Exhibit 10.1
DEVELOPMENT AND LICENSE AGREEMENT
This DEVELOPMENT AND LICENSE AGREEMENT (the "Agreement"), effective as of
April 2, 1999 ("Effective Date"), is made by and between Amira Medical, a
Delaware corporation, with a principal place of business at 0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxx Xxxxxx, XX 00000 ("Amira"), and Integ Incorporated, a Minnesota
corporation, with a principal place of business at 0000 Xxxxxx, Xx. Xxxx, XX
00000 ("Integ"). The parties agree as follows:
1. DEFINITIONS
"Acquired" shall have the meaning as set forth in Section 4.4.3.
"Affiliate(s)" shall mean all corporations or business entities which,
directly or indirectly, are controlled by a Party. The meaning of the word
"control" shall mean the ownership of 50% or more of the voting shares or
interests of such corporation or business entity so long as such ownership of
voting shares or interests continues.
"Agreement" shall have the meaning as set forth in the Preamble.
"Amira" shall have the meaning as set forth in the Preamble.
"Amira Know How" shall mean any unpatented and/or non-patentable technical
data, materials, samples and other information (A) which are owned or controlled
by Amira or its Affiliates during the term of the Agreement, or (B) which Amira
or its Affiliates has the right to license or sublicense (including information
or materials developed by Amira in the Development Program) and which in either
case (C) relate to Meters or Test Strips or their manufacture or use in the
Field. Amira Know-How shall not include the Amira Patent Rights.
"Amira Patent Rights" shall mean (i) the U.S. and foreign patent
applications and patents listed on Exhibit B; (ii) any U.S. or foreign patent or
patent application which claims an invention made or conceived and reduced to
practice by one or more employees, agents or consultants of Amira or of an Amira
Affiliate in the Development Program and related to Meters or Test Strips or
their manufacture or use in the Field; and (iii) any substitution, continuation,
continuation-in-part, or divisional application of any of the preceding, and any
patent issuing thereon, including any reissue, reexamination, renewal or
extension thereof.
"Amira Technology" shall mean the Amira Patent Rights and Amira Know How.
"Amira/Integ Invention" shall have the meaning as set forth in Section
7.1.3.
"Confidential Information" shall mean (i) any information related to Amira
Technology, Integ Technology or the Development Program; (ii) any proprietary or
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" or "Proprietary" at the time it is delivered to the
receiving party, or (iii) proprietary or confidential
information disclosed orally hereunder which is identified as confidential or
proprietary when disclosed and such disclosure of confidential information is
confirmed in writing within thirty (30) days by the disclosing party.
"Costs" shall mean all of a Party's direct and indirect costs related to
the manufacture of the Product(s), including without limitation, costs for
personnel, materials, quality control, regulatory compliance, third party
license royalties, administrative expenses, subcontractors, fixed and variable
manufacturing overhead costs reasonably allocable to the manufacture of the
Product(s), as determined in accordance with generally accepted accounting
principles applied by that party on a consistent basis.
"Development Plan" shall have the meaning as set forth in Section 3.1.
"Development Program" shall have the meaning as set forth in Section 3.1.
"Effective Date" shall have the meaning as set forth in the Preamble.
"FDA" means the U.S. Food and Drug Administration or any corresponding
foreign regulatory authority.
"Field" shall mean glucose monitoring utilizing Interstitial Fluid Samples.
"Integ" shall have the meaning as set forth in the Preamble.
"Integ Know How" shall mean any unpatented and/or non-patentable technical
data, materials, samples and other information other than technical data,
materials, samples and other information relating to infrared technology (A)
which are owned or controlled by Integ during the term of the Agreement, or (B)
which Integ has the right to license or sublicense, including information or
materials developed by Integ in the Development Program, and which in either
case (C) is useful in the Field. Integ Know-How shall not include the Integ
Patent Rights.
"Integ Patent Rights" shall mean (i) the U.S. and foreign patent
applications and patents listed on Exhibit C; (ii) any U.S. or foreign patent or
patent application which claims an invention (other than an invention relating
to infrared technology) made or conceived and reduced to practice by one or more
employees, agents or consultants of Integ or of a Integ Affiliate in the
Development Program and useful in the Field; and (iii) any substitution,
continuation, continuation-in-part, or divisional application of any of the
preceding, and any patent issuing thereon, including any reissue, reexamination,
renewal or extension thereof.
"Integ Technology" shall mean the Integ Patent Rights and Integ Know How.
"Interstitial Fluid Samples" means interstitial fluid samples containing,
at most, contaminating amounts of other substances, including without
limitation, blood.
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"Manufacturing Plan" shall have the meaning as set forth in Section 5.1
"Meters" shall mean any device for measuring glucose in Interstitial Fluid
Samples.
"Party" shall mean Integ or Amira, as the case may be.
"Parties" shall mean Integ and Amira.
"Product(s)" shall mean Meters, Samplers, and Test Strips.
"Sampler(s)" shall mean any device for extracting an Interstitial Fluid
Sample which incorporates a means for delivering such sample to a Test Strip,
and may include a component for incorporation into Meters.
"Territory" shall mean worldwide.
"Test Strip(s)" shall mean any device to which an Interstitial Fluid Sample
is applied, which incorporates a means for delivering such sample to a specific
area for analysis by a Meter.
"Third Party(ies)" shall mean any person or entity other than Amira, Integ
and their respective Affiliates.
2. OPTION
As a condition and inducement to Amira's and Integ's entering into this
Agreement and incurring the obligations set forth herein, concurrently with the
execution and delivery of this Agreement, Amira and Integ are entering into an
Option Agreement (the "Option Agreement") in the form of Exhibit A hereto.
