeding, each shall share in such recovery in
proportion to its costs.  Neither Party
shall settle any such charge of infringement without the advance written
consent of the other Party, which consent shall not be unreasonably withheld,
conditioned or delayed.

(c)           If any such Third-Party claim
materially interferes with GALDERMA’s ability to sell the Licensed Product in a
jurisdiction for a period of more than ninety (90) days, then GALDERMA shall
have the right to elect either (i) to be relieved of its obligations under
Section 12.1(j) of this Agreement and Article V of the Supply Agreement solely
for such jurisdiction or (ii) to terminate all of GALDERMA’s rights and
obligations under this Agreement and the Supply Agreement with respect to such
jurisdiction so that thereafter the definition of Territory shall not include
such jurisdiction for all purposes under this Agreement and the Supply Agreement.  If such interference has a material adverse
effect on aggregate Net Sales of the Licensed Products in the Sales Territory
(taken as a whole), GALDERMA shall have the further right to terminate all of
its rights and obligations under this Agreement and the Supply Agreement with
respect to such Sales Territory so that thereafter the definition of Territory
shall not include such Sales Territory for all purposes under this Agreement
and the Supply Agreement.  The Parties
agree that the remedies provided under this Section 8.6(c) are GALDERMA’s sole
and exclusive remedies for ANIKA’s failure to use reasonable care in accordance
with Section 8.6(b) in determining whether or not to defend a Third-Party
assertion that a patent right owned or licensed by it is infringed by the
manufacture, use or sale of Licensed Product.

(d)           GALDERMA shall have the right, but
not the obligation, to defend an action or proceeding pertaining to a
Third-Party assertion that a patent right owned by ANIKA is infringed by the
manufacture, use, offer for sale, importation, exportation or sale of Licensed
Product, by counsel of its own choice and at its own expense, in any country
not listed on Exhibit D.

(e)           Notwithstanding the foregoing, if an
action has not been brought or proceeding commenced but an assertion has been
made that a patent right owned by a Third Party is infringed by the use or sale
and manufacture of any Licensed Product or if the settlement of any action or
legal proceeding to which this Section 8.6 applies involves a license, then the
provisions of Section 8.7 shall apply.

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8.7.          Third
Party Patents.

(a)           If Patent Rights of a Third Party
should be in force in any country listed in Exhibit D during the Term
covering the manufacture, use or sale of any Licensed Product, and if after
receiving a notice from such Third Party it should prove, in GALDERMA’s
reasonable judgment after consultation with ANIKA, impractical or impossible
for GALDERMA or any GALDERMA sublicensee to continue performing the activities
licensed hereunder without obtaining a license from such Third Party under such
Patent Rights in said country, then GALDERMA shall promptly notify ANIKA in
writing.  If ANIKA agrees in its reasonable
discretion that such a license is required (or it is determined pursuant to the
procedures below that such a license is required), GALDERMA, upon the
reasonable written request of ANIKA, shall as soon as commercially practicable
cease the use or sale of Licensed Product in such country until a license is
procured from such Third Party, and ANIKA shall use commercially reasonable
efforts to procure, at its cost, such license on commercially reasonable terms
from the Third Party.  If ANIKA disagrees
that such a license is required, but GALDERMA then delivers to ANIKA a legal
opinion of an independent patent attorney reasonably satisfactory to ANIKA
opining that such a license is more likely than not required, such license
shall be deemed to be required, and ANIKA will use commercially reasonable efforts
to either procure such license or commence and reasonably prosecute an action
or legal proceeding pursuant to Section 8.6 to permit GALDERMA to continue
performing the activities licensed hereunder in such country without the need
to obtain such license, in each case with ANIKA bearing the cost thereof.  The cost of such patent attorney shall be
borne by ANIKA.  If after electing to
procure a license and using commercially reasonable efforts to do so, ANIKA is
unable to secure an appropriate license, then the Parties shall discuss how to
proceed, including whether to redesign the Licensed Product(s) at issue to
avoid infringement or to defend the infringement action.

(b)           If any such Third-Party Patent Right
materially interferes with GALDERMA’s ability to sell the Licensed Product in a
jurisdiction for a period of more than ninety (90) days,  then GALDERMA shall have the right to elect
either (i) to be relieved of its obligations under Section 12.1(j) of this Agreement
and Article V of the Supply Agreement solely for such jurisdiction or (ii) to
terminate all of GALDERMA’s rights and obligations under this Agreement and the
Supply Agreement with respect to such jurisdiction so that thereafter the
definition of Territory shall not include such jurisdiction for all purposes
under this Agreement and the Supply Agreement. 
If such interference has a material adverse effect on aggregate Net
Sales of the Licensed Products in the Sales Territory (taken as a whole), GALDERMA
shall have the further right to terminate all of its rights and obligations
under this Agreement and the Supply Agreement with respect to such Sales
Territory so that thereafter the definition of Territory shall not include such
Sales Territory for all purposes under this Agreement and the Supply
Agreement.  The Parties agree that the
remedies provided under this Section 8.7(b) are GALDERMA’s sole and exclusive
remedies for ANIKA’s failure to comply with the terms of Section 8.7(a).

(c)           GALDERMA shall have the right, but
not the obligation, to enter into licensing or other arrangements with any
Third Party with respect to Patent Rights in force in any country not listed in
Exhibit D, at GALDERMA’s sole cost and expense.

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8.8.          Joint Patent Competitive Product.  If any Third Party launches a product in the
United States manufactured under a license from the Joint Patent Holder to any
of the Joint Patents that is competitive with any Licensed Product, then
GALDERMA shall be relieved of its obligations under Section 12.1(j) hereof and
Article V of the Supply Agreement solely with respect to the United States, provided
that such competitive product materially interferes with GALDERMA’s ability to
sell the Licensed Products in the United States and such interference is not
eliminated within ninety (90) days.  If
such competitive product has a material adverse effect on aggregate Net Sales
of the Licensed Products in North America (taken as a whole) and such effect is
not eliminated within ninety (90) days, GALDERMA shall have the further right
to terminate all of its rights and obligations under this Agreement and the
Supply Agreement with respect to North America so that thereafter the
definition of Territory shall not include North America for all purposes under
this Agreement and the Supply Agreement. 
The Parties agree that this Section 8.8 is GALDERMA’s sole and exclusive
remedy if a Third Party launches a product in the United States manufactured
under a license from the Joint Patent Holder to the Joint Patents.

8.9.          [***********************************************************************************

****************************************************************************************************

****************************************************************************************************

***************************************************************************************************

*********************************************************************************************].

ARTICLE IX
- CREATION, REGISTRATION, MAINTENANCE AND 

PROTECTION OF TRADEMARK PORTFOLIO

9.1.          Responsibility for Trademarks.

(a)           GALDERMA shall be solely responsible
for and shall have full control over the Trademark Creation Process, the
Trademark Clearance Process, the Trademark Registration Process and the
maintenance and protection of the Trademark Portfolio.  GALDERMA shall use its commercially
reasonable efforts to register or otherwise obtain control over (i) the Main
Trademark in the Territory, and (ii) to the extent such trademark is not
available in a country in the Territory, one (1) Back-up Trademark for such
country.  On or before [********************],
(i) GALDERMA shall have identified from among the Main Trademark and the
Back-up Trademarks the trademark(s) that GALDERMA shall use for the
Commercialization of the Licensed Products in the United States and in the
countries in Europe that are in the Initial Marketing Territory and
successfully completed the Trademark Creation Process, the Trademark Clearance
Process and the Trademark Registration Process in such jurisdictions; and (ii)
shall have notified ANIKA in writing of such trademark(s) and the successful
completion of such processes.

(b)           During the Term, GALDERMA shall take
the following actions in the Initial Marketing Territory and in any country
approved for Product Development by the Steering Committee, at its cost:

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(i)            apply to register any Back-up
Trademark (as needed);

(ii)           file and prosecute applications to
register the Main Trademark and/or Back-up Trademarks (as needed); and

(iii)          maintain the applications and
registrations for the Main Trademark and the Back-up Trademarks.

9.2.          Trademark Ownership.  The Parties hereby agree that, except as set
forth in this Agreement or the Supply Agreement, GALDERMA shall be the
exclusive owner of all of the rights, title and interest in and to the Main
Trademark and any Back-up Trademark.  Any
trademarks listed on Exhibit B that GALDERMA determines not to use shall
be reassigned to ANIKA at no cost and shall be the exclusive property of ANIKA.

9.3.          Trademark Litigation.  During the Term, GALDERMA shall, at its own
cost, use its commercially reasonable efforts to defend the rights in the Main
Trademark and the Back-up Trademarks, including prosecuting, defending and
conducting all proceedings with respect to any Third Party infringing or having
infringed any rights in such trademarks in the Initial Marketing Territory and
in any country approved for Product Development by the Steering Committee.  GALDERMA shall determine in its sole
discretion whether to take any action in a given case.

9.4.          Cooperation.  At GALDERMA’s reasonable request and expense,
ANIKA shall assist GALDERMA in defending rights in the Main Trademark or the
Back-up Trademarks, including without limitation registration and maintenance.

ARTICLE X
- REPRESENTATIONS AND WARRANTIES.

10.1.        Representations
and Warranties of ANIKA.  ANIKA
hereby represents and warrants to GALDERMA as follows as of the Effective Date:

(a)           ANIKA is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has all requisite corporate power and lawful
authority to own, lease and operate its assets and to carry on its business as
heretofore conducted.  ANIKA has the full
legal right, corporate power and authority to execute and deliver this
Agreement and the Supply Agreement and the other agreements contemplated hereby
and thereby and to consummate the transactions contemplated hereby and
thereby.  The execution and delivery of
this Agreement and the Supply Agreement and the performance by ANIKA of its
obligations hereunder and thereunder have been duly authorized by its board of
directors, and no further corporate action or approval is required.  The execution and delivery of this Agreement
and the Supply Agreement and the performance by ANIKA of its obligations
hereunder and thereunder do not and will not violate any material provision of
Applicable Law or any provision of the Articles of Organization or By-Laws of
ANIKA and do not and will not conflict with or result in any breach of any
condition or provision of, or constitute a default under, any contract,
mortgage, lien, lease, agreement, indenture, instrument, judgment or decree to
which ANIKA is a party.

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(b)           This Agreement and the Supply
Agreement have been duly executed and delivered by ANIKA and constitute the
valid and binding obligation of ANIKA, enforceable against ANIKA in accordance
with their terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally or by general equitable principles. 
No action, approval, consent or authorization, including but not limited
to, any action, approval, consent or authorization by any governmental or
quasi-governmental agency, commission, board, bureau or instrumentality, is
necessary as to ANIKA in connection with the execution and delivery of this
Agreement or the Supply Agreement and the performance by ANIKA of its
obligations hereunder or thereunder, other than obtaining Regulatory Approvals.

(c)           (i) ANIKA owns all right, title and
interest in and to the ANIKA IP (subject to the Joint Patent Holder’s rights
therein), free and clear of any options, guarantees, liens, either written,
oral, or implied, or any other encumbrances, including any claim of current or
former employees or contractors of ANIKA or of any of its Affiliates, and to
the extent that any such employees or contractors have developed any ANIKA IP,
such parties have validly and irrevocably assigned, or are under an on-going
obligation to so assign, to ANIKA all of their rights therein, including
intellectual property rights; (ii) ANIKA owns an undivided half-interest in the
Joint Patents; (iii) ANIKA has no agreement with any third party with
respect to the use of the ANIKA Patents or ANIKA Patent Applications in the
Field that currently has any force or effect, (iv) the various studies and
clinical trials pertaining to the Current Licensed Product or any predecessor
product in the Field were performed in accordance with applicable rules and
good clinical practices when they were performed, and (v) except as previously
disclosed in writing to GALDERMA, ANIKA has no knowledge of any specific facts
or circumstances that would reasonably be expected to lead health authorities
in the United States or Europe to require additional human clinical trials prior
to Regulatory Approval of the Current Licensed Product.

(d)           Except for rights that have been
terminated in writing prior to the Effective Date and no longer have any force
or effect, ANIKA has not granted a right to develop, market, sell, promote, or
distribute the Current Licensed Product in the Field in the Territory to any
Third Party.

(e)           To the knowledge of ANIKA, (i) the
ANIKA IP used in the Field does not infringe the rights of any third party and
is not the subject of any notice or claim regarding any infringement of any
such rights, and (ii) no third party is infringing any ANIKA IP used in the
Field.

(f)            (i) Except as previously disclosed
in writing to GALDERMA, ANIKA has no knowledge of any facts or
circumstances that may affect the validity of any registered ANIKA Patents or concerning whether any third party has a
valid claim against ANIKA with respect to any ANIKA IP; (ii) there are no
pending or, to ANIKA’s knowledge, threatened claims with respect to any ANIKA
IP; and (iii) ANIKA has not asserted or brought any material claim or action
against a third party pertaining to any ANIKA IP.

(g)           Except as previously disclosed in writing to GALDERMA, ANIKA has
made all necessary and material filings in connection with the ANIKA Patents,
ANIKA Patent Applications and Trademark Applications with the United States
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permit such patents and trademarks to issue; provided,
however, that, notwithstanding any other provision of this Agreement or
the Supply Agreement, GALDERMA shall have no recourse against ANIKA for breach
of this representation if (i) such breach is capable of being cured,
(ii) ANIKA cures any such breach within a reasonable period of time after
receiving written notice from GALDERMA of such breach, and (iii) GALDERMA
suffers no material loss as a result of such breach.

