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EXHIBIT 10.87
DISTRIBUTION AGREEMENT BETWEEN
COLLAGEN CORPORATION AND LEDERLE (JAPAN), LTD.
This Agreement is made as of January 1, 1996 between COLLAGEN
CORPORATION, a California corporation with offices at 2500 Faber Place, Palo
Alto, California 94303 ("Collagen"), and LEDERLE (JAPAN), LTD., a Japanese
limited liability company with offices at 10-3, Kyobashi, 1- Chome, Chuo-Ku,
Tokyo, Japan ("Distributor").
Collagen is in the business of developing, manufacturing and marketing
a variety of biomedical products derived from highly purified animal source
collagen protein, including Zyderm(R) and Zyplast(R) Collagen Implants which
are used for dermal augmentation and the correction of skin contour
deformities. The parties, the agreement between them having expired, desire to
prolong the grant of exclusive distribution rights for Zyderm(R) and Zyplast(R)
Collagen Implants in Japan on the terms and conditions set forth below for an
interim period of eighteen (18) months, during which time the parties will
study the possible formation of a jointly owned company in Japan for the sales
and marketing of these products and future products of Collagen Inc.
In consideration of the mutual promises contained herein, Collagen and
Distributor agree as follows:
1. DEFINITIONS: As used in this Agreement:
(a) "Products" shall mean Zyderm(R) and Zyplast(R) Collagen
Implants as sold by Collagen in the United States and future
version of Zyderm(R) and Zyplast(R) Collagen Implants which
are developed and marketed by Collagen during the term of this
Agreement for use in skin contour correction and dermal
augmentation using needle implantation.
(b) "Territory" shall mean Japan.
(c) "Best efforts" shall mean a party's reasonable business
efforts consistent with its overall business objectives and
commensurate with products of like nature, volume and market
potential.
2. REAPPOINTMENT OF DISTRIBUTOR:
(a) Exclusive Distributor: Subject to the terms and conditions of
this Agreement, Collagen hereby reappoints Distributor, and
Distributor accepts such reappointment, as Collagen's
exclusive distributor of the Products in the Territory. While
Distributor retains its exclusive distribution rights for the
Products in the Territory, Collagen shall not itself
distribute or sell the Products in the Territory country or
authorize or appoint another distributor for the Products in
the Territory.
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(b) Independent Contractors: It is understood that both parties
hereto are independent contractors and are engaged in the
operation of their own businesses. Neither party hereto is to
be considered the agent of the other party for any purpose
whatsoever, and neither party has any authority to enter into
any contracts or assume any obligations for the other party or
make any warranties or representations on behalf of the other
party.
3. OBLIGATIONS OF DISTRIBUTOR:
(a) Registration and Marketing of Products: Distributor agrees to
use its best efforts to investigate, maintain government
approval for, promote and distribute the Products, at its own
expense, in the Territory as soon as feasible after the date
of this Agreement, using generally appropriate channels and
methods, exercising the same diligence and adhering to the
same standards which it employs with respect to their own
pharmaceutical products. In particular, Distributor shall at
its own expense:
(i) Exercise due diligence promptly to initiate and carry
out clinical investigations as far as they may be
required, to obtain and maintain government approvals
to import, register and market the Products in the
Territory and to diligently proceed to secure, as may
be required from time to time, customs clearances and
currency authorizations and any permits necessary
therefore in the Territory. Distributor shall keep
Collagen generally informed of the regulatory
requirements for the Territory.
(ii) Submit to Collagen regular monthly offtake forecast
for the Products in the Territory and a complete
annual marketing plan. Distributor also agrees to
update Collagen on a timely basis with information
concerning competitive products and procedures.
(iii) Use its best efforts to distribute and sell the
Products for use only by physicians for treatment of
patients in the Territory in compliance with local
laws and regulations and good commercial practice and
for uses and applications approved by Collagen for the
Products.
(iv) It is understood that with effect* Collagen will
supply Lederle Japan with products in shrink wrapping
and with all the appropriate Japanese labels and
inserts. Until this time the parties agree to continue
with their existing system whereby Collagen provides
the products in finished US packaging and Japanese
labels, inserts and shrink wrapping are performed at
the Distributor's manufacturing premises in Shiki,
Prefecture, Japan.
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* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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Distributor shall not make any other changes,
alterations, modifications or additions to the Products
without prior written approval of Collagen.
Should the requirement of the Japanese Ministry of
Welfare related to Medical Devices change, the parties
agree to review these procedures to ensure continued
conformity.
