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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 16, 1997
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Date of Report (date of earliest event reported)
ATHENA MEDICAL CORPORATION
dba A-FEM Medical Corporation
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(Exact name of registrant as specified in its charter)
Nevada 0-17119 33-0202574
- --------------- ---------------- -------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
ATHENA MEDICAL CORPORATION
10180 S.W. Nimbus Avenue, J-5
Portland, OR 97223
(503) 968-8800
--------------------------------------------------
(Address including zip code and telephone number, including
area code, of registrant's principal executive offices)
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ITEM 5. OTHER EVENTS
EXECUTION OF AGREEMENT RELATING TO PADETTE-TM-.
On May 16, 1997, ATHENA Medical corporation dba A-FEM Medical
Corporation (the "Company") signed an agreement effective as of April 28,
1997 (the "Effective Date") with The Procter & Gamble Company ("P&G") related
to its Padette-TM- interlabial pad. Under the terms of the agreement, the
Company has granted P&G the right to make, use and sell products embodying
the Company's interlabial product technology ("Technology") and to utilize
the Company's current trademarks relating to the interlabial pad, including
Padette-TM-, Fresh 'n Fit-Registered Trademark- and Tampette-TM- in
connection therewith. Under the agreement, P&G paid the Company $2,000,000
and will pay up to an additional $2,000,000 depending upon P&G's use of the
Technology. For 12 months from the Effective Date, the Technology may not be
licensed to any one other than P&G, although the Company may continue to use
the Technology to make, use and sell products under its name and sell its
products to third parties for private label sale to consumers and, after such
12 month period, license its technology, to make, use and sell products to
third parties.
If P&G fails to meet certain goals set forth in the agreement, the
license will terminate. In the event of certain changes in control of the
Company, certain of the Company's current trademarks used in connection with
the Technology will be transferred to P&G.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBITS
10.1* Agreement dated effective as of April 28, 1997 between P&G and the
Company.
- ----------
* Confidential portions of this Agreement have been deleted and filed
separately with the Securities and Exchange Commission pursuant to a Request for
Confidential Treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATHENA MEDICAL CORPORATION
/s/ William H. Fleming
Date: May 20, 1997 --------------------------------------
William H. Fleming
President, Chief Operating Officer
and Secretary
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INDEX OF EXHIBITS
The following exhibits are filed as part of this Current Report on
Form 8-K.
EXHIBIT DESCRIPTION
10.1* Agreement dated effective as of April 28, 1997 between P&G and
the Company
- ----------
* Confidential portions of this Agreement have been deleted and filed
separately with the Securities and Exchange Commission pursuant to a Request for
Confidential Treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.
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CONFIDENTIAL
- ------------
AGREEMENT
Effective April 28, 1997, THE PROCTER & GAMBLE COMPANY, an Ohio corporation
(hereafter "Procter & Gamble"), having a principal place of business at One
Procter & Gamble Plaza, Cincinnati, Ohio, 45202, and ATHENA MEDICAL CORPORATION,
a Nevada corporation, dba A-FEM Medical Corporation (hereafter "Athena"), having
a principal place of business at 10180 SW Nimbus Avenue, Suite J5, Portland,
Oregon, 97223, agree as follows:
ARTICLE I - BACKGROUND
1.0 Athena represents that it has certain patents, trademarks,
manufacturing know-how and trade secrets pertaining to absorbent products and
their manufacture and in particular with respect to an Interlabial Product
(defined in Section 2.5 below) currently known and sold under the trademarks
FRESH 'N FIT-Registered Trademark- PADETTE-TM- interlabial pad.
1.1 Athena is interested in entering into a global business relationship
with Procter & Gamble in which Athena will retain the right to continue to
commercialize its Interlabial Products and Athena will, in exchange for the
payments described herein, grant certain rights to Procter & Gamble in order to
assist Procter & Gamble in marketing its own Interlabial Product.
1.2 Athena also has a Section 510(k) U.S. Food and Drug Administration
("FDA") clearance for Interlabial Products and/or menstrual tampons which
Athena, as part of its licensing of Athena Interlabial Product Technology, is
willing to grant a license to use and utilize, as permitted by law, to Procter &
Gamble. Athena is pursuing a change to the classification of Interlabial
Products so that they are classified by the FDA as menstrual pads rather than as
menstrual tampons. Athena is willing to provide whatever rights are permitted
by law to Procter & Gamble to manufacture its own Interlabial Products that are
substantially equivalent under Athena's Section 510(k) marketing clearance. In
addition, Athena is willing to provide all necessary assistance and cooperation
to allow Procter & Gamble to obtain its own Section 510(k) marketing clearance
where such clearance is desired by or otherwise required of Procter & Gamble.
1.3 Procter & Gamble is interested in testing and marketing Athena's
interlabial products, as well as developing, manufacturing, and marketing its
own interlabial products, and in obtaining assistance from Athena in order to do
so.
1.4 Procter & Gamble is further interested in obtaining licensing rights
from Athena to make, use, offer to sell, and sell Athena's Interlabial Products,
and/or certain improvements to such
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products developed by Athena or Procter & Gamble, and its own interlabial
products, and to have the right to use certain of Athena's trademarks in
conjunction therewith.
1.5 Both Athena and Procter & Gamble are interested in exploring other
possible opportunities between the two companies for the mutually beneficial
development of other technologies that each company owns, in addition to
Interlabial Products.
ARTICLE II - DEFINITIONS
2.0 Procter & Gamble and Athena are hereunder commonly referred to as
"Parties" (in singular and plural usage, as required by the context).
2.1 "Affiliate" means any entity that directly or indirectly owns, is
owned by, or is under common ownership with a Party to this Agreement, either
currently or during the Term of this Agreement. "Owns", "owned", or
"ownership" means direct or indirect possession of more than twenty percent
[20%] of the votes of holders of a corporation's voting securities or a
comparable equity or other ownership interest in any other type of entity.
2.2 "Athena's Interlabial Product Trademark(s)" means the trademarks used
by Athena, or proposed for use by Athena, in conjunction with its Interlabial
Products, whether registered, applied for, or common law, all and only as
specifically listed on the attached Exhibit "A", and any other foreign
registrations and/or applications for such trademarks or common law rights in
such trademarks obtained by Athena during the Term of this Agreement, but no
others.
2.3 "Classification Correction" means a change in the FDA classification
of Interlabial Products from classification as menstrual tampons to
classification as menstrual pads.
2.4 "Effective Date" means the date first written above.
2.5 "Interlabial Product(s)" means an absorbent article, worn
interlabially or partially interlabially by a female for menstrual purposes,
nonmenstrual vaginal discharges and/or incontinence protection, but not for
diagnostic collection, surgical absorbency, drug delivery and/or medical
treatment purposes, which is described in the Licensed Patents listed on the
attached Exhibit "B".
2.6 "Licensed Patent(s)" means the patents and patent applications, or
patents issuing from such applications, throughout the world, listed in the
attached Exhibit "B" (including patents of importation, improvement patents,
patents and certificates of addition and utility models as well as divisions,
reissues, continuations, continuations-in-part, renewals, and extensions of the
foregoing anywhere in the world), which claim an Interlabial Product, a process
for manufacturing or using such an Interlabial Product, or materials used in
such a product which claim has not lapsed, become
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abandoned, or been declared invalid or unenforceable by a non-appealed or
non-appealable decision or judgment of a court or governmental agency of
competent jurisdiction.
2.7 "Licensed Product(s)" shall mean any Interlabial Products defined in
Section 2.5 above which products, or their method of manufacture or use, are
claimed in one or more claims of a Licensed Patent in the country of
manufacture, use, or sale.
2.8 "Technology" means all inventions, trade secrets, data, and other
information, whether or not patentable, which is useful for the research,
development and/or commercialization of Interlabial Products which are (a)
developed, conceived, or reduced to practice by a Party or acquired or licensed
by a Party from a Third Party prior to the Effective Date; or (b) developed,
conceived, or reduced to practice by a Party or acquired or licensed by a Party
from a Third Party during the Term of this Agreement (except as otherwise
provided by Subsection 3.0(a)(iii) and Section 4.2 below).
2.9 The "Term" of this Agreement shall be a period that commences on the
Effective Date and ends as specified in Article XVII herein (upon reversion or
when terminated by mutual agreement or as the result of default).
2.10 "Third Party" means any person other than Athena or Procter & Gamble
or their respective Affiliates.
