INTERNATIONAL

DISTRIBUTION AGREEMENT

        THIS AGREEMENT is made as of the 14th day of June 1996 by and between BIOMATRIX, INC., a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 65 Railroad Avenue, Ridgefield, New Jersey 07657, U.S.A. ("Biomatrix") and COLLAGEN CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 2500 Faber Place, Palo Alto, California 94303, U.S.A. (the "Distributor").

        WHEREAS, Biomatrix is engaged in the development and manufacture of the Agreement Product (as hereinafter defined);

        WHEREAS, the Distributor desires to enter into a distribution agreement and be appointed the exclusive distributor (even to Biomatrix) of the Agreement Product and any Improved Agreement Product(s) in the Territory (as such terms are hereinafter defined), and Biomatrix is willing to so appoint the Distributor on the terms and subject to the conditions set forth herein; and

        WHEREAS, the Distributor desires to purchase from Biomatrix, and Biomatrix desires to sell to the Distributor, the Distributor's orders of the Agreement Product and any Improved Agreement Product(s) in the Territory on the terms and subject to the condition set forth herein.

        NOW, THEREFORE, in consideration of the premises and of the mutual covenants of the parties hereto, it is hereby agreed as follows:

        1.    Definitions and Interpretation.    

        1.1  In this Agreement, the following words and expressions shall have the following meanings:

        "Affiliate" shall mean, with respect to any party, any Person which, directly or indirectly, is controlled by, controls or is under common control with such party. For purposes of this definition, the term "control" (including with correlative meanings, the terms "controlled by" and "under common control with") shall mean, with respect to any Person, the direct or indirect ownership of more than fifty percent (50%) of the voting or income interest in such Person or the possession otherwise, directly or indirectly, of the power to direct the management or policies of such Person.

        "Agreement Product" shall mean the one product made of hylan B and called by Biomatrix Hylaform®, the specifications for which are set forth on Exhibit A, for use in the correction of wrinkles and depressed scars.

        "Agreement Product Specifications" shall mean the specifications for the Agreement Product set forth in Exhibit A, as such specifications may be modified or supplemented by Biomatrix from time to time in accordance with Product License Approvals or to reflect any Improved Agreement Product(s).

        "Agreement Year" shall mean, with respect to a country or Region, as applicable, in the Territory, the twelve (12) month period commencing on the date of first commercial sale of the Agreement Product in such country or Region, as applicable, and each separate successive twelve (12) month period thereafter.

        "Contract Quarter" shall mean, for sales of Agreement Product in a country or Region, as applicable in the Territory, the period commencing with the Distributor's first commercial sale of the Agreement Product in such country or Region, as applicable, and ending on the first to occur of March 31, June 30, September 30 and December 31, as applicable, and each three (3) month period thereafter throughout the term of this Agreement.



        "Dermal Tissue Augmentation Products" shall mean biomaterial(s) that are [***].

        "Dollars" and "$" shall mean the lawful currency of the United States of America.

        "Effective Date" shall mean June 17, 1996.

        "EU Countries" shall mean, collectively, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and United Kingdom.

        "European Territory" shall mean, collectively, the EU Countries, Switzerland, Norway, Liechtenstein and Iceland.

        "Formula Price" shall mean an amount equal to [***] of the Agreement Product by Distributor or an Affiliate of Distributor, calculated on a [***] basis, provided that if the [***] the Agreement Product in a Region [***], then the Formula Price for such Region shall mean an amount equal to [***] of the Agreement Product on a [***] basis by Distributor or an Affiliate of Distributor in such Region. [***] the Formula Price shall mean an amount equal to [***] by Distributor or an Affiliate of Distributor, [***], for or an [***], including without limitation [***].

        "Improved Agreement Product(s)" shall mean (i) any modification of the Agreement Product (made entirely from hylan B) regarding the formulation of hylan B in the Agreement Product, that is changes of concentration of the polymer or other changes in the Agreement Product Specifications, whether or not requiring new regulatory approval in the EU Countries or in the United States, and (ii) any modifications or changes related to the packaging of the Agreement Product, including the syringe used, mode of application or dosage.

        "Incremental Royalties" shall mean that term as defined in Section 8.2.

        "Initial Term" shall mean that term as defined in Section 3.2.

        "Launch" shall mean, with respect to a country in the Territory, the commencement by Distributor of sales of the Agreement Product in commercial quantities for use in such country. Such Launch shall be made with respect to each country in the Territory in accordance with the dates set forth on Exhibit B.

        "Minimum Price" shall mean an amount equal to [***] for each Treatment Syringe, [***], then the Minimum Price payable in such Region [***] shall equal [***] for each Treatment Syringe.

        "Net Retail Sales" shall mean, with respect to sales of a Dermal Tissue Augmentation Product in a country in the Territory, the aggregate gross price invoiced for retail sales of such product during a period in such country to unaffiliated third-party purchasers [***]. It is Biomatrix's understanding that the foregoing definition is consistent with how the Distributor reports its sales in its audited financial statements.

        "New Products" shall mean [***].

        "Patents" shall mean Letters Patent or similar statutory rights relating to any Agreement Product and any Improved Agreement Product(s) (including any continuation-in-part, continuation or division thereof or substitute thereof), and patent applications which are pending as of the Effective Date, in each case as set forth in Exhibit C, together with any supplementary or complementary protection certificates therefor if and when such are granted.

        "Person" shall mean an individual, a corporation, limited liability company, a partnership, a trust, an unincorporated organization or a government or any agency or political subdivision thereof.