3. DEVELOPMENT PROGRAM
3.1 Development Program Activities. Subject to the terms and conditions set
forth herein, the Parties shall perform research, conduct development, and
commercialize Products pursuant to the Development Plan. Such activities shall
comprise the "Development Program" and shall be conducted primarily at Integ's
facility. The Parties shall use reasonable efforts to conduct the Development
Program in accordance with the Development Plan set by the Development
Committee, and shall use reasonable efforts to comply with all submission
procedures to the appropriate regulatory authorities, to respond timely to
inquires of said regulatory authorities and to maintain submissions and support
new submissions. The Parties shall keep the Development Committee reasonably
informed of the progress of the Development Program and shall provide the
Development Committee a reasonable opportunity to review and comment on Product
research and development, study designs, clinical trials, submissions, launch
and other relevant factors.
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3.2 Development Plan. The Parties will conduct the Development Program in
accordance with a plan approved by the Development Committee (the "Development
Plan"). The Development Plan shall establish: (i) a budget for the Development
Plan and proposed funding, (ii) the scope of the development which will be
performed including any Product development specifications, (iii) objectives,
work plan activities and time schedules with respect to Product development,
clinical trials, FDA submission and commercial launch; and (iv) the number of
Integ and Amira employees necessary for the Development Plan, if different from
the requirements of Sections 3.5.1 and 3.5.2. The Development Committee shall
review the Development Plan on an ongoing basis and may make changes to the
Development Plan then in effect as it deems appropriate. Each year during the
Development Program prior to the end of the tenth month of such year, the
Development Committee shall agree on an annual Development Plan for the
following calendar year. During the term of the Development Program, the
Development Committee may agree to change the activities of the Development
Program. In such event, subject to the provisions of Section 3.5, the parties
shall discuss and agree on (i) the objectives of the redirected Development
Program, and (ii) additional funding, if any, which will be made by each Party
in support of the Development Program. The Parties shall meet and negotiate in
good faith, within ninety (90) days of the Effective Date, an initial
Development Plan that shall include at least the following:
3.2.1 Integ Development Responsibilities. Integ shall be responsible for:
(a) development of the Sampler;
(b) design and manufacturing development of a means to integrate the
Sampler and Test Strips;
(c) mechanical design of the interface of the Meter system with the
Sampler;
(d) manufacture of the packaged and sterile Sampler, including a Sampler
incorporating the Test Strip; and
(e) payment of all royalties due any Third Parties with respect to Integ
Technology in existence as of the Effective Date necessary for the
manufacture, use or sale of the Products.
3.2.2 Amira Development Responsibilities. Amira shall be responsible for:
(a) development and calibration of a sterilizable Test Strip;
(b) Test Strip manufacturing and scale-up and bulk shipping system
development;
(c) defining Test Strip environmental and packaging requirement inputs for
the Sampler;
(d) development of Meter electronics, optics, calibration and software;
(e) management of ongoing Meter contract manufacturing;
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(f) if required under Section 6.3, manufacture of the Sampler, including
Samplers which incorporate the Test Strip;
(g) filing and holding title to all regulatory submissions in its name in
connection with the Development Program;
(h) labeling and packaging the Products for final sale;
(i) marketing, sales, distribution and customer service of the Products;
and
(j) payment of all royalties due any Third Parties with respect to Amira
Technology, or Integ Technology developed after the Effective Date,
necessary for the manufacture, use or sale of the Products.
3.3 Development Committee.
3.3.1 Membership. The Development Committee shall be comprised of two
representatives from Amira and two representatives from Integ. Amira and Integ
may replace its Development Committee representatives at any time, with written
notice to the other party. Amira may also have one additional representative
with visitation rights to the Development Committee.
3.3.2 Decisions. Each representative of Amira and Integ shall have one vote
on the Development Committee, which vote may be cast by proxy. Decisions of the
Development Committee shall be made by majority vote. A unanimous vote of the
Development Committee shall be required for the following: (i) the selection of
milestones with respect to research regarding Product manufacture development;
and (ii) any redirection or expansion of the Development Program beyond those
activities and responsibilities described in the initial Development Plan, which
by their actions cause the Parties to spend unforeseen amounts. In the event
that the Development Committee fails to reach a majority (or, if applicable,
unanimous) consensus on a decision required pursuant to this Agreement, the
Development Committee shall notify the Chairman of the Board of Directors of
each of Integ and Amira in writing of such failure and of all information
relevant to such decision. The respective Chairmen shall then attempt in good
faith to reach a unanimous consensus on such decision. Failure of the
Development Committee or the parties' respective Chairmen to reach a consensus
on any such decision shall not be considered a breach of this Agreement.
3.3.3 Responsibilities. It will be the responsibility of the Development
Committee, among other things, to (i) oversee the conduct of the Development
Program, and (ii) prepare and approve the Development Plan and the detailed
working program (including timetables) to be carried out. The activities
conducted in connection with the Development Plan shall be monitored by the
Development Committee and periodically reviewed.
3.3.4 Meetings. During the term of this Agreement, the Development
Committee shall meet quarterly, or more often as may be necessary, to discharge
its
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responsibilities. Such meetings shall take place in St. Xxxx, Minnesota, or such
other locations as the parties agree, or by way of video or telephone conference
if practicable. Each Party will pay its own expenses in connection with these
meetings. Amira shall prepare minutes of the Development Committee meetings
covering all essential points discussed, which minutes shall be approved and
signed by a Development Committee representative of each Party.
3.4 Records; Exchange of Information.
3.4.1 Records. The Parties shall maintain (i) financial records in
sufficient detail to establish how the budgeted Development Program funds are
expended, and (ii) scientific records as will properly reflect all work done and
results achieved in the performance of the Development Plan (including all data
in the form required under any applicable governmental regulations). During the
term of this Agreement, the Parties shall provide each other access to such
records, upon reasonable prior request, during ordinary business hours.
3.4.2 Reports. The Development Committee shall periodically and not less
often than semiannually during the term of the Development Program, request and
the Parties shall have the obligation to prepare and provide to the Development
Committee written reports summarizing the progress of the research performed
pursuant to the Development Plan during the preceding half-year.