2.11 The terms of this Agreement (other than names of parties and
Article and Section headings) which are set forth in upper case letters have the
meanings established for such terms in the Sections of this Article II and as
may be defined in other Articles of this Agreement.
ARTICLE III - LICENSE GRANTS
3.0 LICENSED SUBJECT MATTER. Athena hereby grants to Procter & Gamble a
worldwide license to do the following for the periods and on the terms and
conditions set out in this Agreement:
(a) to Make (as defined in Section 3.2(b) below), use, offer to sell,
sell, import, and export Interlabial Products embodying Athena's Interlabial
Product Technology and any improvements to Athena's Interlabial Product
Technology which are developed (i) by Procter & Gamble; or (ii) jointly by
Athena and Procter & Gamble; or (iii) by Athena alone for a period of [*];
(b) to use any manufacturing know-how and trade secrets developed by
or on behalf of Athena pertaining to Athena's Interlabial Product Technology at
all times prior to and until expiration of the period described in Subsection
3.0(a)(iii) above;
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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(c) to use Athena's Interlabial Product Trademarks, either alone or
in conjunction with each other or with a Procter & Gamble trademark;
(d) to utilize and operate within Athena's Section 510(k) FDA
clearance, to the maximum extent permitted by law, to market Interlabial
Products, in order to allow Procter & Gamble to Make, use, offer to sell, sell,
and export and import Interlabial Products manufactured by Athena for Procter &
Gamble or its own Interlabial Products; and
(e) to utilize and operate within any clearances to market
Interlabial Products similar to a Section 510(k) clearance issued by non-U.S.
countries to Athena, or obtained by Procter & Gamble utilizing Athena's
Section 510(k) clearance, in order to permit Procter & Gamble to Make, use,
offer to sell, sell, and export and import Interlabial Products manufactured by
Athena for Procter & Gamble or Procter & Gamble's own Interlabial Products in
non-U.S. countries, if lawful and at no expense to Athena.
3.1 CHARACTER OF LICENSE AND TERM OF LICENSE.
(a) Except as otherwise expressly provided in this Agreement, the
licenses granted herein shall be exclusive to Procter & Gamble and Athena from
the Effective Date until twelve (12) months after the date of Classification
Correction (the "Initial Period") and non-exclusive thereafter during the Term,
subject at all times from the Effective Date to Athena's reservation of rights
to continue to practice its Technology and to use its trademarks as described in
Article IV below. The license for the patents shall be for the full life of the
Licensed Patents, subject to Articles X and XVII below. The non-exclusive
portion of the license of Athena's Interlabial Product Technology and
Section 510(k) clearance shall have no limitations on duration, subject to
Articles X and XVII below.
(b) The right to use Athena's Interlabial Product Trademarks listed
in paragraph A of Exhibit "A" will be exclusive only to Procter & Gamble and
Athena without time limitation during the Term, subject to Articles X and XIV
below. The right to use Athena's Interlabial Product Trademarks listed in
paragraph A of Exhibit "A" shall not be extended to any Third Party without the
agreement of both Athena and Procter & Gamble. The rights granted to Procter &
Gamble in Sections 3.0 and 3.1(a) and this Section 3.1(b) will be irrevocable
during the Term, except as provided in Article X and the following sentence.
The right of Procter & Gamble to use Athena's Interlabial Product Trademarks
listed in paragraph B of Exhibit "A" shall be non-exclusive, subject to
Article X. Provided, however, that Procter & Gamble shall not use any of
Athena's Interlabial Product Trademarks listed in paragraph B of Exhibit "A"
after [*].
3.2 SUB-LICENSES. Neither Procter & Gamble nor any Affiliate of it
(except as otherwise permitted under Section 3.2(a) below) will sub-license any
right it obtains from Athena without
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with the
SEC.
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Athena's prior written permission in each instance. By way of example, but not
in limitation of the foregoing, Procter & Gamble will not grant to any Third
Party any right to utilize any of Athena's Interlabial Product Trademarks,
alone or with any other trademark or trade name. Notwithstanding the foregoing
two sentences, however:
(a) Procter & Gamble may sub-license to an Affiliate of Procter &
Gamble (including a joint venture meeting the definition of Affiliate) in order
to Make, use, sell, offer to sell, export, import, or support the sale of
Interlabial Products carrying a Procter & Gamble trademark (alone or with an
Athena Interlabial Product Trademark) or an Athena Interlabial Product
Trademark, and for no other purpose.
[*]
[*]
3.4 OWNERSHIP AND USE OF TRADEMARKS. Procter & Gamble acknowledges that
(a) its use of Athena's Interlabial Product Trademarks shall not create in
Procter & Gamble's favor any right, title or interest in Athena's Interlabial
Product Trademarks other than as expressly set forth in this Agreement; (b) all
goodwill associated with use of Athena's Interlabial Product Trademarks shall
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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inure to the exclusive benefit of Athena except in those countries where used or
registered or applied for by Procter & Gamble where Athena does not then own
registrations or applications for an Athena Interlabial Product Trademark or
market products bearing an Athena Interlabial Product Trademark in which case
the goodwill in such country shall inure to Procter & Gamble; (c) Procter &
Gamble shall not at any time do or cause to be done any act or thing impairing
or tending to impair any such right of Athena or the validity or enforceability
of Athena's Interlabial Product Trademarks; (d) whenever Procter & Gamble uses
Athena's Interlabial Product Trademarks in the U.S. (and in non-U.S. countries
where Athena owns rights to those Trademarks) in print advertising, packaging or
other printed material or on the Internet in connection with Interlabial
Products, Procter & Gamble shall indicate Athena's ownership thereof by
providing the following language: "[Athena's Interlabial Product Trademark] is a
registered trademark [or trademark, as applicable] of A-FEM Medical Corporation"
or substantially similar language; (e) Procter & Gamble shall provide to
Athena's Director of Regulatory Affairs samples of all literature, packaging,
labels, labeling, and print advertising prepared by or for Procter & Gamble
utilizing one or more of Athena's Interlabial Product Trademarks prior to
Procter & Gamble's use thereof for review to ensure that such Trademarks will be
used as required by this Agreement; Athena shall inform Procter & Gamble of its
approval or disapproval within five (5) business days of receipt. Failure to
approve or disapprove the materials within such time shall be deemed an
approval. Once the use of an Athena Interlabial Product Trademark submitted by
Procter & Gamble has been approved by Athena, Procter & Gamble will have the
right to use identical iterations of that use without resubmission to Athena for
approval. Athena shall have no right to any such samples developed by Procter &
Gamble (other than to Athena's Interlabial Product Trademark(s) set forth
therein); and (f) the quality of Interlabial Products sold by Procter & Gamble
in connection with Athena's Interlabial Product Trademarks shall meet or exceed
the standards set by Athena, and prior to selling any Interlabial Products using
Athena's Interlabial Product Trademarks, Procter & Gamble shall submit
representative samples thereof to Athena's Director of Regulatory Affairs for
its approval. Athena shall inform Procter & Gamble of its approval or
disapproval within ten (10) business days of receipt. Failure to approve or
disapprove within such time shall be deemed as approval. All such samples shall
be returned to Procter & Gamble. Athena shall not use in any way and shall
treat such material and information received from Procter & Gamble as
confidential under Article XII. Athena will supply to Procter & Gamble Athena's
product standard sheets setting forth Athena's standards therefor. Such product
standard sheets shall be treated as confidential under Article XII below.
ARTICLE IV - RESERVATION OF RIGHTS BY ATHENA
4.0 RESERVATION OF RIGHTS BY ATHENA. The license granted in Article III
of this Agreement is subject to Athena's continued right to (a) make, use, offer
to sell, sell, import and export its Interlabial Products, and any other
interlabial products or other products developed or improved solely by Athena,
to the public directly or through others under Athena's name; (b) sell its
Interlabial Products to Third Parties for private label (without an Athena
Interlabial Product Trademark listed in paragraph A or B of Exhibit "A") sale to
consumers; and (c) after the Initial Period license its Technology to Third
Parties. Notwithstanding the foregoing sentence, however,
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Athena agrees that in no event will it grant any rights to any Athena
Interlabial Product Trademark listed in paragraph A of Exhibit "A" to any Third
Party during the Term. Procter & Gamble acknowledges that, except as expressly
limited by this Agreement, it is Athena's right to sell Athena's Interlabial
Products and license Athena's Technology.
4.1 IMPROVEMENTS DEVELOPED BY PROCTER & GAMBLE. The Parties agree
Procter & Gamble will exclusively own and that Athena will not be granted any
rights to interlabial products developed solely by Procter & Gamble or which
contain improvements to Athena's Technology developed solely by Procter &
Gamble.