        "Product License Approvals" shall mean those regulatory approvals required for the importation, promotion, marketing and sale of the Agreement Product and any Improved Agreement Product(s) in the Territory (including any reimbursement or pricing approvals).

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        "Region" shall mean any one of the following countries or groups of countries: [***].

        "Supply Forecast" shall mean that term as defined in Section 7.3(b).

        "Territory" shall mean, collectively, the EU Countries, Switzerland, Norway, Liechtenstein, Iceland, Australia, New Zealand, Japan, Israel, Argentina, Brazil, Mexico, Chile, Columbia, Cyprus, Lebanon, Turkey and Canada and any countries added hereto pursuant to Section 2.4.

        "Trademarks" shall mean (i) the trademark Hylaform®, the details of which are described in Exhibit C, and (ii) any other trademarks, as may be agreed upon in writing from time to time by the parties hereto for use by the Distributor in connection with the promotion, marketing and sale of the Agreement Product and any Improved Agreement Product(s) under this Agreement.

        "Treatment Syringe" shall mean a ready-for-injection 1.0cc syringe of the Agreement Product.

        "United States Consumer Price Index" shall mean the Consumer Price Index, All Items, United States, as published by the Bureau of Labor Statistics.

        1.2.  In this Agreement, unless the context otherwise requires:

        2.    Appointment; Best Efforts; Exclusivity.    

        2.1.    Appointment.    

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        2.2.    Acceptance of Obligations; Best Efforts.    The Distributor hereby accepts the appointment described in Section 2.1 and hereby agrees to use its best efforts at all times during the term hereof to register, promote, market, sell and distribute the Agreement Product and any Improved Agreement Product(s) in the Territory. [***].

        2.3.    Conversion to Non-Exclusive Distributorship.    In the event that (i) in any Agreement Year after and including the third Agreement Year or (ii) from, after and including the first year of the Distributor acquiring and/or commercializing a New Product pursuant to Section 10.1(b) (and so long as (i) no force majeure condition of the Distributor exists at such time pursuant to Section 20, (ii) Biomatrix has met its supply obligations under Section 7.4 and (iii) Distributor is able to lawfully sell the Agreement Product and any Improved Agreement product(s) in each of the countries within any such Region) the Distributor's (or its Affiliates' or Subdistributors', as applicable) Net Retail Sales of the Agreement Product and any Improved Agreement Product(s) in a Region comprise less than [***] of its Net Retail Sales of [***], including the Agreement Product and any Improved Agreement Product(s), [***] [***]. Upon conversion of Distributor's rights to a non-exclusive distribution arrangement in any Region, Biomatrix shall have the right to distribute the Agreement Product and Improved Agreement Product and/or engage another distributor for such Region. Biomatrix will give Distributor [***] days notice prior to appointing a third party distributor for such Region. From and after the date of a conversion to a non-exclusive distribution arrangement within a Region, the Distributor shall lose its rights hereunder to register, promote, market, sell and distribute within such Region any Improved Agreement Product(s) commercialized on or after such date. Notwithstanding the foregoing, the Distributor shall retain the exclusive rights in all trademarks under which the Distributor launched the Agreement Product or any Improved Agreement Product(s) in such Region. Upon conversion of Distributor's rights to a non-exclusive distribution arrangement in any Region in the

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European Territory, the arrangements between the parties under this Agreement shall no longer be governed by this Agreement and such Region shall no longer be deemed a part of the Territory, but rather, such Region shall become the subject of a new agreement between the parties upon the same terms and conditions set forth in this Agreement. Upon such conversion to a non-exclusive arrangement, the parties agree to execute such further documents and agreements as are necessary in order to give effect to the provisions of this Section.

        2.4.    Expansion of Territory.    One or more countries may be added to the Territory from time to time after the Effective Date by mutual written agreement of the parties hereto, conditional upon the satisfactory completion of the necessary due diligence in such country and the satisfaction of Biomatrix with the proposed arrangements for the registration, promotion, marketing, sale and distribution of the Agreement Product and any Improved Agreement Product(s) by the Distributor in such country. Biomatrix agrees to discuss the appointment of Distributor or one of its subdistributors prior to appointing a third party distributor of the Agreement Product in any additional country.

        3.    Term and Termination.    

        3.1.    Effective Date.    This Agreement shall take effect as of the Effective Date

        3.2.    Term.    

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        3.3.    Inventory.    

        3.4.    Insolvency.    This Agreement may be immediately terminated as to the entire Territory by either party, upon giving written notice to the other party, in the event that the other party shall become insolvent or be declared bankrupt by a court of competent jurisdiction or shall be the subject of any reorganization (other than a corporate reorganization effected in the ordinary course of business and not arising out of any insolvency) or winding up, receivership or dissolution, bankruptcy or liquidation proceeding, or any proceeding or action similar to one or more of the above, in which case termination shall be effective upon such written notice. The failure of either party to give notice of termination upon obtaining knowledge of any such event shall not be interpreted as a waiver of such party's rights under this Section 3.4, and such party reserves the right to exercise any such rights at any time after the occurrence of any such event.

        3.5.    Breach.    This Agreement may be terminated as to the entire Territory by either party if the other party shall breach any of its payment obligations hereunder or with respect to any Region if

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Distributor (or its Affiliates or Subdistributors, as applicable) shall commit a material breach of any of its warranties, covenants, conditions, obligations or agreements contained herein with respect to such Region, provided that such breach shall continue for a period of thirty (30) days after written notice thereof and provided further that such termination shall be immediately effective upon further written notice to that effect to the breaching party after its failure to cure such breach within such applicable notice period. For avoidance of doubt, the parties agree that if a Launch is not reached with respect to a country within thirty days after the time period set forth on Exhibit B, then either party may terminate this Agreement with respect to such country (provided that such failure to reach a Launch is not caused by a force majeure condition of the Distributor or Biomatrix's failure to meet its supply obligations under Section 7.4).

