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EXHIBIT 10.13
CONFIDENTIAL
***PORTIONS OF THE EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
THE COMPLETE EXHIBIT, INCLUDING THE PORTIONS FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
COMMERCIALIZATION AGREEMENT
BETWEEN
THE PROCTER & XXXXXX COMPANY AND GENENCOR INTERNATIONAL, INC.
This AGREEMENT, effective April 25, 2000 by and between Genencor
International, Inc. ("GCI"), a Delaware corporation with offices at 000 Xxxx
Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000 and The Procter and Xxxxxx Company
("P&G"), an Ohio corporation with offices at Xxx Xxxxxxx & Xxxxxx Xxxxx,
Xxxxxxxxxx, Xxxx 00000-0000.
WHEREAS P&G has unique skills and technology specific to the development
and use of skin care product formulations desired by consumers, including skin
care products containing enzymes, and has the ability to manufacture and sell
such products globally; and
WHEREAS GCI has unique skills and technology specific to the selection
and development of enzymes and other materials obtainable from biological
systems and desired by manufacturers of products for consumer use, and has the
ability to commercially supply such enzymes and other materials in industrial
quantities; and
WHEREAS GCI and P&G previously executed TERM SHEET on January 25, 2000
concerning the commercialization of a protease enzyme with a low allergenicity
to *** ("LAP ENZYME") for use in P&G proprietary skin care product(s) for
certain SKIN CARE BENEFITS ("SKIN CARE PRODUCTS"), which TERM SHEET requires the
prompt negotiation and execution of this Commercialization Agreement (the
"AGREEMENT"); and
WHEREAS GCI has previously developed or acquired various technologies
and expertise with applications for proteases having skin care ***
allergenicity; and
WHEREAS GCI and P&G wish to collaborate in efforts to commercialize,
including any necessary development and testing, a GCI produced LAP ENZYME in
one or more P&G produced SKIN CARE PRODUCTS; and
WHEREAS P&G and GCI desire and intend to cooperate exclusively on a
worldwide basis in this commercialization endeavor, on terms set out below, and
P&G desires to compensate GCI for a portion of its prior investment in proteases
having skin care *** allergenicity and in return for the PARTIES' exclusive
dealing; and
WHEREAS the PARTIES' intended outcome is that GCI will manufacture and
sell to P&G, and P&G will purchase from GCI, LAP ENZYME for incorporation into
one or more SKIN CARE PRODUCTS, all consistent with terms agreed between the
PARTIES concerning supply and commercialization.
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NOW, THEREFORE, the PARTIES hereby agree as follows:
1. DEFINITIONS
For purposes of this AGREEMENT, terms shall be defined and construed as
follows:
a. "EFFECTIVE DATE" shall mean the date first written above.
b. "PARTY" or "PARTIES" shall mean P&G and/or GCI.
c. "AFFILIATES" shall mean any person or corporate entity that directly
or indirectly controls, or is controlled by, or is under common control with The
Procter & Xxxxxx Company or Genencor International, Inc. The term control shall
mean the possession of more than fifty percent (50%) of the voting stock of the
controlled PARTY.
d. "TERM SHEET" shall mean the Agreement between GCI and P&G dated
January 25, 2000. The PARTIES agree that the TERM SHEET shall automatically
terminate on the EFFECTIVE DATE.
e. "LAP ENZYME(S)" shall mean one or more protease enzymes that achieve
mutually agreed technical criteria, including a defined ***, and are useful in
one or more SKIN CARE PRODUCTS.
f. "SKIN CARE BENEFITS" shall mean benefits through cleaning or
conditioning the human face, hands or body to achieve one or more of the
following: skin softness, skin smoothness, tactile and visual reduction in dry
skin, ***, measurable increases in skin hydration and moisturization, reduction
in lines and wrinkles, ***, and acne treatment. For clarity, SKIN CARE BENEFITS
excludes, inter alia, uses for: ***.
g. "SKIN CARE PRODUCT(S)" shall mean topical products that provide or
are intended to provide SKIN CARE BENEFITS and which include LAP ENZYME(S). SKIN
CARE PRODUCT(S) shall be LEAVE-ON SKIN CARE PRODUCT(S) or RINSE-OFF SKIN CARE
PRODUCT(S). RINSE-OFF SKIN CARE PRODUCT(S) shall mean SKIN CARE PRODUCT(S)
wherein the intended application process includes the step of washing the
product off the skin. LEAVE-ON SKIN CARE PRODUCT(S) shall mean all other SKIN
CARE PRODUCT(S).
h. "OTHER PRODUCT FIELDS" shall mean products, other than SKIN CARE
PRODUCTS, that provide or are intended to provide SKIN CARE BENEFITS and
containing LAP ENZYME, selected from one or more of the following list: ***. In
any event, OTHER PRODUCT FIELDS shall exclude any area where GCI has a
pre-existing relationship covering such field.
i. "DEVELOPMENT PLAN" shall mean the development tasks undertaken by the
PARTIES pursuant to SECTION 8 below.
j. "STEERING COMMITTEE" shall mean a committee consisting of four (4)
persons, with two (2) chosen by each PARTY, whose duties are more specifically
set out in SECTION 11 below.
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k. "INVENTION(S)" shall mean any discovery, whether or not patentable,
first conceived or reduced to practice during the period of, and discovered
during the course of specific tasks in the performance of work under the
DEVELOPMENT PLAN and any patent right granted or pending, now or in the future,
filed in any country, which cover such discovery.
l. "GCI INVENTION(S)" shall mean INVENTION(S), whether invented solely
and independently by staff of either PARTY or jointly by staff of both PARTIES,
the subject matter of which relates to a biomaterial (enzymes and
microorganisms), related processing, purification or manufacture thereof,
including fermentation systems, microorganism expression systems, gene cloning,
and biomaterial selection.
m. "P&G INVENTION(S)" shall mean INVENTION(S) whether invented solely
and independently by staff of either PARTY or jointly by staff of both PARTIES,
the subject matter of which relates to the formulation of a biomaterial in a
SKIN CARE PRODUCT, related processing or manufacture thereof, or methods of
using a biomaterial for SKIN CARE BENEFITS.
n. "NET SALES" shall mean gross receipts from the sales of "relevant
products" by a PARTY, including its AFFILIATES, less only deductions for:
i) ***
ii) ***
iii) ***
iv) ***
For P&G, "relevant products" shall mean RINSE OFF SKIN CARE
PRODUCTS and LEAVE ON SKIN CARE PRODUCTS and for GCI, "relevant products" shall
mean LAP ENZYME, which is sold to third parties under a license provided for in
SECTION 10 (vi) (2).
o. "MAJOR MARKET LAUNCH" shall mean the date P&G first offers to sell
SKIN CARE PRODUCTS nationally to any member of the ***. MAJOR MARKET LAUNCH
shall not include P&G test markets.