4.2 IMPROVEMENTS DEVELOPED BY ATHENA. The Parties agree Athena will
exclusively own and that Procter & Gamble will not be granted any rights to
Interlabial Products hereafter developed by Athena, or which contain
improvements to Athena's Technology developed solely by Athena, [*]. Until
such date, such developed rights and improvements shall be the subject of
Procter & Gamble's license described in Section 3.0 above.
ARTICLE V - MANUFACTURING FOR PROCTER & GAMBLE
5.0 SUPPLY OF PRODUCTS BY ATHENA FOR CONSUMER TESTING. Athena will supply
its Interlabial Products, in such quantities and at such prices and
specifications as mutually agreed, to Procter & Gamble for consumer testing.
Any pricing will reflect Athena's costs, among others, of reasonable insurance
and any existing royalty obligations to Third Parties. During the period of
consumer testing by Procter & Gamble, if Athena manufactures more than one
version of an Interlabial Product, Athena will supply Procter & Gamble with the
version of Interlabial Product or Interlabial Products of Procter & Gamble's
choice.
5.1 QUALIFICATION OF ATHENA AS A SUPPLIER. Procter & Gamble agrees to
invite Athena to qualify to be a supplier for test market quantities and other
special Interlabial Product quantities that Procter & Gamble might not
manufacture for itself. Such qualification consideration shall be consistent
with the requirements applicable to all other suppliers invited to submit bids
on Interlabial Products for Procter & Gamble, which may include retaining or
obtaining adequate general liability and product liability insurance and be
consistent with the last sentence of Section 3.2(b). Nothing in this Agreement,
however, will obligate Procter & Gamble to choose Athena as a supplier, or to
have any other entity manufacture its Interlabial Products.
5.2 INSPECTION BY PROCTER & GAMBLE. Procter & Gamble may market
Interlabial Products manufactured by Athena, in which event Procter & Gamble
will describe on packaging such Interlabial Products as "manufactured by A-FEM
Medical Corporation" or "distributed by Procter & Gamble." Procter & Gamble
shall have the right, exercisable through an authorized representative of
Procter & Gamble, to inspect the facilities (including manufacturing, final
assembly and storage facilities) and manufacturing records of Athena at any time
during normal business hours
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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and at reasonable intervals to verify that the Interlabial Products manufactured
for Procter & Gamble meet the Good Manufacturing Practices ("GMP") requirements
mandated for the Interlabial Products as a medical device of the class described
in the Section 510(k) clearance. Inspections will be coordinated between the
parties upon at least 48 hours' prior notice to Athena. Procter & Gamble's
records inspections will be limited to device history files, in-process and
final inspection records, standard operating procedures, shipping records and
raw material inspection reports for the product lots purchased from Athena. All
inspections will be subject to the confidentiality requirements of Article XII
below.
ARTICLE VI - ASSISTANCE FOR P & G MANUFACTURING
6.0 ASSISTANCE FOR P & G MANUFACTURING. Athena will provide Procter &
Gamble for a period beginning on the Effective Date and ending [*] later (or
upon earlier termination of this Agreement), as part of the licensing rights
granted herein, all necessary technical know-how and assistance possessed by
Athena to allow Procter & Gamble to start up its own process for
manufacturing Interlabial Products. Athena will make its employees available
at such reasonable times and intervals as requested by Procter & Gamble as is
reasonably necessary to carry out this purpose, and considering Athena's
other staffing needs.
6.1 EXPENSES. Procter & Gamble will reimburse Athena for any reasonable
expenses incurred with providing the assistance described in Section 6.0 above,
including any reasonable travel and employee costs to be separately agreed.
ARTICLE VII - SECTION 510(K) CLEARANCE
7.0 This Agreement does not provide for or require a transfer or
assignment (conditional or otherwise) of Athena's FDA Section 510(k) clearance
to Procter & Gamble at any time, before or after the Classification Correction,
or before or after reversion. Notwithstanding the forgoing sentence, it is
understood and agreed between the Parties that:
(a) the licensing of use and utilization to Procter & Gamble of Athena's
Section 510(k) marketing clearance as set out in Sections 3.0(d) and (e) herein
is for the maximum extent as permitted under law and shall allow Procter &
Gamble to use in accordance with this Agreement all of Athena's rights as
reflected in such marketing clearance; and
(b) in the circumstance where Procter & Gamble on its own or otherwise is
required by a governmental authority to obtain its own Section 510(k) marketing
clearance or its foreign equivalent for Interlabial Products, Athena will exert
its best efforts to extend to Procter & Gamble its full cooperation and
assistance in such endeavors, including without limitation, access and use of
Athena data and documentation on material compatibility, sterilization, consumer
or material adverse reaction reports, access to Athena manufacturing facilities,
product record and safety-related documentation, preparation of new
documentation for product modifications, access to and use of
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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Athena internal documentation for submission to the FDA in applying for a
Section 510(k) (or equivalent) or product modification purposes, and safety and
clinical studies. All cost of obtaining a Section 510(k) clearance or its
foreign equivalent for such purpose and any Athena costs agreed in advance in
extending its full cooperation and assistance shall be borne by Procter &
Gamble.
7.1 Procter & Gamble shall, when operating under Athena's Section 510(k)
clearance, manufacture its Interlabial Products under applicable GMP guidelines,
maintain all records required by law, and allow Athena to inspect and copy all
records required by Athena to maintain Athena's clearance. Should recall or
other FDA action occur, Athena and Procter & Gamble shall make available to each
other all necessary data and records. In addition, Athena shall have the right,
exercised through an authorized representative of Athena, to inspect the
facilities (including manufacturing, final assembly and storage facilities) and
manufacturing records of Procter & Gamble at any time during normal business
hours and at reasonable intervals to verify that the Interlabial Products
manufactured by Procter & Gamble meet the GMP requirements mandated for
Interlabial Products as a medical device of the class described in the
Section 510(k) clearance. The rights and obligations set forth in this Section
7.1 shall only be applicable in circumstances where Procter & Gamble is
operating under Athena's Section 510(k) clearance.
ARTICLE VIII - INTERLABIAL PRODUCT DEVELOPMENT
8.0 GENERAL. It is agreed that, except as part of the licenses granted in
Section 3.0 and the manufacturing assistance Athena will provide Procter &
Gamble described in Article VI herein, each Party will develop their own
Interlabial Product Technology separately. The technology development
contemplated in this Agreement will be primarily for the purpose of assisting
Procter & Gamble in manufacturing either a version of Athena's Interlabial
Product, or its own interlabial product. To carry out these purposes, Athena
and Procter & Gamble will arrange opportunities for R&D and manufacturing
specialists from Athena to meet appropriate Procter & Gamble personnel.
8.1 SCOPE OF CONFIDENTIAL DISCUSSIONS. In accordance with the intent and
for purposes of this Agreement, any confidential discussions and disclosures
between Athena and Procter & Gamble will be limited to:
[*]
[*]
[*]
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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8.2 TREATMENT OF CONFIDENTIAL MATTER IN GENERAL. The confidential
discussions and disclosures described in Section 8.1, and any other confidential
information shared by Athena and Procter & Gamble, shall be governed by the
provisions of Article XII.
8.3 CONFIDENTIAL INFORMATION DEVELOPED BY PROCTER & GAMBLE REGARDING
ATHENA'S INTERLABIAL PRODUCTS. Any confidential information shared by Procter &
Gamble with Athena, with regard to Athena's Interlabial Products, may be used by
Athena for its own products subject to the other provisions of this Agreement,
and may not be made available to any other parties by Athena.
8.4 RIGHTS TO IMPROVEMENTS. Athena will retain the rights to any
improvements to Interlabial Products or processes for manufacturing Interlabial
Products that it develops independently of Procter & Gamble, subject to the
license granted to Procter & Gamble in Article III. Procter & Gamble will
retain exclusive rights to any improvements to Interlabial Products or processes
for manufacturing Interlabial Products that Procter & Gamble develops
independently of Athena. To the extent a Party may know of any such
improvements as a result of the cooperation between the Parties provided for in
this Agreement, it will keep such information confidential and will not use such
information for any purpose other than in connection with the possible supply of
Interlabial Products by Athena to Procter & Gamble under Article V. Such
obligation of confidentiality shall continue for the time period provided in
Article XII.
