CONFIDENTIAL DOCUMENT
EXHIBIT 10.4
DISTRIBUTION AGREEMENT
This Agreement ("Agreement") is made and entered into on January 22, 2002
between:
XXXXXXXX PHARMACEUTICALS LTD., a corporation duly organized and existing under
the laws of England having its place of business at Xxxxxxx Xx, Xxxxxxxxx,
Xxxxxx, Xxxxxx Xxxxxxx XX0 0XX and Xxxxxxxx Pharma Srl, a corporation duly
organized and existing under the laws of Italy having its place of business at
Xxxxx Xxxxxx, 00, 00000 Xxxxxx, Xxxxx. Xxxxxxxx Pharmaceuticals Ltd and Xxxxxxxx
Pharma Srl are hereinafter collectively referred to as "Company"
and
CELL PATHWAYS, INC., a corporation duly organized and existing under the laws of
Delaware having a place of business at 000 Xxxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxxxx, 00000 hereinafter referred to as "Distributor".
Whereas Company has the exclusive rights to appoint exclusive distributors for
the Product in the Territory as defined below and has the right to supply
Products for that purpose.
Whereas Distributor wishes to become the exclusive distributor of such Products
in the Territory as set out herein.
Now, therefore, the Parties hereto in consideration of the premises and mutual
covenants and undertakings herein contained agree as follows:
ARTICLE 1. DEFINITIONS
1.1 "Affiliate" of a Party hereto shall mean any entity which controls,
is controlled by, or is under common control with such party. For purposes of
this definition, a Party shall be deemed to control another entity if it owns or
controls, directly or indirectly, more than fifty percent (50%) of the voting
equity of the other entity (or other comparable ownership interest for an entity
other than a corporation) or if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies, whether
through ownership of voting securities, by contract, or otherwise, of such other
entity.
1.2 "Approved Indication" shall mean the "management and relief of oral
pain, by adhering to the mucosal surface of the mouth for soothing of lesions of
various etiologies." The Approved Indication will be deemed amended or changed
in scope in accordance with any additional regulatory approvals of the Product
in the Territory.
1.3 "Competing Product" shall mean any product other than the Products
that is used for the Approved Indication.
1.4 "Effective Date" shall mean the date of receipt by Company of the
payment of $1,000,000 referred to in Section 5.3.
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1.5 "Force Majeure" is any factor beyond a Party's control, including,
without limitation, fire, explosion, accident, riot, flood, drought, storm,
earthquake, lightning, frost, civil commotion, sabotage, vandalism, smoke, hail,
embargo, act of God or the public enemy, other casualty, strike or lockout, or
interference, prohibition or restriction imposed by any government or any
officer or agent thereof.
1.6 "Forecast" shall mean forecasts of sales by Distributor as set
forth in Section 3.3 of this Agreement.
1.7 "Forecast Range" shall mean for any calendar quarter a quantity +/-
50% of Forecast for that quarter.
1.8 "Know-how" shall mean technical or scientific information (1)
regarding the Products which may be necessary, useful or advisable to enable
Distributor to promote, market and sell the Products in the Territory, and as is
or will be specified in the documentation which Company has delivered or will
deliver to Distributor after the Effective Date and during the term of this
Agreement; or (2) regarding the manufacture, packaging and labeling of the
Product consistent with the Specifications.
1.9 "Net Sales I" shall mean Distributor's (or any sub-distributor's)
gross sales of Products actually billed by Distributor or its Affiliates (or
sub-distributors) to unrelated third party customers less (a) rejection or
return of Products previously sold, and (b) any sales, excise, turnover and
similar taxes and any duties and other governmental charges imposed upon the
sale of Products.
1.10 "Net Sales II" shall mean Distributor's (or any sub-distributor's)
gross sales of Products actually billed by Distributor or its Affiliates (or
sub-distributors) to unrelated third party customers less (a) any direct or
indirect credits and allowances and adjustments granted to such customers for
the Products, including without limitation credits and allowances on account of
price adjustments or on account of the rejection or return of Products
previously sold, (b) any trade and/or cash discounts, rebates and distribution
fees, and (c) any sales, excise, turnover and similar taxes and any duties and
other governmental charges imposed upon the production, importation, use or sale
of Products, and (d) transportation, insurance and handling charges on Product.
1.11 "Parties" shall mean Company and Distributor and Party shall mean
either of them as the context indicates.
1.12 "Present Product" means Company's Product known as "GELCLAIR" in a
box containing 21 packets with 15 ml of Product per packet.
1.13 "Products" in this Agreement shall mean Company's oral gel care
formulation(s) for the Approved Indication, including but not limited to
GELCLAIR(R) as presently manufactured by Company and any modification thereof
which may be agreed between the Parties in future. "Products" does not include
Company's product known as "ALOCLAIR".
1.14 "Purchase Price" shall mean the price of Product that Distributor
pays Company for the Distributor's purchase of Product from Company.
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1.15 "Registration" shall mean any official marketing approval,
authorization or license regarding the Products by the appropriate and competent
authorities in the Territory, allowing the lawful marketing of the Products.
1.16 "Specifications" shall mean the specifications for Product,
including its packaging, set forth in Appendix A hereof, which Appendix is
incorporated in and made a part of this Agreement. Specifications shall not be
modified without prior written agreement by the Parties.
1.17 "Territory" means the United States of America (including its
territories and possessions), Canada and Mexico.
1.18 "Year" means calendar year. "Year 1" means 2002; "Year 2" means
2003; "Year 3" means 2004; etc.
1.19 "$" means United States Dollars.
1.20 "Aloclair" means a product [ * ]
ARTICLE 2. APPOINTMENT AND ACCEPTANCE
2.1 Subject to the following terms and conditions, which includes the
payments set forth in this Agreement, the Company hereby appoints the
Distributor as the exclusive distributor to market, sell and distribute Products
in the Territory and the Distributor hereby accepts such appointment.
Distributor shall have the exclusive right to market, sell and distribute
Products, or have those Products marketed, sold or distributed on its behalf in
the Territory.