(h)           Neither this Agreement nor the
transactions contemplated hereby shall result in (i) except as set forth
herein or in the Supply Agreement, ANIKA granting to any Third Party any right
with respect to any ANIKA IP relating to the Field, or (ii) ANIKA being bound
by, or subject to, any non-compete or other restriction on the use of the ANIKA
IP relating to the Field.

(i)            ANIKA has received no notice from
any governmental authority to the effect that it has not materially complied
with or is not now in material compliance with material Applicable Laws and
regulations relating to the manufacture of the Licensed Products.

(j)            There are no claims, actions, suits
or other proceedings pending, or to the knowledge of ANIKA, threatened which,
would reasonably be expected to materially and adversely affect the ability of
ANIKA to perform its obligations hereunder or under the Supply Agreement.

(k)           ANIKA has not filed for bankruptcy,
is not insolvent, has not proposed a compromise or arrangement to its creditors
generally, has not had any petition or a receiving order in bankruptcy filed
against it, has not made a voluntary assignment in bankruptcy, has not taken
any proceeding with respect to a compromise of arrangement with its creditors,
has not taken any proceeding to have it declared either bankrupt or liquidated,
has not taken any proceeding to have a receiver appointed for any part of its
assets, and has not had any execution, charging order, levy or distress warrant
become enforceable or become levied upon any of its assets.

10.2.        Representations and Warrantees of
GALDERMA.  GALDERMA hereby represents
and warrants to ANIKA as follows as of the Effective Date:

(a)           GALDERMA is a corporation duly
organized, validly existing and in good standing under the laws of Switzerland
and has all requisite corporate power and lawful authority to own, lease and
operate its assets and to carry on its business as heretofore conducted.  GALDERMA has the full legal right, corporate
power and authority to execute and deliver this Agreement and the Supply
Agreement and the other agreements contemplated hereby and thereby and to
consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement
and the Supply Agreement and the performance by GALDERMA of its obligations
hereunder and thereunder have been duly authorized by its board of directors,
and no further corporate action or approval is required.  The execution and delivery of this Agreement
and the Supply Agreement and the performance by GALDERMA of its obligations
hereunder and thereunder do not and will not violate any material provision of
Applicable Law or of any provision of the Status of Incorporation of GALDERMA
and do not and will not conflict with or result in any breach of any condition
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contract,
mortgage, lien, lease, agreement, indenture, instrument, judgment or decree to
which GALDERMA is a party.

(b)           This Agreement and the Supply
Agreement have been duly executed and delivered by GALDERMA and constitute the
valid and binding obligation of GALDERMA, enforceable against GALDERMA in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally or by general equitable principles.  No action, approval, consent or
authorization, including but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental agency, commission,
board, bureau or instrumentality, is necessary as to GALDERMA in connection
with the execution and delivery of this Agreement or the Supply Agreement and
the performance by GALDERMA of its obligations hereunder or thereunder, other
than obtaining Regulatory Approval.

(c)           There are no claims, actions, suits
or other proceedings pending, or to the knowledge of GALDERMA, threatened
which, would reasonably be expected to materially and adversely affect the
ability of GALDERMA to perform its obligations hereunder or under the Supply
Agreement.

(d)           GALDERMA has not filed for
bankruptcy, is not insolvent, has not proposed a compromise or arrangement to
its creditors generally, has not had any petition or a receiving order in
bankruptcy filed against it, has not made a voluntary assignment in bankruptcy,
has not taken any proceeding with respect to a compromise of arrangement with
its creditors, has not taken any proceeding to have it declared either bankrupt
or liquidated, has not taken any proceeding to have a receiver appointed for
any part of its assets, and has not had any execution, charging order, levy or
distress warrant become enforceable or become levied upon any of its assets.

(e)           GALDERMA is not currently developing
any HA Product and has not entered into any agreements concerning any HA
Product.

10.3.        NO IMPLIED WARRANTIES.  EXCEPT AS PROVIDED HEREIN, NEITHER PARTY
MAKES ANY WARRANTIES, EXPRESSED, IMPLIED, WRITTEN OR ORAL.  ALL OTHER WARRANTIES, EXPRESS, IMPLIED,
WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY, NON-INFRINGEMENT, TITLE, FITNESS FOR A PARTICULAR PURPOSE AND
ANY IMPLIED WARRANTY ARISING OUT OF A COURSE OF DEALING, CUSTOMER USAGE OR
TRADE ARE HEREBY DISCLAIMED.

ARTICLE XI
- ANIKA’S GENERAL OBLIGATIONS AND COVENANTS

11.1.        During the Term, ANIKA shall, and shall
cause its direct and indirect subsidiaries to:

(a)           Provide to GALDERMA reasonable technical,
scientific, sales and marketing support with respect to the Licensed Product,
to the extent GALDERMA makes available opportunities to provide such support.

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(b)           Maintain ownership of the Regulatory
Approvals for Licensed Products, to the extent consistent with Applicable Law,
ANIKA Patents and ANIKA Patent Applications, including without limitation
making all filings in connection with such Regulatory Approvals, patents and
patent applications.

(c)           Except as contemplated by this
Agreement (including without limitation Section 2.3(a) with respect to
Next Generation Products) or the Supply Agreement, refrain from (i) soliciting
orders for any Competing Product in the Field in the Territory, (ii) selling
any Competing Product to any Person (other than GALDERMA Sellers) in the Field
in the Territory and (iii) otherwise promoting or distributing any Competing
Product in the Field in the Territory.

(d)           Maintain good and unencumbered title
to the Licensed Products manufactured and delivered to GALDERMA pursuant to the
terms of the Supply Agreement.

(e)           Take security measures that are
customary and reasonable in the industry in which ANIKA operates to protect the
confidentiality and secrecy of all of the confidential or secret ANIKA IP.

(f)            Timely notify GALDERMA in writing of
any suit, claim or complaint known to ANIKA resulting from the manufacture or
use of any Licensed Product.

ARTICLE XII - GALDERMA’S GENERAL OBLIGATIONS AND COVENANTS

12.1.        During the Term, GALDERMA shall, and
shall cause its direct and indirect subsidiaries to:

(a)           Store and distribute Licensed Product
in accordance with direction for storage and use as indicated in the applicable
Regulatory Approvals which are in effect at the time of such storage and use;

(b)           Market and sell Licensed Product in
accordance with approved labeling for Licensed Product at the time of such
distribution, marketing or sales;

(c)           Be responsible for the entire cost of
selling, marketing, advertising, promoting and distributing Licensed Product in
the Territory except as explicitly set forth herein;

(d)           Supply ANIKA with any information in
GALDERMA’s possession or reasonably obtainable, as required under Applicable
Law by the FDA or other governmental agencies for U.S. and international
regulatory filings related to the sale of the Licensed Product in the
Territory;

(e)           Timely notify ANIKA in writing of any
suit, claim or complaint known to GALDERMA resulting from the distribution or
use of any Licensed Product;

(f)            Timely notify ANIKA in writing of
any and all meetings concerning any Licensed Products between GALDERMA or any
of its Affiliates or representatives, on the one hand, and 

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any regulatory authorities or any governmental or
reimbursement agency or carrier, on the other hand;

(g)           Invoice Third Parties (and use its
commercially reasonable efforts to ensure any sublicensees invoice) Third
Parties appropriately, consistently and on a timely basis with respect to sales
of any and all Licensed Products;

(h)           Distribute, market and sell (and use its commercially reasonable
efforts to cause other GALDERMA Sellers to distribute, market and sell) the
Licensed Products in accordance in all material respects with all Applicable
Laws, including without limitation, laws relating to the commercialization,
sale, offering for sale, advertising, marketing and/or promotion of the
Licensed Products and other applicable drug and medical device laws.

(i)            To the extent required by Applicable
Law, keep (and use its commercially
reasonable efforts to cause other GALDERMA Sellers to keep) detailed
distribution records for each lot number detailing the quantity shipped and the
first location where the lot was shipped by GALDERMA;

(j)            Except as contemplated by this
Agreement (including without limitation Section 2.3(a) with respect to
Next Generation Products) or the Supply Agreement, neither acquire, market,
distribute or commercialize any products [****************************] for use in the Field in the
Territory (a “Competing Product”), it being understood and agreed that
GALDERMA may, without violating this Section 12.1(j), acquire all or
substantially all of the equity interests or assets of a Person, have all or
substantially all of its equity interests or assets acquired by a Person, or be
merged or otherwise combined with a Person 
(such Person, in each case, the “Acquisition Entity”), that owns
or licenses a Competing Product, provided that GALDERMA determines
promptly after the consummation of any such transaction whether to market the
Licensed Product or the Competing Product and promptly notifies ANIKA in
writing of such determination.  In the
event GALDERMA chooses to continue marketing the Licensed Product, GALDERMA
shall, or shall cause the Acquisition Entity to, as the case may be, cease
marketing the Competing Product as promptly as practicable.  In the event GALDERMA chooses to market the
Competing Product, GALDERMA shall promptly provide an irrevocable written
notice of termination to ANIKA pursuant to Section 13.3(a), shall market
both the Licensed Product and the Competing Product with substantially
equivalent marketing efforts during the period pending termination of this
Agreement and the Supply Agreement, which ANIKA may accelerate at its option
(provided that in no event may ANIKA terminate this Agreement before GALDERMA
consummates the proposed transaction with the Acquisition Entity), and shall
pay upon such termination the amount required under Section 13.3(a).  Notwithstanding the preceding sentence, if
any governmental authority prohibits the marketing of both such products in any
jurisdiction, GALDERMA shall be permitted to terminate this Agreement and the
Supply Agreement with respect to only such jurisdiction, such termination to be
effective upon the consummation of the proposed transaction with the
Acquisition Entity;

(k)           Refrain
from distributing, soliciting orders for or selling Licensed Products to any
Person for sales which GALDERMA knows or believes are intended to be
distributed to users outside the Territory; and

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(l)            Furnish
to ANIKA (i) all advertising, marketing and promotional materials that contain
product claims related to Licensed Products and are principally intended for
use in the United States, including, without limitation, any content to be
displayed on any website, for
ANIKA’s review and approval (which approval shall not be unreasonably withheld,
delayed or conditioned and shall be deemed granted if ANIKA does not deliver an
objection in writing to GALDERMA concerning any such furnished material within
five (5) Business Days of ANIKA’s actual receipt of such furnished material), and (ii) on a quarterly
basis after initial use, all advertising, marketing and promotional materials
that contain product claims and are intended for use in any jurisdiction other
than the United States for ANIKA’s review.

ARTICLE XIII - TERM AND TERMINATION

13.1.        Term.

(a)           This Agreement and the Supply
Agreement shall commence on the Effective Date and shall remain in effect for
ten (10) years (“Initial Term”), subject to the termination and
extension provisions set forth herein.

(b)           After the Initial Term, this
Agreement and the Supply Agreement shall automatically renew for one (1)
additional three (3)-year period (together with the Initial Term, the “Term”),
[**************************************,
*****************************************************************************],
unless GALDERMA provides written notice to ANIKA at least twelve (12) months
prior to the expiration of the Term that it does not wish to renew this
Agreement and the Supply Agreement, or unless terminated earlier in accordance
with the provisions of this Agreement.

13.2.        Termination by Either Party.  Notwithstanding any of the foregoing, this Agreement
and the Supply Agreement may be terminated, but only if both agreements are
simultaneously terminated, by a Party upon written notice to the other Party of
its intent to terminate under this Section 13.2 upon the occurrence of any
of the following:

(a)           a material breach of any term or
condition of this Agreement or the Supply Agreement by the other Party which is
amenable to cure, and the breaching Party shall have failed to cure such breach
within ninety (90) days from the receipt by it of written notice thereof from
the other Party; it being understood and agreed that with respect to ANIKA’s
obligations under Section 4.2 of the Supply Agreement, the failure by ANIKA to
supply GALDERMA with at least [********************] of the monthly quantities of Licensed
Product included in GALDERMA’s Purchase Orders (as defined in the Supply
Agreement) and binding on ANIKA in accordance with Specifications for [********************] consecutive
months shall constitute a material breach; provided, however,
that ANIKA may cure such material breach by fulfilling its supply obligation
shortfall from the previous [********************]
in the succeeding [********************];
provided, further, that ANIKA may not avail itself of such cure
right more often than once in any consecutive [********************] period;

(b)           the other Party commits a material
breach of this Agreement or the Supply Agreement which is not amenable to cure;

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(c)           the other Party shall commence any
case, proceeding or other action (A) under any applicable law relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it as
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
wind-up, liquidation, dissolution, composition or other relief with respect to
it or its debts, provided, however, this subclause shall not
apply to any Affiliate of such other Party, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets;

(d)           there shall be commenced against the
other Party any such case, proceeding or other action referred to in clause (c)
of this Section 13.2 which results in the entry of an order for relief;

(e)           the other Party taking any action
authorizing, or in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth above in clauses (c) or (d) of
this Section 13.2;

(f)            the other Party admitting in writing
its inability to pay its debts as they become due;

(g)           if by reason of force majeure, as
described in Section 17.11, the obligations imposed hereunder or
thereunder cannot be discharged by the other Party for a period of more than
three (3) consecutive months, provided that if at the end of such three (3)
month period ANIKA and GALDERMA agree that such force majeure will not exist for
an additional three (3) months, then this termination right shall not be
exercisable until the expiration of such additional three-month period
and shall be of no force or effect with respect to such force majeure event if
such other Party resumes performance under this Agreement and the Supply
Agreement by the end of such additional three (3) month period; or

(h)           if as a result of a requirement by
health authorities in the United States or Europe that additional human
clinical trials be conducted to obtain Regulatory Approval of the Current
Licensed Product in the United States and Europe providing for a 12-month shelf
life, it becomes apparent, by clear and convincing evidence and after
consultation with the Steering Committee, that ANIKA will not be able to obtain
Regulatory Approval of the Current Licensed Product in the United States and
Europe [*****************************************], provided that a termination notice
is delivered to the other Party within sixty (60) days of such requirement becoming
known to the Parties, it being understood that the Party first receiving notice
of such requirement shall promptly communicate the same in writing to the other
Party; provided, however, that GALDERMA may not terminate this
Agreement and the Supply Agreement under Sections 13.2(c)-(f), if ANIKA has not
materially breached the Supply Agreement.