8.5 PROCTER & GAMBLE TRADEMARKS. Procter & Gamble may also develop and
use its own trademarks in conjunction with its own or Athena's Interlabial
Products. Any trademarks developed by Procter & Gamble will be the exclusive
property of Procter & Gamble, and Athena agrees not to use these trademarks.
8.6 ATHENA'S OTHER TRADEMARKS. Nothing in this Agreement is to be
construed to prevent Athena from developing, registering, using, and/or
licensing any trademarks other than those listed in Exhibit "A" in conjunction
with Athena's Interlabial Products or any other products or services. Any such
other trademarks developed by Athena will be the exclusive property of Athena,
and Procter & Gamble agrees not to use these trademarks. [*].
ARTICLE IX - PAYMENTS
9.0 As consideration for all rights granted to Procter & Gamble in this
Agreement, Procter & Gamble will make cash payments to Athena as follows:
(a) $1 million upon signing this Agreement;
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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(b) $1 million [*] Subject to Article X, it is agreed by the
Parties that the payments made under Section 9.0(a) and this Section 9.0(b)
shall be considered as payment for the licensing rights granted herein;
(c) A one time payment of $1 million [*]; and
(d) A one time payment of $1 million [*].
9.1 Nothing in this Agreement, however, will obligate Procter & Gamble
to [*]. Further, the Parties acknowledge that the time periods set forth in
Subsections 9.0(c) and (d) are inspirational, and Procter & Gamble will not
incur any liability by reason of it being unable to accomplish the specified
tasks within the time period. A payment due under such a Subsection of
Section 9.0 will be payable when the specified task is accomplished,
notwithstanding any time limitation in the preceding Subsection.
ARTICLE X - REVERSION
10.0 REVERSION. If Procter & Gamble has not [*], then all rights, except
as set out in Section 3.3 and Section 10.1 below, Procter & Gamble may have
obtained from Athena will revert, without consideration, to Athena. This
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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<PAGE>
reversion event shall, however, be extended if the first Test Market is not
commenced solely due to failure of the Interlabial Products to meet Procter &
Gamble's safety criteria for catamenial products. Such extension shall be for a
period that Procter & Gamble's safety criteria are not met. Reversion under
this Section 10.0 (if otherwise still operative) shall occur at the end of such
extension or 42 months after Classification Correction, whichever occurs first.
10.1 SECTION 510(k) RIGHTS. In the event of reversion, Procter & Gamble
shall nevertheless retain any rights granted to it by Athena under
Sections 3.0(d) and 3.0(e) above (subject to Article VII above), and such rights
shall be usable by Procter & Gamble without time limitation or further payments
of any kind to Athena. Reversion shall not affect the Parties' respective
obligations and rights under Article VII above.
10.2 RIGHTS IN GENERIC TERMS. If a reversion occurs under Section 10.0,
and it is subsequently determined that Athena is not entitled to federal or
common law rights in any trademark or proposed trademark identified herein, and
that such term or terms become generic within the industry for use in
conjunction with interlabial products, then nothing in this Agreement shall
prevent Procter & Gamble from using such term(s).
10.3 TREATMENT OF CONFIDENTIAL INFORMATION IN EVENT OF REVERSION.
Similarly and at the same time, in the event of reversion under Section 10.0,
all learnings and confidential information developed solely by one Party and
disclosed to the other will revert to the disclosing Party, without
consideration, and may not be used by the other nor given or otherwise provided
to any other person. The terms "learnings" and "confidential information"
include without limitation (with respect to Procter & Gamble as a disclosing
party) the information shared under Section 8.1 and all other information shared
with Athena by Procter & Gamble, or by consultants retained by Procter & Gamble,
in order to obtain the Classification Correction. Each Party shall, in the
event of reversion, return all copies of written or other tangible documentation
of such information to the other Party, although Athena may retain one archival
copy of any learnings and information submitted to the FDA. The foregoing is
not to be construed as limiting Athena's right to use and maintain its current
Section 510(k) clearance and such clearance following the Classification
Correction (if any).
While it is understood that one Party's intellectual property rights will,
in the event of reversion, not be used by the other, it is also understood that
it will not be possible for certain types of information, once learned, to be
returned. These types of information include a Party's manufacturing know-how
and trade secrets relating to its manufacturing process. Each Party agrees to
not use and to otherwise keep these types of information confidential in
accordance with Article XII, but shall not be obligated to attempt to return
such information to the other. Each Party shall, however, in the event of
reversion, return any written or other tangible documentation of such
information to the other and all copies of the same.
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10.4 RIGHT TO NEGOTIATE FOR PROPRIETARY RIGHTS DEVELOPED PRIOR TO
REVERSION. If a reversion occurs, each Party may separately seek to license or
purchase from the other any rights to various proprietary intellectual
properties that were developed prior to reversion, but reverted to the other
Party. Each Party, in turn, will negotiate this in good faith, but nothing in
this Agreement shall obligate either of the Parties to license or sell such
reverted rights.
ARTICLE XI - PATENTS AND TRADEMARKS
11.0 PROSECUTION AND MAINTENANCE OF PATENTS AND TRADEMARKS.
(a) During the Term of this Agreement, Athena warrants that it will
file all necessary documentation with the U.S. Patent and Trademark Office
and foreign intellectual property agencies and take all actions necessary to
keep the Licensed Patents and Athena Interlabial Product Trademarks in force
in the U.S. or in any country where Athena elects to file and obtains a
registration, subject to Section 11.0(b) below. Athena also warrants that it
will process in a timely manner its pending [*] applications pending on the
Effective Date or which Athena may file after the Effective Date. Athena
does not guarantee, however, that any patent or trademark application will be
granted or issued, nor when. Procter & Gamble agrees that it will, if
requested, cooperate with Athena in the execution, filing, and prosecution of
any trademark applications or renewal documents that Athena files for the
Interlabial Product Trademarks. Athena will be responsible for all costs of
the prosecution of patent and trademark applications, and all costs required
to maintain its patents and trademarks in force, pursuant to the foregoing.
[*]
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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<PAGE>
a non-exclusive license and right to use, offer to sell, sell, and export and
import, but not to sub-license, in such non-U.S. country Interlabial Products
under such patent or Licensed Patent.
(c) Athena's obligation to prosecute an infringement proceeding
pursuant to Section 11.1 below shall not apply to a Licensed Patent or Athena
Interlabial Product Trademark described in Subsection (b) above.
11.1 ENFORCEMENT OF PATENTS AND TRADEMARKS. If Procter & Gamble becomes
aware of infringement or threatened infringement of any Licensed Patent or
Athena Interlabial Product Trademark by a Third Party, Procter & Gamble shall
have the right during the Term of this Agreement to give Athena written
notice of such infringement or threatened infringement. Athena shall advise
Procter & Gamble of its conclusion as to whether or not the Third Party
activity constitutes infringement within [*] days of the receipt of such
notice from Procter & Gamble.
(a) [*] and (iii) the annualized sales of products the making or
selling of which constitute the infringement are equal to at least ten
percent of the combined annual net sales of Athena's Interlabial Products and
Procter & Gamble's Interlabial Products in the country where the infringement
is occurring, then Procter & Gamble shall have the right to make written
demand upon Athena to cause the cessation of such infringement.
(b) Athena agrees to use all reasonable measures, whether by action,
suit, or other proceeding, or otherwise, to prevent the infringement of any
Licensed Patent or Athena Interlabial Product Trademark by any Third Party when
properly demanded by Procter & Gamble under the terms of Section (a) above and
for that purpose agrees to bring suit within 180 days of Procter & Gamble's
proper demand under Section (a) to enjoin such infringement and collect (subject
to Section 11.1(c) below) for its use, damages, profits, and awards of whatever
nature recoverable for such infringement, provided (i) Procter & Gamble is not
then in default of payment or performance under this Agreement; and (ii) the
subject Licensed Patent right is not then the subject of a re-examination
proceeding.
(c) All costs, disbursements, and expenses of any action, suit, or
other proceeding brought under this Section 11.1 shall be borne by Athena.
Procter & Gamble agrees to cooperate with Athena in any way necessary in the
prosecution of any action, suit, or other proceeding for infringement. Any
recovery of costs or damages shall be shared by the Parties in proportion to the
Third Party costs and expenses incurred by each in the proceeding. Athena is
empowered to settle any claim, action, or suit for infringement on terms that
are not materially adverse to Procter & Gamble.