2. PAYMENTS AND ROYALTIES
Amounts actually paid under this SECTION are non-refundable once made.
Amounts payable under this SECTION are separate from and not related to purchase
prices mutually agreed for LAP ENZYME.
a. P&G has paid ***, on or about the date of execution of the TERM
SHEET.
b. P&G shall pay to GCI *** upon the earlier of EFFECTIVE DATE, or April
25, 2000.
c. Contingent only upon the PARTIES' mutual agreement to proceed with
large scale clinical qualification studies, P&G shall pay to GCI an additional
sum of ***.
d. P&G shall thereafter make a payment of ***, conditioned upon
completion of the first successful P&G test marketing of the first SKIN CARE
PRODUCT. "Completion of the
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first successful P&G test marketing" occurs upon date of decision to do any
MAJOR MARKET LAUNCH for the first SKIN CARE PRODUCT.
e. In addition to the above one-time payments, beginning upon MAJOR
MARKET LAUNCH for each SKIN CARE PRODUCT, P&G shall pay the following running
royalties:
i) P&G shall pay running royalties of *** of NET SALES of LEAVE
ON SKIN CARE PRODUCT(S) and *** of NET SALES of RINSE OFF SKIN CARE
PRODUCTS up to a maximum amount of ***. Such running royalties shall be
payable on relevant RINSE-OFF SKIN CARE PRODUCT(S) and LEAVE-ON SKIN
CARE PRODUCT(S); provided however, that running royalties shall be
capped so that no more than *** is paid for RINSE-OFF SKIN CARE
PRODUCT(S) and/or no more than *** is paid for LEAVE-ON SKIN CARE
PRODUCT(S).
ii) Notwithstanding SECTION 2(e)(i), if P&G does not proceed with
MAJOR MARKET LAUNCH for any LEAVE-ON SKIN CARE PRODUCT prior to either
the fifth anniversary after the EFFECTIVE DATE or the running royalties
reaching *** for RINSE-OFF SKIN CARE PRODUCTS, then running royalties
will continue to be paid on all SKIN CARE PRODUCT(S) until the entire
*** cap is reached.
f. P&G shall within ninety (90) days after the end of each P&G fiscal
year provide GCI with an annual running royalty payment due for the preceding
fiscal year. Such payments shall be accompanied by the statement detailed in
SECTION 3(b), below.
3. ACCOUNTING AND REPORTING
a. Each PARTY, including its AFFILIATES, shall keep records in
connection with this AGREEMENT consistent with the standard practices of such
PARTY's accounting conventions which shall be adequate for confirming royalty
calculations consistent with provisions of this AGREEMENT, and shall be closed
and balanced as of the end of each such PARTY's fiscal year, and as soon as
practicable after the end of such fiscal year.
b. Each PARTY shall annually supply to the other PARTY a statement
reporting such reporting PARTY's worldwide aggregate NET SALES total for all
"relevant products". Such statement shall be reported in United States Dollars,
and to the extent monies are received/incurred in foreign currency, such amounts
shall be converted to United States Dollars using the currency rate(s) of each
PARTY's standard consolidation procedures as applicable to the reporting period.
c. At the request of either PARTY, made no more often than annually, the
independent accountant of the reporting PARTY, if reasonably acceptable to the
requesting PARTY, or any other independent certified public accountant
acceptable to both PARTIES, shall have the right to review and audit the
relevant books and records of the reporting PARTY for a period of not more than
three (3) years, during normal business hours at the cost of the requesting
PARTY; provided however, that if the audit reveals a discrepancy of Ten Percent
(10%) or greater in favor of the requesting PARTY for such audited period, then
the audit cost shall be borne by the reporting PARTY. Such review and audit
shall occur at the United States corporate headquarters of the reporting PARTY
and the accountant's report to the requesting PARTY shall only state the
aggregate NET SALES for all "relevant products". The accountant shall be
obligated to treat all other information as confidential.
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4. MARKETING RIGHTS
As detailed elsewhere in this AGREEMENT, P&G, including its AFFILIATES,
shall have exclusive worldwide rights in its sole discretion to launch and
market SKIN CARE PRODUCT(S) to third parties. All decisions related to such
marketing shall be determined solely by P&G or its AFFILIATES.
5. MANUFACTURING RIGHTS
GCI, including its AFFILIATES shall have exclusive worldwide rights to
manufacture the LAP ENZYME for inclusion in SKIN CARE PRODUCT(S), as detailed
elsewhere in this AGREEMENT and under terms to be mutually agreed in a LAP
ENZYME supply agreement.
6. EXCLUSIVITY
GCI shall not sell any LAP ENZYME for SKIN CARE PRODUCTS to third
parties during the persistence of contrary exclusivity provisions below. As part
of any LAP ENZYME(S) sales documentation, GCI will for the period of P&G's
exclusivity use reasonable efforts to contractually restrict buyers of any LAP
ENZYME from using such LAP ENZYME(S) for SKIN CARE PRODUCT(S).
a. Before Launch: GCI, including its AFFILIATES, shall not provide any
LAP ENZYME to third parties for SKIN CARE PRODUCT(S) for a pre-launch period of
up to *** years commencing on the EFFECTIVE DATE. If P&G has not initiated a
MAJOR MARKET LAUNCH for a SKIN CARE PRODUCT within *** years from the EFFECTIVE
DATE, but demonstrates to the reasonable satisfaction of GCI that P&G has made a
firm commitment to launch one or more SKIN CARE PRODUCT(S), then such
exclusivity shall be extended for an additional year. Factors to consider in
demonstrating such firm commitment shall include a major financial commitment,
internal project commitment document approval, and/or notice to the trade of
planned launch. If such reasonable satisfaction is not demonstrated or if no
SKIN CARE PRODUCT has been launched by the *** of the EFFECTIVE DATE, the
PARTIES shall meet to discuss exclusivity term revisions, accelerated launch or
appropriate amendments to this AGREEMENT, including additional payments to GCI.