3.5 Development Program Contributions and Funding. Each Party shall
independently bear the costs and contribute the necessary resources for the
development activities for which each party is responsible, including (i) the
necessary resources to most efficiently execute clinical trials, and (ii) the
resources required for integration of their respective technologies into a
Product and (iii) the resources required to complete its requirements under the
Development Plan as set forth in Section 3.2.1 or 3.2.2 as the case may be. It
shall be agreed that in no event shall Integ's contribution exceed its capital
or resources existing as of the Effective Date. In the event that Integ exhausts
its resources on the development of Products, satisfaction of current financial
commitments, and maintenance of its public reporting responsibilities during the
Development Program, (a) Amira shall not be entitled to conduct Integ's
responsibilities under the Development Program primarily at Amira's facilities
and (b) Amira will lend Integ the minimum funding required for Integ to produce
annual audited and quarterly unaudited financial statements, file reports
required under the Securities Exchange Act of 1934, comply with annual meeting
requirements and comply with requirements of The Nasdaq Stock Market to retain a
listing on one of Nasdaq's markets. Any such loan will be unsecured, will bear
interest at the minimum rate necessary to avoid imposed interest and will be due
10 years after being loaned except that if Integ terminates this Agreement
pursuant to Section 11.2, no amounts shall be payable to Amira under this loan.
3.5.1 Integ Employees. Integ shall devote the number of full time employees
to work on the Development Program, primarily on-site at the Integ facility, as
the Development Committee determines is necessary to effect the Development
Plan. These employees will
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remain full time employees of Integ and shall be 100% dedicated to the
Development Program. Amira shall have the right, at its option and as approved
by the Development Committee, to pay bonuses directly to key Integ employees.
Such bonuses will be measured against development milestones to be defined in
the Development Plan for the purpose of effecting the most rapid Product
development.
3.5.2 Amira Employees. Amira shall devote the number of full time employees
to work on the Development Program, on-site at Amira's facilities, as the
Development Committee determines is necessary to effect the Development Plan.
Amira shall also devote two (2) full time employees to work on the Development
Program, primarily on-site at the Integ facility, for the purpose of completing
the Development Plan. If the Development Committee determines that the
Development Plan may proceed more expeditiously with the supply of additional
Amira employees at Integ's facilities to conduct the Research Program, Amira
shall devote more employees to work on the Development Program on-site at the
Integ facility for the purpose of completing the Development Plan. All such
employees will remain full time employees of Amira.
3.5.3 Non-solicitation. During the Development Program, Amira shall not,
without Integ's prior written consent, directly or indirectly solicit (or
attempt to solicit) Integ employees to leave their employment with Integ or hire
any Integ employees.
4. LICENSE GRANTS
4.1 Integ License Grants.
4.1.1 Integ License to Amira.
(a) Integ hereby grants to Amira a non-transferable, exclusive
license, to use the Integ Technology for commercialization (including the
right to import, have imported, use, offer for sale, and sell products
which incorporate the Integ Technology) in the Field in the Territory.
(b) Integ hereby grants to Amira a non-transferable exclusive license,
with right of sublicense, under the Integ Technology to make and have made
products which incorporate the Integ Technology, including the Products, in
the Field in the Territory. Amira agrees not to exercise its rights under
Section 4.1.1(b) with regard to Samplers and Samplers integrated with Test
Strips, unless and until Amira has given Integ written notice pursuant to
Section 6.3 below, that Amira wishes to manufacture the Sampler, and
Samplers integrated with the Test Strip.
(c) The licenses granted to Amira pursuant to this Section 4.1.1 shall
terminate upon the occurrence of the events set forth in Section 4.4.3
hereof.
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4.1.2 Sublicenses. Amira may sublicense the rights granted in Section 4.1.1
to its Affiliates and to Third Parties only in order to effectuate the
manufacture and distribution of the Products. Each such sublicense shall be
consistent with all the terms and conditions of this Agreement, and in
particular Amira shall cause each sublicensee to agree not to exercise its
rights under Section 4.1.1(b) unless and until Amira can exercise its rights
under Section 4.1.1(b). Amira shall remain responsible to Integ for all of each
such sublicensee's applicable financial and other obligations under the
sublicense.
4.2 Amira License Grant.
4.2.1 Amira hereby grants to Integ a license, which shall be co-exclusive
with Amira, with no right of sublicense, under the Amira Technology for research
and development in the Field.
4.2.2 Amira hereby grants to Integ a license, which shall be co-exclusive
with Amira, with no right of sublicense, under the Amira Technology to make,
have made, use, import, have imported, or otherwise transfer physical possession
of (but not to sell, lease, offer to sell or lease, or otherwise transfer title
to any person other than Amira and its Affiliates) products which incorporate
the Amira Technology in the Field.
4.3 Access. Integ shall provide access to the Integ Technology to any of
Amira's employees who are working on the Development Plan in pursuit of the
Development Plan. Amira shall provide access to the Amira Technology to any of
Integ's employees who are working on the Development Plan in pursuit of the
Development Plan.
4.4 Change in Ownership of Integ.
4.4.1 Integ hereby grants to Amira a perpetual, transferable, co-exclusive
with Integ and non-terminable (except as provided in Section 11.3.2(b)) license,
including the right to sublicense, under the Integ Technology existing before
the Effective Date, to make, have made, import, have imported, use, offer for
sale and sell products which incorporate such Integ Technology, including
without limitation Products, for use in the Field.
4.4.2 Integ hereby grants to Amira an exclusive, perpetual transferable and
non-terminable (except as provided in Section 11.3.2(b)) license, including the
right to sublicense, under any Integ Technology developed after the Effective
Date, to make, have made, import, have imported, use, offer for sale and sell
products which incorporate such Integ Technology, including without limitation
Products, for use in the Field.
4.4.3 Amira shall not exercise any of its rights under this Section 4.4
unless and until Integ is Acquired. "Acquired" means that a Third Party (or a
"group" as defined under Section 13(d) of the Securities Exchange Act of 1934)
has obtained (a) possession or control, directly or indirectly, of all or
substantially all of Integ's assets, through a purchase or other
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transfer, or (b) has obtained, directly or indirectly, the power to direct or
cause the direction of management and policies of Integ through a merger of
Integ with or into another entity, recapitalization of Integ or, issuance or
acquisition of voting securities of Integ. Integ shall be deemed to have been
Acquired if Integ or its Affiliate, directly or indirectly, enters into any
agreement with Xxxxxx Laboratories, Xxxxx XX, Xxxxxxx & Xxxxxxx, or Roche, or
any person or entity controlling, controlled by or under common control with any
of those entities.