13.3.        Termination by GALDERMA.  GALDERMA may terminate this Agreement and the
Supply Agreement, but only if both agreements are simultaneously terminated:

(a)           Without cause, at any time, upon [********************] advance written
notice to ANIKA during the [********************]
of the Term and upon [********************]
advance written notice to ANIKA at all times thereafter, with such 

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termination
becoming effective at the end of the applicable notice period and subject to
the payment of the amounts set forth in the immediately succeeding
sentence.  Upon such termination,
GALDERMA will pay to ANIKA the greater of:

(i)            [**********************************************************]

(ii)           [**********************************************************].

(b)           Upon thirty (30) days’ written notice
to ANIKA in the event that GALDERMA’s sale of the Current Licensed Product in the United States and/or Europe is
prohibited or materially restricted by executive, legislative or judicial order
or by an order or action by the regulatory authorities (including the FDA,
European Agency for the Evaluation of Medicinal Products, or National European
Agencies) for a period that exceeds [********************], provided that if at the end of
such [********************]
period ANIKA and GALDERMA agree that such order or action will not prohibit or
materially restrict such sales after an additional [********************], then this termination right shall not be
exercisable until the expiration of such additional three-month period
and shall be of no force or effect with respect to such order or action if such
order or action is rescinded in full by the end of such additional three (3)
month period; provided, however, that if this right of
termination is exercised by GALDERMA in connection with a breach of any
covenant, representation or warranty for which ANIKA is entitled to
indemnification, then this right of termination shall in no way impact the
ability of ANIKA to enforce its indemnification rights.

(c)           Upon thirty (30) days’ written notice
to ANIKA, if any patent claim, action or proceeding contemplated by Sections
8.4, 8.5, 8.6 or 8.7 has a material adverse effect on aggregate Net Sales of
Licensed Products in the Territory (taken as a whole).

(d)           Upon thirty (30) days’ written notice
to ANIKA, if GALDERMA at any time prior to the first Date of First Sale in any
country in the Initial Marketing Territory discovers or is notified of any
legitimate and material safety issue concerning a Licensed Product that is not
resolved within a period of six (6) months after written notice thereof to
ANIKA.

(e)           [************************************************************].

(f)            [************************************************************].

13.4.        Milestone Payments.  GALDERMA shall not be required to make the
payments contemplated by Sections 6.1(b)(i) and 6.1(b)(ii) during ANIKA’s cure
period under Section 13.2(a) or any termination-notice period under Section
13.3 if such payments are earned by ANIKA within such periods; provided,
however, that all such payments that become due during any such cure or
termination-notice period shall be paid in full immediately upon cure of any
breach or default in accordance with Section 13.2(a) or rescission of any
termination notice.

13.5.        Termination by ANIKA.  ANIKA may terminate this Agreement and the
Supply Agreement, but only if both agreements are simultaneously terminated:

(a)           At any time, upon nine (9) months
advance written notice to GALDERMA during the first three (3) years of the Term
and upon six (6) months advance written notice to 

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GALDERMA at all
times thereafter, with such termination becoming effective at the end of the
applicable notice period and subject to the payment of the amounts set forth in
the immediately succeeding sentence, but only if in any twelve (12)-month
period commencing after the commencement of Commercialization in the United
States and in any one of the countries in Europe that is in the Initial
Marketing Territory GALDERMA’s Net Sales total is less than the Net Sales
Threshold for such twelve (12)-month period. 
Upon such termination, ANIKA will pay to GALDERMA the greater of:

(i)            [**********************************************************]

(ii)           [**********************************************************].

(b)           Upon written notice to GALDERMA
delivered to GALDERMA on or before January 31, 2007, if GALDERMA does not meet its
obligation set forth in the last sentence of Section 9.1(a).

13.6.        Results of Termination.

(a)           Upon expiration or termination of
this Agreement and the Supply Agreement for any reason, all rights and licenses
granted to GALDERMA pursuant to this Agreement and the Supply Agreement shall
immediately terminate, and GALDERMA and all GALDERMA Sellers shall discontinue
all marketing and distribution of the Licensed Products; provided, that
GALDERMA shall be permitted to continue marketing and distributing the Licensed
Products for a period of three (3) months
if ANIKA has not repurchased all Licensed Products in GALDERMA’s possession
pursuant to Section 13.6(f).

(b)           Upon expiration or termination of
this Agreement and the Supply Agreement for any reason, each Party shall
provide the other Party, at no cost to the other Party, copies of all relevant
unprivileged communications and correspondence with and from regulatory
agencies pertaining to the Licensed Products and copies of all relevant
marketing and promotional materials, including without limitation customer
lists.

(c)           Upon expiration or termination of
this Agreement and the Supply Agreement for any reason, each Party shall
promptly upon request return to the requesting Party all of the requesting
Party’s relevant records, materials and Confidential Information relating to
the Licensed Product in the possession or control of the other Party or its
sublicensees.

(d)           Termination or expiration of this
Agreement and the Supply Agreement for any reason shall not terminate GALDERMA’s
obligation to pay ANIKA all payments earned, payable or accrued pursuant to
this Agreement or the Supply Agreement, including without limitation for
Licensed Product which has been shipped to GALDERMA; provided, in the
case of a termination by ANIKA pursuant to Section 13.5(a) or by GALDERMA upon
ANIKA’s breach of this Agreement or the Supply Agreement, that ANIKA shall
repurchase all of GALDERMA’s or GALDERMA’s Sellers’ unsold inventory of
Licensed Product in merchantable condition or having a remaining shelf life
acceptable to ANIKA at the applicable Per Unit Price; provided that
GALDERMA is unable in good faith to sell such inventory or any portion thereof
to one or more Third Parties.

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(e)           Upon expiration or termination of
this Agreement or the Supply Agreement for any reason, ANIKA shall retain all
payments made by GALDERMA under this Agreement or the Supply Agreement; provided,
however, that ANIKA shall refund to GALDERMA all Product Development
costs and expenses paid by GALDERMA with respect to the Current Licensed
Product pursuant to Article II and any milestone payments made pursuant to
Section 6.1(b) if this Agreement and the Supply Agreement are terminated
pursuant to Section 13.2(h), 13.3(b), 13.3(c), 13.3(d) or 13.3(f) at any time
prior to September 30, 2007.

(f)            Upon expiration or termination of
this Agreement and the Supply Agreement for any reason, ANIKA shall have the
right to purchase all of GALDERMA’s or GALDERMA’s Sellers’ unsold inventory of
Licensed Product in merchantable condition or having a remaining shelf life
acceptable to ANIKA, at the applicable Per Unit Price.

(g)           Upon expiration or termination of
this Agreement and the Supply Agreement for any reason, ANIKA may elect that
GALDERMA assign and transfer all right, title and interest in and to the
Trademark Portfolio and the associated goodwill to ANIKA in exchange for:

(i)            in the case ANIKA or
any of its Affiliates distributes the Licensed Product directly,
[**************************************************************
********************************************]

(ii)           in the case ANIKA licenses the
distribution of the Licensed Product to a Third Party:

(A)          [******************************************************
***************************************************************]

(B)           [******************************************************
************************************************].

Such sales or re-licensing shall be at ANIKA’s sole discretion, and
such payments shall be due to GALDERMA within thirty (30) days after receipt of
such upfront, non-refundable payments or royalties from ANIKA’s new licensee,
as the case may be.  ANIKA shall in good
faith seek to structure any such new license and distribution arrangement so as
not to deprive GALDERMA of the benefits of this Section 13.6(g)(ii).

(h)           From and after any termination of
this Agreement and the Supply Agreement by ANIKA pursuant to Section 13.2(h)
after notice in writing from GALDERMA to ANIKA stating that GALDERMA is willing
to continue with the arrangements contemplated hereby and thereby without
changing the terms or conditions of this Agreement or the Supply Agreement,
ANIKA shall be prohibited, for a period of [********************], from promoting,
soliciting orders for, selling or otherwise distributing any HA Products for
use in the Territory, and from entering into any agreement with respect to any
of the foregoing, in each case without first for a period of sixty (60) days
offering GALDERMA the opportunity to license and distribute such HA Product on
substantially the same or, from GALDERMA’s perspective, better terms as those
contained herein; provided, however, that (i) GALDERMA
shall not be obligated to accept any offer concerning such HA Product or be
required to enter into any agreement and (ii) ANIKA shall not be
obligated to accept any counteroffer by GALDERMA that is more favorable to
GALDERMA 

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than ANIKA’s
original offer.  If such sixty (60) day
period expires without the Parties reaching an agreement (for avoidance of
doubt, it being understood that acceptance by GALDERMA of ANIKA’s offer shall
constitute an agreement), ANIKA may pursue negotiations with Third Parties
concerning commercial arrangements regarding the same HA Product and shall be
free to enter into any agreements with Third Parties concerning such HA Product
on any terms.

13.7.        Accrued Rights; Surviving Obligations.

(a)           Termination of this Agreement and the
Supply Agreement for any reason shall be without prejudice to any Party’s
obligations which shall have accrued prior to such termination, or to the
remedy, in accordance with the terms herein or therein, of either Party in
respect of any previous breach of any covenant contained herein or therein, as
applicable.

(b)           Such termination shall not relieve
either Party from obligations that are indicated to survive termination or
expiration of this Agreement and the Supply Agreement.

(c)           Notwithstanding any provision to the
contrary herein, the following provisions shall survive any termination or
expiration of this Agreement and the Supply Agreement:

(i)            This
Agreement:

(A)          Articles:  I (Definitions); VII (Publications; Transfer
of Data; Confidentiality; Cooperation); X (Representations and Warranties); XIV
(Indemnification); XVI (Dispute Resolution); and XVII (Miscellaneous); and

(B)           Sections:  13.6 (Results of Termination); 13.6(h)
(Accrued Rights; Surviving Obligations); and 13.8 (Termination Not Sole
Remedy).

(ii)           Supply
Agreement:

(A)          Articles:  I (Definitions); VI (Manufacturing Transfer);
and XIV (Coordination with License Agreement).

(d)           Each Party acknowledges and agrees
that, following termination or expiration of this Agreement and the Supply
Agreement, the terms and conditions of this Agreement and the Supply Agreement
shall be treated as Confidential Information of the other Party and shall be
subject to the confidentiality provisions hereof.

13.8.        Termination Not Sole Remedy.  Termination is not the sole remedy under this
Agreement or the Supply Agreement and, whether or not termination is effected,
all other remedies will remain available except as agreed to otherwise herein.

ARTICLE XIV - INDEMNIFICATION

14.1.        Indemnification by ANIKA.  ANIKA and its direct and indirect
subsidiaries shall indemnify, defend and hold harmless GALDERMA, and any
Affiliates of GALDERMA, together with their respective officers and directors,
from and against any and all losses (except 

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lost profits and consequential losses claimed directly
by GALDERMA, as opposed to those claimed by a Third Party, and subject to
Section 17.17), including compensatory losses for personal injury, damages,
liabilities, costs and expenses, including without limitation reasonable
attorneys’ fees and expenses, arising out of or in connection with:

(a)           the breach of any of ANIKA’s
representations and warranties made hereunder or under the Supply Agreement;

(b)           the breach by ANIKA of any of its
obligations, covenants or undertakings hereunder or under the Supply Agreement;

(c)           any grossly negligent act or omission
of ANIKA in connection with the design, Development, manufacture, packaging,
testing, warehousing, handling or use of the Licensed Product;

(d)           any claim, action or proceeding
initiated by the Joint Patent Holder against GALDERMA or ANIKA arising out of
the Joint Patent Holder’s joint ownership of any Joint Patent or any agreement
in respect thereof; or

(e)           any illness or personal injury,
including death, or property damage relating to the Licensed Products, to the extent
resulting from ANIKA’s negligence; provided, however, that,
except as otherwise provided in Section 11.1(c) of the Supply Agreement, in
circumstances in which this Agreement or the Supply Agreement provides to
GALDERMA a sole and exclusive remedy, nothing in this Section 14.1 is intended,
or shall be interpreted, to provide GALDERMA, its successors or permitted
assigns with any additional remedy, benefit or recovery, unless any of ANIKA’s
representations and warranties under Section 10.1 were untrue when made, in
which case GALDERMA shall be entitled to indemnification pursuant to Section
14.1(a).