        3.6.    Certain Rights Upon Termination.    Upon termination of this Agreement for any reason whatsoever, Biomatrix shall have the following rights, or if such termination is as to a country in the Territory in accordance with the provisions of this Agreement, Biomatrix shall have the following rights in such country:

        3.7.    Effects of Termination.    

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        3.8.    Waiver.    The Distributor (for itself and on behalf of its Affiliates and Subdistributors) hereby waives, to the extent it is able to do so under the law of every country in the Territory and other applicable law, any statutory rights it may have or acquire in respect of the termination of the relationship established hereby pursuant to the terms hereof, and agrees that the rights available to it hereunder in the event of such termination are adequate and reflect the agreement of the parties. The Distributor shall not have any right to claim any indemnity for goodwill or lost profits or any damages arising from the rightful termination of this Agreement in accordance with the terms hereof.

        4.    Payments.    All payments hereunder shall be made in Dollars. Payments to Biomatrix shall be wired to an account designated by Biomatrix and the costs of any such remittance shall be borne by the Distributor. All amounts (except for the Minimum Price, which shall be denominated in Dollars) denominated in another currency shall be converted to Dollars using the average month-end rates of exchange for the relevant period as published in The Wall Street Journal (or, if The Wall Street Journal shall no longer publish such exchange rates, as determined by a method that is mutually agreed upon in writing by the parties).

        5.    Withholding.    All payments to be made by the Distributor under this Agreement shall be made in full, free and clear of and without any deduction of or withholding for or on account of any taxes levied in any country of the Territory or elsewhere; provided that if the Distributor shall be required by law to make any deduction or withholding from any payment to Biomatrix then:

        6.    Trademarks; Agreement Product Marking; Promotional Information.    

        6.1.    Trademarks.    Subject to the provisions of Section 3.6, Biomatrix hereby licenses to the Distributor the right to use, and hereby requires solely in association with the independent sale by the Distributor of the Agreement Product and any Improved Agreement Products the use of, the Trademarks in the Territory during the term of this Agreement. The Distributor warrants that it shall not use any of the Trademarks at any time outside the Territory or use any of the Trademarks for any products other than the Agreement Product and any Improved Agreement Product(s) within the Territory. The Distributor shall not use a trademark or other mark (other than a Trademark) in connection with its distribution of the Agreement Product and any Improved Agreement Products unless and until it has been agreed upon in writing by each of the parties and become a Trademark as defined herein. Biomatrix shall prosecute, maintain and defend the Trademarks throughout the Term of this Agreement in all countries in the Territory in which the Distributor, any of its Affiliates or any

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Subdistributor is selling the Agreement Product and/or any Improved Agreement Product. The parties shall execute a short form Trademark assignment agreement to the extent that it is necessary to record the Trademark license under this Section 6.1 in any country whose laws require any such registration.

        6.2.    Termination of Right to Use Trademarks.    Subject to the sell-out right of Section 3.3(b) and except as otherwise provided in Section 3.6, upon termination of this Agreement, the license to use the Trademarks in the Territory shall terminate, and the Distributor unconditionally agrees promptly to take all necessary action and execute and deliver to Biomatrix all necessary documents and instruments to remove the Distributor as a registered user and/or a recorded licensee of the Trademarks. In the event that the Distributor fails promptly upon written request by Biomatrix to comply with any of its agreements in the preceding sentence of this Section 6.2, the Distributor hereby irrevocably consents to Biomatrix's taking any action necessary to give effect to such agreements.

        6.3.    Notice.    Each party hereto agrees promptly to notify the other in writing of any infringements or imitations of the Trademarks by third parties which may come to its attention.

        6.4.    Labelling and Promotional Materials; Approved Use of Product.    

        6.5.    Legend.    Subject to applicable laws and regulations in the Territory, all relevant packaging and promotional material for the Agreement Product and any Improved Agreement Product(s) used or sold by the Distributor (and its Affiliates and Subdistributors) shall contain (i) all applicable markings needed to keep the Trademarks enforceable throughout the Territory as reasonably specified by Biomatrix to the Distributor and (ii) a legend which shall be displayed in a reasonably conspicuous manner on all packaging of such Agreement Product and any Improved Agreement Product(s) containing the corporate identification logo of Biomatrix and indicating that such product has been developed and manufactured by Biomatrix, Inc., and its affiliates, 65 Railroad Avenue, Ridgefield, New Jersey, 07657 U.S.A.

        6.6.    Promotional Support.    Biomatrix and the Distributor (and its Affiliates and Subdistributors) shall provide to each other on an ongoing basis and without charge (to the extent not prevented by law or contract from doing so) all medical information relating to the Agreement Product and any Improved Agreement Product(s) (including summary data from studies, clinical trials and the like as

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well as information regarding adverse events associated with the use of the Agreement Product), the proceedings of all symposia on the Agreement Product and any Improved Agreement Product(s) and all promotional information that is available to such party relating to the Agreement Product and any Improved Agreement Product(s). In addition, Biomatrix and the Distributor (and its Affiliates and Subdistributors) shall provide each other with access to such primary data and information in its possession as the other may reasonably request regarding the results of the studies contained in such summary data referred to above.