If the PARTIES fail to agree on exclusivity extensions within six (6) months
after such *** of the EFFECTIVE DATE, GCI's exclusivity commitment shall expire.
b. After first MAJOR MARKET LAUNCH of any LEAVE-ON SKIN CARE PRODUCT and
agreement upon mutually acceptable supply terms: GCI, including its AFFILIATES,
shall not sell any LAP ENZYME for SKIN CARE PRODUCT(S) to third parties for
LEAVE-ON SKIN CARE PRODUCT(S) worldwide for a period of *** years commencing
upon the first MAJOR MARKET LAUNCH of a LEAVE-ON SKIN CARE PRODUCT. Any
subsequently launched LEAVE-ON SKIN CARE PRODUCT shall enjoy exclusivity for the
remainder of such *** year term. By the *** anniversary of the above MAJOR
MARKET LAUNCH of such LEAVE-ON SKIN CARE PRODUCT, P&G shall have paid to GCI ***
in cumulative purchases for the LAP ENZYME used in LEAVE-ON SKIN CARE PRODUCTS.
If revenues from said LAP ENZYME purchases have not reached ***, then P&G shall
pay to GCI *** of the difference between the actual cumulative purchase amounts
paid to GCI and ***. If
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P&G declines to pay this differential amount within ninety (90) days after such
*** anniversary date mentioned above, then such exclusivity shall expire as to
LEAVE-ON SKIN CARE PRODUCT(S).
c. After first MAJOR MARKET LAUNCH of any RINSE-OFF SKIN CARE PRODUCT
and agreement upon mutually acceptable supply terms: GCI, including its
AFFILIATES, shall not sell any LAP ENZYME for SKIN CARE PRODUCT(S) to third
parties for RINSE-OFF SKIN CARE PRODUCT(S) worldwide for a period of *** years
commencing upon the first MAJOR MARKET LAUNCH of a RINSE-OFF SKIN CARE PRODUCT.
Any subsequently launched RINSE-OFF SKIN CARE PRODUCT shall enjoy exclusivity
for the remainder of such *** year term. By the *** anniversary of the above
MAJOR MARKET LAUNCH of such RINSE-OFF SKIN CARE PRODUCT, P&G shall have paid ***
in cumulative purchases for the LAP ENZYME used in RINSE-OFF SKIN CARE PRODUCTS.
If revenues from said LAP ENZYME purchases have not reached *** , then P&G shall
pay to GCI *** of the difference between the actual cumulative purchase amounts
paid to GCI and ***. If P&G declines to pay this differential amount within
ninety (90) days after such *** anniversary date mentioned above, then such
exclusivity shall expire as to RINSE-OFF SKIN CARE PRODUCT(S).
d. No exclusivity or other commitment in this AGREEMENT shall prohibit
either PARTY from receiving, evaluating, or sampling protease or other enzymes,
including low allergenic protease enzymes, from or to any third party. Each
PARTY is free to develop and/or commercialize technologies other than LAP ENZYME
independently with third parties.
7. OTHER PRODUCT FIELD
Each PARTY shall have the right of first negotiation regarding use of
any LAP ENZYME in any one of OTHER PRODUCT FIELD(S).
a. Either PARTY may initiate discussions for such use by forwarding two
copies of a completed Project Form (EXHIBIT A), signed by the initiating PARTY,
to the Primary Contact appointed in accordance with SECTION 8(b), a legal
contact, and a commercial contact. Any Project Form will be treated as
confidential information pursuant to SECTION 12.
b. The PARTY receiving a completed Project Form shall consider in good
faith the Project proposed in the Project Form and, within 14 (fourteen) working
days of receipt of the completed Project Form, shall give written notice:
(i) that the PARTY agrees to negotiate in good faith for an
agreement regarding the proposed Project, by returning a duly executed
copy of the Project Form; or
(ii) that the PARTY declines to negotiate an agreement regarding
the proposed Project; or
(iii) that the receiving PARTY wishes to pursue the proposed
Project, but under a modified Project Form provided with said written
notice; or
(iv) If the receiving PARTY provides said modified Project Form,
the initiating PARTY shall consider in good faith the Project proposed
in the modified Project Form and, within fourteen (14) working days of
receipt of the modified Project Form, shall give written notice of
agreement to negotiate an agreement, decline to
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negotiate an agreement, or desire to pursue the proposed Project under a
second modified Project Form in accordance with (b)(i), (b)(ii) or
(b)(iii). The receiving PARTY shall then consider in good faith the
Project proposed in the second modified Project Form and, within
fourteen (14) working days of receipt of the modified Project Form,
shall give written notice of agreement to negotiate an agreement or
decline to negotiate an agreement.
c. If both PARTIES agree to negotiate an agreement regarding said
Project, the PARTIES shall then work diligently and in good faith, during the
thirty (30) days following receipt of notice of acceptance of a Project Form, to
determine whether they have basic agreement upon the principal terms for such
LAP ENZYME for use in the OTHER PRODUCT FIELD. If the PARTIES cannot reach
mutual understanding upon the terms of such an agreement within thirty (30)
days, then each PARTY is free to proceed with third parties, or not, in its sole
discretion, subject to the other PARTIES' patent rights and confidentiality
provisions under SECTION 12.
d. Until both PARTIES have executed the applicable Project Form, no
PARTY is obligated under any proposed Project, except for the confidentiality
provisions of SECTION 12.