14.2.        Indemnification by GALDERMA.  GALDERMA and its direct and indirect
subsidiaries shall indemnify, defend and hold harmless ANIKA and any Affiliates
of ANIKA, together with their respective officers and directors, from and
against any and all losses (except lost profits and consequential losses
claimed directly by ANIKA, as opposed to those claimed by a Third Party, and
subject to Section 17.17), including compensatory losses for personal injury,
damages, liabilities, costs and expenses, including without limitation
reasonable attorneys’ fees and expenses, arising out of or in connection with:

(a)           the breach of any of GALDERMA’s
representations and warranties made hereunder or under the Supply Agreement;

(b)           the breach by GALDERMA of any of its
obligations, covenants or undertakings hereunder or under the Supply Agreement;

(c)           any claim made by GALDERMA Sellers,
as to the safety or effectiveness of the Licensed Product or the use to be made
of the Licensed Product by any purchaser of Licensed Product, contained in any
advertising or other promotional material created and disseminated by GALDERMA
Sellers to the extent that such claim is not supported by the Licensed Product
label 

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and package insert
as approved by the FDA in the PMA (or, in other countries, the appropriate
governmental body having authority to approve the Licensed Product, label, and
package insert for marketing in such country);

(d)           any other act or omission of the
GALDERMA Sellers in connection with marketing, promotion, and sale of Licensed
Product, including the storage, handling and distribution by GALDERMA Sellers
of Licensed Product;

(e)           GALDERMA Sellers’ use, sale or
disposition of Licensed Products where such Licensed Products incorporate
changes made by GALDERMA Sellers to the applicable Specifications or packaging,
or changes made by GALDERMA Sellers to any Regulatory Application with respect
to Licensed Product which ANIKA has not approved;

(f)            any claim of
trademark infringement with regard to a Licensed Product sold by or
manufactured for a GALDERMA Seller;

(g)           any use, sale or disposition of a
Licensed Product in any country in the Territory in which Regulatory Approval
for such product was not obtained at or prior to, or effective as of, the time
of such use, sale or disposition; or

(h)           any illness or personal injury,
including death, or property damage relating to the Licensed Products, to the
extent resulting from GALDERMA’s negligence.

14.3.        Shared Responsibility.  The Parties agree that in the event of any
and all losses (except lost profits and consequential losses claimed directly
by either Party, as opposed to those claimed by a Third Party, and subject to
Section 17.17), including compensatory losses, damages, liabilities, costs and
expenses, including without limitation reasonable attorneys’ fees and expenses,
arising out of or in connection with any illness or personal injury, including
death, or property damage relating to the Licensed Products, to the extent
resulting from neither ANIKA’s negligence nor GALDERMA’s negligence, such
losses shall be borne equally by the Parties.

14.4.        Exculpation of ANIKA.  Notwithstanding anything contained in this
Agreement to the contrary, the Parties agree that ANIKA shall have no liability
to GALDERMA under this Article XIV for claims, losses, or liability of any kind
based upon or related to:

(a)           changes made by GALDERMA Sellers to
the Specifications or packaging, or changes made by GALDERMA Sellers to any
Regulatory Application with respect to Licensed Product;

(b)           sale or disposition of Licensed
Products by GALDERMA Sellers for any use other than the uses specified by the
accompanying package inserts;

(c)           use, sale or disposition of Licensed
Products by GALDERMA Sellers in combination with devices or Licensed Products
not licensed hereunder, where such combined sale or disposition is the sole
cause of an infringement claim and whereas such Licensed Products would not
themselves be infringing;

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(d)           sale or disposition of Licensed
Products by GALDERMA Sellers in or for an application or environment for which
such Licensed Products were not approved by the FDA or other applicable
governmental or regulatory agency; or

(e)           modifications of Licensed Products by
GALDERMA Sellers;

in each case to the extent such
changes, uses, sales, dispositions or modifications give rise to the claim,
loss or liability and have not been approved by ANIKA or the Steering
Committee.

14.5.        Exculpation of GALDERMA.  Notwithstanding anything contained in this
Agreement to the contrary, the Parties agree that GALDERMA shall have no
liability to ANIKA under this Article XIV for claims, losses or liability of
any kind based upon or related to:

(a)           the design, manufacturing, packaging,
sterilization, testing, warehousing or handling of the Product by ANIKA;

(b)           ANIKA’s use, sale or disposition of
Licensed Products where such Licensed Products incorporate changes made by
ANIKA to the Specifications;

(c)           sale or disposition of Licensed
Products by ANIKA in or for an application or environment for which such
Licensed Products were not approved by the FDA or other applicable governmental
or regulatory agency; or

(d)           modification of Licensed Products by
ANIKA;

in each case to the extent such
changes, uses, sales, dispositions or modifications give rise to the claim,
loss or liability and have not been approved by GALDERMA or the Steering
Committee.

14.6.        Indemnification Procedures.  If GALDERMA or ANIKA intends to claim
indemnification under this Article XIV as a result of a Third Party claim or
suit, such Party (the “Claiming Party”) shall (i) promptly notify
the other Party in writing of any claim or loss for which it intends to claim
such indemnification, (ii) use its commercially reasonable efforts
to cooperate with the other Party and its legal representatives in the
investigation of any claim or loss covered by this Article XIV, and
(iii) allow the other Party to control the defense and/or disposition of
such suit or claim; provided that the Claiming Party shall have the
right to participate at its own expense through counsel of its own
choosing.  Neither Party shall have any
indemnification obligations hereunder to the extent that such Party’s ability
to defend such suit or redress such loss is materially prejudiced by the
Claiming Party’s failure to perform the obligations under subclause (ii) of the
preceding sentence.  No claim shall be
settled for which any Indemnifying Party shall be liable without the advance
written consent of both the indemnifying Party and the Claiming Party, which
consent shall not be unreasonably withheld.

14.7.        Cooperation.  GALDERMA and ANIKA hereby agree to reasonably
cooperate in the defense of any Third-Party claim.  Each Party further agrees to make available
to the other such of its employees, documents and expertise as are reasonably
required in the mutual defense of such Third-Party claim.

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14.8.        Mitigation of Damages.  Each Party shall (and shall cause its
Affiliates to) use reasonable commercial efforts to pursue all legal rights and
remedies available in order to minimize the losses for which indemnification is
provided to it under this Article XIV.

14.9.        Exclusive Remedy.  Except as otherwise provided herein or in the
Supply Agreement (including, without limitation, Article VI thereof) and except
with respect to claims for fraud or for equitable relief (including specific
performance), the rights of the indemnified Parties under this Article XIV
shall be the sole and exclusive remedies of the indemnified Parties and their
respective Affiliates with respect to claims covered by this Article XIV.  Without limiting the generality of the
foregoing, in no event shall any Party, its successors or permitted assigns be
entitled to claim or seek rescission of the transactions consummated by this
Agreement or the Supply Agreement.

ARTICLE XV
- STEERING COMMITTEE

15.1.        Steering Committee Structure and
Members. ANIKA and GALDERMA shall create, within ten (10) days after the
Effective Date (or such later time as may be mutually agreed to by the
Parties), a committee (the “Steering Committee”) to coordinate the
Product Development and commercialization of Licensed Products.  The Steering Committee shall have two (2)
members from each Party who shall be named at the time of the formation of the
Steering Committee.  Each Party may
change its representatives upon notice to the other Party.  Members of the Steering Committee shall serve
on such terms and conditions as shall be determined by the Party selecting such
person for membership on the Steering Committee.  The chairmanship of the Steering
Committee shall initially be held by a representative of ANIKA until the first
anniversary of the Effective Date and thereafter alternate on an annual basis
between the representatives of GALDERMA, on one hand, and the representatives
of ANIKA, on the other hand.

15.2.        Steering Committee Meetings. The
Steering Committee:  (a) shall hold
meetings at such times and places as shall be determined by a majority of the
entire membership of the Steering Committee, but in no event shall such
meetings be held less frequently than three (3) times per year; (b) may conduct
meetings in person or by telephone conference; and (c) shall keep minutes
reflecting actions taken at meetings signed by one of the members of the
Steering Committee from each of the Parties. 
Each Party may invite to the meetings those people whom it believes may
be necessary to discuss issues to be discussed at such meeting.

15.3.        Steering Committee Action by
Agreement of the Parties Only. 
Actions to be taken by the Steering Committee pursuant to the terms of
this Agreement shall be taken only following the affirmative vote of all the
members of the Steering Committee representing each Party; provided, however,
that any expenditures by the Parties not otherwise required by this Agreement
shall be confirmed in writing by the most senior officer of GALDERMA and ANIKA,
respectively.  If the Steering Committee
is unable to reach a decision with regards to any action after consideration of
such action at a meeting of the Steering Committee, such decision shall be
referred to and be made jointly by such senior officer of GALDERMA and such
senior officer of ANIKA pursuant to Section 16.1.

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15.4.        Responsibilities of the Steering
Committee.  Subject to
Section 15.3, the duties and responsibilities of the Steering Committee
shall include to: (i) review, comment and approve any Product Development of
Licensed Products being conducted pursuant to Article II of this Agreement,
including approval of associated budgets, provided, however, that
any modification to a Product Development plan that is requested by a
Regulatory Authority shall be deemed to have been agreed to by the Steering
Committee and both Parties, provided, further, however,
that any modification to a Product Development plan that is not requested by a
Regulatory Authority shall need to be agreed in writing by both Parties;
(ii) amend the Specifications for Licensed Products, as appropriate; provided,
however, that any modification to the Specification that is not
requested by a Regulatory Authority shall need to be agreed in writing by both
Parties; (iii) review and approve launch plans and annual sales and
marketing plans of Licensed Products prior to the implementation thereof; (iv)
make determinations concerning whether to Commercialize and/or launch Licensed
Products (including good faith consideration of any proposed initial, expedited
launches of Licensed Product) in any country in the Territory, including review
and approval of associated plans and budgets; (v) review and approve any
packaging and marketing strategy; (vii) establish the Per Unit Price and the
pricing under Section 6.1(c) for each Line Extension pursuant to
Section 6.2; (vii) approve the publication of the results of any Product
Development activities relating to Licensed Products pursuant to
Section 7.3; and (viii) determine in which additional countries to file,
prosecute and maintain one or more of the ANIKA Patents pursuant to
Section 8.3.  In connection with any
meeting of the Steering Committee, the Parties will endeavor to provide to the
other Party all materials in connection with this Section 15.4 at least
five (5) Business Days in advance of such meeting.  Notwithstanding anything to the contrary
contained herein, ANIKA shall be responsible for the preparation of any Development
plans and associated budgets for any Line Extension contemplated by
Section 2.2.

ARTICLE XVI - DISPUTE RESOLUTION

16.1.        Dispute Resolution.

(a)           In the case of any claim, dispute or
controversy between the Parties arising out of or in connection with or
relating to this Agreement (including, without limitation, disputes with
respect to the rights and obligations of the Parties following termination),
and in case this Agreement does not provide a solution for how to resolve such
disputes, the Parties shall endeavor to discuss and negotiate in good faith
towards a solution acceptable to both Parties and in the spirit of this
Agreement.  If the Parties fail to reach
agreement within thirty (30) days, then for a further thirty (30) day period a
senior officer of ANIKA and a senior officer of GALDERMA shall discuss in good
faith an appropriate resolution to the dispute.

(b)           Notwithstanding the foregoing, if the
Parties dispute any Licensed Product recall, withdrawal or corrective action
under Article XII of the Supply Agreement, the Parties shall use commercially
reasonable efforts to resolve such dispute on an expedited basis, but in no
event later than five (5) days after such dispute arises.

(c)           Prior to commencement of arbitration
pursuant to Section 16.2, the Parties must attempt to mediate their
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Resolution.  Within a period of forty-five (45) days
after the request for mediation, the Parties agree to convene with the
mediator, with business representatives present, for at least one session to
attempt to resolve the matter.  In no
event will mediation delay commencement of the arbitration for more than forty-five
(45) days absent agreement of the Parties or interfere with the availability of
emergency relief.  Any disputes
concerning the propriety of the commencement of the arbitration shall be
finally settled by arbitration pursuant hereto.

16.2.        Arbitration.  Any claim, dispute or controversy arising out
of or in connection with or relating to this Agreement, (including, without
limitation, disputes with respect to the rights and obligations of the Parties
following termination) not settled by the procedures set forth in Section 16.1
above shall be adjudicated by arbitration in accordance with the arbitration
proceedings as set forth in Exhibit E attached hereto.

16.3.        Injunctive Relief.  Each Party hereby acknowledges that, in the
event it violates, or threatens to violate, any of the covenants herein, the
other Party will be, subject to Section 16.2, entitled to seek from any court
of competent jurisdiction, without the posting of any bond or other security,
injunctive relief, which rights will be cumulative and in addition to any other
rights or remedies in law or equity to which it may be entitled.

ARTICLE XVII - MISCELLANEOUS

17.1.        Relationship of Parties.  For the purposes of this Agreement and the
Supply Agreement, each Party is an independent contractor and not an agent or
employee of the other Party.  Neither
Party shall have authority to make any statements, representations, or
commitments of any kind, or to take any action which shall be binding on the
other Party, except as may be explicitly provided for herein or therein or
authorized in writing.

17.2.        Counterparts.  This Agreement and the Supply Agreement may
be executed in two or more counterparts, including facsimile counterparts, each
of which shall be deemed an original, and all of which together shall be deemed
to be one and the same instrument.

17.3.        Headings.  All headings in this Agreement and the Supply
Agreement are for convenience only and shall not affect the meaning of any
provision hereof.

17.4.        Binding Effect.  This Agreement and the Supply Agreement shall
inure to the benefit of and be binding upon the Parties and their respective
lawful successors and assigns.