4.5 Retained Rights; No Further Rights. Only the licenses granted pursuant
to the express terms of this Agreement shall be of any legal force or effect. No
other license rights shall be granted or created by implication, estoppel, or
otherwise.
5. COMMERCIALIZATION
5.1 Reasonable Efforts. Amira shall use commercially reasonable efforts,
comparable to those efforts Amira makes with respect to other products of
comparable value, developmental stage and clinical indication, to obtain and
maintain all approvals, registrations and government authorizations necessary
for commercial sale of the Products worldwide. Amira will use commercially
reasonable efforts to actively pursue commercial sales of the Products in each
country in which regulatory approval is obtained.
5.2 Delivery of Know-How. During the term of this Agreement, each Party
shall deliver to the other Party such Know-How and other information relating to
the Integ Technology, Amira Technology, Amira/Integ Inventions and the
Product(s) as is necessary for the other Party's performance under this
Agreement.
6. PRODUCT MANUFACTURE
6.1 Manufacturing Plan. The Development Committee shall determine a
manufacturing plan that shall establish: (i) the first-year and five-year
production volumes of Products; (ii) manufacturing responsibilities; and (iii)
budget for corresponding plant and equipment required ("Manufacturing Plan").
The Development Committee shall review the Manufacturing Plan on an ongoing
basis and may make changes to the Manufacturing Plan then in effect. Amira will
fund the incremental plant and equipment costs associated with meeting the
Manufacturing Plan.
6.2 Manufacture of Products.
6.2.1 Manufacture of Products by Amira. Amira shall be responsible for the
manufacture of all Meters, any portion of the Sampler included in the Meters and
Test Strips. All Products manufactured by or on behalf of Amira will conform
with all FDA regulations relating to Good Manufacturing Practices and all
applicable comparable foreign laws and regulations.
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6.2.2 Supply of Products by Amira. Amira shall supply Test Strips for
integration with Samplers free of charge to Integ in quantities that
sufficiently meet production demand as set by the Manufacturing Plan. Amira
shall deliver the Products to Integ C.I.F. Integ.
6.2.3 Manufacture of Products by Integ. Integ shall be responsible for the
manufacture of all Samplers (except for any portion of the Sampler included in a
Meter) and integrating Amira's Test Strips with Samplers (except for any portion
of the Sampler included in a Meter). All Products manufactured by or on behalf
of Integ will conform with all FDA regulations relating to Good Manufacturing
Practices and all applicable comparable foreign laws and regulations.
6.2.4 Supply of Products by Integ. Integ shall supply Samplers (except for
any portion of the Sampler included in a Meter) to Amira, including Samplers
integrating Amira's Test Strips, at *** , and in no event greater than *** per
unit (not including cost of Test Strip); provided however, that if the Option
has become exercisable and has not been exercised by Integ within the time
period set forth in the Option Agreement, Integ will supply Samplers integrating
Amira's Test Strip at *** , and in no event greater than *** per unit (not
including cost of Test Strip). Integ shall deliver the Products to Amira F.O.B.
Integ. If the Consumer Price Index has increased by more than 8% over the three
years after the Effective Date, the Parties will negotiate in good faith an
increase in the *** or *** per unit, respectively, to reflect increases in
Integ's manufacturing costs during that period.
6.3 Election of Product Manufacture.
6.3.1 Election of Product Manufacture by Amira. In the event Integ is
unable to meet set manufacturing minimums, Amira will be entitled to assume the
right to manufacture the Sampler, including Samplers integrated with Test
Strips, by providing written notice to Integ and subject to payment of a royalty
which will be equal to *** per Product (not including Test Strip) *** ; provided
however, that if the Option has become exercisable and has not been exercised by
Integ within the time period set forth in the Option Agreement, the royalty will
be *** per Product (not including Test Strip) *** .
6.3.2 Transfer of Manufacturing Know-How. Within 60 days of the election by
Amira to manufacture Samplers, Integ will deliver to Amira all Integ Know-How
relating to the manufacture of the Sampler, including Samplers integration with
the Test-Strip, existing as of the Effective Date and developed in connection
with the Development Program. In such event, the parties shall cooperate with
each other in order that Amira may initiate manufacture of the Sampler,
including Samplers integrated with the Test-Strip, as soon as practicable, and
shall take such actions as are appropriate to achieve such goal.
*** Confidential treatment requested pursuant to Rule 24b-2 of the Securites
Exchange Act of 1934, as amended.
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6.4 Records; Reports; Inspection. Integ and Amira shall each keep complete,
true and accurate books of account and records for the purpose of determining
Integ's Costs and Amira's Costs, respectively, under this Agreement. Such books
and records shall be kept at the principal place of business of Integ or Amira,
as the case may be, for at least two years following the end of the calendar
quarter to which they pertain. Such records will be open for inspection during
such two year period by a representative of Amira or Integ, as the case may be,
for the purpose of verifying Integ's Cost or Amira's Costs, as the case may be.
Such inspections may be made no more than once each calendar year, at reasonable
times mutually agreed. The representative will be obliged to execute a
reasonable confidentiality agreement prior to commencing any such inspection.
Inspections conducted under this Section 6.4 shall be at the expense of the
party requesting such inspection.
7. INTELLECTUAL PROPERTY
7.1 Ownership of Inventions.
7.1.1 Integ Ownership. Integ shall own (and Amira hereby assigns to Integ)
all right, title and interest in and to all inventions, discoveries and other
intellectual property conceived, developed or reduced to practice by Integ or
Amira, and which is derived from the Integ Technology alone. Integ shall own all
right, title and interest in and to all inventions, discoveries and other
intellectual property conceived, developed or reduced to practice by Integ alone
which is not derived from the Integ Technology or the Amira Technology.