8. DEVELOPMENT PLAN
a. The PARTIES shall, with the assistance of the STEERING COMMITTEE,
create, execute and if necessary, modify DEVELOPMENT PLAN to provide for the
tasks necessary for the development of LAP ENZYME(S) for use in SKIN CARE
PRODUCT(S) by P&G, with certain tasks conducted by GCI and other tasks conducted
by P&G, according to their respective skills. The DEVELOPMENT PLAN contains
detailed plans for specific projects to be undertaken by each PARTY under terms
consistent with those set out in this SECTION. Unless otherwise mutually agreed,
each PARTY shall bear the costs for development tasks which it undertakes. The
DEVELOPMENT PLAN is annexed hereto as EXHIBIT B.
b. All decisions concerning any proposal or task under the DEVELOPMENT
PLAN, falling within the scope of authority set out in SECTION 11 below, and not
requiring an expenditure in excess of ***, shall be undertaken by approval of
the STEERING COMMITTEE. Each PARTY shall appoint a Primary Contact who will be
responsible for the day-to-day activities of the DEVELOPMENT PLAN and reporting
of activities to the STEERING COMMITTEE.
c. Each PARTY agrees to make its employees and non-employee consultants
reasonably available at their respective places of employment to keep the other
PARTY informed of the progress of tasks in the DEVELOPMENT PLAN and of issues
arising from work performed under the DEVELOPMENT PLAN through the other PARTY's
Primary Contact and/or the STEERING COMMITTEE.
d. All work on tasks in the DEVELOPMENT PLAN shall end no later than ***
years from the EFFECTIVE DATE, subject only to agreed extensions consistent with
the provisions of SUBSECTION 6(a).
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9. INVENTIONS AND OWNERSHIP
a. INVENTION(S), shall be owned as follows: P&G shall own all P&G
INVENTIONS and GCI shall own all GCI INVENTIONS. Any INVENTION(S), other than
P&G INVENTION(S) or GCI INVENTION(S), if invented solely and independently by
staff of one PARTY, shall be owned by the inventing PARTY. Any INVENTION(S),
other than P&G INVENTION(S) or GCI INVENTION(S), if invented jointly by staff of
both PARTIES, shall be jointly owned by both PARTIES.
b. Patent procurement activity in regard to INVENTION(S) shall be
pursued at the discretion and expense of the owner(s) set forth in this SECTION.
Each PARTY further agrees to sign documents to vest or maintain title to patents
in the owner(s) designated in this SECTION and to provide reasonable assistance
to the other with respect to preparation and prosecution of such patents.
c. As to INVENTION(S) to be owned by P&G or GCI in accordance with this
SECTION, the other PARTY agrees to furnish all information and data in its
possession reasonably necessary to file and obtain patents on such INVENTION(S)
and, upon request agrees to review applications for such patents.
d. Each PARTY agrees to work in good faith, to provide the other's
Primary Contact with timely notification of any patent application relating to
INVENTIONS before the filing of the patent application. The other PARTY will be
given at least ten (10) working days in which to review and comment on such
patent application, unless the other PARTY agrees on a term which is shorter.
e. In the event an owner of any INVENTION elects not to obtain or
maintain patents on such INVENTION(S) in any country, the owner will promptly
notify the other PARTY who may obtain or maintain such patents at its own
expense. In such circumstances, such owner agrees to have executed by its
appropriate staff such documents as may be tendered to it by the other PARTY to
obtain, maintain, or perfect owner's title to such patents and to furnish
information and data in its possession reasonably necessary to obtain such
patents.
10. LICENSES
GCI LICENSED INVENTION(S) under SECTION 10 LICENSES shall mean: (1) GCI
INVENTION(S) owned by GCI hereunder; (2) any patent right granted or pending,
now or in the future, filed in any country by GCI, which GCI owns or has the
legal right to license based on work done by GCI before commencement of work
under the DEVELOPMENT PLAN, and only insofar as is necessary for P&G to make,
have made, use or sell LAP ENZYME in SKIN CARE PRODUCT(S).
P&G LICENSED INVENTION(S) under SECTION 10 LICENSES shall mean: (1) P&G
INVENTION(S) owned by P&G hereunder; provided however, such P&G INVENTION is
directed to a method for utilizing a LAP ENZYME to provide SKIN CARE BENEFITS
and not dependent upon a specific combination of ingredients, including, for
example, formulations; (2) any patent right granted or pending, now or in the
future, filed in any country by P&G, which P&G owns or has the legal right to
license based on work done by P&G before commencement of work under the
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DEVELOPMENT PLAN, and only insofar as is necessary for GCI and its third party
purchasers to, make, have made, use or sell any and all SKIN CARE PRODUCTS
including LAP ENZYME.
Before GCI operates under the definition of P&G LICENSED INVENTIONS,
SUBSECTION (2) and before P&G under the definition of GCI LICENSED INVENTIONS,
SUBECTION (2), such PARTY shall notify the licensing PARTY of the applicable
patent(s) under which the operating PARTY believes itself licensed.
a. Licenses during purchase by P&G of LAP ENZYME from GCI for
commercialization of SKIN CARE PRODUCT(S):
(i) GCI, including its AFFILIATES, hereby grants to P&G and its
AFFILIATES a worldwide license, under GCI LICENSED INVENTIONS, all
insofar as necessary for P&G to make, have made, use or sell SKIN CARE
PRODUCT(S), provided that this grant does not include the right for P&G
to make or have made the LAP ENZYME except as provided in SECTION
10(b)(v). The license shall be exclusive during the periods of
exclusivity as detailed in SECTION 6, and royalty bearing in that P&G is
obligated to make payments under SECTION 2(e). Effective upon
termination of exclusivity under SECTION 6, GCI, including its
AFFILIATES, hereby grants to P&G and its AFFILIATES a worldwide,
royalty-free, nonexclusive, license under GCI LICENSED INVENTIONS, all
insofar as necessary for P&G to make, have made, use or sell SKIN CARE
PRODUCT(S).
(ii) P&G, including its AFFILIATES, hereby grants to GCI and its
AFFILIATES a worldwide, royalty-free license, under, P&G LICENSED
INVENTIONS, all insofar as necessary for GCI to make, have made, use or
sell to P&G any LAP ENZYME for SKIN CARE PRODUCT(S). The license shall
be sole and royalty-free during the periods of exclusivity in SECTION 6.