2.2 Company shall not and shall cause its Affiliates not to, directly
or indirectly knowingly supply the Product or Competing Product to any Person
outside the Territory for resale or use in the Territory. Company shall promptly
refer exclusively to Distributor all orders or inquiries received by Company in
connection with the sale, marketing and/or distribution of the Product in the
Territory. To the extent that either Party becomes aware of a Person outside the
Territory re-selling Product in the Territory, each shall notify the other and
the Parties shall use best efforts to cooperate and cause such unauthorized sale
in the Territory to cease.
2.3 Distributor shall not and shall cause its Affiliates not to,
directly or indirectly knowingly supply the Product or Competing Product to any
Person in the Territory for resale or use outside the Territory. Distributor
shall promptly refer exclusively to Company all orders or inquiries received by
Distributor in connection with the sale, marketing and/or distribution of the
Product outside the Territory. To the extent that either Party becomes aware of
a Person in the Territory re-selling Product outside the Territory, each shall
notify the other and the Parties shall use best efforts to cooperate and cause
such unauthorized sale outside the Territory to cease.
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2.4 Distributor and its Affiliates shall not, directly or indirectly,
or jointly or in conjunction with any other person, whether as principal, agent,
shareholder, employee, independent contractor or in any other manner whatsoever,
distribute, market or sell any Competing Product in the Territory during the
term of this Agreement and 12 months thereafter.
2.5 Distributor and its Affiliates shall purchase their entire
requirements for the Products from Company, subject to Section 3.9.
2.6 Company warrants that it has not made any written or oral agreement
or undertaking with any other Person regarding the rights to distribute or sell
Product or Competing Product in the Territory.
2.7 Company warrants that it has the exclusive rights to appoint
exclusive distributors for the Product in the Territory as defined herein and
that it has the right to supply Products for that purpose.
2.8 If within [ * ] Distributor has not established a reasonable level
of prescriptions from the dental market, the Parties shall meet and discuss in
good faith the matter but, if they are not able to agree on a mutually
acceptable resolution of the problems within [ * ] of such meeting, Company
shall be entitled [ * ] to distribute the Products to the dental market in the
Territory independently of the Distributor using trademarks which are not
confusingly similar to any trademarks used on Products which are sold to
Distributor hereunder.
ARTICLE 3. PURCHASE AND SUPPLY OF PRODUCTS
3.1 Within 90 days of the receiving from Distributor all necessary
camera ready art work and product insert, Company shall provide Distributor [ *
] of the Present Product in accordance with the Specifications and within a
further [ * ] shall provide Distributor [ * ] of the Present Product in
accordance with the specifications.
3.2 By October 31, 2002, Distributor shall place an order for the
Present Product of at least $2,000,000 at the price set forth in Section 5.1
below, which order shall be delivered by Company to Distributor on or before
December 31, 2002. If Distributor fails to place the order referred to in this
Section 3.2, Distributor shall be obliged to pay to Company the amount of [ * ]
by December 31, 2002 in any event.
3.3 Upon the Effective Date, Distributor shall submit to Company a
non-binding good faith estimate of its requirements of Product for the current
Year broken down by quarters. Within and not later than September 30th of each
Year of this Agreement, Distributor shall submit to Company a non-binding good
faith estimate of its requirements of Product for the subsequent two Years
broken down by quarters. The first Year of each two-Year estimate shall serve to
amend the second Year of the previous two-Year estimate. The total amount and
the quarterly breakdown estimated by Distributor for any Year, as amended by
each annual estimate or as further amended in timely fashion, shall be known as
the Forecast for such Year.
3.4 Within and not later than ninety (90) days before the beginning of
each calendar quarter during the term of this Agreement, Distributor shall place
with Company a Firm Order
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for Product for that calendar quarter. Each Firm Order shall specify the
quantity of Product ordered and the delivery date, provided that the terms and
conditions of this Agreement shall prevail over any terms and conditions
included in any purchase order used in ordering Product. Firm Orders for
purchases for Products shall be submitted in writing to the Company at Company's
address above or at such other address as Company may indicate in writing. Those
orders shall bind Company if within the Forecast Range, and shall otherwise bind
Company if accepted by it in writing if outside the Forecast Range. Company
shall use reasonable efforts to accommodate orders higher than +50% of Forecast
for any calendar quarter.
3.5 Distributor shall place the following minimum annual orders for the
Products from Company at the prices referred to in Section 5.1 for the Present
Product and such prices as may have been agreed between the Parties for other
versions of the Products (if prices have not been agreed for other versions,
Distributor shall be obliged to order the Present Product):
Minimum Annual Order
--------------------
Year 1 $4,000,000, including $2,000,000 in respect
of the quantities referred to in Section
3.1 and $2,000,000 for the order referred
to in Section 3.2
-------------------------------------------
Year 2 $ 3,000,000
-------------------------------------------
Year 3 $ 5,000,000
-------------------------------------------
Minimum annual orders for the fourth and subsequent Years of this Agreement
shall have been negotiated in good faith and agreed upon by the Parties for each
of those Years by each October 1st from October 1, 2004 onward (i.e., one Year
at a time on a rolling basis). If the Parties are unable to agree upon a minimum
annual order level for any Year after 2004 which is at least 80% of the minimum
annual order level for the previous Year, either Party shall have the right to
terminate this Agreement upon 90 days' notice in writing to the other Party.
If Distributor fails, by the 31st December of Year 1, Year 2, or Year 3, to
place orders for the Products from the Company exceeding the minimum annual
order set out in this Section 3.5 for those Years (and Distributor has not
rectified the situation by ordering the shortfall within 90 days of being given
notice by the Company of such shortfall), Company may terminate this Agreement
upon 90 days notice in writing to Distributor.
3.6 All Products shipped by or on behalf of Company to Distributor will
comply with the Specifications and shall have at least 30 months until the date
of product expiry from the date of delivery. The title to any consignment of the
Products shall not pass to Distributor until Company has received payment in
full for the price of the Products. Risk of loss or damage to any consignment of
the Products shall pass to Distributor from the time Company notifies
Distributor that the consignment is available for collection or from the time of
delivery to the carrier at Company's (or its supplier's) premises, whichever is
the earlier. The relevant batch release certificate and certificate of analysis
shall accompany each delivery.