(b) Reports: Distributor shall at its expense submit regular
monthly reports to Collagen setting forth sales of the
Products by Distributor in the Territory for the previous
month (including prices, unit sales and other information as
may be reasonably requested by Collagen from time to time).
(c) The Distributor undertakes to comply with the attached
protocols (Exhibit A):
(i) International Marketing Recall Guideline
(ii) International Marketing Shipments to Customers
Guideline
(iii) International Marketing Receiving of Collagen
Products Guideline
(iv) International Marketing Report of Technical and
Medical Complaints Guidelines
4. OBLIGATIONS OF COLLAGEN:
(a) Requirements of Distributor: Collagen shall supply
Distributor's requirements for the Products in the Territory,
consistent with commitments to its other customers and
Distributor's forecasts of its expected requirements for the
Products described in Section 3 above. If Collagen believes
it will not be able to satisfy Distributor's requirements for
the Products, it shall promptly notify Distributor, specifying
the reasons for the expected delay and its duration.
(b) Marketing Support: To assist Distributor in registering and
marketing the Products in the Territory, Collagen shall:
(i) Provide Distributor, free of charge, with information
on marketing and promotional plans of Collagen for the
Products as well as copies of all marketing,
advertising, sales and promotional literature
concerning the Products.
(ii) Provide to Distributor, free of charge, training of
key personnel in reasonable amounts and upon
reasonable prior written notice at Collagen's facility
in Palo Alto, California at the request of Distributor
concerning the quality control, storage,
transportation, marketing, advertising, promotion,
distribution and sale of the Products, provided that
Distributor shall be responsible for all
transportation and lodging costs of personnel
attending such training.
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(iii) Provide to Distributor, free of charge, certificates
of analysis concerning the Products purchased by
Distributor, certificates of free sale, trademark
authorizations and any other documents which
Distributor may require for registration purposes, at
Distributor's request.
(c) Trademark License: Collagen hereby grants to Distributor the
exclusive right and license to use Collagen's trademark
Zyderm(R) and Zyplast(R) for the Products and any trademark in
the Territory, but only in connection with sales of the
Products purchased from Collagen in the Territory.
Distributor shall be required to use Collagen's trademark with
respect to all sales of the Products. Such trademark license
shall continue in effect for the Territory while Distributor
retains its distribution rights in the Territory. All right,
title and interest to Collagen's trademark (except the right
to use such trademark set forth herein) shall remain with
Collagen. Distributor shall not have the right to use
Collagen's name in any advertising or promotion or otherwise
without Collagen's prior written consent. Upon Distributor's
request Collagen shall at its expense file trademark
registrations in the Territory.
(d) New Products: If Collagen at any time within the lifetime of
this Agreement or any renewals thereof, develops other
products for soft tissue augmentation or skin contour
correction applications, it shall notify Distributor of such
proposed products in broad outline at as early a date as
possible and, in any event, not later than application in the
United States by Collagen for an Investigational New Drug or
Investigational Device Exemption (IND or IDE). Collagen
shall, not later than the application for such IND or IDE in
the United States, offer Distributor the exclusive
distribution rights for such new products in the Territory,
providing a draft of the proposed distribution agreement.
Collagen shall also supply additional information to
Distributor concerning such new product as may be reasonably
necessary in Collagen's judgment and as may be requested by
Distributor to enable Distributor to make a reasoned decision
as to acceptance of Collagen's offer setting forth the terms
on which Collagen is willing to grant distribution rights for
such proposed products.
If Collagen and Distributor have not entered into a final
distribution agreement for such products within ninety (90)
days after Distributor's receipt of such draft, Collagen shall
be free to market such new products in the Territory itself or
through third parties.
5. TERMS AND CONDITIONS OF SALE:
(a) Terms of Orders: All purchases of the Products by Distributor
from Collagen during the term of this Agreement shall be
subject to the terms and conditions of this Agreement and to
Collagen's Terms and Conditions of Sale, provided that in the
event of any conflict between the terms of this Agreement and
the Terms and Conditions of Sale of Collagen, this Agreement
shall be controlling. A copy of
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Collagen's Terms and Conditions of Sale is attached hereto as
Exhibit B. Any printed or standard terms and conditions
contained in Distributor's purchase order form shall be
disregarded. All purchase orders submitted by Distributor to
Collagen shall be subject to acceptance by Collagen at its
offices at Palo Alto, California, which acceptance shall not
be unreasonably held.
(b) All quantities of the products packed from Collagen by
Distributor shall be in the form of finished US packaging
until March 1996: subsequently Collagen will produce in US
packaging with Japanese labeling and Japanese pack inserts, to
be shrink wrapped in Fremont, California. The product will be
shipped to Japan in this fashion and re-sold by the
Distributor who will not break the shrink wrapping.