        6.7.    Joint Coordinating Committee.    Upon the execution of this Agreement, Biomatrix and the Distributor shall establish a joint coordinating committee (the "Committee") to review all matters relating to product labelling, product claims, regulatory matters or clinical trials. The Committee shall consist of an equal number, not to [***], of voting representatives from each of Biomatrix and the Distributor and shall meet [***]. In the event of a dispute between representatives of Biomatrix and the Distributor on the Committee, a senior representative of each such party shall be appointed to resolve such dispute, and in the event such senior representatives are unable to resolve the matter, Biomatrix's view shall prevail over the Distributor's.

        6.8.    Recalls of the Agreement Product.    

        6.9.    Product Vigilance System.    The Distributor shall be responsible for maintaining medical device vigilance systems, as established for the Agreement Product by Biomatrix, and shall promptly provide Biomatrix with notice of all product complaints, including medical complaints. Biomatrix shall be solely responsible for processing, analyzing and, if necessary, reporting medical complaints to regulatory authorities. The Distributor shall provide all necessary support to Biomatrix for carrying out such activities.

        7.    Supply of Agreement Product.    

        7.1.    General; Fee.    

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        7.2.    Price; Adjustment; Reports; Payment.    

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        7.3.    Sales and Supply Forecasts; Accounts.    

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        7.4.    Shipment and Delivery; Packaging.    

        7.5.    Title.    Legal title to all quantities of the Agreement Product and any Improved Agreement Product(s) sold hereunder shall remain in Biomatrix until delivery of the Agreement Product and any Improved Agreement Product(s) to Distributor or its agent and acceptance thereof and upon such delivery and acceptance the title to such Agreement Product and any Improved Agreement Product(s) shall, without further action, be transferred to and vested in the Distributor.

        7.6.    Risk of Loss.    Biomatrix shall bear all risk of loss of, or damage to, all units of the Agreement Product and any Improved Agreement Product(s) to the extent the same is in its possession or the possession of its Affiliates, nominees or agents. The Distributor shall bear all risk of loss of, or damage to, all units of the Agreement Product and any Improved Agreement Product(s) after delivery to a common carrier for shipment to the Distributor in accordance with Section 7.4.

        7.7.    Acceptance.    [***]. All units of the Agreement Product and Improved Agreement Products delivered to Distributor pursuant to this Agreement shall be [***], the specifications listed in Exhibit A. Any non-conformity which arises after acceptance by Distributor directly associated with product specification shall be the responsibility of Biomatrix unless such non-conformity is due to improper storage conditions subsequent to delivery of the Agreement Product. All other non-conformities of the

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Agreement Product shall be the responsibility of the Distributor. Biomatrix and the Distributor agree to consult with each other in order to resolve the discrepancy between each other's determinations. If such consultation does not resolve the discrepancy, the parties agree to nominate a reputable independent laboratory, acceptable to both parties, that shall carry out tests on representative samples taken from such shipment, and the results of such tests shall be binding on the parties. Biomatrix shall at its expense replace any such shipment to the extent that it does not conform to the Agreement Product Specifications. All defective units of the Agreement Product or any Improved Agreement Product(s) shall be returned to Biomatrix at the address set forth in Section 23 of this Agreement, accompanied or preceded by a reasonably detailed statement of the claimed defect or non-conformity and proof of date of purchase, and packed and shipped according to instructions provided by Biomatrix. The shipping costs of any such returned units shall be borne by Biomatrix, unless such units are determined not to be defective under the terms of this Agreement, in which case such shipping costs shall be borne by the Distributor.

        7.8.    Purchase Orders.    The provisions of this Agreement shall prevail over any inconsistent statement or provisions contained in any document related to this Agreement passing between the parties hereto including, but not limited to, any purchase order, acknowledgment, confirmation or notice.

        7.9.    Limited Warranty; Limitation on Liability.    

        Biomatrix represents and warrants that the Agreement Product and any Improved Agreement Product(s) supplied to the Distributor hereunder shall:

        THE FOREGOING WARRANTY IS THE SOLE AND EXCLUSIVE WARRANTY GIVEN BY BIOMATRIX WITH RESPECT TO THE AGREEMENT PRODUCT, AND BIOMATRIX GIVES AND MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, OTHER THAN THE FOREGOING. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO IMPLIED WARRANTY OF MERCHANTABILITY, NO IMPLIED WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE, AND NO IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE IS GIVEN OR MADE BY BIOMATRIX OR SHALL ARISE BY OR IN CONNECTION WITH ANY SALE OR PROVISION OF THE AGREEMENT PRODUCT BY BIOMATRIX, OR THE DISTRIBUTOR'S (OR ITS AFFILIATES' OR SUBDISTRIBUTORS') USE OR SALE OF THE AGREEMENT PRODUCT, OR BIOMATRIX'S AND/OR THE DISTRIBUTOR'S (OR ITS AFFILIATES' OR SUBDISTRIBUTORS') CONDUCT IN RELATION THERETO OR TO EACH OTHER. NO REPRESENTATIVE OF BIOMATRIX IS AUTHORIZED TO GIVE OR MAKE ANY OTHER REPRESENTATION OR WARRANTY OR TO MODIFY THE FOREGOING WARRANTY IN ANY WAY.

        The limited warranty set forth in this Section 7.9 does not apply to any non-conformity of the Agreement Product or any Improved Agreement Product(s) resulting from (a) repair or alteration by any party other than Biomatrix or its Affiliates. (b) misuse, negligence, abuse, accident, mishandling or storage in an improper environment by an party other than Biomatrix or its Affiliates, or (c) use, handling, storage or maintenance other than in accordance with instructions and recommendations provided by Biomatrix or its Affiliates.