7.1.2 Amira Ownership. Amira (or to the extent required by licenses granted
to Amira, Amira's licensor) shall own (and Integ hereby assigns to Amira or such
licensor) all right, title and interest in and to all inventions, discoveries,
and other intellectual property conceived, developed or reduced to practice, and
which is derived from the Amira Technology alone. Amira shall own all right,
title and interest in and to all inventions, discoveries and other intellectual
property conceived, developed or reduced to practice by Amira alone which is not
derived from the Integ Technology or the Amira Technology.
7.1.3 Joint Ownership. Subject to Sections 7.1.1 and 7.1.2, all right,
title and interest in and to all inventions and other intellectual property made
jointly by employees of Integ and Amira, and either (a) derived from both the
Integ Technology and the Amira Technology, or (b) derived from neither the Integ
Technology or the Amira Technology, shall be jointly owned by Integ and Amira
(each an "Amira/Integ Invention").
7.1.4 Future Actions. Each Party agrees to sign and deliver the
applications, instruments of assignment and other documents reasonably requested
by the other Party to perfect the requesting Party's (or, if applicable, its
licensor's) ownership of intellectual property assigned to it under Sections
7.1.1, 7.1.2 or 7.1.3.
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7.2 Patent Prosecution.
7.2.1 Patent Rights. Amira shall be responsible, at its expense, for the
preparation, filing, prosecution and maintenance of the patent applications and
patents of all inventions and other intellectual property rights arising out of
or in connection with the Development Program in countries selected by Amira,
and for conducting any interferences, reexaminations, reissues, oppositions, or
request for patent term extension relating thereto. Any Patents shall be
assigned to Integ, Amira or Integ and Amira in accordance with the provisions of
Section 7.1 hereof.
7.2.2 Failure to Prosecute. In the event that Amira declines to file or,
having filed, declines to further prosecute and maintain any patent applications
or patents for any invention owned by Integ subject to Section 7.2.1 above,
Amira shall provide Integ notice thereof prior to the expiration of any deadline
relating to such activities, but in any event at least 30 days prior notice, and
Integ shall have the right, but not the obligation, to file, prosecute and
maintain such patent applications or patents, at Integ's expense, using counsel
of its choice.
7.2.3 Cooperation. Each party shall be given an opportunity to review the
other party's activities relating to joint inventions and Integ inventions or
Amira inventions pursuant to Section 7.2.1 and provide input thereto. Amira
shall include in such patent applications such claims as Integ may reasonably
request. Amira shall keep Integ fully informed as to the status of such patent
matters, including, without limitation, by providing Integ the opportunity, at
Integ's expense, to review and comment on any documents relating to Integ
Technology which will be filed in any patent office at least 30 days before such
filing, and promptly providing Integ copies of any documents relating to Integ
Technology which Amira receives from such patent offices, including notice of
all interferences, reissues, reexaminations, oppositions or requests for patent
term extensions.
7.3 Enforcement.
7.3.1 In the event that any Integ Technology necessary for manufacture, use
and sale of a Product is infringed or misappropriated by a Third Party in any
country or is subject to a declaratory judgment action arising from such
infringement or misappropriation in such country, or is the subject of an
interference, re-examination, reissue or opposition proceeding, the party
becoming aware thereof shall promptly notify the other party hereto. Integ shall
have the initial right (but not the obligation), at its expense, to bring suit
to xxxxx any infringement or misappropriation of Integ Technology, using counsel
of its choice. In the event that Integ fails to initiate a suit to enforce such
Integ Technology against a commercially significant infringement in the Field by
a Third Party within 30 days, Amira may initiate such suit to xxxxx such
infringement or misappropriation, and Amira shall bear the expenses associated
therewith; provided, Amira may not enter into any settlement without the prior
consent of Integ, which shall not be unreasonably withheld, and may not make any
statement which admits that any of the Integ Patent Rights or other intellectual
property licensed to Amira pursuant to this Agreement
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are invalid or unenforceable. The party involved in any such claim, suit or
proceeding, shall keep the other party hereto reasonably informed of the
progress of any such claim, suit or proceeding and each party shall cooperate
reasonably in connection with the pursuit of any such action, at the request and
expense of the party requesting such cooperation. Any recovery by such party
received as a result of any such claim, suit or proceeding shall be used first
to reimburse the parties hereto for all expenses (including court costs,
attorneys and professional fees and other expenses of all kinds) incurred in
connection with such claim, suit or proceeding. 75% of the remainder shall be
retained by the party initiating the suit and 25% of the remainder shall be paid
to the other party.
7.3.2 In the event that any Amira Technology necessary for manufacture, use
and sale of a Product is infringed or misappropriated by a Third Party in any
country or is subject to a declaratory judgment action arising from such
infringement or misappropriation in such country, or is the subject of an
interference, re-examination, reissue or opposition proceeding, the party
becoming aware thereof shall promptly notify the other party hereto. Amira shall
have the initial right (but not the obligation), at its expense, to bring suit
to xxxxx any infringement or misappropriation of Amira Technology, using counsel
of its choice. In the event that Amira fails to initiate a suit to enforce such
Amira Technology against a commercially significant infringement in the Field by
a Third Party within 30 days, Integ may initiate such suit to xxxxx such
infringement or misappropriation, and Integ shall bear the expenses associated
therewith; provided, Integ may not enter into any settlement without the prior
consent of Amira, which shall not be unreasonably withheld, and may not make any
statement which admits that any of the Amira Patent Rights or other intellectual
property licensed to Integ pursuant to this Agreement are invalid or
unenforceable. The party involved in any such claim, suit or proceeding, shall
keep the other party hereto reasonably informed of the progress of any such
claim, suit or proceeding and each party shall cooperate reasonably in
connection with the pursuit of any such action, at the request and expense of
the party requesting such cooperation. Any recovery by such party received as a
result of any such claim, suit or proceeding shall be used first to reimburse
the parties hereto for all expenses (including court costs, attorneys and
professional fees and other expenses of all kinds) incurred in connection with
such claim, suit or proceeding. 75% of the remainder shall be retained by the
party initiating the suit and 25% of the remainder shall be paid to the other
party.