(c) Quality Control: Quality Control procedures in place will
continue until March 1996. Subsequently Distributor will
check each product on a random basis twice a year.
(d) Price and Payment: Collagen shall sell the Products for the
following prices:
Code Product US$
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* * *
In the event of a * Agreement not being signed by December
1996 all prices shall increase by * effective January 1, 1997.
Both parties agree that Collagen may continue to increase
their selling price thereafter in the event a * has not been
signed up to a maximum of * of the US list price as at
February 1, 1994 (Exhibit C). All taxes, fees, duties and
other charges with respect to the sale by Collagen to
Distributor of the Products (excluding income taxes, franchise
taxes and taxes based on income) shall be paid by Distributor
or reimbursed by Distributor to Collagen. All payments must
be paid within sixty (60) days after the date of shipment of
the Products to Distributor. If Distributor fails to make any
payment to Collagen when due, Collagen may, without affecting
its rights under this Agreement, cancel or delay any future
shipments of the Products to Distributor. All payments to
Collagen pursuant to this Agreement shall be made in United
States currency.
Collagen undertakes to continue to provide the * bonus goods
up to and including February 1996.
(e) Warranty: Collagen warrants that the Products sold to
Distributor will at all times comply with the requirements of
and regulations adopted pursuant to the U.S. Federal Food Drug
and Cosmetic Act.
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* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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Collagen further represents and warrants and hereby agrees to
hold Distributor harmless from any and all liability, causes
of action, damages and/or judgments, including but not limited
to attorney's fees, costs and expenses, which may arise out or
due to Collagen's actions in not manufacturing the Products
for Distributor in accordance with applicable U.S. Food and
Drug Administration ("FDA") rules and regulations and/or in
accordance with the IDE/PMA filed and amended by Collagen with
respect to the Products which have been approved by the FDA.
Collagen will provide, when requested by Distributor,
certification that to the best of its knowledge it is in
compliance with U.S. laws, statutes, rules, regulations and
relevant orders relating to the manufacture, use, distribution
and sale of the Products. If Distributor finds any deficiency
in quantity and/or any defect in quality of the Products
delivered hereunder, Distributor shall promptly give Collagen
written notice of such deficiency or defect, and Collagen,
upon receiving such notice shall discuss deficiency or defect
with Distributor and will work with Distributor to insure
Collagen's obligations under this Agreement with regard to
quantity and quality of supply are being met. Distributor
shall be not obligated to pay for Products with any claimed
deficiencies or defects until such claims are resolved. In
the event Collagen agrees that such defect in quality and/or
quantity are its responsibility, then Collagen shall promptly
and without charge to Distributor make up for such deficiency
and/or replace such defective Products with the Products
meeting specifications for Products. Collagen shall bear the
costs of return of such defective Products to Collagen.
EXCEPT AS SET FOR ABOVE, COLLAGEN MAKES NO WARRANTIES, EXPRESS
OR IMPLIED, WITH RESPECT TO THE PRODUCTS, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
(e) Collagen will continue to furnish from time to time samples
for testing as may be requested by the Japanese authorities
free of charge.
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7. CONFIDENTIAL INFORMATION: Collagen and Distributor agree that during
the term of this Agreement and for a period of * years thereafter each
shall keep completely confidential and shall not publish or otherwise
divulge or use for its own benefit or for the benefit of any third
party any information of a proprietary nature furnished to it (the
"receiving party") by the other party (the "disclosing party") without
the prior written approval of the disclosing party in each instance,
except to the extent that it is necessary to divulge such information
for the purposes of this Agreement or the obtaining of governmental
approval for the investigation or marketing of the Products. Nothing
in this Section 7 shall prevent disclosure or use of information (i)
already known to the receiving party; (ii) which is or becomes public
knowledge (iii) which is properly acquired by the
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* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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receiving party from a third party having the right to convey such
information. Information of a proprietary nature shall include but not
be limited to information concerning a party's products, proposed
products, marketing plans, methods of manufacture, customers or any
other information or materials in whatever form not generally known to
the public.