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        Biomatrix's obligation with respect to units of the Agreement Product and any Improved Agreement Product(s) which do not meet the warranty contained herein is limited to replacement of such units of the Agreement Product or Improved Agreement Product(s) as applicable, provided that such units are returned to Biomatrix accompanied by a reasonably detailed statement of the claimed defect or non-conformity and proof of date of purchase, and packed and shipped according to instructions provided by Biomatrix, and only if, upon examination by Biomatrix, such units of the Agreement Product or the Improved Agreement Product(s) are determined to have been defective under the terms of this Agreement.

        BIOMATRIX'S LIABILITY, AND THE EXCLUSIVE REMEDY, IN CONNECTION WITH THE SALE OR USE OF THE AGREEMENT PRODUCT AND ANY IMPROVED AGREEMENT PRODUCT(S) (WHETHER BASED ON CONTRACT, NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY OR ANY OTHER LEGAL THEORY), SHALL BE STRICTLY LIMITED TO BIOMATRIX'S OBLIGATIONS AS SPECIFICALLY AND EXPRESSLY PROVIDED IN THIS SECTION 7.9 AND IN SECTION 9 BELOW. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 7.9 AND IN SECTION 9 BELOW, BIOMATRIX SHALL HAVE NO LIABILITY, OBLIGATION OR RESPONSIBILITY OF ANY KIND, IN ANY WAY OR TO ANY EXTENT, FOR ANY DAMAGES, LOSSES, COSTS, EXPENSES OR LIABILITIES FOR ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE AGREEMENT PRODUCT AND ANY IMPROVED AGREEMENT PRODUCT(S) OR THE PERFORMANCE THEREOF, OR ARISING IN ANY WAY IN CONNECTION WITH THE PURCHASE OR USE OR INABILITY TO USE THE AGREEMENT PRODUCT OR ANY IMPROVED AGREEMENT PRODUCT(S), EVEN IF BIOMATRIX HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WHATSOEVER SHALL BIOMATRIX HAVE ANY LIABILITY, OBLIGATION OR RESPONSIBILITY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING IN ANY WAY IN CONNECTION WITH THE AGREEMENT PRODUCT OR ANY IMPROVED AGREEMENT PRODUCT(S) OR THEIR SALE OR USE.

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        8.    Royalty Payments by Distributor.    

        8.1.    Royalties for Sales of Dermal Tissue Augmentation Products.    The Distributor shall pay to Biomatrix a royalty of [***] of the Net Retail Sales by the Distributor and its Affiliates and Subdistributors of all Dermal Tissue Augmentation Products (other than sales of the Agreement Product and any Improved Agreement Product(s)) in all countries in the Territory on a country-by-country basis, including any countries that are added to the Territory after the Effective Date, [***]. Such royalty shall commence with respect to each country in the Territory at the earlier of (a) the Launch of the Agreement Product in such country or (b) the Launch date for such country set forth on Exhibit B; provided that if a Launch is delayed due to Biomatrix's failure to meet its supply obligations under Section 7.4, due to a force majeure condition of Distributor or if the Distributor is not able to lawfully sell the Agreement product in such country, such royalty with respect to any such country shall not commence until Biomatrix meets its supply obligations, Distributor is able to lawfully sell the Agreement Product in such country, or until such force majeure condition ceases. Such royalty shall be paid by not later than [***] after the end of each Contract Quarter.

        8.2.    Incremental Royalties.    The Distributor shall pay to Biomatrix the following annual royalties (the "Incremental Royalties") on the Distributor's and its Affiliates' and Subdistributors' total incremental increases in Net Retail Sales of all Dermal Tissue Augmentation Products (including the Agreement Product and any Improved Agreement Product(s)), in each country in the Territory based on the incremental increases, if any, in Net Retail Sales of all Dermal Tissue Augmentation Products in such country in each Agreement Year over a base year amount comprised of Net Retail Sales of Dermal Tissue Augmentation Products in the twelve (12) months immediately preceding the first commercial sale of either the Agreement Product or any Improved Agreement Product(s) in such country:

Sales Over
Increase in Total
Base Year Amount

  Royalty on Total
Incremental Sales

[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]

The Distributor's obligation to pay the Incremental Royalties shall cease with respect to a country in the Territory in the event that the Distributor's rights to sell, distribute, market and promote the Agreement Product and any Improved Agreement Product have become non-exclusive with respect to such country pursuant to Section 2.3 or have terminated pursuant to Section 3.2(d). The Incremental Royalty shall be paid by not later than [***] after the end of each Agreement Year. For the avoidance of doubt, if the Distributor had no sales of any Dermal Tissue Augmentation Products in a country prior to the first commercial sale of either the Agreement Product or any Improved Agreement Product in such country, the Distributor shall be obligated to pay a [***] royalty on Net Retail Sales of all Dermal Tissue Augmentation products sold after such first commercial sale.

        9.    Indemnification; Confidentiality; Public Announcement.    

        9.1.    Indemnification from the Distributor.    Subject to the provisions of Section 9.3, the Distributor shall defend, indemnify and hold Biomatrix and its Affiliates and their respective directors, officers, agents and employees harmless from and against any and all liabilities, claims, damages and expenses

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(including without limitation actual court costs and reasonable attorneys' fees regardless of outcome) resulting from claims of third parties or arising out of:

provided, however, that upon Biomatrix being advised of any assertions of any such third party claims or suits or upon the bringing or filing of such claims or suits by any third party against Biomatrix, Biomatrix will promptly notify the Distributor thereof and Biomatrix may, at its option, permit the Distributor's attorneys to handle and control the defense of such claims or suits at the Distributor's cost and Biomatrix will co-operate with the Distributor in the defense thereof. The parties agree that there shall be no settlements, whether agreed to in court or out of court, without the prior written consent of the indemnifying party.