7.4 Infringement Claims. If the manufacture, sale or use of the Product(s)
pursuant to this Agreement results in any claim, suit or proceeding alleging
patent infringement against Amira or Integ, such party shall promptly notify the
other party hereto. If Integ is not named as a party in such a suit or
proceeding, Integ may, at its own expense and through counsel of its own choice,
seek leave to intervene in such suit or proceeding. Amira agrees not to oppose
such intervention. If Integ, and not Amira, is named as a party to such suit or
proceeding, Integ shall have the right to control the defense and settlement of
such suit or proceeding, at its own expense, using counsel of its own choice,
however Amira, at its own expense and through counsel of its own choice, may
seek to intervene if the suit or proceeding relates to the commercialization of
the Product(s) in the Field. Integ agrees not to oppose such intervention. If
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both Integ and Amira are named as parties in such suit or proceeding, or become
parties through intervention, each shall have the right, at its own expense and
through counsel of its own choice, to present its own defense and to determine
its own terms for settlement. If Integ shall, at any time, tender its defense to
Amira, then Amira shall defend Integ in such suit or proceeding, at Amira's own
expense and through counsel of its own choice, and Integ shall then have the
right to determine the terms for settlement. The parties shall cooperate with
each other in connection with any such claim, suit or proceeding and shall keep
each other reasonably informed of all material developments in connection with
any such claim, suit or proceeding.
8. REPRESENTATIONS AND WARRANTIES
8.1 Integ hereby makes to Amira the representations and warranties
contained in Section 10 of the Option Agreement as if fully set forth herein.
Amira hereby makes to Integ the representations and warranties contained in
Section 9 of the Option Agreement as if fully set forth herein.
8.2 Disclaimer of Warranties. Integ and Amira specifically disclaim that
the Development Program will be successful in whole or part. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT AND SUBJECT TO THE INDEMNITY PROVISIONS OF
ARTICLE 10, INTEG AND AMIRA AND THEIR RESPECTIVE AFFILIATES MAKE NO
REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER
EXPRESS OR IMPLIED, WITH RESPECT TO THE PATENT RIGHTS AND KNOW-HOW, OR PRODUCTS
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OF THE PATENT RIGHTS OR KNOW-HOW LICENSED
HEREUNDER, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.
9. CONFIDENTIALITY
9.1 Confidential Information. Except as expressly provided herein or in the
Option Agreement, the parties agree that, for the term of this Agreement and for
five years thereafter, the receiving party shall keep completely confidential
and shall not publish or otherwise disclose and shall not use for any purpose
except for the purposes contemplated by this Agreement any Confidential
Information furnished to it by the disclosing party hereto pursuant to this
Agreement or the Option Agreement, except that to the extent that it can be
established by the receiving party by competent proof that such Confidential
Information:
(a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;
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(c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement;
(d) was independently developed by the receiving party as demonstrated
by documented evidence prepared contemporaneously with such independent
development; or
(e) was subsequently lawfully disclosed to the receiving party by a
person other than a party.
9.2 Permitted Use and Disclosures. Each party hereto may use or disclose
information disclosed to it by the other party to the extent such use or
disclosure is reasonably necessary to comply with the rules of any applicable
securities exchange, the Nasdaq National Market or other self regulatory
organization, in filing or prosecuting patent applications, prosecuting or
defending litigation, complying with applicable governmental regulations, law,
legal process or otherwise submitting information to tax or other governmental
authorities, conducting clinical trials, or making a permitted sublicense or
otherwise exercising its rights hereunder, provided that if a party is required
to make any such disclosure of another party's confidential information, other
than pursuant to a confidentiality agreement, it will give reasonable advance
notice to the latter party of such disclosure and, save to the extent
inappropriate in the case of patent applications will use its best efforts to
secure confidential treatment of such information (including the significant
financial terms of this Agreement) prior to its disclosure (whether through
protective orders or otherwise) and disclose such information only to the
minimum extent necessary to comply with such requirements.
9.3 Public Disclosure. Except as otherwise required by law, legal process,
or the rules of any applicable securities exchange, the Nasdaq National Market
or other self-regulatory organization, neither party shall issue a press release
or make any other public disclosure of the terms of this Agreement or regarding
the results of the Development Program without the prior approval of the other
party of such press release or public disclosure. Each party shall submit any
such press release or public disclosure to the other party, and the receiving
party shall have five days to review and approve any such press release or
public disclosure, which approval shall not be unreasonably withheld. If the
receiving party does not respond within such five day period, the press release
or public disclosure shall be deemed approved. In addition, if a public
disclosure is required by law, including without limitation in a filing with the
Securities and Exchange Commission, the disclosing party shall provide copies of
the disclosure reasonably in advance of such filing or other disclosure for the
nondisclosing party's prior review and comment, will disclose such information
only to the minimum extent necessary to comply with such requirements and, if
reasonably requested by the nondisclosing party, will seek confidential
treatment of such information prior to making such public disclosure.
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9.4 Injunctive Relief. Notwithstanding Section 12.2 (Arbitration), Integ
and Amira hereby acknowledge that damages at law may be an inadequate remedy for
the breach of any of the covenants, promises and agreements contained in this
Article 9, and accordingly, Integ or Amira, as the case may be, may be entitled
to injunctive relief with respect to any such breach, including specific
performance of such covenants, promises or agreements or an order enjoining
Integ or Amira from any threatened, or from the continuation of any actual,
breach of covenants, promises or agreements. The rights set forth in this
Section 9.4 shall be in addition to any other rights which Integ or Amira may
have at law or in equity.