8. DEFENSE OF LEGAL ACTIONS AND INDEMNIFICATION:
(a) Legal Actions: Distributor agrees that Collagen shall have
the right to defend, or at its option to settle, any claim,
suit or proceeding brought against Distributor or its
customers on the issue of infringement of any United States or
foreign patent or trademark by reason of the Products sold
hereunder or the use thereof, subject to the limitations
hereinafter set forth. Collagen shall have sole control of
any such action or settlement negotiations, and Collagen
agrees to pay, subject to the limitations hereinafter set
forth, any final judgment entered against Distributor or its
customers on such issue. Distributor agrees that Collagen at
its sole option shall be relieved of the foregoing obligations
unless Distributor or its customers notifies Collagen in
writing within fifteen (15) days after it becomes aware of any
such claim, suit or proceeding and gives Collagen authority to
proceed as contemplated herein, and, at Collagen's expense,
gives Collagen proper and full information and assistance to
settle and/or defend such claim, suit or proceeding.
Notwithstanding the foregoing, Collagen assumes no liability
for any modification or combination of the Products with other
products or for any unauthorized or improper use or
application of the Products.
(b) Indemnification: Collagen and Distributor each agree to
indemnify and hold the other party harmless from and against
any and all claims made by any person or entity arising out of
the manufacturing, testing, marketing, distribution and sale
of the Products, where and to such extent the damages are
alleged to have been caused by the fault of such party or its
employees or agents. Collagen hereby indemnifies and holds
Distributor harmless from and against any and all claims made
against Distributor where and to the extent that damages are
alleged to have been caused by previously unknown or
undetected adverse effects or counterindications disclosed by
Collagen in its package insert (as updated from time to time)
or in U.S. registration applications for the Products
provided to Distributor or as Collagen may otherwise notify
Distributor from time to time without any fault of
Distributor.
9. TERMINATION:
(a) Term and Renewal: This Agreement shall commence on the date
first set forth above and shall continue in effect and until
either the * between the parties is
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* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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constituted, or the parties agree to an alternative way of
doing business together, but no longer than June 30, 1997.
(b) Termination:
(i) Either party may, at its option, terminate this
Agreement by giving to the other not less than sixty
(60) days prior written notice in the event that the
other party shall at any time commit a breach of any
of its material obligations hereunder and shall fail
to correct such breach during the period of said
notice. This Agreement shall terminate automatically
without further notice or action by either party if
the other party shall become insolvent, shall make or
seek to make an arrangement with or an assignment for
the benefit of creditors, or it proceedings in
voluntary or involuntary bankruptcy shall be
instituted by, on behalf of or against such other
party, or if a receiver or trustee of such other
party's property shall be appointed.
(c) Effect of Termination: Distributor shall terminate all
distribution activities in the Territory immediately upon any
termination due to its default or insolvency. The obligations
of Collagen and Distributor pursuant to Sections 7 and 8 of
this Agreement shall survive any termination of this
Agreement. Nothing herein shall limit any remedies which a
party may have for the other's default, except as set forth in
Section 10(e).
10. GENERAL PROVISIONS:
(a) Governing Law: This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
California.
(b) Entire Agreement: This Agreement represents the entire
agreement and understanding of Collagen and Distributor with
respect to distribution of the Products, supersedes all
previous agreements and understandings related thereto and may
only be amended or modified in writing signed by authorized
representatives of Distributor and Collagen.
(c) Assignment: Neither Collagen nor Distributor shall assign any
of its rights or obligations pursuant to this Agreement except
to a successor to substantially all of its business by merger
or other form of reorganization.
(d) Notices: Any notice required or permitted to be given
hereunder shall be sent by prepaid registered air mail, return
receipt requested, addressed to the parties at their
respective addresses as the parties may designate in writing.
Notice, including notice of change of address, shall be deemed
served fourteen (14) days after deposit in the mail, provided
that such notice is also sent by telex, telegram or delivered
in person at the time of transmittal.
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(e) Limitation of Damages: In no event shall either party be
liable to the other for incidental or consequential damages,
even if such party shall have been advised of the possibility
of the same.
(f) Force Majeure: Each of the parties hereto shall be excused
from the performance of its obligations hereunder in the event
such performance is prevented by force majeure, and such
excuse shall continue so long as the condition constituting
such force majeure continues plus thirty (30) days after the
termination of such condition. For the purposes of this
Agreement, force majeure is defined to include causes beyond
the control of Distributor or Collagen, including without
limitation acts of God, acts, regulations or laws of any
government, war, civil commotion, destruction of production
facilities or materials by fire, earthquake or storm labor
disturbances, epidemic and failure of public utilities or
common carriers.
(g) Shareholders not liable: Shareholders of Distributor and
Collagen shall have no responsibility or liability with
respect to rights and obligations contained in this Agreement.
/s/ COLLAGEN CORPORATION /s/ LEDERLE (JAPAN), LTD.