3.6.1 Until such time as the title in the Products passes to the
Distributor, the Distributor shall be entitled to resell or use the Products in
the ordinary course of its business, but it shall be accountable to the Company
for the proceeds of sale or otherwise of the Products
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(such that Distributor shall pay to Company such proportion of such proceeds
owing to the Company), whether tangible or intangible, including insurance
proceeds, and it shall keep all such proceeds (to the extent of the amounts owed
to Company hereunder) separate from any monies or property of the Distributor
and third parties, and in the case of tangible proceeds, properly stored,
protected and insured;
3.7 If within a reasonable time (not to exceed 30 days after receiving
any shipment at the Distributor's designated place of business in the United
States) Distributor demonstrates to the satisfaction of Company that any of the
Products shipped to it hereunder were defective at the time of delivery to
Distributor's designated place of business, Company will replace such defective
Products free of costs and delivery charges. As Company may direct, Distributor
will either return the defective Products to Company with the freight costs to
be at Company's expense or hold or otherwise dispose of such defective Products
in accordance with Company's instructions. Company shall replace all Product
which is defective hereunder within three (3) months from Company's receipt of
such notice from Distributor. Company shall pay the cost of customs, insurance,
and freight for any defective Product returned to it. In the event of any
unresolved dispute between the Parties concerning the rejection by Distributor
of all of or any part of the Product, the Product shall be submitted for testing
to a mutually agreed-upon qualified independent laboratory. If the Parties are
unable to agree upon such a laboratory, each will select a qualified independent
laboratory and the two laboratories will select a third qualified independent
laboratory which shall perform the testing. The parties agree to be bound by the
findings of the laboratory. All costs associated with the investigation shall be
paid by the unsuccessful party.
3.8 Company will use all reasonable efforts to supply or have supplied
Distributor's requirements of Product and will keep Distributor closely informed
if there should be any anticipated problem of supply. Company shall be solely
responsible for providing all necessary equipment facilities and personnel to
manufacture the Product in compliance with GMP and government regulatory
requirements in the areas of the Territory where it is marketed, and Company
shall comply with all such regulatory and legal requirements in the manufacture
of Products both in such areas as well as in the country(s) of manufacture.
3.9 Under a mutually acceptable escrow agreement, Company agrees to
deposit in escrow located in the United States [ * ] The escrow agreement shall
provide for Distributor's access to such escrowed materials in the event that
Company or its nominee is unable or unwilling to meet its obligations under this
Agreement to supply Distributor's requirements for Product for more than a
90-day period.
In the event that Company notifies Distributor that it is able to recommence
supply of the Present Product or Products to Distributor, Distributor shall
within a reasonable time cease to make or have made the Products and thereafter
shall purchase its entire requirements for the Products from Company.
In respect of any Products which Distributor makes or has made in accordance
with this Section 3.9, Distributor shall pay a royalty to Company of [ * ] the
Net Sales II of all such Products sold or otherwise disposed of on a commercial
basis by Distributor. Distributor shall keep all such accounts and records as
may be necessary for the calculation of such royalty and shall
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supply copies of such accounts and records to Company upon request. Distributor
shall pay such royalty to Company for each calendar quarter within [ * ] of the
end of that calendar quarter and at the same time shall supply to Company a
detailed calculation of the royalty concerned.
3.10 Company shall provide batch release certificates and certificates
of analysis with each shipment of Product to Distributor (including Product
samples).
3.11 Company warrants that all Product provided or sold by it to
Distributor under this Agreement shall:
(a) conform to the Specifications;
(b) be merchantable;
(c) be manufactured in accordance with ISO requirements and any
other applicable regulations and laws of the Territory and of
the jurisdiction of manufacture; and
(d) be fit for use by humans for the Approved Indication(s).
3.12 Company warrants that it has the capacity to supply conforming
Product in accordance with the terms of the Agreement.
ARTICLE 4. REGULATORY MATTERS
4.1 Company shall comply with all applicable laws and regulations in
relation to the manufacturing and handling of the Product in the Territory and
in any country outside the Territory where Company manufactures Product or has
Product manufactured on its behalf. Distributor shall comply with all applicable
regulations and laws in relation to the handling, storage, distribution and sale
of the Product in those areas of the Territory where the Product is distributed
and sold by Distributor.
4.2 Each Party will report to the other all adverse events (hereinafter
called "AE"), customer complaints, technical or quality-related incidents and/or
issues, which come to its attention relating to the Product, including any that
come to a Party's attention through publications in journals or other media.
Each party shall report any serious adverse events relating to Product, within
48 hours of receipt, to the other.
4.3 Distributor shall be responsible for preparing and submitting
medical device reports ("MDRs") to the FDA or other responsible national
governmental authorities in the Territory. Company shall review and evaluate all
Product complaints forwarded by Distributor. If Distributor believes that an MDR
report needs to be filed, Company shall fully investigate the complaint and
shall provide all information necessary to Distributor for Distributor to file
the MDR report. With respect to adverse events and the like occurring with the
Product outside the Territory, Company shall provide to Distributor all
information relating to such complaints that may be or are subject to the FDA's
reporting MDR requirements. Distributor shall evaluate this information and
shall determine whether an MDR should be submitted. Company shall evaluate such
events in relation to the standard operating procedures of Distributor's that
will be adopted
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by Distributor and agreed upon by the parties. Company shall designate
Distributor as agent to the FDA for these reporting purposes.
4.4 Within 15 days of the Effective Date of this Agreement, Company
shall provide Distributor with copies of all documents relating to or
constituting Company's 510(k) filing with the FDA.
4.5 Company agrees that it will not modify the Present Product or any
other Product whose specifications have been agreed upon by the Parties without
prior notification to and approval by Distributor (which approval shall not be
unreasonably withheld) so that Distributor can ascertain whether Distributor
will need to file any additional Rule 510(k) filings.
4.6 Company will register as the Product manufacturer with the FDA.
Distributor will list Product with FDA as approved for marketing.
4.7 Each Party will maintain such records and procedures to ensure that
any batch of Products can be effectively and completely recalled from the market
in the event that such action is required.