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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<PAGE>
11.2 While and as long as its license with respect to any of its rights
under this Agreement remains exclusive, or if Athena fails to bring an action
when required under Section 11.1, Procter & Gamble is empowered:
(a) To bring suit or action in its own name (or, if required by law,
jointly with Athena), at its own expense and on its own behalf, for infringement
of the Licensed Patents, or of any of the Athena Interlabial Product Trademarks;
(b) In any such suit or action, to enjoin infringement and to collect
for its use, damages, profits, and awards of whatever nature recoverable for
such infringement; and
(c) To settle any claim, action, or suit for infringement of the
Licensed Patents or of the Athena Interlabial Product Trademarks on terms that
are not materially adverse to Athena.
11.3 Each Party agrees to mark all Interlabial Products it manufactures
with the appropriate Licensed Patent numbers in conformance with applicable law.
ARTICLE XII - CONFIDENTIALITY
12.0 CONFIDENTIALITY AND NON-USE OBLIGATIONS.
(a) Both parties shall maintain in confidence all information
received from the other Party concerning Interlabial Products. Neither Party
shall disclose the confidential information of the other Party to any Third
Party or use such information other than as permitted by the provisions of this
Agreement without that other Party's prior written consent. These obligations
of confidentiality and non-use shall terminate five (5) years after the
termination of this Agreement, but shall not apply to information that:
(1) was known to the public or to the receiving Party prior to
disclosure under this Agreement;
(2) becomes known to the public through no fault of the
receiving Party;
(3) is disclosed to the receiving Party by a Third Party having
a legal right to do so;
(4) is required to be disclosed in furtherance of this
Agreement, provided that efforts are made to protect confidentiality to the
extent feasible; or
(5) is required to be disclosed to a regulatory agency or
pursuant to a valid court order or judgment or valid subpoena.
Page 15 - AGREEMENT
<PAGE>
(b) In the event either Party or any of its Affiliated companies
believes it will be or becomes legally compelled to disclose any confidential
information of the other Party, the Party compelled to disclose shall provide
the other Party with prompt written notice of such requirement prior to any such
disclosure so that the affected Party may seek a protective order or other
appropriate remedy. The Party so compelled will furnish only the portion of the
confidential information that is legally required and will exercise its best
efforts to obtain a protective order or other reliable assurance that
confidential treatment will be accorded the confidential information.
12.1 PRIOR CONFIDENTIAL AGREEMENTS. This Agreement supersedes the prior
confidential disclosure agreements dated September 18, 1996, November 12, 1996,
and January 7, 1997, between Athena and Procter & Gamble and all information
required to be kept confidential under such agreements (defined therein as "SAID
INFORMATION" and "P&G INFORMATION") as of the Effective Date of this Agreement
will be required to be kept confidential, subject to the terms of Section 12.0
of this Agreement. This Agreement does not supersede or terminate the
confidential disclosure agreement of the Parties dated March 4, 1997, with
respect to health care and diagnostics research, technology, and products.
12.2 RESEARCH MANUSCRIPTS AND PUBLICATIONS. It is understood that the
Parties may wish to publish or otherwise disclose Technology to a Third Party
for publication in a reputable scientific forum (for example, as an abstract,
poster presentation, lecture, article, book, or any other means of dissemination
to the public). A Party wishing to make any such disclosure shall submit a
complete written draft of the proposed disclosure to the other Party at least
thirty (30) days prior to submission for the disclosure to a Third Party. The
Party wishing to disclose shall consider comments from the other Party. No such
disclosure shall be made to a Third Party until a patent application has been
filed adequately describing and claiming any patentable Technology in such
disclosure. If there is good faith disagreement as to whether a disclosure
would disclose confidential or proprietary information to a competitor of a
Party, then the disclosure shall not be made.
ARTICLE XIII - REPRESENTATIONS, WARRANTIES AND INDEMNIFICATIONS
13.0 OWNERSHIP OF LICENSED PROPERTY; RIGHT TO GRANT LICENSE. Athena
represents and warrants that:
(a) (i) Subject to the provisions of Sections 13.7 and 13.8 below,
Athena owns the Licensed Patents, the Athena Interlabial Product Trademarks, and
other subject matter licensed to Procter & Gamble herein, that its ownership of
these licensed rights is full, free, and unencumbered, and that there are no
obligations, liens, or other encumbrances on such rights that would prevent
Procter & Gamble from using or otherwise enjoying the rights enumerated in this
Agreement; and (ii) it has the right to license or otherwise grant to Procter &
Gamble the use of the licenses or other rights as provided for in Section 3.0 of
this Agreement.
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(b) Athena (i) has when marketing its Interlabial Products complied
with all applicable general controls provisions of the Federal Food, Drug, and
Cosmetic Act including its foreign equivalents (including without limitation
annual registration, listing of devices, GMP, and labeling, and prohibitions
against misbranding and adulteration); (ii) possesses a Section 510(k)
"clearance to market" letter from the FDA dated February 9, 1989, and any
foreign equivalents respecting sale of Athena's current Interlabial Products,
each of which clearance is valid and in force and will be maintained by Athena
to perform its obligations under this Agreement; but (iii) all the foregoing is
subject to Procter & Gamble labeling all Interlabial Products manufactured by
Athena for Procter & Gamble as "distributed by Procter & Gamble", or
substantially similar language.
[*]
13.1 POWER AND AUTHORITY.
(a) Athena warrants that it has full power and authority to grant to
Procter & Gamble the licenses provided for herein and that the execution of this
Agreement has been duly and validly authorized by all necessary corporate action
on the part of Athena. Upon the execution and delivery of this Agreement, it
will be a valid and binding obligation of Athena enforceable in accordance with
its terms.
(b) Procter & Gamble warrants that it has full power and authority to
enter into this Agreement and that the execution of it has been duly and validly
authorized by all necessary corporate action on the part of Procter & Gamble.
Upon the execution and delivery of this Agreement, it will be a valid and
binding obligation of Procter & Gamble enforceable in accordance with its terms.
13.2 NO VIOLATIONS CREATED BY THIS AGREEMENT.
(a) Athena warrants that the execution and delivery of this
Agreement, and the grant of the licenses provided for herein, does not create
any encumbrance on any Licensed Patents or on the Athena Interlabial Product
Trademarks in favor of any Third Party and does not violate any law or the terms
of any Athena contract.
(b) Procter & Gamble warrants that the execution and delivery of this
Agreement does not violate any law or the terms of any Procter & Gamble
contract.
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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<PAGE>
(c) Each Party and its respective Affiliates warrants that it has not
entered into any agreement with a Third Party that might prevent, inhibit, or
limit the Parties from carrying out the activities described in this Agreement.
13.3 CONSENTS. Each Party warrants that the execution and performance
under this Agreement by it does not require the consent, waiver, approval,
license, or authorization of, or any filing with, any person or any governmental
authority.
13.4 FINDER'S FEES AND COMMISSIONS. Each Party warrants that it has not
incurred any liability for finder's fees, brokerage fees, agent's commissions,
or other similar forms of compensation in connection with this Agreement.
13.5 REPRESENTATIONS REGARDING TRADEMARKS. Athena warrants and represents
that:
(a) Exhibit "A" sets forth a complete list of all of Athena's
registered Interlabial Product Trademarks, all applications for registration
pending for any Interlabial Product Trademarks by Athena filed on or before
April 8, 1997, and all common law uses of those Trademarks by Athena. Athena
does not claim any right to any Interlabial Product Trademarks for any period
prior to March 20, 1997, other than those listed in Exhibit "A".
(b) Except as otherwise described in this Agreement, the registered
Interlabial Product Trademarks set forth on Exhibit "A" are currently
commercially used in the United States.
(c) From July 12, 1991, to the present, there is no past or pending
litigation, and to Athena's knowledge no threatened litigation, alleging that
Athena's current or proposed use of the trademarks set forth as registered or
applied for on Exhibit "A" infringes any trademark, trade name, or service mark
of any Third Party other than as listed on Exhibit "A".
(d) The registrations and/or applications listed on Exhibit "A" are
owned by Athena free and clear of all joint ownership, assignments, liens,
security interests, and encumbrances.
(e) No Third Party has any right to receive from Athena or any
obligation to pay to Athena any royalty, nor are there any royalty-free licenses
to which Athena is a party with respect to the trademarks registered or applied
for on Exhibit "A".
(f) To Athena's knowledge, and subject to the provisions of
Section 13.8 below, no Third Party has registered or applied to register any of
the trademarks listed on Exhibit "A" in the U.S. in the same International
Classes in which they are currently registered or in which there is a pending
application to be registered other than as listed on Exhibit "A".