Effective upon termination of exclusivity under SECTION 6, P&G,
including its AFFILIATES, hereby grants to GCI and its AFFILIATES, a
worldwide nonexclusive, royalty-free license under P&G LICENSED
INVENTIONS, all insofar as necessary to make, have made, use or sell any
LAP ENZYME for SKIN CARE PRODUCTS.
b. Post Termination Licenses:
(i) UPON TERMINATION BY MUTUAL AGREEMENT, INCLUDING FAILURE TO AGREE ON
SUPPLY TERMS EVEN AFTER MEETING SUCCESS CRITERIA:
1. The PARTIES shall not work with third parties to further develop or
commercialize any LAP ENZYME actively worked on by PARTIES under the DEVELOPMENT
PLAN for a period of *** years following said termination.
2. Effective upon the expiration of said *** year period, GCI hereby
grants to P&G and its AFFILIATES, a nonexclusive, worldwide, royalty-bearing
license under GCI LICENSED INVENTIONS as necessary to allow P&G to make, have
made, use and sell SKIN CARE PRODUCT(S) containing any LAP ENZYME actively
worked on by PARTIES under the DEVELOPMENT PLAN. Royalties under this license
will be negotiated as necessary, and a "reasonable royalty" rate shall be
utilized.
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3. Effective upon the expiration of said *** year period, P&G hereby
grants to GCI and its AFFILIATES, a nonexclusive, worldwide, royalty-bearing
license under P&G LICENSED INVENTIONS as necessary to allow GCI to make, have
made, use and sell any LAP ENZYME actively worked on by PARTIES under the
DEVELOPMENT PLAN. Royalties under this license will be negotiated as necessary,
and a "reasonable royalty" rate shall be utilized.
(ii) UPON TERMINATION BY P&G THROUGH NO FAULT OF GCI
1. P&G shall transfer all available human trial and safety testing and
technical data related to LAP ENZYME to GCI.
2. Effective upon such termination, P&G hereby grants to GCI and its
AFFILIATES a sole, worldwide, royalty-free license, under P&G LICENSED
INVENTIONS, as necessary to allow GCI to make, have made, use and sell any LAP
ENZYME actively worked on by PARTIES under the DEVELOPMENT PLAN
(iii) UPON TERMINATION BY P&G AS A RESULT OF GCI'S FAILURE TO USE GOOD
FAITH EFFORTS TO PERFORM UNDER THE DEVELOPMENT PLAN
1. GCI shall not work with third parties to further develop or
commercialize any LAP ENZYME actively worked on by PARTIES under the DEVELOPMENT
PLAN for a period of *** years following said termination.
2. GCI hereby grants to P&G and its AFFILIATES a sole, royalty-free,
worldwide license under GCI LICENSED INVENTIONS as necessary to allow P&G to
make, have made, use and sell any LAP ENZYME actively worked on by PARTIES under
the DEVELOPMENT PLAN.
(iv) UPON TERMINATION BY GCI AS A RESULT OF P&G'S FAILURE TO USE GOOD
FAITH EFFORTS TO PERFORM UNDER THE DEVELOPMENT PLAN
1. P&G shall transfer all available human trial and safety testing and
technical data related to LAP ENZYME to GCI.
2. P&G shall not work with third parties to further develop or
commercialize any LAP ENZYME actively worked on by PARTIES under the DEVELOPMENT
PLAN for SKIN CARE PRODUCT(S) for a period of *** years following said
termination.
3. P&G hereby grants to GCI and its AFFILIATES a sole, royalty-free,
worldwide license under P&G LICENSED INVENTIONS as necessary to allow GCI to
make, have made, use and sell SKIN CARE PRODUCT(S) containing any LAP ENZYME
actively worked on by PARTIES under the DEVELOPMENT PLAN.
(v) UPON SUSPENSION BY P&G AS A RESULT OF GCI'S FAILURE TO COMMERCIALLY
SUPPLY
1. GCI will arrange for supply to be reestablished over the shortest
period of time possible, whether this is at a GCI facility or through an
arrangement with an alternative supplier
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(such other supplier to be approved by P&G). In the event that GCI cannot
supply, P&G shall have the right to arrange for an alternative supplier,
provided however that GCI's proprietary information shall be safeguarded by an
appropriate confidential non-disclosure agreement and non-use other than for the
purpose of its supply agreement with P&G. GCI shall aid in the reestablishment
of supply over the shortest period of time possible, and shall grant a
non-exclusive, worldwide, royalty-free license to such alternative supplier
procured by P&G covering the technology and know-how required to produce LAP
ENZYME, including but not limited to samples of LAP ENZYME and/or the process
conditions used to produce LAP ENZYME, as well as GCI paying any expenses for
any up charges associated with P&G obtaining the alternate supplied LAP ENZYME.
Such third party license shall expire at the conclusion of such P&G suspension.
2. Upon such suspension, GCI hereby grants to P&G and its AFFILIATES a
non-exclusive, worldwide, license under GCI LICENSED INVENTIONS as necessary to
allow P&G to buy this LAP ENZYME from third parties for the duration of the
suspension and for SKIN CARE PRODUCT(S); the license shall be royalty-bearing in
that P&G is obligated to make payments under SECTION 2(e) above.
3. Moreover, GCI shall not collaborate with third parties or sell this
LAP ENZYME for SKIN CARE PRODUCT(S) for any time during such P&G suspension up
to the *** anniversary of such suspension. Effective upon the expiration of said
*** year period, P&G hereby grants to GCI and its AFFILIATES a non-exclusive,
worldwide, royalty-bearing license under P&G LICENSED INVENTIONS as necessary to
allow GCI to collaborate with third parties and sell any LAP ENZYME actively
worked on by PARTIES under the DEVELOPMENT PLAN. Royalties under this license
will be negotiated as necessary, and a "reasonable royalty" rate shall be
utilized.
4. If at any time in the future, GCI is able to resume supply of such
LAP ENZYME, GCI and P&G shall agree on terms for GCI to resume such supply. GCI
shall not offer this LAP ENZYME to any third party at a price lower than that
which is already offered to P&G.
(vi) UPON TERMINATION BY GCI AS A RESULT OF P&G'S FINAL DECISION NOT TO
LAUNCH A SKIN CARE PRODUCT AFTER THE DEFINED SUCCESS CRITERIA, AS SHOWN IN
EXHIBIT C, HAVE BEEN MET.