17.5.        Assignment.  Neither Party may assign or transfer this
Agreement or the Supply Agreement or its rights and obligations under this
Agreement or the Supply Agreement without the prior written consent of the
other Party, which consent may not be unreasonably withheld, and any such
assignment or transfer shall be null and void and entitle the non-assigning
party to terminate this Agreement or the Supply Agreement, as the case may be,
forthwith.  Notwithstanding the
foregoing, either Party may assign this Agreement or the Supply Agreement
without the consent of the other Party in connection with the sale of all or
substantially all of its assets (whether by merger, consolidation or
otherwise); provided, however, that in no event shall any such
assignment release either Party from its responsibilities under this Agreement
or the Supply Agreement unless the assignee has agreed in writing to assume all
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assignor hereunder or under the Supply Agreement or
thereunder, as the case may be.  In the
event the Supply Agreement is assigned by GALDERMA to a Third Party in
accordance with this Section 17.5, the guaranty provided by GALDERMA PHARMA
S.A. under Section 15.1 of the Supply Agreement shall have no further force or
effect.

17.6.        Amendment and Waiver.  This Agreement and the Supply Agreement may
be amended, supplemented, or otherwise modified at any time, but only by means
of a written instrument signed by both Parties. 
Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to
waive any rights or fail to act in any other instance, whether or not similar.

17.7.        Governing Law.  This Agreement, the Supply Agreement and the
legal relations between the Parties shall be governed by and construed in
accordance with the laws of the State of New York, USA, irrespective of any
choice of laws or conflict-of-law principles.

17.8.        Severability.  In the event that any provision of this
Agreement or the Supply Agreement shall, for any reason, be held to be invalid
or unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision hereof or thereof, and this Agreement and the Supply
Agreement shall be construed as if such invalid or unenforceable provision had
not been included herein or therein.

17.9.        Entire Agreement.  This Agreement and the Supply Agreement
constitute the entire agreement between the Parties with respect to the subject
matter hereof and thereof and supersede any and all prior or contemporaneous
oral and prior written agreements and understandings.

17.10.      Advice of Counsel.  GALDERMA and ANIKA have each consulted
counsel of their choice regarding this Agreement and the Supply Agreement, and
each acknowledges and agrees that this Agreement and the Supply Agreement shall
not be deemed to have been drafted by one party or another and will be
construed accordingly.

17.11.      Force Majeure.  Neither Party shall lose any rights hereunder
or under the Supply Agreement or be liable to the other Party for damages or
losses on account of failure or delay of performance by the defaulting Party if
the failure or delay is occasioned by (i) any fire, explosion, unusually severe
weather, natural disaster or Act of God; (ii) epidemic, any nuclear,
biological, chemical, or similar attack; any other public health or safety
emergency; any act of terrorism; and any action reasonably taken in response to
any of the foregoing; (iii) any act of declared or undeclared war or of a
public enemy, or any riot or insurrection; (iv) any disruption in
transportation, communications, electric power or other utilities, or other
vital infrastructure; or any means of disrupting or damaging internet or other
computer networks or facilities; (v) any strike, lockout or other labor dispute
or action; (vi) any action taken in response to any of the foregoing events by
any civil or military authority; or (vii) any other event beyond such Party’s
control, provided that the Party claiming force majeure has exerted all
reasonable efforts to avoid or remedy such force majeure; provided, however,
that in no event shall a Party be required to settle any labor dispute or
disturbance.  The Party claiming force
majeure shall (a) notify in writing the other Party of such disability as soon
as practicable and (b) use its commercially reasonable efforts to remove such
disability within thirty (30) days of such notice.

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17.12.      Further Actions.  Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement and the Supply Agreement.

17.13.      No Trademark Rights.  Except as otherwise explicitly provided
herein or therein, no right, express or implied, is granted by this Agreement
or the Supply Agreement to use in any manner the name “ANIKA” or “GALDERMA,” or
any other trade name or trademark of the other Party or its Affiliates in
connection with the performance of the Agreement or the Supply Agreement.

17.14.      Notices.  All notices hereunder or under the Supply
Agreement shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission (receipt verified), email (receipt acknowledged),
mailed by registered or certified mail (return receipt requested), postage
prepaid, or sent by express courier service, to the Parties at the following
address (or at such other address for a Party as shall be specified by like
notice; provided, that notices of a change of address shall be effective
only upon receipt thereof).

If
to ANIKA,

addressed to:

ANIKA THERAPEUTICS INC.

160 New Boston Street

Woburn, MA 01801

Attention:  Chief Executive Officer

Facsimile:  (781) 932-3360

Email: csherwood@anikatherapeutics.com

With a copy to:

Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Attention:  H. David Henken, P.C.

Facsimile:  (617) 523-1231

Email: dhenken@goodwinprocter.com

and

Attention: 
Antonio G. Gomes

Facsimile:  (617) 523-1231

Email: agomes@goodwinprocter.com

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If
to GALDERMA:

addressed to:

GALDERMA PHARMA S.A.

Zugerstrasse 8

Cham CH-6330

Switzerland

Attn:  Finance & Administration
Manager

Fax: +41-21-641-1161

With a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, NY  10022

Attention:  David H. Bernstein, Esq.

Facsimile:  (212) 909-6836

Email: dhbernstein@debevoise.com

17.15.      Waiver.  Except as specifically provided for herein or
therein, the waiver from time to time by either of the Parties of any of their
rights or their failure to exercise any remedy shall not operate or be
construed as a continuing waiver of same or of any other of such Party’s rights
or remedies provided in this Agreement or the Supply Agreement.

17.16.      Bankruptcy.  All rights and licenses granted under or
pursuant to this Agreement and the Supply Agreement by ANIKA are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of Title 11, U.S.
code (the “Bankruptcy Code”), licenses of rights to “intellectual
property” as defined under Section 101(60) of the Bankruptcy Code.  The Parties agree that GALDERMA shall retain
and may fully exercise all of its rights and elections under the Bankruptcy
Code.  ANIKA agrees, during the Term, to
create and maintain current copies or, if not amenable to copying, detailed descriptions or other
appropriate embodiments, of all such intellectual property; provided, however,
that such descriptions or other appropriate embodiments are held and used by
ANIKA in the ordinary course of business, it being understood that ANIKA is not
subject to any obligation to develop any additional descriptions or other
embodiments of such intellectual property. 
The Parties further agree that in the event of the commencement
of a bankruptcy proceeding by or against ANIKA under the Bankruptcy Code,
GALDERMA shall be entitled to a complete duplicate of (or complete access to,
as appropriate) any such intellectual property, and all embodiments of such
intellectual property, and same, if
not already in its possession, shall promptly be delivered to GALDERMA (a) upon
such commencement of a bankruptcy proceeding upon written request therefore by
GALDERMA, unless ANIKA elects to continue to perform all of its obligations
under this Agreement, or (b) if not delivered under (a) above, upon the
rejection of this Agreement or the Supply Agreement by or on behalf of ANIKA
upon written request therefore by GALDERMA.

17.17.      Damages.  EXCEPT AS OTHERWISE PROVIDED FOR IN THIS
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EVENT BE LIABLE TO THE OTHER FOR LOST PROFITS,
PUNITIVE, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE SUPPLY AGREEMENT, PROVIDED, THAT THIS LIMITATION SHALL
NOT LIMIT THE INDEMNIFICATION OBLIGATION OF SUCH PARTY UNDER THE PROVISIONS OF
ARTICLE XIV FOR SUCH DAMAGES CLAIMED BY A THIRD PARTY.

17.18.      Agreement Expenses; Reimbursement.  Except as specifically provided herein,
GALDERMA and ANIKA shall each bear their own attorneys’ and accounting fees and
other expenses in connection with this Agreement and the Supply Agreement and
any related transaction.  Except as
otherwise provided herein or in the Supply Agreement, either Party shall
invoice the other Party within thirty (30) days of the end of each Calendar
Quarter for all costs which are the responsibility of the reimbursing Party
under this Agreement or the Supply Agreement. 
The reimbursing Party shall reimburse the reimbursed Party for such
costs within thirty (30) days of receipt of such invoice.  Such invoice shall itemize such costs in
reasonable detail.  If the reimbursing
Party does not indicate in writing to the reimbursed Party the basis for any
dispute of an invoice within thirty (30) days of receipt of such invoice, the
validity of the underlying amounts shall be deemed automatically accepted by
the reimbursing Party.  If the
reimbursing Party disputes the validity of any invoice provided by the
reimbursed Party hereunder, the Parties shall endeavor to resolve the dispute
in good faith.  If the Parties are unable
to resolve such dispute, the dispute shall be resolved pursuant to the
provisions of Article XVI.

17.19.      Schedules and Exhibits.  All Schedules and Exhibits referred to in
this Agreement and the Supply Agreement are attached hereto and thereto and
incorporated herein or therein by reference.

17.20.      Beneficiaries.  Except as provided in Article XIV, nothing in
this Agreement or the Supply Agreement shall confer any rights upon any Person
other than the Parties and their respective Affiliates, successors and
permitted assigns.

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IN
WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.

	
  GALDERMA PHARMA S.A.

  	
   

  	
  ANIKA THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Humberto C. Antunes

  	
   

  	
  By:

  	
   

  	
  /s/ Charles H. Sherwood

  
	
   

  	
   

  	
  Name: Humberto C. Antunes

  	
   

  	
   

  	
   

  	
  Name: Charles H. Sherwood, Ph.D

  
	
   

  	
   

  	
  Title: President and CEO

  	
   

  	
   

  	
   

  	
  Title: President and CEO

  

 

 

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EXHIBIT A

ANIKA PATENTS AND
ANIKA PATENT APPLICATIONS

Joint
Patents

	
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ANIKA
Patent Applications

	
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EXHIBIT B

TRADEMARK APPLICATIONS

	
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EXHIBIT C

SPECIFICATIONS

	
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EXHIBIT D

COUNTRIES FOR
ADDITIONAL ANIKA PATENT APPLICATIONS

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EXHIBIT
E

ARBITRATION

Any controversy or claim arising out
of or relating to this Agreement shall be resolved by arbitration before a
single arbitrator in accordance with the Commercial Rules of Arbitration of the
International Chamber of Commerce (the “ICC”) then pertaining (available
at
http://www.iccwbo.org/court/english/arbitration/pdf_documents/rules_/arb_english.pdf
, except where those rules conflict with this provision, in which case this
provision controls.  Any application to
enforce this clause and enter judgment on any award shall be brought only in
the federal or state courts located in the County of New York in the State of
New York (the “Courts”).  The
arbitration shall be conducted in English, provided that either Party may
submit testimony or documentary evidence in any language if it furnishes, upon
the request of the other Party, a translation into English of any such
testimony or documentary evidence.

The arbitrator shall be selected
within twenty (20) Business Days from commencement of the arbitration pursuant
to agreement of the Parties or through selection procedures administered by the
ICC.  The arbitrator shall not be a
citizen of the United States, France or Switzerland.  Within forty-five (45) days of initiation of
arbitration, the Parties shall reach agreement upon and thereafter follow
procedures, including limits on discovery, assuring that the arbitration will
be concluded and the award rendered within no more than six months from
selection of the arbitrator or, failing agreement, procedures meeting such time
limits will be implemented by the arbitrator after submissions by the Parties
and adhered to by the Parties.  In
connection with the arbitration proceeding, the arbitrator shall order the
prompt exchange of relevant documents by each Party; each Party may take up to
two depositions as of right, and the arbitrator may in his or her discretion
allow additional depositions upon good cause shown by the moving Party;
however, the arbitrator shall not have the power to order the answering of
interrogatories or the response to requests for admission.  In connection with any arbitration, each
Party shall provide to the other, no later than fourteen (14) days before the
date of the arbitration, the identity of all persons that may testify at the
arbitration and a copy of all documents that may be introduced at the
arbitration or considered or used by a Party’s witness or expert.

The arbitration shall be held in the
County of New York in the State of New York, U.S.A. and the arbitrator shall
apply the substantive law of New York, except that the interpretation and
enforcement of this arbitration provision shall be governed by the Convention
on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York
Convention”), 9 U.S.C.A. § 201. 
From the date of initiation of arbitration and until such time as any
matter has been finally settled by arbitration, the running of the time periods
contained in Article XIV as to which Party must cure a breach of this Agreement
shall be suspended as to the subject matter of the dispute.  Prior to appointment of an arbitrator,
emergency relief may be sought only from the Courts to avoid irreparable harm.  The arbitrator may take all measures
necessary for the protection of trade secrets and confidential information,
including awarding interim equitable relief. 
All proceedings and any award shall be confidential, and the
Parties agree not to disclose any information obtained from the other Party in
connection with the Arbitration except to the extent required by law or
regulation, or to a party’s accountants, attorneys or agents or to enforce any
award, or to the extent the information has been lawfully obtained from third
parties or is publicly available through other sources.

 

 E-1Exhibit 10.2

REDACTED COPY

Confidential Treatment Requested(1)

SUPPLY AGREEMENT

among

GALDERMA S.A.

GALDERMA PHARMA S.A.

and

ANIKA THERAPEUTICS,
INC.

(1) Redacted
portions have been marked with brackets containing asterisks ([***]).  The
redacted portions are subject to a request for confidential treatment and have
been filed separately with the Securities and Exchange Commission.

