condition, intercurrent illness, drug interaction, significant worsening of a disease under investigation or treatment, and significant failure of expected pharmacological or biological action.

 

(e)           “ Affiliate ”, when used to indicate a relationship with any person or entity, means (i) any corporation, firm, partnership or other entity, whether de jure or de facto, which directly or indirectly owns, is owned by or is under common ownership with such person or entity to the extent of at least fifty percent (50%) of the equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to vote on or direct the affairs of the entity, or (ii) any person, firm, partnership, corporation or other entity actually controlled by, controlling or under common control with such person or entity.

 

(f)            “ Agency ” or “ Agencies ” means any U.S. or foreign governmental regulatory authority responsible for granting approvals and clearance for manufacturing, marketing and sale of any Product.

 

(g)           “ Agreement ” means this Asset Sale Agreement, together with the Schedules and Exhibits hereto, and any instrument amending this Agreement in accordance with Section 14.6; and the expression “Section” followed by a number refers to the specified Section of this Agreement.

 

(h)           “ Amlexanox ” means the chemical compound of the formula 2–amino–7–isopropyl–5–oxo–5H–[1]benzopyrano–[2,3–b]–pyridine–3–carboxylic acid (also known by Takeda Code No.: AA-673).

 

(i)            “ Ancillary Agreements ” means any other agreement to be executed by ULURU and/or Access in connection with this Agreement, including, without limitation, the Bill of Sale and Assignment Agreement, the Product Patents Assignment, the Product Trademarks Assignment and the License Agreement.

 

(j)            “ Annual Net Sales ” means gross revenues received by ULURU and its Affiliates on the worldwide sale of the Products in any calendar year, less (i) trade discounts actually allowed; and (ii) when borne by ULURU or its Affiliates in connection with the sale, transportation and handling charges; sales, use and excise taxes; import duties, tariffs or other governmental charges; and credits for claim or allowances, retroactive price reductions, refunds, returns, and recalls. There shall not be any imputed gross revenue for samples, free goods or other marketing programs whereby the Products are given away to induce sales thereof. For purposes of determining Annual Net Sales, a sale shall be deemed to have occurred when the sale is invoiced or when the applicable Product is delivered, whichever occurs first. In the case of the transfer or sale of the Products by ULURU to an Affiliate, or by ULURU or its Affiliate to their respective distributor, or subdistributor for sale by such Affiliate, distributor or subdistributor, Annual Net Sales shall be based upon the greater of the total invoice price charged by ULURU to such Affiliate, distributor, subdistributor or the total invoice price charged by such Affiliate, distributor or subdistributor to its customers. Annual Net Sales for countries outside the U.S. shall be calculated by converting to U.S. currency using the exchange

 

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rate in effect on the last business day of each quarter as published in the Wall Street Journal . Annual Net Sales shall also include Licensee Net Sales.

 

(k)           “ Aphthasol Product ” means a topical oral paste formulation or mucoadhesive film formulation containing Amlexanox currently approved by the FDA for use in the treatment of aphthous ulcers.

 

(l)            “ Assumed Liabilities ” has the meaning set forth in Section 2.2(a).

 

(m)          “ Bill of Sale and Assignment Agreement ” means the bill of sale to be executed by Access and delivered to ULURU at Closing, substantially in the form of Exhibit A attached hereto.

 

(n)           “ Closing ” and “ Closing Date ” have the meaning set forth in Section 13.1.

 

(o)           “ Cumulative Net Sales ” means gross revenues received by ULURU and its Affiliates on the worldwide sale of the Products, less (i) trade discounts actually allowed; and (ii) when borne by ULURU or its Affiliates in connection with the sale, transportation and handling charges; sales, use and excise taxes; import duties, tariffs or other governmental charges; and credits for claim or allowances, retroactive price reductions, refunds, returns, and recalls. There shall not be any imputed gross revenue for samples, free goods or other marketing programs whereby the Products are given away to induce sales thereof. For purposes of determining Cumulative Net Sales, a sale shall be deemed to have occurred when the sale is invoiced or when the applicable Product is delivered, whichever occurs first. In the case of the transfer or sale of the Products by ULURU to an Affiliate, or by ULURU or its Affiliate to their respective distributor, or subdistributor for sale by such Affiliate, distributor or subdistributor, Cumulative Net Sales shall be based upon the greater of the total invoice price charged by ULURU to such Affiliate, distributor, subdistributor or the total invoice price charged by such Affiliate, distributor or subdistributor to its customers. Cumulative Net Sales for countries outside the U.S. shall be calculated by converting to U.S. currency using the exchange rate in effect on the last business day of each quarter as published in the Wall Street Journal . Cumulative Net Sales shall also include Licensee Net Sales.