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<PAGE>
(g) There are no agreements or commitments limiting or restricting
Athena's rights to use the trademarks listed as registered or applied for on
Exhibit "A".
(h) No trademark listed as registered or applied for on Exhibit "A"
is subject to any governmental proceeding or investigation communicated in
writing to Athena, nor to any other claims or litigation pending, asserted, or
threatened in writing against Athena other than as listed on Exhibit "A".
13.6 REPRESENTATIONS REGARDING PATENTS. Athena warrants and represents
that:
[*]
(b) To Athena's knowledge, there are no patents, know-how or other
rights owned by a Third Party that might prevent, inhibit, or limit the Parties
from carrying out the activities described in this Agreement, including the
manufacture and sale by Procter & Gamble of Athena's Interlabial Products.
(c) From July 12, 1991, to the present, there is no past or pending
litigation, and to Athena's knowledge no threatened litigation, alleging that
Athena's current or proposed use of the subject matter described in the patents
or applications on Exhibit "B" infringes the claims of any patent of any Third
Party, other than as listed on Exhibit "B".
(d) To Athena's knowledge, no information exists which would render
invalid or unenforceable any Patent licensed to Procter & Gamble hereunder,
other than as listed on Exhibit "B".
(e) Except as otherwise provided in Section 13.7 below, the patents
and applications listed on Exhibit "B" are owned by Athena free and clear of all
joint ownership, assignments, liens, security interests, and encumbrances.
(f) Except as otherwise provided in Section 13.7 below, no Third
Party has any right to receive from Athena or any obligation to pay to Athena
any royalty, nor are there any royalty-free licenses to which Athena is a party
with respect to the patents or applications listed on Exhibit "B".
(g) No patent or application for patent listed on Exhibit "B" is
subject to any interference, reexamination, or other Patent Office proceeding or
any other claims or litigation pending, asserted, or threatened in writing other
than as listed on Exhibit "B".
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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13.7 PRIOR AGREEMENTS. Procter & Gamble acknowledges that (a) Athena has
obtained rights to certain Licensed Patents [*]; and [*].
[*]
13.8 TRADEMARK APPLICATIONS. No warranty or representation herein by
Athena relating to its ownership is made with respect to any Interlabial Product
Trademark unless and until a federal registration is issued. In addition,
Athena makes no representation or warranty, express or implied, of continuous
use or non-abandonment as to the "butterfly logo" listed in paragraph B of
Exhibit "A".
13.9 DEFINITION OF KNOWLEDGE. As used in this Article XIII, the term
"Athena's knowledge" shall mean Athena's current actual knowledge (not
constructive knowledge) and as based upon reasonable and due inquiry of its
officers, directors, attorneys, and consultants.
13.10 NO IMPLIED REPRESENTATIONS. Neither party makes any implied
representations, warranties, indemnities, or like agreements. Each party makes
only those representations, warranties, indemnities, and agreements that are
expressly set forth in this Agreement.
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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<PAGE>
13.11 INDEMNIFICATION.
(a) ATHENA'S INTERLABIAL PRODUCT. The Parties agree that
Athena's manufacturing and marketing of Athena's Interlabial Products will be
the sole responsibility of Athena, and will not subject Procter & Gamble to any
liability. Should any Third Party bring an action against Procter & Gamble as a
result of Athena's manufacturing and marketing of Athena's Interlabial Products,
Athena agrees to indemnify and hold Procter & Gamble harmless from any and all
liability, damage, loss, cost (including without limitation reasonable
attorneys' fees), and expense resulting from any suits, claims, actions,
demands, liabilities, expenses, and/or loss ("Losses") relating to the same.
(b) PROCTER & GAMBLE'S INTERLABIAL PRODUCT. The Parties
contemplate that three possible sets of circumstances could occur in the
manufacturing and marketing of an interlabial product by Procter & Gamble: (1)
the product could be manufactured entirely by Procter & Gamble or entirely by a
permitted Third Party for Procter & Gamble; (2) a portion of the product could
be manufactured by Athena for Procter & Gamble; or (3) the entire product could
be manufactured by Athena for Procter & Gamble. In these circumstances, if:
(i) the product is manufactured entirely by Proctor &
Gamble or for Procter & Gamble by a Third Party, the manufacturing and marketing
of such a product will be the sole responsibility of Procter & Gamble, and will
not subject Athena to any liability for the same. Should any Third Party bring
an action against Athena as a result of Procter & Gamble's manufacturing and
marketing of such a product, Procter & Gamble agrees to indemnify and hold
Athena harmless from any and all liability, damage, loss, cost (including
without limitation reasonable attorneys' fees), and expense resulting from any
Losses relating to the same.
(ii) a portion of the product is manufactured by Athena, any
liability resulting from the sale or use of the product due to the portion
manufactured by Athena will be the sole responsibility of Athena, and will not
subject Procter & Gamble to any liability for the same. Should any Third Party
bring an action against Procter & Gamble as a result of Athena's manufacturing
of such portion of a product, Athena agrees to indemnify and hold Procter &
Gamble harmless from any and all liability, damage, loss, cost (including
without limitation reasonable attorneys' fees), and expense resulting from any
Losses attributable to the portion of the product manufactured by Athena.
Should a Third Party bring an action against Athena as a result of Procter &
Gamble (or a Third Party) manufacturing a portion of a product not manufactured
by Athena, Procter & Gamble agrees to indemnify and hold harmless Athena from
any and all liability, damage, loss, cost (including without limitation
reasonable attorneys' fees), and expense resulting from any Losses attributable
to the portion of the product manufactured by Procter & Gamble (or a Third
Party).
(iii)the product is manufactured entirely by Athena, any
liability resulting from the sale or use of the product due to the manufacturing
by Athena will be the sole responsibility of Athena, and will not subject
Procter & Gamble to any liability for the same. Should any Third
Page 21 - AGREEMENT
<PAGE>
Party bring an action against Procter & Gamble as a result of Athena's
manufacturing of such product, Athena agrees to indemnify and hold Procter &
Gamble harmless from any and all liability, damage, loss, cost (including
without limitation reasonable attorneys' fees), and expense resulting from any
Losses relating to the same.
13.12 EXCLUSION. Athena shall have no obligation under Subsection
13.11(b)(ii) or (b)(iii) above for any Losses attributable to any alteration,
modification, or mistreatment (including without limitation damage to product or
packaging, exposure to the elements, or shelf life expiration) of a product or
portion thereof, nor due to any incorrect, incomplete, omitted, misleading, or
false claim or statement on any packaging or advertising for an Interlabial
Product by Procter & Gamble or by any Third Party contracting with or acting on
behalf of Procter & Gamble.
13.13 INSURANCE. Each Party will maintain commercial general and product
liability insurance coverage in amounts it deems appropriate to protect its own
business.
ARTICLE XIV - CHANGE IN CONTROL
14.0 DEFINITIONS. For purposes of this Agreement, a "Change in Control"
of Athena shall be deemed to have occurred in the event [*].
14.1 RIGHTS IN EVENT OF CHANGE IN CONTROL. If during the Term of this
Agreement a Change in Control of Athena is imminent, Athena or its successor
shall notify Procter & Gamble of the proposed Change in Control. In such event,
Athena agrees Procter & Gamble shall have, before such Change in Control can be
executed without further consideration (other than as set out in Article IX
herein), the following rights:
(a) if the Change in Control is to any person or entity, including an
Acquiror, Section 10.0 of this Agreement shall be amended such that any Athena
reversion rights set out therein shall only be applicable [*]
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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Gamble may elect to place a Test Market or expansion of such at any time within
such 60-month period; and
(b) if the Change in Control is to an Acquiror, Procter & Gamble's
rights as provided for in this Agreement to Athena's Interlabial Product
Trademarks as set out in paragraph A of Exhibit "A" shall become exclusive to
Procter & Gamble.
Upon any Change in Control, each Party agrees to execute all necessary documents
and, other than as set out in Subsections (a) and (b) above, the remaining terms
and conditions of this Agreement shall not be affected and this Agreement shall
continue to remain in force until otherwise terminated.
[*]
ARTICLE XV - PUBLIC ANNOUNCEMENTS
15.0 PUBLICITY. Upon the signing of this Agreement, Procter & Gamble and
Athena will jointly discuss and agree on any press releases Athena or Procter &
Gamble will make, standby answers to possible Third Party questions, and any
other public statements regarding the execution and the subject matter of this
Agreement, subject in each case to disclosure otherwise required by law or
regulation. In determining whether to make such announcements, the principles
observed by Procter & Gamble and Athena will be accuracy, the requirements for
confidentiality under Article XII, the advantage a competitor of Procter &
Gamble or Athena may gain from any statement regarding the terms of this
Agreement, the requirements of disclosure under any securities laws or
regulations of the United States, including those associated with U.S.