 

Confidential Treatment Requested

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I -
  DEFINITIONS

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II -
  MANUFACTURE AND SALE

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III -
  PRICING AND PAYMENT TERMS

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV -
  FORECASTS; ORDERS

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V -
  PURCHASE COMMITMENTS

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI -
  SECOND SOURCE OF SUPPLY

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII -
  SPECIFICATIONS; IMPROVEMENTS

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII -
  PACKAGING

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX -
  DELIVERY

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X -
  MANUFACTURING INSPECTIONS

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI -
  PRODUCT INSPECTION; NON-CONFORMING PRODUCT

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII -
  CORRECTIVE ACTION

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII -
  INSURANCE

  	
   

  	
  14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV -
  COORDINATION WITH LICENSE AGREEMENT

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV - GUARANTY

  	
   

  	
  15

  	
   

  

 

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SUPPLY
AGREEMENT

THIS SUPPLY AGREEMENT (this “Agreement”) is
made effective as of June 30, 2006 (“Effective Date”) by and among
GALDERMA S.A., a Swiss corporation having its place of business at Zugerstrasse
8, Cham CH-6330, Switzerland (“GALDERMA”), GALDERMA PHARMA S.A., a Swiss
corporation having its place of business at Zugerstrasse 8, Cham CH-6330,
Switzerland (“PARENT”), for purposes of Article XV only, and ANIKA
THERAPEUTICS, INC., a Massachusetts corporation, having its place of business
at 160 New Boston Street, Woburn, Massachusetts 01801 (“ANIKA”).  ANIKA and GALDERMA are each referred to by
name or as a “Party” or collectively as the “Parties.”

RECITALS

1.             ANIKA
develops, manufactures and packages therapeutic products.

2.             GALDERMA
distributes and markets therapeutic products.

3.             The
Parties are entering into a License and Development Agreement (the “License
Agreement”) concurrently herewith, providing for, among other things, an
exclusive (except as set forth in Article IV of the License Agreement) license
from ANIKA to GALDERMA under the ANIKA Patents to use, promote, sell, offer to
sell, and distribute the Licensed Products in the Field in the Territory.

4.             This
Agreement will be coterminous with the License Agreement.

5.             GALDERMA
desires to have ANIKA manufacture and supply the Licensed Products for GALDERMA
pursuant to the terms of this Agreement.

NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows:

ARTICLE I - DEFINITIONS

1.1.          Each term not
otherwise defined herein shall have the meaning assigned to such term in the
License Agreement.

1.2.          For the purpose of
this Agreement, the following terms shall have the meanings set forth below:

“Additional Amount” shall have the meaning set
forth in Section 5.3.

“Agreement” shall have the meaning set forth in
the preamble.

“ANIKA” shall have the meaning set forth in the
preamble.

 

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“Annual Minimum Purchase Commitment” shall have
the meaning set forth in Section 5.1.

“Facility” means ANIKA’s manufacturing facility
located at 236 West Cummings Park, Woburn, MA 
01801, or any other manufacturing facility certified under Applicable
Law for the manufacture of the Licensed Products and selected by ANIKA from
time to time.

“Forecast” shall have the meaning set forth in
Section 4.1.

“GALDERMA” shall have the meaning set forth in
the preamble.

“License Agreement” shall have the meaning set
forth in the recitals.

“PARENT” shall have the meaning set forth in
the preamble.

“Party” or “Parties” shall have the
meaning set forth in the preamble.

“Purchase Orders” shall have the meaning set forth
in Section 4.2.

“Obligations” shall have the meaning set forth
in Section 15.1.

“Recall” shall have the meaning set forth in
Section 12.4(a).

“Retained Sample” shall have the meaning set
forth in Section 11.1(c).

“Sales Territory” means each of North America,
South America and the rest of the countries in the Territory.

“Second Source Supplier” shall have the meaning
set forth in Section 6.1.

“Shipping Point” shall have the meaning set
forth in Section 9.1(b).

ARTICLE II - MANUFACTURE
AND SALE

2.1.          Supply of
Licensed Products.  Subject to the
provisions of this Agreement and the License Agreement, during the Term, ANIKA
and its Affiliates shall manufacture and supply GALDERMA in the Territory on an
exclusive (except as set forth in the License Agreement or this Agreement)
basis with those quantities of the Licensed Products as ordered by GALDERMA
pursuant to and in accordance with the terms of this Agreement, and GALDERMA
and its Affiliates shall purchase exclusively (except as set forth in the
License Agreement or this Agreement) from ANIKA (which includes permitted
sublicensees of ANIKA pursuant to Section 2.2) 100% of GALDERMA’s requirements
for the Licensed Products to be sold subject to the ordering procedures set
forth in Article IV.  ANIKA’s associated
responsibilities shall include:

(a)           reception, control and storage of raw
materials and work-in process inventory;

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(b)           manufacturing, packaging and storage
of the Licensed Products until delivery pursuant to Article IX;

(c)           control and testing of the finished
Licensed Products to the extent required by Applicable Law or pursuant to the
terms of this Agreement or the License Agreement;

(d)           decision to release batches of the
Licensed Products for delivery;

(e)           delivery of the Licensed Products in
accordance with Article IX;

(f)            storage of batch records and
retention samples to the extent required by Applicable Law or pursuant to the
terms of this Agreement or the License Agreement; and

(g)           file maintenance to the extent required
by Applicable Law or pursuant to the terms of this Agreement or the License
Agreement.

2.2.          Permitted
Sublicensees.  Notwithstanding any
provision in this Agreement or the License Agreement, ANIKA shall be permitted
to sublicense or outsource to Affiliates or Third Parties the manufacturing and
supply of the Licensed Products; provided, however, that ANIKA
shall be responsible for the compliance by such sublicensees with all
applicable terms of this Agreement and the License Agreement and bear all the
related costs that ANIKA is obligated to bear under this Agreement and the
License Agreement.  ANIKA shall consult
with the Steering Committee with respect to the selection by ANIKA of any such
Third Party sublicensees, provided that ANIKA’s sole obligation with
respect to any comments or observations made by the Steering Committee is to
consider such comments or observations in good faith.

2.3.          Compliance with
Applicable Law.  ANIKA shall comply
in all material respects with all Applicable Laws relating to the manufacture
and supply of the Licensed Products being provided hereunder, including,
without limitation, those enforced by the United States Food and Drug
Administration (including compliance with cGMP) and International Standards
Organization Rules 9000 et seq., it being understood by the Parties that, upon
delivery of the Licensed Products to the Shipping Point in accordance with
Article IX, responsibility for compliance with all Applicable Laws with respect
to such delivered Units of Licensed Products shall shift to GALDERMA, and
thereafter GALDERMA shall comply in all material respects with all Applicable
Laws relating to the storage and distribution of the Licensed Products.

2.4.          ANIKA Marketing
Support; Samples.  ANIKA agrees to
assist GALDERMA’s commercialization effort by providing Samples at the Price
Per Sample set forth on Exhibit A and in such quantities as GALDERMA
shall reasonably request and order pursuant to the ordering procedures set
forth in Article IV and pay for pursuant to the payment terms provided for in
Article III; provided, however, that (i) such quantity of Samples
of the Current Licensed Product shall not in the aggregate exceed
[****************]; (ii) such quantity of Samples of the Current Licensed
Product for each calendar year thereafter shall not exceed the greater of (A)
the number of Units in a sampling plan prepared annually by GALDERMA and
approved by the Steering Committee or (B) [****************] of the number of
Units of Current Licensed Product sold worldwide during such calendar year
calculated on a quarterly basis by 

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extrapolating
the actual number of Units of Current Licensed Product sold worldwide year to
date in order to reasonably estimate the number of Units of Current Licensed
Product expected to be sold worldwide during such calendar year (taking into
account expected sales trends); and (iii) ANIKA is not required to provide
Samples with respect to any Sales Territory until at least one Regulatory
Approval has been received in one country in such Sales Territory.  GALDERMA agrees that the Samples shall be
used solely for marketing purposes in accordance with Applicable Law, and
GALDERMA shall not sell, or offer for sale, or otherwise permit its Affiliates
or distributors to sell or offer for sale, the Samples.

ARTICLE III - PRICING AND
PAYMENT TERMS

3.1.          Pricing.  GALDERMA shall pay ANIKA for the Licensed
Products in accordance with the prices set forth in Exhibit A hereto.

3.2.          Payment Terms.

(a)           The Per Unit Price payments shall
become due and payable by GALDERMA no later than thirty (30) days after
GALDERMA has received an invoice for any Licensed Product.  GALDERMA agrees that receipt of an invoice by
facsimile transmission shall be treated as receipt of an original invoice for
purposes of this Agreement.  GALDERMA
shall make the Per Unit Price payments hereunder to ANIKA within the above
referenced thirty (30) day period in accordance with written instructions
delivered to GALDERMA by ANIKA from time to time.

(b)           GALDERMA shall keep accurate records
in sufficient detail to enable the Per Unit Price payments payable hereunder to
be determined.  GALDERMA shall be
responsible for all such payments and late payments that are due to ANIKA
pursuant to the terms of this Agreement. 
Any past due amounts for any overdue payment to either Party pursuant to
any provision of this Agreement will be subject to a late fee of one percent
(1%) per month, or the highest rate allowed by law, whichever is less, with
such interest accrual commencing on the thirtieth (30th) day after the applicable due
date.  All costs of enforcing or
collecting payment hereunder, including attorneys’ fees and expenses and court
costs, shall be paid by the non-prevailing Party.  Breach for non-payment commences on the
forty-sixth (46th) day
following the due date assuming the invoice is materially accurate; provided,
however, that GALDERMA shall promptly notify ANIKA of any material inaccuracies
in any ANIKA invoice received by GALDERMA.

ARTICLE IV - FORECASTS;
ORDERS

4.1.          No later than ninety
(90) days prior to the anticipated date of first delivery of the first Licensed
Product, GALDERMA shall provide ANIKA with its initial written forecast of
GALDERMA’s anticipated requirements for such Licensed Product by SKU for each
of the first twelve (12) months following such date of first delivery (such
initial forecast and all future forecasts herein referred to as a “Forecast”
or the “Forecasts”); provided, however, that such 

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initial Forecast shall not provide for delivery of
more than [****************] Units of such Licensed Product per month in the
first [****************] of such Forecast without ANIKA’s written consent.  From and after the delivery of the initial
Forecast, no later than fifteen (15) days prior to the commencement of each
calendar month during the Term, GALDERMA shall provide ANIKA with a revised
Forecast by SKU covering each of the following twelve (12) months.  With respect to all Forecasts issued to ANIKA
by GALDERMA pursuant to the terms hereof, (i) [****************] of the
first and second months, (ii) [****************] of the third and fourth
months, and (iii) [****************] of the fifth and sixth months, in each
case shall become binding on the Parties on a rolling basis and constitute a
firm order for Licensed Products, regardless of receipt by ANIKA of GALDERMA’s
actual Purchase Orders, it being understood and agreed that each Forecast shall
reflect at least the quantities that are binding on the Parties pursuant to the
foregoing thresholds and no more than the maximum quantities contemplated by
the first sentence of Section 4.2 below. 
For example, if the first Forecast provides for a quantity of [********]
Units in the third month of such Forecast, no subsequent Forecast shall provide
for a quantity with respect to such month of less than [*****] Units or more
than [******] Units.  Each Forecast will
indicate the delivery dates for the Licensed Products, and the delivery dates
for the first [*******************] will be binding on the Parties as indicated
in such Forecast; provided, however, that such delivery dates for the
number of Units of Licensed Product forecasted for a month in the then current
Forecast must fall within such month, unless the Parties otherwise agree in
writing to alternative delivery dates.

4.2.          Subject to the binding commitment
incurred pursuant to each Forecast pursuant to Section 4.1, GALDERMA shall
place specific binding orders for Licensed Product by the issuance of separate purchase
orders to ANIKA, which may be in written or electronic form or by any other
means agreed to by the Parties and shall be binding on ANIKA to the extent that
such purchase orders [*******************] by SKU by month of the applicable
Forecast with respect to the first and second months of such Forecast,
[************] by SKU by month of such Forecast with respect to the third and
fourth months, and [**********] by SKU by month of such Forecast with respect
to the fifth and sixth months (the “Purchase Orders”).  If GALDERMA requests a quantity of Licensed
Product that exceeds the binding portion of a given Forecast, the Parties agree
in good faith to negotiate additional quantities and associated delivery dates.  The Purchase Orders shall designate the
desired SKU’s and quantities of Licensed Products (subject to the requirements
of this Section 4.2), delivery dates (subject to the last sentence of Section
4.1) and destinations.  The minimum
Purchase Order quantity by SKU shall be [*************] Units.  GALDERMA shall issue written Purchase Orders
for Licensed Products to ANIKA at least sixty (60) days prior to the requested
delivery dates.

4.3.          In the event that
GALDERMA shall fail to place sufficient Purchase Orders to satisfy the binding
order commitment incurred pursuant to any Forecast, such Purchase Orders shall
be deemed to have been submitted by GALDERMA, and ANIKA shall deliver such
Licensed Products to GALDERMA.

4.4.          To the extent of any
conflict or inconsistency between this Agreement and any Purchase Order,
purchase order release, confirmation, acceptance or any similar document, the
terms of this Agreement shall govern.

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ARTICLE V - PURCHASE
COMMITMENTS

5.1.          Exclusive of any
Samples and notwithstanding any other provision in this Agreement, but subject
to the satisfaction of the Condition Precedent to Commercial Sale in the United
States and in at least one or more of the countries in Europe within the
Initial Marketing Territory, GALDERMA irrevocably hereby [***************************************

***************************] after the first Date of First Sale, pursuant to
the terms of this Agreement and the License Agreement.