10. INDEMNIFICATION
10.1 Indemnification of Amira. Integ shall indemnify Amira and its
Affiliates and the directors, officers, employees, agents and counsel of Amira
and such Affiliates and the successors and assigns of any of the foregoing (the
"Amira Indemnitees"), harmless from and against any and all liabilities,
damages, losses, costs or expenses (including reasonable attorneys' and
professional fees and other expenses of litigation and/or arbitration) resulting
from a claim, suit or proceeding brought by a Third Party against an Amira
Indemnitee, arising from or occurring as a result of activities performed by or
on behalf of Integ in connection with the Development Program, or as the result
of activities performed in connection with the use, development, manufacture,
and commercialization of the Products, except to the extent caused by the
negligence or willful misconduct of Amira. In no event shall any indemnification
that Integ is required to provide under this Section 10.1 reduce the amount of
the Merger Consideration payable pursuant to the Option Agreement. To the extent
that insurance proceeds and Integ's resources are not sufficient to provide the
indemnification required by Integ hereunder, then in lieu of such additional
indemnification Amira shall be entitled to terminate this Agreement and to hold
the licenses granted in Section 11.3.2 hereof, but the Option shall not be
terminated.
10.2 Indemnification of Integ. Amira shall indemnify Integ and its
Affiliates and the directors, officers, employees, agents and counsel of Integ
and such Affiliates and the successors and assigns of any of the foregoing (the
"Integ Indemnitees"), from and against any and all liabilities, damages, losses,
costs or expenses (including reasonable attorneys' and professional fees and
other expenses of litigation and/or arbitration) resulting from a claim, suit or
proceeding brought by a Third Party against a Integ Indemnitee, arising from or
occurring as a result of activities performed by or on behalf of Amira in
connection with the Development Program, or as the result of activities
performed by or on behalf of Amira in connection with the use, development,
manufacture, commercialization, or sale the Products, except to the extent
caused by the negligence or willful misconduct of Integ.
10.3 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 10 shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its Affiliates, or their directors,
officers, employees or agents intend to claim such indemnification, and the
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Indemnitor shall have the right to participate in, and, to the extent the
Indemnitor so desires, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an Indemnitee shall have
the right to retain its own counsel, with the fees and expenses to be paid by
the Indemnitor, if representation of such Indemnitee by the counsel retained by
the Indemnitor would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other party represented by such
counsel in such proceeding. The Indemnitor shall control the defense and/or
settlement of any such action claim or liability, and the indemnity agreement in
this Article 10 shall not apply to amounts paid in connection with any loss,
claim, damage, liability or action if such payments are made without the consent
of the Indemnitor, which consent shall not be withheld unreasonably. The failure
to deliver written notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article 10 At the Indemnitor's request, the Indemnitee under this Article
10, and its employees and agents, shall cooperate fully with the Indemnitor and
its legal representatives in the investigation of any action, claim or liability
covered by this indemnification and provide full information with respect
thereto.
11. TERM AND TERMINATION
11.1 Term. This Agreement shall be effective as of the Effective Date and
shall continue unless otherwise terminated earlier pursuant to this Article 11.
11.2 Termination for Cause. Either party may terminate this Agreement in
the event the other party has materially breached or defaulted in the
performance of any of its material obligations hereunder or under the Option
Agreement, and such default has continued for 60 days after written notice
thereof was provided to the breaching party by the nonbreaching party. Upon
provision of a written notice of termination to the breaching party at the end
of such 60 day period, the termination shall become effective unless the
breaching party has cured any such breach or default prior to the expiration of
the 60 day period. No waiver of a breach is implied by a Party's failure to give
notice of breach to the other.
11.3 Effect of Breach or Termination.
11.3.1 Accrued Obligations. Termination of this Agreement for any
reason shall not release any party hereto from any liability which, at the
time of such termination, has already accrued to the other party or which
is attributable to a period prior to such termination nor preclude either
party from pursuing all rights and remedies it may have hereunder or at law
or in equity with respect to any breach of this Agreement. For the
avoidance of doubt, it is agreed that following the termination of the
Agreement Amira shall have no obligation to provide any funding to Integ
under Section 3.5 after such date.
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11.3.2 Licenses.
(a) In the event that Amira terminates this Agreement pursuant to
Section 11.2, (i) Integ shall be deemed to have granted on the Effective
Date to Amira a royalty-free co-exclusive, worldwide, non-terminable
license, including the right to sublicense, under the Integ Technology
existing before the Effective Date, to make, have made, import, have
imported, use, offer for sale and sell products incorporating the Integ
Technology in the Field, (ii) Integ shall be deemed to have granted to
Amira on the Effective Date an exclusive, perpetual, worldwide and
non-terminable license, including the right to sublicense, under the Integ
Technology developed after the Effective Date, to make, have made, import,
have imported, use, offer for sale and sell products incorporating the
Integ Technology in the Field; (iii) the licenses and rights granted by
Amira to Integ hereunder shall terminate .
(b) In the event that Integ terminates this Agreement pursuant to
Section 11.2, (i) Amira shall be deemed to have granted on the Effective
Date to Integ a royalty-free non-exclusive, worldwide, non-terminable
license, including the right to sublicense with respect to manufacturing
and distribution only, under the Amira Technology, to make, have made,
import, have imported, use, offer for sale and sell Products incorporating
both the Amira Technology, and a Sampler, in the Field; and (ii) the
licenses granted to Amira hereunder shall terminate.
11.3.3 Bankruptcy. All licenses granted under or pursuant to this Agreement
by a Party (a "Licensor") to the other Party (a "Licensee") are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy
Code, licenses of rights to "intellectual property" as defined under Section 101
of the Bankruptcy Code. If the trustee in bankruptcy for the Licensor rejects
this Agreement (i) the Licensee may retain its rights (including a right to
enforce any exclusivity provision of this Agreement, but excluding any other
right under applicable nonbankruptcy law to specific performance of this
Agreement) under this Agreement and under any agreement supplementary to this
Agreement to the Licensor's Technology as such rights existed immediately before
the Licensor filed or became the subject of a petition in bankruptcy, for the
duration of this Agreement and on the other terms of Section 365(n), including
its right to receive from the trustee in bankruptcy such Technology held by the
trustee. These rights of Licensee shall continue notwithstanding any rejection
or attempted rejection of the Licensor's other executory obligations under this
Agreement.