4.8 If, for any reason, it shall become necessary to trace back or
recall any particular lot of the Product, or to identify the customer or
customers to whom units from such lot will have been delivered, each party shall
co-operate fully with the other in doing so. In the event that either Party has
reason to believe that one or more lots of the Product should be recalled or
withdrawn from distribution in the Territory, such Party shall immediately
notify the other Party in writing. To the extent permitted by the circumstances,
the Parties will confer before initiating any recall, but the decision as to
whether or not to initiate a recall of the Product and to notify regulatory
authorities in the Territory shall be Distributor's alone. If the recall is
required because of a modification or withdrawal of an approval from a competent
regulatory authority or a failure of the Product to conform to its
Specifications, Company shall promptly reimburse Distributor for the reasonable
costs and expenses of such recall, and, at Distributor's option, Company shall
replace the recalled Product free of additional charge, or credit or refund the
Purchase Price of the recalled Product. If the recall is required because of a
negligent act or omission of Distributor in handling, storage or distribution of
the Product, then such recall shall be conducted by Distributor at its sole cost
and expense and Distributor shall not be entitled to any such credits,
replacements or refunds from Company. If such recall is required because of a
joint act or omission of the Parties, Distributor shall conduct the recall, the
Parties shall divide the cost of such a recall, and any replacement Product
required by Distributor shall be provided by the Company to the Distributor at
cost.
4.9 Each Party shall furthermore notify the other immediately of any
information that it receives regarding any threatened or pending action by any
Regulatory Authority which may affect the safety or efficacy claims of the
Product within the Territory or the continued marketing of same. Upon receipt of
any such information, the Parties shall consult with each other in an effort to
arrive at a mutually acceptable procedure for taking appropriate action;
provided, however, that nothing contained herein shall be construed as
restricting either Party's right to make a timely report of such matter to any
Regulatory Authority in the Territory or to take any further action that either
Party deems appropriate or is required by applicable law or regulation.
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4.10 Distributor will provide a medical information service concerning
the Products to the health professionals and patients in the Territory.
ARTICLE 5. PAYMENTS
5.1 For quantities of Product beyond that set forth in Section 3.1,
Company shall initially sell Present Product to Distributor at the price of
[ * ] Ex Works Lecco, Italy. The price shall be revised [ * ] For the avoidance
of doubt, there shall be no downward revision of the price due to changes in the
above-mentioned index. If during any such two-Year period (or shorter initial
period), the documented actual Product manufacturing cost [ * ], the
then-current price will be adjusted accordingly, provided Product is being
manufactured in accordance with best manufacturing practices (e.g., ISO
standards). In the event of an extraordinary increase, however, Company shall
supply to Distributor (or its agents) details of the manufacturing costs and
methods to reasonably justify such an extraordinary increase. Distributor shall
be entitled to audit such details on reasonable notice to Company. In the event
of an extraordinary increase, the next increase at the end of the two Year
period referred to above (or shorter initial period) shall be the percentage
increase in the [ * ] from the date of the extraordinary increase to the end of
the two Year period concerned (or shorter initial period). Further increases in
price shall be made in the two Year period concerned (or shorter initial period)
if supported as described above as a further extraordinary increase. If during
any such two-Year period (or shorter initial period), the documented actual
Product manufacturing cost [ * ]
5.2 Payment terms for conforming Product sold by Company under Section
5.1 are[ * ]
5.3 The Distributor will pay Company $1,000,000 (one million dollars)
(U.S.) on the Effective Date of this Agreement, and a further $2,000,000 (two
million dollars) (U.S.) which latter payment will be credited against the amount
that would otherwise be due from Distributor to Company in respect of the
quantity of Product set forth in Section 3.1, based on the price set out in
Section 5.1.
5.4. The Distributor will pay the Company [ * ] upon issuance of a
United States Patent in the name of the Company or its Affiliates with claims
covering the Products.
5.5. Upon Distributor achieving [ * ] cumulative Net Sales I of
Products, Distributor shall pay Company [ * ].
5.6 Upon Distributor achieving [ * ] cumulative Net Sales I of
Products, Distributor shall pay Company [ * ].
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5.7 Upon the results of the first clinical trial concerning the
Products' efficacy appearing in a peer-reviewed journal, Distributor shall pay
Company [ * ]
5.8 All payments made by Distributor to Company shall be in U.S.
Dollars and shall be made by transfer to the following U.S. Dollar bank account
or such other bank account as Company may notify to Distributor from time to
time. [ ]
5.9 The Products to be supplied by Company pursuant to this Agreement
shall be sold or otherwise supplied on an Ex Works basis (as defined in the
International Chamber of Commerce's Incoterms 2000 edition), and accordingly
Distributor shall, in addition to the price (where there is a price), be liable
for arranging and paying all costs of transport (including insurance for
transport). For the avoidance of doubt, the provisions of this Section 5.9 shall
apply to Products supplied in accordance with Sections 3.1, 6.5, 6.6 and 6.7 as
well as all other Products supplied under this Agreement.
5.10 If Distributor fails to pay the price for any Products within
[ * ]of the date of the invoice therefor or fails to pay any other amount when
due under this Agreement, Company shall be entitled (without limiting any other
right or remedy it may have) to:
(a) cancel or suspend any further delivery to the Distributor
under any order until such time as the payment concerned is
made;
(b) sell or otherwise dispose of any Products which are the
subject of any orders by Distributor, whether or not
appropriated to the order;
(c) charge Distributor interest on the amount due, both before and
after any judgement, at the rate of 4 per cent per annum above
the Prime Rate prevailing in the United States from time to
time from the date the payment became due until actual payment
is made.
ARTICLE 6. PROMOTION/SALES OBLIGATIONS OF COMPANY
6.1 The Company shall use its reasonable endeavors to cooperate with
and assist Distributor in its sales and marketing activities in the Territory.
6.2 The Company shall from time to time supply Distributor [ * ] with
specimens and artwork (including any electronic files of the same) of displays,
promotional and advertising material and literature previously published or
prepared by Company, provided that Company shall have no obligation to produce
such material for Distributor.
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6.3 The Company shall provide Distributor with technical assistance at
its request if required and against remuneration as agreed in each case.