5.2.          In each calendar
year during the Term commencing with [****************], GALDERMA annually
shall purchase the minimum number of Units of Licensed Products that is equal
to [****************] of GALDERMA’s annual corporate sales budget for the
Licensed Products (which budget shall be prepared on a Sales Territory by Sales
Territory basis and in good faith by GALDERMA, is the same budget that GALDERMA
will use for internal reporting purposes and has been delivered to ANIKA no
later than [****************] of the prior year) for each Sales Territory in
which GALDERMA has begun Commercialization by [****************] of such prior
year (as to any such Sales Territory, the “Annual Minimum Purchase
Commitment”).

5.3.          Upon sixty (60) days’
written notice to GALDERMA, ANIKA shall have the right to terminate all of
GALDERMA’s rights and obligations under this Agreement and the License
Agreement with respect to any Sales Territory in which GALDERMA fails to meet
its calendar year Annual Minimum Purchase Commitment and such failure shall not
have been cured in accordance with the provisions of this Section 5.3, and
thereafter the definition of Territory shall not include such Sales Territory
for all purposes under this Agreement and the License Agreement.

(a)           Notwithstanding the foregoing
sentence, ANIKA shall not exercise such termination right with respect to any
Sales Territory if:

(i)            prior to the expiration of such
sixty (60)-day notice period, GALDERMA indicates in writing its commitment to
purchase during the calendar year following the calendar year in which the
default occurred, an amount, in addition to the amounts required to be
purchased by GALDERMA during such following calendar year pursuant to Article
IV, equal to one hundred percent (100%) of the difference in such prior period
between the amount necessary to have been purchased for such Sales Territory
and the amount actually purchased for such Sales Territory (the “Additional
Amount”); provided, however, that if the Additional Amount is
not in fact purchased from ANIKA during such calendar year, then ANIKA shall
have the full power and authority under this Agreement to exercise the
termination right set forth in this Section 5.3 as of the end of such calendar
year, upon sixty (60) days’ written notice; provided, further, however,
that if within such calendar year, ANIKA cannot manufacture and deliver an
additional number of Units of Licensed Product equal to the Additional Amount,
then ANIKA shall extend such period by an additional period of time as is

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necessary to permit ANIKA to produce and
deliver such number of additional Units of Licensed Product; and

(ii)           the Annual Minimum Purchase
Commitment for the Sales Territory at issue for the year following the calendar
year in which the default occurred shall be no less than the Annual Minimum
Purchase Commitment for such Sales Territory for the prior calendar year; provided,
however, that if the market for the Licensed Products in the Sales
Territory (taken as a whole) in which GALDERMA failed to meet its calendar year
Annual Minimum Purchase Commitment has been adversely impacted by events not
primarily caused by GALDERMA or any of its Affiliates (e.g.,
through the introduction of generic alternatives to the Licensed Products) and
such events are materially interfering with the ability of GALDERMA or its
Affiliates to sell the Licensed Products in such Sales Territory, then the
Annual Minimum Purchase Commitment for the Sales Territory at issue for the
year following the calendar year in which such default occurred shall be set by
the Steering Committee.

(b)           Without the prior written consent of
ANIKA, GALDERMA shall avail itself of the relief provided in Section 5.3(a)
only twice per Sales Territory during the Term, but in no event shall such
relief be available for consecutive calendar years.

5.4.          The Parties
acknowledge and agree that to the extent this Agreement or the License
Agreement contemplates relief of GALDERMA’s obligations under this Article V
with respect to a given country, such relief shall be granted by means of a
proportionate reduction in the Annual Minimum Purchase Commitment with respect
to the applicable Sales Territory based on the Net Sales in such country
relative to the Net Sales in all other countries in such Sales Territory, in
each case during the preceding twelve (12) calendar months.

ARTICLE VI - SECOND
SOURCE OF SUPPLY

6.1.          Second Source of
Supply.  Upon GALDERMA’s request but
provided that worldwide Net Sales for the twelve (12) month period immediately
preceding such request exceed [****************], ANIKA within nine (9) months
of such request shall develop a plan and budget for a qualified second source
of supply capable of supplying Licensed Products (the “Second Source
Supplier”) and shall submit such plan and budget to the Steering Committee
for its approval.  Such Second Source
Supplier shall be under the control of ANIKA and may be an alternative Facility
owned by ANIKA or consist of one or more sub contractor relationships with
Third Parties established by ANIKA.  If
such Second Source Supplier involves a Third Party, ANIKA’s obligation to
establish a second source relationship with such Third Party will be subject to
such Third Party agreeing in writing to be bound by the terms of a
confidentiality and non-disclosure agreement satisfactory to ANIKA.  Upon approval by the Steering Committee of
the plan and budget for a Second Source Supplier, GALDERMA shall be responsible
for all reasonable and reasonably documented costs and expenses incurred by
ANIKA in establishing and maintaining such Second Source Supplier.  If such costs exceed the budget approved by
the Steering Committee, then such excess shall be borne by 

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(i) GALDERMA,
if such excess resulted from a change in the agreed plan requested by GALDERMA
or the Steering Committee or requested by ANIKA and agreed to by GALDERMA or
(ii) ANIKA, if such excess resulted from any mismanagement of the agreed upon
budget.

6.2.          Preparedness for
Force Majeure Events.  By
[****************], ANIKA will use commercially reasonable efforts to prepare
and present to GALDERMA for its review a force majeure preparedness and
business continuity plan, the goal of which will be to reduce, to the extent
reasonably practicable, disruptions in the supply of Licensed Products by ANIKA
to GALDERMA.  ANIKA’s sole obligation
with respect to any comments or observations made by GALDERMA pursuant to its
review of such plan is to consider such comments and observations in good
faith.

ARTICLE VII -
SPECIFICATIONS; IMPROVEMENTS

7.1.          Specifications.  ANIKA agrees that it shall manufacture the
Licensed Products in accordance with the Specifications.

7.2.          Change in
Specifications.

(a)           Either Party shall have the right to
request a change to the Specifications during the Term.  In such event, the Party wishing to request a
change shall notify the other Party of its request in writing.  If the receiving Party agrees to such
request, the Parties shall cooperate with each other to have such change to
such Specifications or packaging of the Licensed Product approved by the FDA or
other regulatory agency (if necessary). 
ANIKA shall not be obligated to make any changes to such Specifications
of the Licensed Products requested by GALDERMA, unless such changes are
approved by the Steering Committee in accordance with the License Agreement.  In the case of any approved changes to
Specifications of the Licensed Products requested by GALDERMA or required by
the FDA or other regulatory agency, GALDERMA shall reimburse ANIKA for all
ANIKA’s reasonable and reasonably documented costs related to such changes to
Specifications, including without limitation costs associated with up to six
(6) months (determined by reference to the Forecast then in effect for the
Licensed Product at issue) of Licensed Product inventory rendered obsolete by
the change in Specifications and any necessary Regulatory Approval costs.

(b)           Any disputes arising from a request
for cost-sharing or reimbursement of expenses incurred in connection with a
change in Specifications not resolved by the Parties within thirty (30) days
shall be referred to the Steering Committee for resolution; and, if not
resolved by the Steering Committee, the provisions of Article XVI of the
License Agreement shall apply to such dispute.

7.3.          Records.

(a)           ANIKA shall keep complete, accurate
and detailed original records pertaining to the manufacture, including quality
control, of the Licensed Product.

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GALDERMA shall keep, and will use its
reasonable efforts to the extent required by law to cause other GALDERMA Sellers
to keep, complete, accurate and detailed original records pertaining to the
use, storage, sale, distribution and other disposition of the Licensed Product,
including for each lot number of Licensed Product, the quantity shipped and
where the lot was shipped, so that, among other things, in the event of a
recall, GALDERMA will be able to contact all physicians and/or end users of
Licensed Products.  Each party shall keep
its respective records for at least five (5) years or for such longer period if
and as required by Applicable Law from the date of delivery or receipt, as
applicable, of each batch of Licensed Product to which said records
pertain.  For validation batches, each
Party shall keep the documents throughout the commercial life of the relevant
Licensed Products.

(b)           Each Party shall make available such
records (including making copies thereof) to the other Party for such lawful
purpose as such other Party may reasonably request in writing.

ARTICLE VIII - PACKAGING

8.1.          GALDERMA, with the
approval of the Steering Committee, shall have the right to determine the
appearance of any labeling and packaging consistent with the approved label
used in connection with the Licensed Product in the Territory.

8.2.          GALDERMA shall pay
all of the costs associated with the design of the labeling and packaging for
the Licensed Product.  In determining the
labeling for the Licensed Product, GALDERMA shall have the right to use its
corporate and/or trade name(s) and its own trademark(s) and to determine the
general design and appearance of said labeling. 
ANIKA’s corporate name shall be displayed on Licensed Product
packaging.  ANIKA shall be responsible
for procurement of the packaging materials and ensuring that the appearance of
any labeling and packaging meets the requirements of any approved
specifications.

8.3.          Once the initial
labeling and packaging has been decided upon and confirmed in writing, ANIKA
shall not be required to make subsequent changes to such labeling, including
any changes required by any applicable regulator, unless GALDERMA agrees to pay
all additional costs associated with the implementing of changes and to pay
ANIKA’s reasonable and reasonably documented costs related to such labeling or
packaging changes, including without limitation costs associated with up to six
(6) months (determined by reference to the Forecast then in effect for the
Licensed Product at issue) of packaging inventory rendered obsolete by the
change in labeling or packaging.  Notwithstanding
the foregoing, if any changes are required to be made to the packaging or
labeling as a result of changes requested by ANIKA, ANIKA shall bear the
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ARTICLE IX - DELIVERY

9.1.          Shipment.

(a)           ANIKA shall deliver the Licensed
Products to the Shipping Point and assist in shipping the Licensed Product to
GALDERMA or to such other location as designated in writing by GALDERMA and
acknowledged by ANIKA by such mode of transportation as GALDERMA shall direct
and pursuant to the validated transportation specifications to ensure Licensed
Products’ quality (including packaging and temperature).  At the time of such delivery, (i) [*************************************************************

************], and (ii) each Licensed Product with any other shelf
life shall have at a minimum eighty percent (80%) of such shelf life
remaining.  All charges for packing,
handling, hauling, storage, bar coding and transportation to the Shipping Point
are included in the Per Unit Price unless otherwise agreed to by the Parties in
writing.

(b)           The risk of loss and damage with
respect to Licensed Product shall remain with ANIKA through production until
Licensed Product is picked-up by GALDERMA’s carrier at ANIKA’s Facility (the “Shipping
Point”).  Shipping terms will be Ex
Works (EXW) per INCOTERMS 2000.  ANIKA
will pack all Licensed Product ordered hereunder in a manner suitable for
shipment and sufficient to enable the Licensed Product to withstand the normal
effects of shipping, including handling during loading and unloading.  GALDERMA shall be responsible for designating
the carrier(s) and negotiating terms for shipment of Licensed Product with ANIKA’s
insights and recommendations, and shall be responsible for payment of all
transportation charges, shipping insurance, handling, storage, taxes, custom
duties and fees and all other charges incident to the storage and movement of
the Licensed Products in commerce subsequent to delivery by ANIKA to the
Shipping Point.  ANIKA agrees not to
direct the shipment of any Licensed Product to GALDERMA or any other location
other than as directed by GALDERMA.  In
the event any of said charges are paid by ANIKA, with the approval of GALDERMA,
ANIKA shall invoice GALDERMA therefor, and GALDERMA shall remit said amount(s)
to ANIKA not later than thirty (30) days after the date of invoice.

9.2.          Certificates of
Analysis.  At the time of delivery, ANIKA
shall provide GALDERMA with a certificate of analysis for each batch of the
Licensed Product delivered confirming that each batch of Licensed Product
complies with the applicable Specifications, and containing a statement of
conformance confirming that each batch of product complies with the cGMP.

ARTICLE X - MANUFACTURING
INSPECTIONS

10.1.        Inspection by
GALDERMA.  During the Term, GALDERMA
retains the right to perform independent quality assurance audits of the
Facility where the Licensed Products are manufactured and of the procedures and
capabilities relating to the manufacture of the Licensed Product.  Such audits shall include, without
limitation, inspection of manufacturing, laboratory and storage facilities, any
materials stored for GALDERMA, all equipment and machinery and 

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all records
relating to such manufacturing.  Such
audits shall not unreasonably disrupt the normal operations of ANIKA.  Such audits shall be conducted during normal
business hours upon at least twenty (20) Business Days prior written notice and
shall be limited to not more than one(1)  visit per year, except in the
event of a Recall of the Licensed Product not caused by GALDERMA or
governmental action involving the Licensed Product, in which case GALDERMA
shall have the right to one (1) additional audit visit per such Recall or
governmental action.  Observations and
conclusions of such audits will be issued by GALDERMA and discussed with ANIKA,
and the Parties may agree upon what, if any, corrective actions will be
implemented by ANIKA in response to such observations and conclusions.  ANIKA shall implement any such agreed-to
corrective actions as soon as practicable at its expense.  The cost of all such audits shall be borne by
GALDERMA.

10.2.        Inspection by ANIKA.  ANIKA shall have the right to visit GALDERMA’s
or GALDERMA’s Sellers’ facilities where the Licensed Product is stored or
delivered from time to time during the Term to perform a quality audit of
GALDERMA’s records concerning storage and distribution (including shipping and
handling) of the Licensed Products.  Such
audits shall include, without limitation, inspection of distribution and
storage facilities, all equipment and machinery and all records relating to such
storage and distribution.  Such audits
shall not unreasonably disrupt the normal operations of GALDERMA.  Such audits shall be conducted during normal
business hours upon at least twenty (20) Business Days prior written notice and
shall be limited to not more than one (1) visit per year, except in the event
of a Recall of the Licensed Product not caused by ANIKA or governmental action
involving the Licensed Product, in which case ANIKA shall have the right to one
(1) additional audit visit per such Recall. 
Observations and conclusions of such audits will be issued by ANIKA and
discussed with GALDERMA, and the Parties may agree upon what, if any,
corrective actions will be implemented by GALDERMA in response to such
observations and conclusions.  GALDERMA shall
implement any such agreed-to corrective actions as soon as practicable at its
expense.  The cost of all such audits
shall be borne by ANIKA.