Securities and Exchange Commission (the "SEC") and regulatory filings and public
offerings, the restrictions imposed by the Federal Food, Drug, and Cosmetic Act,
and the standards and customs in the industry for such disclosures by companies
comparable to Procter & Gamble and Athena. Except as provided above and under
Section 15.1 below, the terms of this Agreement shall not be made public or
publicized.
15.1 CONFIDENTIALITY REQUEST. If this Agreement is required to be filed
with the SEC, Athena will request confidential treatment of the terms of this
Agreement to the extent permitted by the SEC. The Parties understand that the
extent of any confidential treatment granted, if any, cannot be assured.
Athena will not be required to appeal any denial of a confidentiality request.
ARTICLES XVI - OTHER DEVELOPMENTS
16.0 EXPLORATION OF OTHER DEVELOPMENT OPPORTUNITIES. In an effort to
establish a broader relationship between the Parties beyond the scope and intent
of this Agreement, Athena and
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
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Procter & Gamble will explore on a confidential basis opportunities for other
development opportunities and agreements. Such other potential development
opportunities may be presented:
[*]
[*]
16.1 AGREEMENT AS TO OTHER DEVELOPMENT OPPORTUNITIES. In the event the
Parties reach agreement with respect to such other development opportunities,
any arrangement between the Parties shall be governed by a separate agreement
between the Parties. Should any agreements between the Parties result from this
other exploration, Athena and Procter & Gamble, as may be appropriate to the
situation, will jointly develop public announcements and standby answers to
possible Third Party questions that are satisfactory to both Parties.
16.2 RIGHTS IN OTHER TECHNOLOGIES. Nothing in this Agreement shall require
the parties to enter into such an agreement, and nothing in this Agreement shall
give any Party any rights, preferential or otherwise, to the other Party's
Technology. Further, nothing in this Agreement shall require that a specific
technology be discussed.
ARTICLE XVII - TERMS AND TERMINATION
17.0 TERM. This Agreement will remain in full force and effect unless
(a) terminated pursuant to Section X - Reversion; (b) terminated by mutual
agreement of the Parties; or (c) one of the Parties commits a default under this
Agreement and after arbitration (or litigation, if applicable) the nondefaulting
Party elects not to go forward with this Agreement. Upon any termination,
Athena may retain all payments and reimbursements previously made by Procter &
Gamble to Athena or on Athena's behalf, and each Party shall be liable for
obligations arising prior to termination.
17.1 DEFAULT. Failure by either Party (the "Defaulting Party") to comply
with any of the material obligations contained in this Agreement shall entitle
the other Party (the "nondefaulting Party") to give the Defaulting Party notice
specifying the nature of the default and requiring it to cure such default. If
the Defaulting Party disagrees with the existence, extent or nature of the
claimed default, the Parties shall use good faith efforts to resolve the dispute
within forty-five (45) days or ten (10) days in the event of a payment dispute.
If (a) such default is not cured within such forty-five (45) (or ten (10)) day
period after the receipt of such notice; or (b) the Parties have not otherwise
resolved the dispute during such forty-five (45) (or ten (10)) day period, the
nondefaulting Party shall be entitled to initiate arbitration under Section 18.4
below and at its sole discretion suspend performance under this Agreement.
ARTICLE XVIII - MISCELLANEOUS
Page 24 - AGREEMENT
<PAGE>
18.0 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or loss on account of failure of
performance by the Defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the reasonable control of the Defaulting Party,
provided that the Party claiming force majeure has exerted all reasonable
efforts to avoid or remedy such force majeure and given prompt notice to the
other Party.
18.1 SURVIVAL OF TERMS. The provisions of Article XIII shall survive the
execution and termination of this Agreement. The provisions of Article XII and
the last sentence of Section 3.2(b) shall survive the execution and termination
of this Agreement and shall extend for the period specified in Article XII. The
provisions of Section 18.10 shall survive the execution and termination of this
Agreement and shall extend for the period specified in Section 18.10.
18.2 NOTICES. Any notices, consents, or other communications provided for
in this Agreement to be made by either of the Parties to the other shall be in
writing, in English, and shall be made by prepaid certified first class mail
with return receipt addressed to the other at its address set forth below. Any
such communication may also be given by hand or facsimile transmission to the
appropriate designation with confirmation of receipt generated by the sender's
machine. Either Party may by like notice specify an address to which
communications shall thereafter be sent. Notices sent by mail or facsimile
shall be effective two (2) days after being sent as provided above; notices
given by hand shall be effective when delivered.
Notices for Athena shall be sent to:
Athena Medical Corporation
Attn: William H. Fleming, President & COO
10180 SW Nimbus Avenue, Suite J5
Portland, Oregon 97223
Facsimile: (503) 639-3674
With copy to:
Kenneth A. Williams
Hagen, Dye, Hirschy & DiLorenzo, P.C.
One SW Columbia Street, Suite 1900
Portland, Oregon 97258-2087
Facsimile: (503) 274-7979
Notices for Procter & Gamble shall be sent to:
The Procter & Gamble Company
Attn: President, Paper Products
Page 25 - AGREEMENT
<PAGE>
One Procter & Gamble Plaza
Cincinnati, Ohio 45202
Facsimile: (513) 983-4594
With copy to:
The Procter & Gamble Company
Attn: Associate General Counsel
Disposable Absorbent Articles
Winton Hill Technical Center
6100 Center Hill Road
Cincinnati, Ohio 45224
Facsimile: (513) 634-3612
18.3 GOVERNING LAW. Except to the extent superseded by the United States
Arbitration Act as provided in Section 18.4 below, this Agreement shall be
governed by the laws of the State of Ohio or Oregon, according to conflicts of
law principles. The United Nations Convention on Contracts for the
International Sale of Goods will not apply to this Agreement.
18.4 ARBITRATION. In the event of any claim or controversy arising out of
this Agreement or relating to interpretation of any term or provision contained
in it, such claim or controversy shall be resolved by binding arbitration.
Arbitration shall be conducted pursuant to the Commercial Rules of the American
Arbitration Association (the "AAA") and under the United States Arbitration Act
(9 U.S.C. Section 1 et seq.). Procter & Gamble shall select one arbitrator and
Athena shall select one arbitrator, and the arbitrators so selected shall choose
a third arbitrator. If one Party fails to choose its proposed arbitrator within
ten (10) days after receipt from the other Party of a list containing no fewer
than five (5) names of potential arbitrators, the other Party shall be entitled
to choose the second arbitrator from such list.
If the amount in dispute is more than $50,000, the matter shall be decided
by the three arbitrators so selected. If the amount in dispute is $50,000 or
less, the matter shall be decided by the one arbitrator chosen by the other two.
If the arbitrator(s) can reasonably do so, the hearing shall be conducted within
three (3) months after first written notice of intent to arbitrate is received
from the Party demanding arbitration, unless the arbitrator(s) for good cause
grant a continuance. The arbitrator's(s') award shall issue no later than
thirty (30) days after close of the arbitration proceeding. The prevailing
party in any arbitration proceeding shall recover from the losing Party
reasonable costs of arbitration, including reasonable expert witness fees and
reasonable attorneys' fees. Any award of the arbitrator(s) may be reduced to
judgment and filed and enforced in any court of competent jurisdiction. The
arbitration hearing shall take place in Seattle, Washington.
In the event either Party commences an action or suit based on this
Agreement or the interpretation of any term or provision contained in it, the
foregoing arbitration clause shall
Page 26 - AGREEMENT
<PAGE>
constitute a bar or defense thereto unless a temporary restraining order or
preliminary injunction is necessary to protect a Party pending completion of the
arbitration. Unless otherwise agreed by the involved parties, an arbitration
proceeding may be stayed by a court if a Third Party or parties not subject to
arbitration are involved in the dispute.
No arbitration or legal action of any kind arising out of this Agreement
may be brought by either Party more than six (6) years after termination of this
Agreement, or the applicable period specified in Section 18.1, whichever is
longer.
18.5 NON-WAIVER OF RIGHTS. Except as specifically provided for herein, the
waiver from time to time by either of the Parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a
continuing waiver of same or of any other of such Party's rights or remedies
provided in this Agreement.