1. P&G shall transfer all available human trial and safety testing and
technical data related to LAP ENZYME to GCI.
2. P&G shall not work with third parties to further develop or
commercialize any LAP ENZYME actively worked on by PARTIES under the DEVELOPMENT
PLAN for a period of *** years following said termination.
3. P&G hereby grants to GCI and its Affiliates a nonexclusive,
worldwide, royalty-bearing license under P&G LICENSED INVENTIONS as necessary to
allow GCI to make, have made, use and sell any LAP ENZYME actively worked on by
PARTIES under the DEVELOPMENT PLAN. Royalties under this license will be
negotiated as necessary, and a reasonable royalty rate shall be utilized, up to
a maximum amount of ***.
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c. Expiration of Licenses
In SUBSECTIONS 10 (b) (i) through (vi) above, the expiration of such
licenses shall occur upon the date of expiration of the last to expire of P&G
LICENSED INVENTIONS or GCI LICENSED INVENTIONS, as the case may be, unless
otherwise noted.
d. Third Party License, Sale, or Transfer
Each PARTY agrees not to license, sell, or transfer to third parties any
P&G LICENSED INVENTIONS or GCI LICENSED INVENTIONS without first reserving or
providing for the grant of the licenses to the other PARTY as set forth in this
AGREEMENT. Any successor in interest of all or any portion of a PARTY or the
business sector of the PARTY corresponding to the field of LAP ENZYME or SKIN
CARE PRODUCT(S) shall take such interest subject to the grants and obligations
set forth in this AGREEMENT.
11. STEERING COMMITTEE
a. Each PARTY shall appoint up to two (2) representatives to serve as
members of the STEERING COMMITTEE to direct the overall course of activities
under this AGREEMENT. Decisions of the STEERING COMMITTEE shall require a
unanimous vote. Chairmanship of the STEERING COMMITTEE shall rotate, beginning
with a P&G representative, for twelve- (12) month periods.
b. Subject to the oversight and approval of the PARTIES, the STEERING
COMMITTEE shall be responsible for the following:
(i) Overall direction of the DEVELOPMENT PLAN and each
individual project thereof, including safety testing, staffing and other
requirements for the DEVELOPMENT PLAN;
(ii) Monitoring, updating and modifying, if necessary, the
overall DEVELOPMENT PLAN;
(iii) Scheduling and conducting biannual reviews, or such more
frequent reviews as the STEERING COMMITTEE determines necessary;
(iv) Recommending to the PARTIES the licensing of technology
and/or intellectual property, if any, from third parties to enhance the
DEVELOPMENT PLAN projects as needed;
(v) Preparation and approval of the Success Criteria, consistent
with the terms of this AGREEMENT; and
(vi) Reviewing INVENTIONS made pursuant to this AGREEMENT with
patent counsel, facilitating patent filings by the appropriate PARTY,
and tracking of patent activities.
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c. Each PARTY shall notify the other within thirty (30) days after the
EFFECTIVE DATE of the names of its STEERING COMMITTEE members. The STEERING
COMMITTEE shall have no authority to modify or amend the terms of this
AGREEMENT. Any dispute or issue that cannot be resolved by the STEERING
COMMITTEE shall be referred to senior management of the PARTIES to be resolved
by them, if possible. For purposes of this SECTION, "senior management" for P&G
shall be Vice President, Research & Development, Global Beauty Care and
President, Global Cosmetics & Skin Care and for GCI shall be Vice President,
Research and Vice President, Enzyme Cleaning Products
12. CONFIDENTIALITY
a. Disclosure of confidential and proprietary information hereunder by
either PARTY to the other will be made in writing or other tangible form, or
confirmed in writing within thirty (30) days of disclosure if made in
nontangible form, will be clearly marked confidential and will include any
confidential information provided to GCI, or P&G under the Non-Disclosure
Agreement dated February 3, 2000.
b. Such confidential information will be safeguarded by the receiving
PARTY. The receiving PARTY shall protect the disclosing PARTY's confidential
information against unauthorized disclosure using the same degree of care, but
no less than a reasonable degree of care, as the receiving PARTY uses to protect
its own confidential information of a like nature. Such confidential information
will be used by the receiving PARTY only for the purpose of this AGREEMENT and
will not be otherwise utilized or disclosed to third parties without first
having obtained written consent of the disclosing PARTY, which consent will not
be unreasonably withheld. Disclosing PARTY's confidential information will be
made available only to such receiving PARTY's employees and AFFILIATES who have
a need to know such information. Subject to the provisions of this SECTION these
obligations of confidentiality will apply until the expiration of exclusivity or
three (3) years from the termination of the AGREEMENT, whichever is later.
c. Obligations regarding confidential information received by either
PARTY under the provisions of SUBSECTION (b) above shall not apply to any such
information that:
i) becomes publicly available without default hereunder by the
receiving PARTY; or
ii) is lawfully acquired by the receiving PARTY from a source
not under any obligation of confidentiality to the disclosing PARTY
regarding disclosure of such information; or
iii) is in the possession of the receiving PARTY in written or
other recorded form at the time of its disclosure hereunder; or
iv) is nonconfidentially disclosed to any third party by or with
the permission of the disclosing PARTY hereunder; or
v) is developed by or on behalf of the receiving PARTY by
individuals who have not received confidential information hereunder.
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d. The obligations of confidentiality set forth herein further shall not
apply to any information to the extent that such information:
i) is required to be disclosed by order of a court of law,
provided that the receiving PARTY provides reasonable prior notice of
such required disclosure to the disclosing PARTY;
ii) is used with the prior written consent of the disclosing
PARTY which consent shall not be unreasonably withheld in applications
for patents on INVENTIONS or in financial information in the usual
conduct of business; or
iii) has been approved in writing for publication by both of the
PARTIES; or
iv) is submitted to governmental agencies to facilitate the
issuance of marketing approvals for materials and products, consistent
with the DEVELOPMENT PLAN hereunder provided that reasonable measures
shall be taken to assure confidential treatment of such information; or
v) is product-related information which is reasonably required
to be disclosed by either PARTY in connection with its testing or
marketing of "relevant products", in such PARTY's discretion.