10.3.        Governmental
Inspection.  ANIKA hereby agrees to
notify GALDERMA promptly of any inspection of the Facility where the Licensed
Products are manufactured or any manufacturing process or procedures relating
to the Licensed Product by any relevant governmental authority to the extent
that such inspection pertains to the Licensed Products and ANIKA has sufficient
advance notice thereof.  ANIKA shall promptly,
and in any event within ten (10) Business Days, provide GALDERMA with a copy of
any correspondence or documents issued by the relevant governmental authority
relating to the inspection promptly after such correspondence or documents have
been received by ANIKA.  ANIKA agrees to
implement reasonable compliance requests pertaining to the Licensed Products as
directed by any governmental authority.

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ARTICLE XI - PRODUCT
INSPECTION; NON-CONFORMING PRODUCT

11.1.        Licensed Product
Inspection.

(a)           GALDERMA shall promptly upon receipt
inspect all shipments of the Licensed Product.

(b)           In the event that GALDERMA reasonably
believes that any portion of the Licensed Product delivered to GALDERMA by
ANIKA fails to conform with any Specification, GALDERMA may reject all or a
portion of the same by giving written notice to ANIKA within thirty (30) days
of GALDERMA’s receipt of the Licensed Product and may not so reject after
thirty (30) days from GALDERMA’s receipt of the Licensed Product.  Such notice shall evidence GALDERMA’s claims
of nonconformity of the Licensed Product with an analysis of the allegedly
nonconforming Licensed Product that shall have been prepared by GALDERMA or its
agent.  Such report shall be accompanied
with a copy of the records pertaining to such testing and a sample of the
Licensed Product from the batch analyzed. 
If the non-conformity is due to damage to the Licensed Product caused
subsequent to ANIKA’s delivery to a common carrier at ANIKA’s Shipping Point,
ANIKA shall have no liability to GALDERMA with respect thereto.

(c)           If, after its own analysis of a
sample stored by ANIKA from such lot of the Licensed Product (which such sample
ANIKA is required to retain) (the “Retained Sample”), ANIKA confirms such
nonconformity, ANIKA shall, at GALDERMA’s election (which election shall be
communicated in writing to ANIKA no later than ten (10) Business Days after
GALDERMA’s rejection of such Licensed Product pursuant to Section 11.1(b)),
either replace the nonconforming Licensed Product with a conforming Licensed
Product as soon as reasonably practicable at ANIKA’s expense or refund to
GALDERMA the entire Per Unit Price therefor; provided, however,
that, if GALDERMA elects to have ANIKA replace such nonconforming Licensed
Products, then upon all such occurrences ANIKA shall be obligated to use no
more than commercially reasonable efforts to replace such nonconforming
Licensed Products.  Except as set forth
in Section 13.2(a) of the License Agreement, the foregoing, and the rights
under this Article XI, shall be GALDERMA’s sole and exclusive remedy with
respect to such nonconformity, unless this Agreement and the License Agreement
are terminated pursuant to Section 13.2(a), in which case GALDERMA shall be
entitled to all available remedies in respect of any breach of this Agreement
or the License Agreement.  The
nonconforming Licensed Product shall either be returned to ANIKA, at ANIKA’s
request, or destroyed by GALDERMA, in each case at ANIKA’s expense.

(d)           If, after ANIKA’s own analysis, ANIKA
does not confirm such non-conformance to the Specifications or whether the
Retained Sample of the Licensed Product has such a defect, either Party may
deliver the Licensed Product to an independent Third-Party laboratory, mutually
and reasonably acceptable to both Parties, for analytical testing to confirm
the Retained Sample of the Licensed Product’s conformance to the Specifications
or the presence or absence of defects. 
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associated with such Third-Party testing
shall be at GALDERMA’s expense unless the tested Retained Sample of the
Licensed Product is deemed by such Third-Party to be materially defective or
not in compliance with the Specifications, in which case all such costs, including
reimbursement of freight and disposition costs, shall be paid by ANIKA.

(e)           Except as provided in Section
11.1(b), no inspection or testing of or payment for Licensed Product by
GALDERMA or any Third-Party agent of GALDERMA shall constitute acceptance by
GALDERMA thereof, nor shall any such inspection or testing be in lieu or
substitution of any obligation of ANIKA for testing, inspection and quality
control as provided in the Specifications or under applicable local, state, or
federal laws, rules, regulations, standards, codes or statutes.  In the event that any such shipment or batch
thereof is ultimately agreed or found to meet the Specifications, GALDERMA
shall retain such shipment or batch, and all the terms and conditions of this
Agreement and the License Agreement shall continue to apply to such Licensed
Product.

ARTICLE XII - CORRECTIVE
ACTION

12.1.        Reportable Events.  ANIKA shall be responsible for notifying all
applicable regulatory authorities of reportable events (including without
limitation complaints) involving the Licensed Product for which ANIKA receives
written notification, as required by Applicable Law.  GALDERMA shall notify ANIKA of potentially
reportable events promptly but in no event later than twenty-four (24) hours
after it receives notice of such event. 
In addition, all such notices shall be consistent with the requirements
of law in the applicable jurisdictions.

12.2.        Licensed Product
Complaints.  The Parties shall
determine which Party shall be responsible for complaint investigation by
reference to their respective responsibilities under Applicable Law.  Each Party shall promptly communicate to the
other Party by facsimile, telephone or email (and confirm any such telephone
communication as instructed at the time) any complaint received in respect of
the Licensed Product in the configuration supplied by the other Party.  To the extent applicable or known by the
notifying Party, each notification of a complaint shall contain, but not be limited
to, the lot number, dosage size, expiration date, indication for actual use,
description of circumstances involved in the failure of the Unit(s) in
question, and any other pertinent information available at that time to the
Party that receives such complaint.  The
Parties shall reasonably cooperate to address the complaint, including
providing access to employees with knowledge of facts pertinent to such
complaint and making available all relevant documentation.  For avoidance of doubt and notwithstanding
the foregoing, nothing in this Section 12.2 is intended to shift between the
Parties responsibilities under Applicable Law concerning complaints related to
Licensed Products.

12.3.        Safety or Efficacy
Concerns.  Each Party agrees to
notify the other Party as soon as practicable of any information of which it
becomes aware which relates to the safety or efficacy claims of the Licensed
Product.  Upon receipt of any such
information, the Parties shall consult with each other in an effort to arrive
at a mutually agreeable course of action that is consistent with the
obligations of the Parties under this Agreement and consistent with Applicable
Laws.

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12.4.        Licensed Product
Recalls.

(a)           If (x) the Licensed Product is
subjected to a recall by any governmental agency or (y) either Party, after
notification to, and good faith consultation in an emergency meeting of the
Steering Committee with, the other Party (including, if requested by either
Party, in one or more face-to-face meetings), elects to make a Licensed Product
recall, withdrawal or corrective action (collectively, the “Recall”),
the expense of such Recall shall be borne as follows:

(i)            If (i) it is established that the
Licensed Product was nonconforming pursuant to Article XI upon delivery by
ANIKA to a common carrier at ANIKA’s Shipping Point, or (ii) such Recall arises
from any breach by ANIKA of the provisions of this Agreement, then ANIKA,
subject to Article XIV of the License Agreement, shall hold GALDERMA harmless
and shall bear all expenses related to the Recall, including the replacement of
the recalled or withdrawn Licensed Product, which shall be replaced as soon as
reasonably practicable.

(ii)           If such Recall arises as a result of
actions or omissions on the part of GALDERMA Sellers, or from any breach by
GALDERMA Sellers of the provisions of this Agreement, then GALDERMA, subject to
Article XIV of the License Agreement, shall hold ANIKA harmless and shall bear
all costs and expenses in connection with such Recall.

(b)           If either Party elects to make a
Licensed Product Recall, the other Party shall reasonably cooperate in good
faith with the electing Party to effect such Recall.  Upon any Recall due to safety concerns
(unless such Recall arises under the circumstances described in Section
12.4(a)(ii)), GALDERMA shall be relieved of its obligations under Section
12.1(j) of the License Agreement and Article V hereof during the continuation
of such Recall solely for the country in which such Recall was effected, provided
such Recall materially interferes with GALDERMA’s ability to sell the Licensed
Products in such country.  If such safety
concern, which (for the avoidance of doubt) excludes concerns arising under the
circumstances described in Section 12.4(a)(ii), has a material adverse effect
on aggregate Net Sales of the Licensed Products in any Sales Territory (taken
as a whole), GALDERMA shall have the further right to terminate all of its
rights and obligations under this Agreement and the Supply Agreement with
respect to such Sales Territory so that thereafter the definition of Territory
shall not include such Sales Territory for all purposes under this Agreement
and the Supply Agreement.

ARTICLE XIII - INSURANCE

13.1.        Each Party agrees to
procure and maintain in full force and effect during the Term valid and
collectible insurance policies in connection with its activities as
contemplated hereby, which policies shall be in compliance with Exhibit B
attached hereto, provided that GALDERMA 
shall procure such insurance with respect to the United States as
promptly as practicable (and in any event within two (2) months following the
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other Party’s
request, each Party shall provide the other with a certificate of coverage or
other written evidence reasonably satisfactory to the requesting Party of such
insurance coverage.

ARTICLE XIV -
COORDINATION WITH LICENSE AGREEMENT

14.1.        Article VII
(Publication; Transfer of Data; Confidentiality; Cooperation), Article X
(Representations and Warranties), Article XIII (Term and Termination), Article
XIV (Indemnification), Article XVI (Dispute Resolution) and Article XVII
(Miscellaneous) of the License Agreement are incorporated into this Agreement
by reference to such articles.  For
avoidance of doubt, the incorporation of Article XIII (Term and Termination) of
the License Agreement into this Agreement by reference means that this
Agreement is coterminous with the License Agreement.

ARTICLE XV - GUARANTY

15.1.        PARENT irrevocably guarantees the full and timely
performance by GALDERMA, and each of its successors and assigns that are
Affiliates of PARENT, of all its obligations under this Agreement, as now or
hereafter amended, restated, supplemented or otherwise modified from time to
time, in favor of ANIKA and each of its successors and assigns, and hereby
undertakes that if GALDERMA, or its successors or assigns, shall in any respect
fail to perform and observe all of the terms, provisions, conditions and
stipulations of this Agreement (the “Obligations”), PARENT shall perform
or have performed all such Obligations as required by this Agreement without
any requirement that ANIKA first proceed against GALDERMA or resort to any
other means to collect or receive the benefit of the Obligations.  Claims hereunder may be made on one or more
occasion.  The obligations of PARENT
under this Article XV shall be primary, absolute and unconditional obligations
of PARENT and shall not be subject to any counterclaim, set-off, deduction, diminution,
abatement, recoupment, suspension, deferment, reduction or defense based upon
any claim PARENT may have against GALDERMA.

 

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1.1.          IN WITNESS WHEREOF,
the undersigned have duly executed and delivered this Agreement as a sealed
instrument effective as of the date first above written.

	
  

  	
   

  	
   

  
	
  GALDERMA S.A.

  	
   

  	
  ANIKA THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Humberto C. Antunes

  	
   

  	
  By:

  	
   

  	
  Charles H. Sherwood

  
	
   

  	
   

  	
  Name: Humberto C. Antunes

  	
   

  	
   

  	
   

  	
  Name: Charles H. Sherwood, Ph.D

  
	
   

  	
   

  	
  Title: President and CEO

  	
   

  	
   

  	
   

  	
  Title: President and CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GALDERMA PHARMA S.A.

  	
   

  	
   

  	
   

  	
   

  
	
  (with respect to Article 15 only)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Humberto C. Antunes

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Humberto C. Antunes

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: President and CEO

  	
   

  	
   

  	
   

  	
   

  

 

 

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EXHIBIT A

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EXHIBIT B

Insurance
Requirements

Each Party shall procure and maintain, at all times,
and at its own expense, until final completion of the work covered by this
Agreement, and during the time period following termination if either Party is
required to return or perform additional work, for any reason whatsoever, the
types of insurance(s) specified below.

A.            Commercial General Liability

Coverage on a Commercial General Liability Occurrence
Coverage Form (or equivalent) with limits of not less than $1,000,000 for each
occurrence, $5,000,000 products/completed operations aggregate, $1,000,000
personal injury/advertising injury aggregate and $2,000,000 general
aggregate.  Each Party will endeavor to
inform the other Party of any exclusions or amendments to the policy form which
would result in direct impact to such other Party.  Each Party’s policy shall be specifically
endorsed to include the other Party, its subsidiaries, and its directors,
officers and employees, as an Additional Insured, as respects negligence caused
by the first Party as a result of this Agreement.  Each Party shall supply the other Party with
proof of the above insurance and a copy of the policy(ies) as promptly as practicable
after the signing of this Agreement, but a Party’s failure to demand such proof
or forms shall not waive such Party’s rights to such coverage as specified
herein.

B.            Excess Liability

Umbrella Liability coverage with a limit of liability
no less than $5,000,000 each occurrence, $5,000,000 aggregate.

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