6.4 The Company shall assist Distributor if required in training
personnel concerned with the marketing of the Products, if Distributor requests
such assistance, subject to a maximum obligation on Company to provide the
assistance of one person for seven working days under this Agreement.
6.5 The Company shall provide [ * ] reasonable quantities of Products
for the execution of formal clinical trials by or on behalf of Distributor,
protocols for which have been approved by Company which approval shall not
unreasonably be withheld.
6.6 Company shall provide Product samples to Distributor [ * ] as
follows:
(a) [ * ] packets of Product delivered within 90 days of receiving
from Distributor all necessary camera ready art work and
product insert; and
(b) samples equal to [ * ] of all firm commercial Product orders
for the [ * ] of this Agreement;
(c) samples equal to [ * ] of firm commercial Product orders for [
* ] of this Agreement;
(d) All samples under Sections 6.6(a) - (c) shall be made in
accordance with the Specifications and provided in boxes of
seven 15 ml packets of Product labeled as "sample use only."
[ * ].
6.7 To the extent that Distributor desires additional samples beyond
the amounts set forth in the preceding Section, Company will provide them at [ *
], provided that Distributor shall not be entitled to purchase as additional
samples more than [ * ] (determined on a per-packet basis) in any given Year.
6.8 If Company or its licensed distributor intends to carry out a
controlled and randomized clinical trial of the Products, Company shall provide
Distributor a copy of the protocol at least 30 days prior to submission to any
institutional review board or regulatory authority (or initiation of the trial
if the protocol is not so submitted) to provide Distributor an opportunity to
comment on the same. Company shall have no obligation to accept such comments of
Distributor. Company shall provide to Distributor a copy of any data produced as
a result of such clinical trials, provided Company has the right to do so.
6.9 Company agrees that it and its Affiliates and agents will not
conduct or actively permit other distributors outside the Territory to conduct
any clinical trial of the Product (or a Competing Product) in the Territory.
6.10 Company agrees that if Distributor's purchases of Product from
Company exceed [ * ] per year, Company shall as soon as practicable thereafter
begin manufacturing Distributor's requirements of Product within the Territory
at a location and facility that provides
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equal or better quality and equal or lower cost to Distributor (including
duties) than currently provided under this Agreement.
ARTICLE 7. OBLIGATIONS OF DISTRIBUTOR
7.1 Distributor shall use commercially reasonable efforts to launch the
Product in the United States within 90 days of receipt of at least 50% of the
quantity of conforming Product set forth in Section 3.1 above and 50% of the
conforming samples set forth in Section 6.6(a) above, in Distributor's
distribution center in the United States, provided that (1) Company has also
supplied to Distributor all regulatory materials specified under Article 4 of
Agreement; and (2) the U.S. government authorities have not otherwise precluded
Product from being marketed and/or sold in the United States. In the event of
any delay due to regulatory authorities or due to Force Majeure, Distributor
shall immediately notify Company and the above-mentioned period for launch of
the Products shall be extended for as long as any such delay continues. If
Distributor has still not launched the Products within 30 days of the end of the
90 day period as referred to above or, if there have been delays as referred to
in this Section 7.1, within 90 days of the end of the extended period as
referred to in the previous sentence, Company may forthwith terminate this
Agreement upon notice in writing to Distributor.
7.2 Distributor shall use all reasonable efforts to sell and distribute
the Products in the Territory. With respect to countries in the Territory
outside the United States (hereinafter "the non-U.S. Territory"), Distributor
shall use all reasonable efforts to maximise its sales of the Products in such
countries unless to do so would not be materially profitable to Distributor. In
the event that Distributor decides to sell or distribute in the non-U.S.
Territory (or any portion thereof), Company shall make all necessary regulatory
filings required for Product approval at Company's expense in the part of the
non-U.S. Territory concerned.
7.3 During the term of this Agreement, Distributor will spend at least
[ * ] annually on direct sales force expenses relating to Product. Distributor
shall also spend at least the following amounts annually on marketing the
Product:
[ *
]
With the sales force efforts outlined in this Section 7.3, Distributor shall be
permitted to sell, promote, market and distribute other products in addition to
Product with the same sales force efforts.
[*]CONFIDENTIAL TREATMENT REQUESTED 12
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7.4 Distributor furthermore agrees:
(a) that as compliance with Section 7.3 above, to ensure that the
Territory is covered by adequate and reasonable sales
activities including sampling, promotion, distribution of
technical and sales matter, demonstrations and other measures
for promoting the sale of Products and to use commercially
reasonable endeavors to achieve Forecast sales and to bear all
expenses above arising in connection with its activities
hereunder.
(b) to ensure that the Products are sold with the name of the
manufacturer, Xxxxxxxx Pharmaceuticals Limited, on the
Product's label and literature.
(c) not to disclose either during the term of this Agreement or
thereafter to any third party any prices or technical or other
information of a confidential nature received or obtained from
the Company except insofar as may be required for the purpose
of selling the Products and complying with any legal or
regulatory requirements, and on termination of this Agreement
to return all price lists and documents containing such
information.
(d) to procure at Distributor's own expense the execution of
clinical trials to support marketing of Products if
Distributor feels further trials are necessary for successful
commercialization of the Products. For any such randomized and
controlled clinical trials, Distributor shall provide Company
a copy of the protocol at least 30 days prior to submission to
any institutional review board or regulatory authority (or
initiation of the trial if the protocol is not so submitted)
to provide Company an opportunity to comment on the same.
Distributor shall have no obligation to accept such comments
of Company. Distributor shall provide to Company a copy of any
data produced as a result of such clinical trials.
7.5 All scientific and clinical data related to Products generated by
Distributor or its agents shall be disclosed to the Company. Distributor shall
promptly deliver to the Company copies of any new scientific or clinical data
related to the Products, as soon as it comes into its possession. Company shall
be entitled (free of charge) to use such scientific and clinical data for any
purpose.
ARTICLE 8. PRODUCTS LIABILITY AND INSURANCE
8.1 Each Party shall defend, indemnify and hold harmless the other
Party and the other's Affiliates, officers, directors, employees and agents,
from and against all claims, liabilities, demands, damages, expenses and losses
(including reasonable attorneys' fees and expenses) arising out of or connected
with:
(a) any breach by the Party of any of its representations,
warranties or covenants under this Agreement; or
(b) any materially wrongful acts or wrongful omissions contrary to
law on the part of the Party or its authorized agents or
employees.