        9.2.    Indemnification from Biomatrix.    Subject to the provisions of Section 9.3, Biomatrix shall defend, indemnify and hold the Distributor and its Affiliates and their respective directors, officers, agents and employees harmless from and against any and all liabilities, claims, damages and expenses (including without limitation actual court costs and reasonable attorneys' fees regardless of outcome) resulting from claims of third parties arising out of:

provided, however, that upon the Distributor being advised of any assertions of any such third party claims or suits or upon the bringing or filing of such claims or suits by any third party against the Distributor, the Distributor will promptly notify Biomatrix thereof and, at Biomatrix's cost, permit Biomatrix's attorneys to handle and control the defense of such claims or suits and will co-operate with Biomatrix in the defense thereof. The parties agree that there shall be no settlements, whether agreed to in court or out of court, without the prior written consent of the indemnifying party.

        9.3.    Limitation on Liability.    

        NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN SECTIONS 9.1 AND 9.2 ABOVE, OR ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT (INCLUDING THE FAULT, NEGLIGENCE OR STRICT LIABILITY OF EITHER PARTY) SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES OTHER THAN TO THE EXTENT NECESSARY TO REIMBURSE SUCH OTHER PARTY FOR DAMAGES ACTUALLY PAID TO A NON-AFFILIATED THIRD PARTY, PROVIDED THAT SUCH DAMAGES ARE OTHERWISE COVERED BY THE PROVISIONS OF SECTION 9.1 OR SECTION 9.2, AS THE CASE MAY BE.

        9.4.    Confidential Information.    All information acquired by either party (the "Recipient") from the other party or any of its Affiliates (the "Discloser") during the term of this Agreement or prior to the Effective Date, relating directly or indirectly to the present or potential business, operations, corporate, technical or financial situation of the Discloser, or to manufacturing know-how, patents, data, test results, techniques, processes, procedures, raw materials, dealer, supplier and customer lists, pre-clinical and clinical protocols or any improvements thereof of the Discloser ("Confidential Information") is confidential, and shall be held in trust by the Recipient for the exclusive benefit of the Discloser. Unless otherwise agreed to in writing by the Discloser, the Recipient shall not at any time, either during or subsequent to the term of this Agreement, use for itself (other than in accordance with the terms of this Agreement) or any other Person, or disclose or divulge to any Person, other than to

17



those of its employees and advisors and Affiliates who require the same for the purposes hereof and who are bound by the same obligations of confidentiality, non-disclosure and non-use as set forth herein, any Confidential Information or any other confidential or proprietary information of the Discloser of which the Recipient may acquire knowledge; provided, however, that the confidentiality, non-disclosure and non-use provisions contained in this Section 9.4 shall not apply to any information or data to the extent that the Recipient:

Confidential Information shall be immediately returned to the Discloser upon termination of this Agreement, along with any copies, reproductions, digests, abstracts or the like of all or any part thereof in the Recipient's possession or under the Recipient's control, and upon such return any computer entries or the like relating thereto shall, to the extent legally permissible, be destroyed. Such return (and destruction) will not affect the Recipient's obligations hereunder which shall survive indefinitely. Notwithstanding anything herein to the contrary, the provisions of this Section 9.4 shall be subject to Biomatrix's rights under Section 3.6.

        9.5.    Public Announcement.    Except as shall be necessary for governmental notification purposes or to comply with applicable laws and regulations, and except as otherwise agreed to by the parties hereto in writing, the parties agree to keep the existence of this Agreement, and the transactions contemplated hereby, strictly confidential. In the event that a party must file this document or otherwise disclose any of its subject matter pursuant to public filing requirements, such party shall seek confidential treatment of those portions of the Agreement as the parties shall mutually agree upon; provided, however, that the Distributor must provide written notice to Biomatrix no later than June 30, 1996 of those portions of the Agreement for which the Distributor requests confidential treatment. The parties shall agree upon the text of an initial public announcement relating to the transactions contemplated by this Agreement as soon as possible. Any subsequent public announcements regarding this Agreement or the transactions contemplated herein shall also be agreed upon in writing between the parties prior to any release thereof.

        10.    New Products.    

        10.1 [***], Distributor shall not commercialize nor begin the commercialization process with respect to or acquire any New Product anywhere in the Territory or the United States, either independently or in conjunction with one or more third parties, unless and until the following conditions have been satisfied:

        In the event that Biomatrix fails to accept any written offer made by Distributor pursuant to this Section 10.1 within [***] of Biomatrix's receipt thereof, then Distributor, subject to the terms of this Agreement, shall have the right to independently or with other parties develop and/or commercialize any New Product to which such written offer relates; provided, however, that any such New Product

18


does not infringe upon any of the intellectual property rights of Biomatrix. Distributor shall not be required to make the written offer to Biomatrix set forth in Section 10.1(a) above only in the event and to the extent that it is prevented from doing so due to patented proprietary rights of a third party.

        10.2 [***]

        10.3    Nothing in this Section 10 shall be construed, by implication or otherwise, (i) to effect any sale or license of proprietary Biomatrix technology (including any New Products), (ii) to grant any license relating to Biomatrix's proprietary methods of formulating, fabricating and manufacturing the Agreement Product, Improved Agreement Products or New Products, or (iii) to grant Distributor any rights in or to any proprietary technology or Patents or Trademarks of Biomatrix.