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EXHIBIT A
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INTERNATIONAL MARKETING RECALL GUIDELINE
In the event that Collagen Corporation should determine the recall of a product
or product lot, this will be advised to the distributor by fax.
The distributor will:
1. Recover from customer, whenever possible, unused product and keep it in
quarantine in his warehouse, pending decision from Collagen Corporation.
Collagen may, at its discretion, either credit product quarantined or replace
it.
2. Distributor undertakes, if requested, to provide proof of destruction of
quarantined product and to report back to Collagen product successfully recalled
from field or warehouse.
25 May 1995
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INTERNATIONAL MARKETING
SHIPMENTS TO CUSTOMERS GUIDELINE
A. Gel ice bags shall be placed along the inside styrene walls of the
shipping carton. To avoid freezing the product, it shall not be packed
with the gel ice bags until they thaw to the acceptable shipping
temperature range.
1. The ice bag temperature is measured by sandwiching a temperature
probe between 2 ice bags until the probe meter is stable and resting
within the correct ice shipping range of -2(Degrees) to 0(Degree) C.
B. Syringes can sit in a controlled room-temperature environment (up to
27(Degrees) C) for a maximum of 8 hours in preparation for shipment.
C. Products sealed into cartons designed as above (A) can be considered
protected from unacceptable temperatures for at least 3 days.
D. The objective when shipping collagen is to provide maximum protection.
The following instructions shall be visible on all shipping
documentation in an appropriate language:
Products are perishable and packed with gel ice bags. If
delayed, place cartons in refrigeration:
-2 to -8 Degrees C
DO NOT DELAY. DO NOT FREEZE
25 May 1995
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INTERNATIONAL MARKETING
RECEIVING OF COLLAGEN PRODUCTS GUIDELINE
A. Upon receipt open each Shipping carton and confirm that the syringes are
still "cool" to the touch (between 2(Degrees) - 25(Degrees) C). If the
product feels "warm" notify the Export Supervisor, (ES) at once for
further instructions:
B. Verify the contents of each carton e.g., Collagen code and lot number,
expiration date and quantity. Report any discrepancies to the ES
immediately for further instructions.
C. Immediately following receiving inspection, all syringes shall be stored
between 2(Degrees) - 10(Degrees) C.
D. Styrene shipping cartons and gel ice refrigerant bags are re-usable.
25 May 1995
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INTERNATIONAL MARKETING
REPORT OF TECHNICAL AND MEDICAL COMPLAINTS GUIDELINES
DEFINITIONS:
Complaint - Information received that constitutes a complaint refers to any
written or oral expression of dissatisfaction relative to the identity, quality,
durability, reliability, safety, effectiveness, or performance of one of
Collagen Corporation's marketed products.
Technical Complaint - Complaints of a technical nature are complaints that are
not of a medical nature, e.g. complaints regarding the syringe, syringe cap,
needles, etc.
Medical Complaint - Complaints of a medical nature are those complaints that
involve a human being.
GUIDELINES:
A. Technical Complaints
Technical complaints from national customers should be forwarded
to the International Marketing Specialist, ensuring that
sufficient information is available for investigation by Collagen
Corporation.
B. Medical Complaints
Medical complaints should be forwarded to the Medical Specialist
within 48 hours of initial receipt of information, using the
attached form (International Clinical Report). Distributors are
responsible for submitting local reports to their regulatory
agencies in accordance with local regulations.
25 May 1995
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Exhibits B and C
COLLAGEN TERMS AND CONDITIONS OF SALE
Ordering Call Collagen Biomedical toll free at 1-800-227-8933; in
Procedure Alaska call collect at 415-856-0200; or write Collagen
Biomedical, 2500 Faber Place, Palo Alto, California 94303. For
faster service, please have your customer account number
ready.
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Pricing and Catalog Numbers
Product
Code Description Volume Supplied Price
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* * * * *
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(Prices effective February 1, 1994 and subject to
change without notice). Quantity lot pricing is available.
Please contact our sales representative for details
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Notes: 1. Payment terms:*
2. Shipping: FOB shipping point. Transportation charges will be prepaid and
added to the invoice.
3. Please note expiration date on boxes. Length of product stability is based
ongoing stability studies.
4. Collagen Biomedical has an expired materials policy which may be utilized if
appropriate conditions are met. Please contact your sales representative for
details.
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DO NOT FREEZE. Collagen implants should be stored at standard refrigerator
temperatures.
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* Material has been omitted pursuant to a request for confidential
treatment. Such material has been separately filed with the Securities and
Exchange Commission.