[*]CONFIDENTIAL TREATMENT REQUESTED 13
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8.2 As to the Company's manufacture and Distributor's storage,
handling, promotion and sale of Products under this Agreement, each Party agrees
to maintain product liability insurance to cover its risks related to the
Products and, upon the other Party's request, to provide the other Party with
certificates of insurance attesting to the existence of such insurance.
[
* ] Each Party shall add the other Party as an additional insured under its
respective insurance policy. Each Party agrees, upon request, to advise the
other of the status of the required insurance and of any change in such status.
It is understood and agreed that furnishing of such insurance coverage will not
relieve the Parties of their respective obligations under this Agreement.
ARTICLE 9. TRADEMARKS
9.1 Company grants Distributor the exclusive right and license to use
the trademarks GELCLAIR and XXXXXXXX (hereinafter "Trademarks") in connection
with the marketing, sale, manufacture (if Distributor manufactures Product under
the provisions of Section 3.9 above) and distribution of the Products within the
Territory, subject to the terms of this Section 9.1. Company further authorizes
Distributor to grant sublicenses of the rights granted under this Section 9.1 to
Affiliates on identical terms to those set out in this Section 9.1 and
Distributor shall immediately inform Company of the identity of such Affiliates.
Distributor shall be entitled to use the Trademarks in ways which are consistent
with any regulatory approvals which Company may have for the Products in the
Territory. Distributor shall not use the Trademarks in any way which would
undermine or have a negative effect upon the reputation of the Company or the
strength or validity of Company's rights in the Trademarks. Distributor's
licence under this Section 9.1 is conditional on advertising using the
Trademarks complying with all applicable laws in the Territory. Distributor
shall discontinue all use of the Trademarks upon Company's request or upon
termination of this Agreement.
9.2 Distributor shall use the Trademarks on or in connection only with
those Products that conform to the Specifications.
9.3 To verify compliance with Article 9 hereof, Distributor will submit
to Company samples of promotional materials and any packaging therefor that
Distributor has prepared, and other items bearing the Trademarks that
Distributor may have prepared, and Company, or its delegate, will inspect such
material and inform Distributor of any objections thereto within 15 days. If
Company registers no objection after the 15 day period, Company is deemed to
have accepted such items as compliant. The Trademarks shall be the exclusive
property of the Company, and Distributor shall not seek to register or have
registered the Trademarks in the Territory.
9.4 Company agrees that it will file applications for registration of
the marks GELCLAIR and XXXXXXXX in all the countries in the Territory (if not
already filed). Company will:
(a) Provide Distributor with copies of all such filings and
correspondence with the pertinent trademark registration
authorities, and provide Distributor the opportunity to
comment on the same prior to filing, provided that this
obligation will be satisfied by Company issuing a standing
instruction to its trademark
[*]CONFIDENTIAL TREATMENT REQUESTED 14
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attorneys to copy all relevant correspondence to Distributor
and if Distributor has not objected to any proposed action
within 15 days, Distributor will be taken to have accepted the
proposed action;
(b) bear the expense and responsibility of such trademark
registration filings, prosecution and maintenance, including
filing any statements of use; and
(c) not allow such trademark registrations to become abandoned
without Distributor's permission (which is not to be
unreasonably withheld).
Distributor shall reasonably cooperate with Company in supplying
Company with any appropriate information and specimens to support the trademark
registrations filed for or obtained in accordance with the terms of this
Agreement.
9.5 Company agrees that if the "Gelclair" Trademark is unavailable for
use in the Territory or any portion thereof, the Parties shall agree upon an
alternative trademark to be used on the Products and such trademark shall be
owned by Company. The alternative trademark shall be deemed to fall within the
definition of `Trademarks' given in Section 9.1 and the provisions of Sections
9.1 to 9.8 shall apply to the alternative trademark.
9.6 During the term of this Agreement, if either Party becomes aware of
a possible third party infringement of a Trademark in the Territory (or any
portion thereof) within the license grant in section 9.1, that Party shall
immediately notify the other of the possible infringement so that the other
Party can investigate the matter. Distributor shall, at its sole option, have
the right to enforce such trademark rights against such a third-party infringer
in such parts of the Territory as it sees fit using counsel of its own selection
and at its own expense. Distributor shall also have the option of joining
Company as a party to such an enforcement action, and Company will provide
reasonable cooperation in such joinder and in any such enforcement action. If
Company is made a party to such action, Distributor shall compensate Company for
any reasonable costs, expenses or fees which Company incurs as a result of such
action. In any such enforcement action initiated by Distributor, Distributor
shall have the option to settle such an action on such terms as it deems
reasonable. Any damages awarded as a result of any such infringement action, or
any monies recovered in such a settlement shall, in order, first be used to
compensate Distributor its costs of initiating and pursuing such an infringement
action and second to compensate Distributor and Company for their lost sales as
a result of such infringement in a proportion to reflect their respective loss
of sales recovered.
9.7 Company warrants that it has no knowledge of any actual or
potential Trademark infringement claim by a third party in the Territory that
would, if successfully brought and prosecuted, impair the Company's ability to
supply Distributor Product consistent with the terms of this Agreement or impair
the Distributor's ability to distribute and sell Product in the Territory under
the licensed Trademarks. If, at any time during the term of this Agreement
either Party learns that any Product distributed or sold by Distributor under
this Agreement is subject to a possible third-party claim of trademark
infringement of any of the Trademarks, the Party learning of the claim shall
promptly notify the other Party in writing. Company shall indemnify and hold
Distributor harmless and accept all legal and financial responsibility for any
liability, damage, loss, cost or expense arising out of any such trademark
infringement claims in respect of the manufacture, use or sale of the Product
bearing the Trademark(s), provided that such liabilities are not related to any
artwork or packaging that Distributor has asked Company to
[*]CONFIDENTIAL TREATMENT REQUESTED 15
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produce. Distributor shall promptly notify Company of any trademark infringement
claims for Company to indemnify and at Company's cost, permit attorneys mutually
agreeable to the Parties to handle and control such trademark infringement
claims or suits. Distributor agrees to provide Company with reasonable
assistance in defending such infringement action or in prosecuting any related
action.