11.4 Survival. Sections 1, 4.4, 7, 9, 10 11 and 12 shall survive the
expiration or termination of this Agreement for any reason. Section 8 shall
survive until March 31, 2000 except that the representatives and warranties of
each Party concerning intellectual property shall survive until consummation of
the Merger.
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12. MISCELLANEOUS
12.1 Governing Law. This Agreement and any dispute, including without
limitation any arbitration, arising from the performance or breach hereof shall
be governed by and construed and enforced in accordance with the laws of the
state of New York, without reference to conflicts of laws principles.
12.2 Arbitration. Any dispute under this Agreement which is not settled by
mutual consent shall be finally settled by binding arbitration, conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association by three arbitrators appointed in accordance with said rules. The
arbitration shall be held in Denver, Colorado and at least one of the
arbitrators shall be an independent expert in medical devices. The arbitrators
shall determine what discovery will be permitted, consistent with the goal of
limiting the cost and time which the Parties must expend for discovery; provided
the arbitrators shall permit such discovery as they deem necessary to permit an
equitable resolution of the dispute. The costs of the arbitration, including
administrative and arbitrators' fees, shall be shared equally by the parties and
each party shall bear its own costs and attorneys' and witness' fees incurred in
connection with the arbitration. A disputed performance or suspended
performances pending the resolution of the arbitration must be completed within
30 days following the final decision of the arbitrators or such other reasonable
period as the arbitrators determine in a written opinion. Any arbitration
subject to this Section 12.2 shall be completed within one year from the filing
of notice of a request for such arbitration. The arbitration proceedings and the
decision shall not be made public without the joint consent of the parties and
each party shall maintain the confidentiality of such proceedings and decision
unless otherwise permitted by the other party. Any decision which requires a
monetary payment shall require such payment to be payable in United States
dollars, free of any tax or other deduction. The parties agree that the decision
shall be the sole, exclusive and binding remedy between them regarding any and
all disputes, controversies, claims and counterclaims presented to the
arbitrators. Application may be made to any court having jurisdiction over the
party (or its assets) against whom the decision is rendered for a judicial
recognition of the decision and an order of enforcement.
12.3 Waiver. Neither party may waive or release any of its rights or
interests in this Agreement except in writing. The failure of either party to
assert a right hereunder or to insist upon compliance with any term or condition
of this Agreement shall not constitute a waiver of that right or excuse a
similar subsequent failure to perform any such term or condition.
12.4 Assignment. This Agreement shall not be assignable by either party to
any Third Party hereto without the prior written consent of the other party
hereto, which may be withheld for any or no reason; provided that Amira shall
not need the prior written consent of Integ to the assignment of this Agreement
in connection with a Sale (as such term is defined in the Option Agreement). An
acquisition of control of Integ by a Third Party shall be deemed to be an
assignment of this Agreement requiring the consent of Amira.
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12.5 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by telecopy or
other electronic facsimile transmission, by registered or certified mail, return
receipt requested, postage prepaid, or by a nationally recognized courier
service, prepaid (for example, Federal Express) in each case to the respective
address specified below, or such other address as may be specified in writing to
the other parties hereto:
AMIRA: Amira Medical
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Attn: Chief Financial Officer
INTEG: Integ Incorporated
0000 Xxxxxx Xxxx
Xx. Xxxx, XX 00000
Attn: President
12.6 Force Majeure. Neither party shall be liable to the other for failure
or delay in the performance of any of its obligations under this Agreement for
the time and to the extent such failure or delay is caused by riots, civil
commotions, wars, hostilities between nations, governmental laws, orders or
regulations, embargoes, actions by the government or any agency thereof, acts of
God, storms, earthquakes, fires, floods, accidents, labor disputes or strikes,
sabotage, explosions or other similar or different contingencies, in each case,
beyond the reasonable control for the respective parties. The party affected by
Force Majeure shall provide the other party with full particulars thereof as
soon as it becomes aware of the same (including its best estimate of the likely
extent and duration of the interference with its activities), and will use its
best endeavors to overcome the difficulties created thereby and to resume
performance of its obligations as soon as practicable.
12.7 Independent Contractors. Both parties are independent contractors
under this Agreement. Nothing contained in this Agreement is intended nor is to
be construed so as to constitute Integ or Amira as partners or joint venturers
with respect to this Agreement. Neither party shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of the other party or to bind the other party to any other contract,
agreement, or undertaking with any Third Party.
12.8 Advice of Counsel. Integ and Amira have each consulted counsel of
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.
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12.9 Trademarks. Amira shall have the right to market Products in the Field
under Amira's or Integ's labels and trademarks subject to Integ's approval as to
quality.
12.10 Other Obligations. Except as expressly provided in this Agreement or
as separately agreed upon in writing between Integ and Amira, each party shall
bear its own costs incurred in connection with the implementation of the
obligations under this Agreement.
12.11 No Implied Licenses. No rights or licenses with respect to the Amira
Technology or the Integ Technology are granted or deemed granted hereunder or in
connection herewith, other than those rights expressly granted in this
Agreement.
12.12 Patent Marking. The Parties agree to xxxx and have their Affiliates
xxxx all Products they sell or distribute pursuant to this Agreement in
accordance with the applicable statute or regulations in the country or
countries of manufacture and sale thereof.
12.13 Compliance with Laws. Each party shall furnish to the other party any
information requested or required by that party during the term of this
Agreement or any extensions hereof to enable that party to comply with the
requirements of any U.S. or foreign federal, state and/or government agency.
12.14 Complete Agreement. This Agreement with its Exhibits, together with
the Option Agreement dated the Effective Date, constitutes the entire agreement,
both written and oral, between the parties with respect to the subject matter
hereof, and that all prior agreements respecting the subject matter hereof,
either written or oral, expressed or implied, are merged and canceled, and are
null and void and of no effect. No amendment or change hereof or addition hereto
shall be effective or binding on either of the parties hereto unless reduced to
writing and duly executed on behalf of both parties.
12.15 Headings. The captions to the several Sections and Articles hereof
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.
12.16 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, and both together shall be deemed to be
one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the Effective Date.
Amira Medical Integ Incorporated
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------- ----------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: President Title: Interim President
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