 

(p)           “ Dental Product ” means [a product developed for use in the oral cavity or implanted in the oral cavity including implantation in teeth utilizing the Licensed Technology].

 

(q)           “ Encumbrance ” has the meaning set forth in Section 5.3.

 

(r)            “ Excluded Assets ” shall mean all assets of Access other than the Purchased Assets and the Assumed Liabilities and any assets or contracts that by their terms are not assignable.

 

(s)           “ Excluded Intellectual Property ” means (i) Access Trademarks, (ii) the Access Trade Dress, (iii) the Licensed Technology and (iv) any Intellectual Property that does not relate to the Products.

 

(t)            “ FDA ” means the U.S. Food and Drug Administration.

 

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(u)           “ Finished Goods ” means any Product packaged in sample and commercial sizes and ready for distribution to the ultimate customer.

 

(v)           “ Intellectual Property ” means all (i) Patents and U.S. and other registered designs; (ii) U.S. and other mask works and copyrights in works of authorship of any type, including, but not limited to, computer software and industrial designs, registrations and applications for registration thereof; (iii) Trademarks and trade dress; (iv) trade secrets, know-how and other confidential or proprietary technical, business and other information, and all rights thereto in any and all jurisdictions, to limit the use or disclosure thereof; (v) rights to obtain and file for patents and registrations thereof; and (vi) rights to sue and recover damages or obtain injunctive relief for infringement, dilution, misappropriation, violation or breach thereof.

 

(w)          “ Inventory ” means Access’s inventory of Finished Goods, an electronic accounting of which is set forth on Schedule 1.1(w) attached hereto.

 

(x)            “ Liabilities ” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, or determined or determinable, including those arising from any Claim or other action by a third party under any law, action or governmental order and those arising under any contract, agreement, arrangement, commitment or undertaking, or otherwise. For the purposes of this definition “Claim” shall mean any action (including, without limitation, any proceedings to establish insurance coverage), claim, suit, arbitration or governmental, administrative, or other proceeding or investigation or judgment or equitable relief.

 

(y)           “ License Agreement ” means that certain License Agreement, substantially in the form of Exhibit B attached hereto, entered into by and between Access and ULURU as of the Closing Date, pursuant to which Access shall grant to ULURU a license to the Licensed Technology on the terms and conditions set forth therein.

 

(z)            “ Licensed Technology ” means Access’s nanoparticle aggregate technology, to which Access shall grant to ULURU a license pursuant to the License Agreement, as such technology is further described in the License Agreement.

 

(aa)         “ Licensee ” means a licensee of, or other third party otherwise engaged by, ULURU or its Affiliates for the purpose of selling or distributing any Product.

 

(bb)         “ Licensee Net Sales ” means gross revenues received by a Licensee on the sale of any Product as requested in the applicable license agreements as reported to Access or ULURU. There shall not be any imputed gross revenue for samples, free goods or other marketing programs whereby any Product is given away to induce sales thereof. For purposes of determining Licensee Net Sales, a sale shall be deemed to have occurred when the sale is invoiced or when a Product is delivered, whichever occurs first. In the case of the transfer or sale of a Product by the Licensee to an Affiliate, distributor or subdistributor of the Licensee for sales by such Affiliate, distributor or subdistributor, Licensee Net Sales shall be based upon the greater of the total invoice price charged by the Licensee to such Affiliate, distributor or subdistributor or the total invoice price charged by such Affiliate, distributor or subdistributor to its customers. Licensee Net Sales for countries outside the U.S. shall be calculated by converting to U.S.

 

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currency using the exchange rate in effect on the last business day of each month as published in the Wall Street Journal .