18.6 SEVERABILITY. If any term, covenant, or condition of this Agreement
or the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (a) the remainder of this Agreement,
or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant, or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the Parties hereto covenant and agree to renegotiate any such term,
covenant, or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant, or condition of this Agreement or
the application thereof that is invalid or unenforceable, and in the event that
the Parties are unable to agree upon a reasonably acceptable alternative, then
the Parties agree that a submission to arbitration shall be made in accordance
with Section 18.4 to establish an alternative to such invalid or unenforceable
term, covenant, or condition of this Agreement or the application thereof, it
being the intent that the basic purposes of this Agreement are to be
effectuated.
18.7 ENTIRE AGREEMENT. This Agreement sets forth all the covenants,
promises, agreements, warranties, representations, conditions, and
understandings between the Parties hereto with the exception of any agreements
by the Parties executed at an even date hereof, and supersedes and terminates
all prior agreements and understandings between the Parties except as referenced
in Section 12.1 above. No subsequent alteration, amendment, change, or addition
to this Agreement shall be binding upon the Parties hereto unless reduced to
writing and signed by the respective authorized officers of the Parties.
18.8 ASSIGNMENT.
(a) Subject to Section 3.2 above, Procter & Gamble and Athena may
assign any of their rights or obligations under this Agreement in any country to
any Affiliates (including a joint venture meeting the definition of
"Affiliate"); provided, however, that such assignment shall not
Page 27 - AGREEMENT
<PAGE>
relieve the assigning Party of its responsibility for performance of its
obligations under this Agreement.
(b) The Parties recognize that each may perform some of its
obligations hereunder through Affiliates; provided, however, that Procter &
Gamble and Athena shall remain responsible and be guarantors of such performance
by their Affiliates and shall cause their Affiliates to comply with the
provisions of this Agreement in connection with such performance.
(c) Other than as provided for in Section 18.8 (a) herein, neither
Procter & Gamble nor Athena may assign this Agreement or any of their rights,
obligations, or liabilities under this Agreement to a Third Party without the
written permission of the other Party, which permission will only be given at
the other Party's sole discretion.
(d) This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective successors and assigns.
18.9 COUNTERPARTS AND INTERPRETATION. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The captions
appearing in this Agreement are inserted only as a matter of convenience and as
a reference and in no way define, limit, or describe the scope or intent of this
Agreement or any of the provisions hereof. As the context may require in this
Agreement, the use of any gender (male, female, or neuter) shall include any
other gender, and the singular shall include the plural and the plural the
singular. As used in this Agreement, the term "person" includes individual,
sole proprietorship, partnership, joint venture, trust, corporation, limited
liability company, association, or any other entity or agency. The term "days"
means calendar days.
18.10 NO SOLICITATION. Each Party agrees that during the Term of this
Agreement, and continuing for a period of twenty four (24) months thereafter,
it shall not directly or indirectly (a) solicit any employee, contract
employee, or leased employee of the other Party for employment; (b) solicit
any consultant of the other Party for an exclusive consulting arrangement;
(c) induce any employee, contract employee, leased employee, or consultant of
the other Party to terminate that person's employment or relationship with
the other Party; (d) induce any distributor of the other Party to terminate
or modify its relationship with the other Party; or (e) induce any supplier
of the other Party to terminate or modify its relationship with the other
Party with the purpose of adversely affecting the other Party.
Notwithstanding Subsection (e) of this Section 18.10, however, each of the
Parties agrees that solicitation of a supplier in the normal course of
business for purposes of a supply relationship which may or may not result in
that supplier terminating, modifying, or otherwise adversely affecting its
relationship with the other Party shall not constitute a violation or breach
of such Subsection (e). Each Party covenants not to initiate any contract or
communication of any kind, directly or indirectly, during the period
described above for the express purpose of inviting, encouraging, or
requesting any employee, consultant, supplier, or distributor to so terminate
or to modify its relationship with the other Party.
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
Page 28 - AGREEMENT
<PAGE>
18.11 COOPERATION IN INVESTIGATION. During the Term and in circumstances
where either (a) Athena manufactures wholly or partially Interlabial Products
for Procter & Gamble; or (b) each Party is actively selling Interlabial Products
in the same country and all such Interlabial Products utilize one or more of
Athena's Interlabial Product Trademarks or utilize the same Technology as
licensed hereunder, Athena and Procter & Gamble agree that in the defense of any
governmental litigation, hearing, regulatory proceeding, investigation or other
similar matter (an "Investigation") related to such products, each will provide
reasonable access to the other's employees, business sites, and original
business records as necessary or desirable to effect the defense or
investigation of such Investigations. In all such Investigations, Procter &
Gamble shall have the right at its cost to select counsel to defend such
matters, to have the right to contest, settle or compromise any such matter on
terms that are not materially adverse to Athena, and to otherwise be solely
responsible to direct all actions in response to such Investigations to the
extent feasible in the best interests of both Parties. Athena shall have the
right to become actively involved in the defense or investigation of any such
Investigation through counsel or representatives of its own selection and at its
own cost.
18.12 ADDITIONAL DOCUMENTS AND ACTIONS. As required after execution of
this Agreement, the Parties agree to execute and deliver, without further
consideration, such documents and to take such actions as either Party hereto
may reasonably request in such form as may be appropriate, necessary, or
advisable in connection with the intent and agreements contained herein. Such
cooperation shall include, without limitation, reasonable access to employees of
either Party.
18.13 COSTS AND EXPENSES. Except as otherwise provided in this Agreement
or by separate concurrent or later agreement, each Party shall bear its own
costs and expenses in connection with this Agreement and the transactions
contemplated thereby.
18.14 INTEGRATION OF ATTACHMENTS. All Exhibits described in and attached
to this Agreement are incorporated herein and made a part of this Agreement.
ARTICLE XIX - EXECUTION
19.0 In witness whereof the Parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first
written above.
The Procter & Gamble Company
By
--------------------------------------
Walker J. Wallace, Vice President
Athena Medical Corporation
Page 29 - AGREEMENT
<PAGE>
By
--------------------------------------
William H. Fleming, President & COO
Page 30 - AGREEMENT
<PAGE>
EXHIBIT "A"
(Page 1 of 2)
ATHENA'S INTERLABIAL PRODUCT TRADEMARKS
A. ATHENA'S INTERLABIAL PRODUCT TRADEMARKS
U.S. Federal Registration Registration Number
------------------------- -------------------
FRESH 'N FIT (1610359)
TRADEMARK SUBJECT OF PENDING U.S. FEDERAL INTENT TO USE APPLICATION
Application Number Filing Date
------------------ -----------
PADETTE (75246475) (2/24/97)
OTHER ATHENA INTERLABIAL PRODUCT TRADEMARK
TRADEMARK SUBJECT OF PENDING U.S. FEDERAL INTENT TO USE APPLICATION
Application Number Filing Date
------------------ -----------
TAMPETTE (none issued) (4/08/97)
B. ATHENA'S INTERLABIAL PRODUCT TRADEMARKS - LIMITED TIME USE
U.S. Federal Registration Registration Number
------------------------- -------------------
Butterfly logo (1,586,474)
Female silhouette logo (2,030,290)
C. COMMON LAW RIGHTS
[*]
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
Page 31 - AGREEMENT
<PAGE>
EXHIBIT "A"
(Page 2 of 2)
ATHENA'S INTERLABIAL PRODUCT TRADEMARKS
[*]
[*]
[*]
* CONFIDENTIAL PORTION. Deleted portions have been filed separately with
the SEC.
Page 32 - AGREEMENT
<PAGE>
EXHIBIT "B"
(Page 1 of 1)
ATHENA'S INTERLABIAL PRODUCT PATENTS
U.S. Patent 3,983,873 - expired
U.S. Patent 4,095,542 - expired
U.S. Patent 4,175,561 - expired
U.S. Patent 4,196,562 - expired
U.S. Patent 4,142,476
U.S. Patent 4,995,150
U.S. Patent 5,575,047
Jap. Patent 1,437,500
Can. Patent 1,102,756
Can. Patent 1,146,130
U.S. PCT WO 96/16626
Any patent which issues in the following U.S. Patent applications:
Serial No. 08/344,991 filed November 25, 1994 (abandoned)
Serial No. 08/380,830 filed January 30, 1995
Serial No. 08/670,137 filed June 25, 1996
Any other patent which issues from a pending patent application or application
filed within the term of this Agreement which covers an Interlabial Product.
Page 33 - AGREEMENT