        11.    Representations of Biomatrix.    Biomatrix represents, warrants and covenants as follows:

        11.1.    It is a corporation duly organized and validly existing under the laws of the State of Delaware with the full power to conduct its affairs as currently conducted and contemplated hereunder. All necessary action has been taken to enable it to execute and deliver this Agreement and perform its obligations hereunder.

        11.2.    This Agreement is a valid and binding obligation of Biomatrix enforceable in accordance with its terms. Biomatrix has the unencumbered right to enter into this Agreement and to fulfill its duties hereunder. It is not and will not become a party to any agreement in conflict herewith. Accordingly, Biomatrix has the right to appoint the Distributor as the exclusive distributor of the Agreement Product in the Territory in accordance with the terms of this Agreement and such appointment will not constitute a breach of any existing contractual or other arrangements between Biomatrix and any Affiliated or non-Affiliated third party, nor shall it infringe the rights of any Affiliated or non-Affiliated third party.

        11.3.    No approval, consent, order, authorization or license by, giving notice to or taking any other action with respect to, any governmental or regulatory authority is required in connection with the execution and delivery of this Agreement by Biomatrix and the performance by Biomatrix of its obligation hereunder.

        12.    Representations of the Distributor.    The Distributor represents, warrants and covenants as follows:

        12.1    It is a corporation duly organized and validly existing under the laws of Delaware with full power to conduct its affairs as currently conducted and contemplated hereunder. All necessary action has been taken to enable it to execute and deliver this Agreement and perform its obligations hereunder.

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        12.2.    This Agreement is the Distributor's valid and binding obligation enforceable in accordance with its terms. The Distributor has the unencumbered right to enter into this Agreement and to fulfill its obligations hereunder. It is not and will not become a party to any agreement in conflict herewith. Accordingly, the Distributor has the right to act as the exclusive distributor of the Agreement Product in the Territory in accordance with the terms of this Agreement and the performance of its obligations hereunder will not constitute a breach of any existing contractual or other arrangements between the Distributor and any Affiliated or non-Affiliated third party, nor shall it infringe the rights of any Affiliated or non-Affiliated third party.

        12.3.    No approval, consent, order, authorization or license by, giving notice to or taking any other action with respect to any governmental or regulatory authority is required in connection with the execution and delivery of this Agreement by the Distributor and the performance by the Distributor of its obligations hereunder.

        13.    Insurance.    Each party hereto shall (a) obtain and maintain such insurance policies as are adequate to cover its respective obligations hereunder and which are consistent with normal business practices of prudent companies similarly situated and (b) provide the other party, upon request, with certificates of insurance confirming the existence of such insurance policies.

        14.    Infringement.    Each of the Distributor and Biomatrix will promptly notify the other party in writing of any infringement of a Patent or Trademark or unauthorized disclosure or use of any Confidential Information, of which it becomes aware in the Territory. Biomatrix shall have the exclusive right at its own cost to take all legal action in the Territory it deems necessary or advisable to eliminate or minimize the consequences of such infringement of a Patent or Trademark in the Territory. For the purpose of taking any such legal action, Biomatrix shall have the right, subject to the Distributor's consent which consent shall not be unreasonably withheld or delayed, to use the name of the Distributor as plaintiff, either solely or jointly in accordance with the applicable rules of procedure; provided that Biomatrix shall give the Distributor prior notice of such use of the Distributor's name. The Distributor shall promptly furnish Biomatrix with whatever written authority may be required in order to enable Biomatrix to use the Distributor's name in connection with any such legal action, and shall otherwise cooperate fully and promptly with Biomatrix in connection with any such action. All proceeds realized upon any judgment or settlement regarding such action shall belong to Biomatrix.

        15.    Regulatory Activities; Clinical Trials and Marketing Studies.    

        15.1.    General.    

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        15.2.    Clinical Trials and Marketing Studies.    

        16.    Further Assurances.    The parties hereto agree to execute such further or other documents and assurances as are necessary from time to time in order to give effect to the provisions of this Agreement.

        17.    Assignment.    The rights and obligations of the parties hereto shall inure to the benefit of and shall be binding upon the authorized successors and permitted assigns of each party. Neither party may assign its rights or obligations under this Agreement or may designate another person to perform all or part of its obligations under this Agreement, or to have all or part of its rights and benefits under this Agreement without the prior written consent of the other party, except to an Affiliate or to a successor of the business, by merger or otherwise, to which this Agreement relates, provided that in the case of an assignment to an Affiliate the assigning party shall promptly notify the other party in writing of such assignment and shall remain liable (both directly and as guarantor) with respect to all obligations so assigned. In the event of any assignment or in the event that an Affiliate of either party shall exercise

21



rights and/or perform obligations hereunder pursuant to the terms of this Agreement, the assignee or Affiliate, as the case may be, shall specifically assume and be bound by the provisions of the Agreement by executing and agreeing to an assumption agreement satisfactory to the other party hereto.

        18.    Governing Law; Arbitration; Injunctive Relief.    

        19.    Severability.    In the event that any provision of this Agreement shall be held by a court of competent jurisdiction or by any governmental body to be invalid or unenforceable, such provision shall be deemed severable and the remaining parts and provisions of this Agreement shall remain in full force and effect.