9.8 The Distributor and its Affiliates shall at the request of the
Company execute such registered user or other agreements in respect of the use
of the Trademarks in the Territory as the Company may reasonably require. Each
Party will join with the other Party in registering the trademark licence
granted hereunder with the registrars of trademarks in the Territory as may be
required by the other Party. The Distributor and its Affiliates hereby agree
that upon any amendment or termination of this Agreement the Distributor and its
Affiliates will execute any documents that the Company may reasonably request
for the purpose of applying for variation or cancellation of the entries with
the registrars of the Distributor and its Affiliates as licensees of the
Trademarks.
9.9 Distributor shall have the right to use the trademark "Cell
Pathways" on the Product, and Company shall cooperate with Distributor to ensure
that that xxxx (as well as any alternative xxxx under Section 9.5 above) appears
on all packaging of Product supplied by Company to Distributor under this
Agreement.
ARTICLE 10. PATENTS
10.1 Company grants Distributor an exclusive license to use and sell
(and to manufacture in the circumstances referred to in Section 3.9) Products
under any patents owned or licensed to the Company claiming Product or
improvements or modifications thereto, including such a license under any such
patents that claim priority from Italian Patent Application No. MI20000A001732
filed July 28, 2000 and/or PCT/EP/01/08303 filed July 18, 2001.
10.2 Company agrees that as to any of its patent application filings in
the Territory within the scope of the preceding section:
(a) Company will file U.S, Canadian and Mexican patent
applications claiming priority from Italian Patent Application
No. MI20000A001732 filed July 28, 2000 and/or PCT/EP/01/08303
filed July 18, 2001.
(b) Company will provide Distributor with copies of all such
filings and correspondence to or from the pertinent patent
granting authorities, and provide Distributor a reasonable
opportunity to comment on correspondence to the patent
authorities prior to filing, provided that this obligation
will be satisfied by Company issuing a standing instruction to
its patent attorneys to copy all relevant correspondence to
Distributor and if Distributor has not objected to any
proposed action within 15 days, Distributor will be taken to
have accepted the proposed action;
(c) Company will employ counsel mutually agreed upon by the
parties;
[*]CONFIDENTIAL TREATMENT REQUESTED 16
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(d) Such patent filings and prosecution will be at Company's
expense;
(e) Company will pay all maintenance fees and taxes to maintain
any issued patents in force in the Territory, and will not
allow such issued patents to become abandoned without
Distributor's permission (which is not to be unreasonably
withheld).
10.3 Company warrants that it or its Affiliates own and have title to
Italian Patent Application No. MI20000A001732 filed July 28, 2000 and
PCT/EP/01/08303 filed July 18, 2001, and have the right to file corresponding
applications in the Territory consistent with this Agreement. Company also
warrants that it or its Affiliates own and have title to Know-how regarding the
Product, including its formulation, manufacturing, Specifications and the like.
10.4 During the term of this Agreement, if either Party becomes aware
of a possible third-party infringement of a patent right within the license
grant in section 10.1, that Party shall immediately notify the other of the
possible infringement so that the other Party can investigate the matter.
Distributor shall, at its sole option, have the right to enforce such patent
rights against such a third-party infringer in such parts of the Territory as it
sees fit using counsel of its own selection and at its own expense. Distributor
shall also have the option of joining Company as a party to such an enforcement
action, and Company will provide reasonable cooperation in such joinder and in
any such enforcement action. If Company is made a party to such action,
Distributor shall compensate Company for any reasonable costs, expenses or fees
which Company incurs as a result of such action. In any such enforcement action
initiated by Distributor, Distributor shall have the option to settle such an
action on such terms as it deems reasonable. Any damages awarded as a result of
any such infringement action, or any monies recovered in such a settlement
shall, in order, first be used to compensate Distributor its costs of initiating
and pursuing such an infringement action and second to compensate Distributor
and Company for their lost sales as a result of such infringement in a
proportion to reflect their respective loss of sales recovered.
10.5. Company warrants that it has no knowledge of any actual or
potential patent infringement claim that would, if successfully brought and
prosecuted, impair the Company's ability to supply Distributor Product
consistent with the terms of this Agreement or impair the Distributor's ability
to distribute and sell Product in the Territory. If, at any time during the term
of this Agreement either Party learns that any Product manufactured by or on
behalf of Company or distributed or sold by Distributor under this Agreement is
subject to a possible third-party claim of patent infringement within the
Territory, the Party learning of the claim shall promptly notify the other Party
in writing.
Company shall indemnify and hold Distributor harmless and accept all
legal and financial responsibility for any liability, damage, loss, cost or
expense arising out of any such patent infringement claims as referred to in
this Section 10.5 in respect of the use or sale of the Product by Distributor
hereunder. Distributor shall promptly notify Company of any claims for Company
to indemnify and at Company's cost, permit attorneys mutually agreeable to the
parties to handle and control such patent infringement claims or suits.
Distributor agrees to provide Company with reasonable assistance in defending
such infringement action or in prosecuting any related action.
ARTICLE 11. DURATION AND TERMINATION
[*]CONFIDENTIAL TREATMENT REQUESTED 17
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11.1 This Agreement shall become effective upon the receipt by Company
of the sum of $1,000,000 referred to in Section 5.3 and, subject to the
provisions of this Article 11, shall remain in effect for a period of ten (10)
years and be automatically renewed thereafter for successive one (1) year
periods, unless notice of the election not to renew shall have been given in
writing by either Party to the other not less than 180 days before the beginning
of any such renewal period, provided however that the Parties hereto also agree
that during the second 6 months of the eighth year of this Agreement they shall
meet to determine whether at the end of the ten (10) years term of this
Agreement the Agreement shall automatically be extended for a further five (5)
year period after the first 10 year term has expired.