13. PUBLICITY
The PARTIES will not publicly release any statement for a period of nine
months from the EFFECTIVE DATE, with the exceptions that:
a. GCI is free at any time to release information necessary for, or in
support of, a GCI initial public offering; and
b. either PARTY may disclose the existence of a relationship without
naming the other PARTY in business-to-business meetings or discussions.
14. SAFETY INFORMATION AND TESTING
a. GCI shall use best reasonable efforts to promptly provide to P&G
relevant safety and allergenicity assessment information in the possession of
GCI and relating to the LAP ENZYME prior to the EFFECTIVE DATE, and under a
separate confidentiality agreement. Any additional or new relevant safety and
allergenicity assessment information which has not been provided prior to the
EFFECTIVE DATE, shall be provided by GCI promptly after the EFFECTIVE DATE or
acquisition by GCI, including any revisions or additions to such earlier
provided information. GCI further agrees to report to P&G as soon as practicable
any known hazards or operational difficulties in handling the LAP ENZYME.
b. The PARTIES will follow the mutually agreed upon principles for
appropriate safety testing, as shown in EXHIBIT D.
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15. FORCE MAJEURE
Neither PARTY shall be responsible or liable for any delay or failure to
perform its obligations hereunder if such delay or failure is caused by an act
of God; fire; flood; embargo; explosion; accident; shortage of or inability to
obtain fuel, energy, raw materials, equipment or transportation; good faith
compliance of any law, regulations, standard, order, rule or recommendation made
by any governmental authority; strike or labor controversy (neither PARTY shall
be required to settle any labor matter against its own best judgment); riot or
civil unrest or any cause or circumstances whether similar or dissimilar to the
foregoing beyond the reasonable control of the affected PARTY which makes
impracticable the production, transportation, delivery or sale of LAP ENZYME(S)
or SKIN CARE PRODUCTS. Each PARTY agrees to promptly notify the other PARTY of
any such circumstance. The initial term of this AGREEMENT and any affected time
period as set forth in SECTION 20(a) herein shall be extended by the period of
time during which performance is suspended under this SECTION.
16. DEFAULT
If either PARTY hereto shall fail to perform or fulfill, at the time or
in the manner herein provided, any material obligation or condition required to
be performed or fulfilled by such PARTY hereunder and (i) if such PARTY fails to
remedy any such default, other than a default in a monetary payment which shall
be entitled to a ten (10) day period for remedy, within sixty (60) days after
written notice thereof has been given to it by the other PARTY, or (ii) if such
failure consists of a default of a monetary payment and the defaulting PARTY
fails to make such a payment within thirty (30) days after written notice
thereof has been given to it by the other PARTY, such other PARTY thereafter
shall have the right to terminate this AGREEMENT. Nothing contained in this
article shall be construed to exclude any other remedy for legal or equitable
relief otherwise provided by law.
17. INDEPENDENT CONTRACTORS
Nothing in this AGREEMENT shall be deemed to create an agency,
employer-employee, partnership, or joint venture relationship between the
PARTIES. The PARTIES are independent contractors. Neither PARTY has the right to
control the work of the other's employees.
18. NO CONFLICTS
a. GCI warrants to P&G that this AGREEMENT does not conflict with GCI's
obligations, or those of its AFFILIATES, under any other agreement to which GCI
is a party and that GCI is free to fulfill all obligations stated herein.
b. P&G warrants to GCI that this AGREEMENT does not conflict with P&G's
obligations, or those of its AFFILIATES, under any other agreement to which P&G
is a party and that P&G is free to fulfill all obligations stated herein.
19. SEVERABILITY
If any provision of this AGREEMENT is held by a court of competent
jurisdiction to be contrary to law or public policy or otherwise unenforceable,
the remaining provisions of this
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AGREEMENT shall remain in full force and effect. To the extent possible, a
substitute, valid and enforceable provision which most nearly reflects the
PARTIES' stated intention as set forth in the original affected provision shall
be given effect by the court.
20. TERM AND TERMINATION
a. This AGREEMENT shall continue from the EFFECTIVE DATE until the
earlier of the date of execution of an applicable supply agreement, expiration
of the PARTIES exclusive cooperation under SECTION 6 above or their
non-exclusive cooperation under SUBSECTION 20 (e) below; provided however that
the following provisions shall survive termination hereof consistent with their
terms and including any definitions from SECTION 1 as they are utilized in such
surviving sections: SECTIONS 9(b), 9(c), 9(d), 10(b), 10(c), 10(d), 12, 15, 16,
17, 18, 19, 21, and 22, 23, 24, 25, 26, and 27.
b. GCI shall have the right to terminate the AGREEMENT in the event that
P&G fails to perform in good faith under the Development Plan or fails to launch
after the defined Success Criteria have been met, in accordance with SECTION
10(b)(iv) or (vi) above.
c. P&G shall have the right, in its sole discretion, to terminate or
suspend the AGREEMENT at any time, for any commercial or technical reason in
accordance with SECTION 10(b)(ii), (iii), or (v).
d. If the PARTIES mutually agree to terminate the AGREEMENT, each PARTY
will retain its rights in the technology and know-how related to the LAP ENZYME
and the P&G SKIN CARE PRODUCTS, subject to the provisions of SECTION 10(b)(i)
above.
e. If the PARTIES mutually agree to continue development work on a
non-exclusive basis after expiration of the pre-commercialization exclusivity
term as provided in SUBSECTION 6 (a) above, then the PARTIES shall operate under
the terms of this AGREEMENT as it may be modified by mutual agreement.
21. GOVERNING LAW
This AGREEMENT shall without regard to its conflict of law rules, be
construed in accordance with the laws of the State of Ohio.
22. NOTICES
All notices and other communications permitted or required under this
AGREEMENT shall be in writing and shall be deemed given when delivered
personally against receipt or three days after being mailed by registered or
certified mail return receipt requested. The recipients listed below may be
changed by providing notice to the other PARTY.
If to GCI at: Genencor International, Inc.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Senior Vice President, Commercial and
Legal Affairs
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Telephone: 000-000-0000
With a copy to: Genencor International, Inc.