        20.    Force Majeure.    Each of the parties shall be excused from the performance of its obligations hereunder in the event such performance is prevented by force majeure, and such excuse shall continue as long as the condition constituting such force majeure continues. For the purpose of this Agreement, force majeure is defined as contingencies beyond the reasonable control of either party, including, without limitation, acts of God, judicial or regulatory action, war, civil commotion, destruction of

22



production facilities or materials by fire, earthquake or storm and labor disturbances (whether or not any such labor disturbance is within the power of the affected party to settle).

        21.    Interest.    Any overdue amounts payable by either party hereunder shall bear interest compounded monthly at the prime lending rate for Dollars published from time to time in The Wall Street Journal plus [***] per annum, or, if lower, the highest rate permissible by applicable law, from the due date until the date of payment.

        22.    No Partnership or Agency.    This Agreement and the relations hereby established by and between Biomatrix and the Distributor do not constitute a partnership, joint venture, agency or contract of employment between them.

        23.    Notices.    All communications in connection with this Agreement shall be in writing and sent by postage prepaid first class mail, courier, or telefax, and if relating to default, late payment or termination, by certified mail, return receipt requested, telefax or courier, addressed to each party at the address set forth at the beginning of this Agreement, in the case of Biomatrix, Attn: Chief Executive Officer, with a copy to: Justin P. Morreale, Esq., Bingham, Dana & Gould LLP, 150 Federal Street, Boston, Massachusetts 02110, U.S.A., and in the case of the Distributor, Attn: President, with a copy to Kimberlie L. Cerrone, Esq., Venture Law Group, 2800 Sand Hill Road, Menlo Park, California 94025, or to such other address as the addressee shall last have designated by notice to the communicating party. The date of giving any notice shall be the date of its actual receipt.

        24.    EU Regulations.    It is the intention of the parties hereto that this Agreement shall at all times qualify for the exemption from the provisions of Article 85(1) of the Treaty of Rome dated 25 March, 1957, as amended, which either (a) is available under EEC Regulation Number 1983/83, or (b) may subsequently be available under any successor regulation or regulations thereto. In the event that any provision of this Agreement is deemed to violate the conditions for qualifying for the exemption, set out in whichever of those regulations may be in effect at the relevant time, or if any such regulation is amended after the date of this Agreement so as to cause this Agreement to fail to qualify for the exemption, the parties hereto agree that they will, as soon as it is practicable to do so, enter into good faith negotiations to amend this Agreement as necessary in order to re-qualify for the exemption or to notify the Agreement. If those negotiations are not successfully concluded within a reasonable time (not to exceed ninety (90) days, or such other period as is agreed upon in writing by the parties hereto, after the relevant regulation is amended), either party may terminate this Agreement upon written notice to the other party.

        25.    Survival.    The provisions of Sections 3.3, 3.6, 3.7, 3.8, 6.2, 9.1, 9.2, 9.3, 9.4 and 9.5 of this Agreement shall survive the termination or expiration of this Agreement (as the case may be) and shall remain in full force and effect. The provisions of this Agreement that do not survive termination or expiration hereof (as the case may be) shall, nonetheless, be controlling on, and shall be used in construing and interpreting the rights and obligations of the parties hereto with regard to, any dispute, controversy or claim which may arise under, out of, or in connection with this Agreement.

        26.    Miscellaneous.    This Agreement sets forth the entire agreement between the parties with respect to the transactions and arrangements contemplated hereby and supersedes all prior oral or written arrangements. This Agreement may be modified or amended only by a written instrument executed and delivered by both parties. None of the provisions of this Agreement shall be deemed to have been waived by any act or acquiescence on the part of either party except by an instrument in writing signed and delivered by the party executing the waiver. This Agreement may be executed in several identical counterparts, each of which shall be an original, but all of which constitute one instrument, and in making proof of this Agreement it shall not be necessary to produce or account for more than one such counterpart.

[The remainder of this page is intentionally left blank.]

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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

  COLLAGEN CORPORATION

 

 

By:

 

/s/  HOWARD D. PALEFSKY      
Name: Howard D. Palefsky
Title: CHAIRMAN & CEO
     
  BIOMATRIX, INC.
     
  By: /s/  ENDRE A. BALAZS      
Name: Endre A. Balazs
Title: CEO

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EXHIBITS

 
   
   
Exhibit A  Agreement Product Specification and Approval Documents

Exhibit B

 


 

Launch Schedule

Exhibit C

 


 

Patents and Trademarks

Exhibit D

 


 

Sales Forecasts

Exhibit E

 


 

Subdistributors

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EXHIBIT A

Agreement Product Specification and Approval Documents

[***]

26



EXHIBIT B

Launch Schedule

 
  Country:

  Date of Launch
1. Australia [***]
2. Austria [***]
3. Belgium [***]
4. Denmark [***]
5. Finland [***]
6. France [***]
7. Germany [***]
8. Greece [***]
9. Iceland [***]
10. Ireland [***]
11. Italy [***]
12. Japan [***]
13. Liechtenstein [***]
14. Luxembourg [***]
15. The Netherlands [***]
16. New Zealand [***]
17. Norway [***]
18. Portugal [***]
19. Spain [***]
20. Sweden [***]
21. Switzerland [***]
22. United Kingdom [***]
23. Israel [***]
24. Argentina [***]
25. Brazil [***]
26. Mexico [***]
27. Canada [***]
28. Chile [***]

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EXHIBIT C

Patents and Trademarks

Patents(1)

[***]


(1)
All numbers given are for issued patents except [***].

(2)
This [***] been allowed and will issue in the next few months under the same number.

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[***]

29

Source: OneCLE Business Contracts.