11.2 Without prejudice to any other rights or remedies it may have,
Company may terminate this Agreement at the time and in the circumstances
described in Section 7.1. In the event of such termination by the Company,
Company may assign the Territory to another distributor immediately and payments
made by Distributor under Section 5.3 above shall not be refundable to
Distributor and any amounts owing from Distributor to Company under Section 5.3
at the time that Company notifies Distributor of termination shall forthwith be
paid by Distributor to Company.
11.3 Without prejudice to any other rights or remedies it may have (but
subject to Section 12 hereof), either Party may terminate this Agreement by
prior notice in writing to the other Party ("the Other Party") :
(a) if the Other Party is in material breach of a material
provision this Agreement (including, without limitation, any
default by Distributor in the payment when due of any sum owed
by Distributor to Company) and, in the case of a breach
capable of a remedy, the breach is not remedied within 90 days
of the Other Party receiving written notice specifying the
breach and requiring its remedy; or
(b) in the event that the Other Party shall become bankrupt or
insolvent, or if any reviewer or trustees shall be appointed
for such Party or for all or substantially all of the property
of such Other Party and such appointment shall not have been
discharged within 30 days or such Other Party shall make an
assignment for the benefit of its creditors, then the other
Party may terminate this Agreement by tendering written notice
to that effect;
11.4 Without prejudice to any other rights or remedies it may have,
Company may terminate this Agreement in the circumstances described in Section
3.5.
11.5 Distributor may terminate this Agreement upon one year's written
notice to the Company.
11.6 Upon termination of the Agreement for any reason, Distributor
shall, at Company's written request which must be made within [ * ] sell to
Company at Distributor's cost [ * ] any or all Products then in Distributor's
inventory which are in saleable condition and shall return to Company all price
lists, catalogues and other advertising literature furnished by Company to
Distributor. Should Company not request to buy Distributor's inventory under
this Section, Distributor shall be
[*]CONFIDENTIAL TREATMENT REQUESTED 18
CONFIDENTIAL DOCUMENT
permitted to sell such inventory, or otherwise dispose of it in the Territory in
accordance with all applicable laws.
11.7 Distributor shall have no claim and compensation from Company in
case of termination of this Agreement by Company under Sections 3.5, 7.1 or 11.3
above. In the event of termination by Company, Distributor shall have no claim
against Company for loss of distribution rights, loss of goodwill or any similar
loss.
11.8 Termination of this Agreement shall not affect rights which have
accrued as of the date of termination or obligations to maintain
confidentiality, which shall continue in force.
ARTICLE 12. FORCE MAJEURE
Neither Distributor nor Company shall have any liability hereunder if
either is prevented from performing any of its obligations hereunder by reason
of Force Majeure. Such affected Party shall give to the other Party prompt
notice of any such event of Force Majeure, the date of commencement thereof and
its probable duration and shall give a further notice in like manner upon the
termination thereof. Each Party hereto shall endeavor with due diligence to
resume compliance with its obligations hereunder at the earliest date and shall
do all that it reasonably can to overcome or mitigate the effects of any such
Force Majeure upon both Party's obligations under this Agreement. Should the
Force Majeure continue for more than six (6) months, then the other Party shall
have the right to cancel this Agreement and the Parties shall seek an equitable
agreement on the Parties' reward of interests. To the extent that an event of
Force Majeure occurs that inhibits Company's ability to supply Product for more
than 90 days, there shall be no cancellation of this Agreement by Company and
the provisions of Section 3.9 shall control.
ARTICLE 13. MISCELLANEOUS PROVISIONS
13.1 The relationship between Company and Distributor hereunder is
solely that of seller and purchaser. Distributor is not an agent of the Company
for any purpose hereof. Distributor shall have no power or authority to bind
Company in any manner and shall not hold itself out as the agent of the Company
for any purpose.
13.2 To the extent that the Products are modified consistent with the
terms of this Agreement (i.e., by mutual agreement of the Parties) the term
"Products" as used herein shall be deemed to include the Products as so amended.
13.3 In the event of a conflict between the terms of this Agreement and
Company's General Terms and Conditions of Sales, this Agreement shall govern.
13.4 The headings of this Agreement have been provided for convenience
only and shall have no legal effect in connection with any interpretation of any
of the provisions of this Agreement. If one or more provisions of this Agreement
will be or should become invalid, this shall not affect the validity of the
remaining provisions and the Parties shall replace the invalid provision by a
valid and operable arrangement which achieves to the greatest extent possible
the economic results intended by the invalid provision.
[*]CONFIDENTIAL TREATMENT REQUESTED 19
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13.5 Condition Precedent - This Agreement shall be of no force and
effect until Company has received the sum of $1,000,000 referred to in Section
5.3.
13.6 In construing this Agreement:-
- words importing a person shall include a firm or corporation;
- words importing the singular shall include the plural and vice
versa.
13.7 Any notice required to be given by either Party in this Agreement
shall be duly given when mailed by registered mail, postage prepaid, or by
Federal Express to the other party at its address set forth above or at such
other address as shall have been designated by such other Party by written
notice.
13.8 This Agreement cancels and supersedes all previous agreements
relating to any matter covered by this Agreement, except for the confidentiality
agreement between the Parties dated 18th October 2001.
13.9 Any dispute in connection with this Agreement shall be finally
settled by arbitration in London by a single arbitrator in accordance with the
rules of arbitration of the International Chamber of Commerce.
ARTICLE 14. GOVERNING LAW
This Agreement shall in all aspects be construed and operated as an English
contract and in accordance with English law.
IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate.
XXXXXXXX PHARMACEUTICALS LTD. CELL PATHWAYS INCORPORATED
Signed by: Xxxxxxx X. Xxxxx Signed by: Xxxxxx X. Xxxxxxxxxx
Signature: /s/Xxxxxxx X. Xxxxx Signature: /s/Xxxxxx X. Xxxxxxxxxx
----------------------------- --------------------------
Position: President & CEO Position: President & C.E.O.
Date: January 22, 2002 Date: January 22, 2002
XXXXXXXX PHARMA SRL
Signed by: Xxxxxxx X. Xxxxx
Position: President
Signature: /s/Xxxxxxx X. Xxxxx
-----------------------------
Date: January 22, 2002
[*]CONFIDENTIAL TREATMENT REQUESTED 20