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Senior Corporate Counsel
Telephone: (000) 000-0000
With second copy to: Genencor International, Inc.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx Xxxxxxxxxx 00000-0000
Attention: Vice President, Enzyme Cleaning
Products
Telephone: (000) 000-0000
If to P&G: The Procter & Xxxxxx Company
00000 Xxxx Xxxxxxx Xxxxxxx
Xxx 000 XX0X00
Xxxxxxxxxx, XX 00000-0000
Attention: Associate General Counsel - Patent
Division, Beauty Care
Telephone: (000) 000-0000
With a copy to: The Procter & Xxxxxx Company
Ivorydale Technical Center
0000 Xxxxxx Xxxxx Xxxxxx Xxxx 0X00
Xxxxxxxxxx, XX 00000
Attention: Purchasing Manager-Enzymes
Telephone: (000) 000-0000
With second copy to: The Procter & Xxxxxx Company
Miami Valley Labs
00000 X. Xxxxx Xxxxx Xxxx
Xxx 0X000
Xxxx, XX 00000
Attention: Principal Scientist
Telephone: (000) 000-0000
23. WAIVER
The failure of either PARTY to insist upon strict compliance with the
terms of this AGREEMENT shall not at any time be considered a waiver or
condonation by such PARTY. Consequently, any delay or failure of a PARTY to
require strict performance shall have no impact on the PARTY's rights.
24. ASSIGNMENT
Neither PARTY shall assign any rights or obligations under this
AGREEMENT without the prior written consent of the other PARTY, except insofar
as the assignment is a part of the assigning
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PARTY's entire line of business related to the subject matter of the AGREEMENT.
Any purported assignment which does not meet the terms of this SECTION shall be
null and void.
25. EXPORT OF TECHNICAL DATA
Notwithstanding any other provision of this AGREEMENT, neither PARTY
shall export, directly or indirectly, any U.S. Source technical data acquired
from the other PARTY or its AFFILIATES under this AGREEMENT or any commodities
using such data to any country to which the United States Government or any
agency thereof forbids export or for which the United States Government or any
agency thereof at the time of export requires an export license or other
Government approval, without first obtaining such license or approval.
26. CAPTIONS
The captions of this AGREEMENT are illustrative only and shall not be
used in the construction and/or interpretation of this AGREEMENT.
27. ENTIRE AGREEMENT
This AGREEMENT supersedes all prior agreements or understandings, oral
or written, covering the subject matter contained herein and, together with its
exhibits, constitutes the entire understanding between the PARTIES with respect
to such subject matter. No modification hereof shall be effected by the use of a
purchase order, a purchase order acknowledgment, acceptance, confirmation or any
other form at variance with or in addition to the terms and conditions contained
herein. This AGREEMENT may only be modified by a writing duly executed by both
PARTIES.
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IN WITNESS WHEREOF, the PARTIES hereto have caused this AGREEMENT to be
executed by their duly authorized representatives effective as of the day and
year first above written.
THE PROCTER & XXXXXX COMPANY GENENCOR INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ W. Xxxxxx Xxxxxxxx
------------------------------------- ---------------------------------------
Name: Xxxxx X. Xxxxxx Name: W. Xxxxxx Xxxxxxxx
----------------------------------- -------------------------------------
Title: President, Cosmetics & Skin Care Title: President & Chief Executive Officer
---------------------------------- ------------------------------------
Date: 4/24/00 Date: 4/24/00
------------------------------------ -------------------------------------
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Confidential Info : P&G / GCI, April 7 EXHIBIT B
P&G / GCI LAP DEVELOPMENT PLAN - CALENDAR 2000
`FASTEST POSSIBLE TIMELINE'
TIMELINE MILESTONE P&G ACTIVITIES GCI ACTIVITIES
-------- --------- -------------- --------------
***
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Confidential Info : P&G / GCI, April 7 '00 EXHIBIT B
GCI / P&G LAP DEVELOPMENT PLAN - 2001-2003
`FASTEST POSSIBLE TIMINGS'
TIMELINE MILESTONE P&G ACTIVITIES GCI ACTIVITIES
-------- --------- -------------- --------------
***
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Confidential Info : P&G / GCI, April 17 '00 Exhibit C
P&G AND GCI
LOW ALLERGENIC PROTEASE (LAP) FOR SKIN CARE BENEFITS
PROJECT : DEVELOPMENT SUCCESS CRITERIA
Strategic Objective: Increase P&G's share of the global Skin Care market
(leave-on and/or rinse-off applications for face, hands
& body) via significant skin benefits.
Grow Genencor's business in Skin Care through
incorporation of LAP into one or more P&G Skin Care
products. P&G and GCI should have patented protection
for making & use.
Project Objective: Revolutionize the global Skin Care market as measured by
incorporation of LAP enzyme into at least one leave on
and/or rinse off skin care product that delivers one or
more consumer noticeable SKIN CARE BENEFITS in an acute
time frame (e.g. ***).
Action to be taken: If the success criteria are met P&G and GCI will enter a
mutually agreed upon Supply Agreement.
--------------------------------------------------------------------------------
ATTRIBUTE SUCCESS CRITERIA MEASURE
--------------------------------------------------------------------------------
Consumer Recognition *** ***
--------------------------------------------------------------------------------
Technical Performance *** ***
--------------------------------------------------------------------------------
ATTRIBUTE SUCCESS CRITERIA MEASURE
--------------------------------------------------------------------------------
Safety *** ***
--------------------------------------------------------------------------------
Financial Assessment *** ***
--------------------------------------------------------------------------------
Proprietary *** ***
--------------------------------------------------------------------------------
Industrial Hygiene *** ***
Regulatory
--------------------------------------------------------------------------------
Timings : as per Development Plan, Exhibit B in the Commercialization Agreement.
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C Xxxxx X Xxxxxx B Xxxxxxxxxxxxx D Xxxxx X Xxxxxxxx For P&G
--------------------------------------------------------------------------------------------------------------------
D Xxxxxx X Xxxxxxx X Xxxxxxx A Caddow P Xxxxxxxx For GCI
--------------------------------------------------------------------------------------------------------------------
Submitted by: X X X Xxxxxx (P&G)
E Lippay (GCI)
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