 

(cc)         “ Manufacturing Technology ” means all technology, trade secrets, research and development, formulae, know-how, inventions, discoveries, processes, compositions, test procedures, manufacturing procedures, techniques, developments, enhancements and modifications, confidential, technical, or proprietary information and knowledge not generally known to the public, whether or not patentable, commercially useful, or reducible to writing or practice that enable Access to make, have made, use, offer for sale, sell and import any Product that is a Purchased Asset and are owned or controlled by Access as of the Closing Date; provided that Manufacturing Technology shall not include any Manufacturing Technology relating to any Excluded Assets.

 

(dd)         “ Marketing Materials ” means those marketing materials used by Access solely with respect to the Products in the U.S. that are in existence as of the Closing Date, to the extent such materials are within the possession or control of Access and relate to the Purchased Assets, as set forth on Schedule 1.1(dd) .

 

(ee)         “ Material Adverse Effect ” means an event, change or occurrence which, individually or together with any other event, change or occurrence, has a material adverse effect on the Purchased Assets taken as a whole, but shall not include (i) any adverse effect due to changes, after the date of this Agreement, in conditions generally affecting (A) the healthcare industry or (B) the worldwide, U.S. or European economy as a whole, (ii) any change or adverse effect caused by, or relating to, the announcement of this Agreement and the transactions contemplated by this Agreement or (iii) any adverse effect due to legal or regulatory changes effective after the date of this Agreement.

 

(ff)           “ Mucoadhesive Product ” means an erodible multi-layer strip or patch which adheres to the teeth or the oral mucosa for the purpose of controlled delivery of an active ingredient either to the surface of the teeth or oral mucosa or for release of the active into the oral cavity.

 

(gg)         “ NDA ” means a New Drug Application filed with the FDA pursuant to 21 C.F.R., Part 314, and all supplements, amendments, revisions thereto and all correspondence between Access and FDA relative thereto.

 

(hh)         “ Party ” or “ Parties ” shall have the meaning set forth in the Preamble.

 

(ii)           “ Patents ” means all U.S. and foreign patents, patent applications and statutory invention registrations (which, for the purposes of this Agreement, shall be deemed to include provisional applications, invention disclosures, certificates of invention and applications for certificates of invention), including reissues, divisions, continuations, continuations-in-part, supplementary protection certificates, extensions and reexaminations thereof, all inventions disclosed therein, all rights therein provided by international treaties and conventions, and all rights to obtain and file for patents and registrations thereto.

 

(jj)           “ Premises Agreement ” means that certain 2600 Stemmons Freeway License Agreement, to be entered into by and between Access and ULURU as of the Closing

 

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Date, substantially in the form of Exhibit E attached hereto, pursuant to which ULURU shall sublease from Access certain space at the premises located at 2600 Stemmons Freeway, Dallas Texas.

 

(kk)         “ Products ” means, collectively, the Aphthasol Product, the Mucoadhesive Product and the ResiDerm Product and any product developed or sold under the License Agreement, and any improvements or corollaries thereto.

 

(ll)           “ Product Intellectual Property ” means (i) all Product Patents, (ii) all Product Trademarks, (iii) the Manufacturing Technology, (iv) the Product Trade Dress, (v) the Marketing Materials, (vi) the domain name “www.Aphthasol.biz” and (vii) all other Intellectual Property primarily related to the Products, but excluding (in all cases) Excluded Intellectual Property, Excluded Assets and the “Technology and Know How” of Takeda, as such term is defined in Section 1.6 of the Takeda License Agreement.

 

(mm)       “ Product Patents ” means those Patents set forth on Schedule 1.1(ll) attached hereto.

 

(nn)         “ Product Patents Assignment ” means that assignment agreement to be executed by Access and delivered to ULURU at Closing, substantially in the form of Exhibit C attached hereto.

 

(oo)         “ Product Registrations ” means registrations required by applicable Agencies in the U.S. relating to the manufacture, sale and distribution of the Products in the U.S. and foreign countries, including, without limitation, NDAs relating to the Products.

 

(pp)         “ Product Trade Dress ” means, collectively, the current trade dress of each of the Products, including, but not limited to, product packaging associated with the sale of the Products in the U.S., but excluding the Access Trade Dress.

 

(qq)         “ Product Trademarks ” means those Trademarks set forth on Schedule 1.1(pp) attached hereto.

 

(rr)           “ Product Trademarks Assignment ” means the assignment agreement to be executed by Access and delivered to ULURU at Closing, substantially in the form of Exhibit D attached hereto.

 

(ss)         “ Purchase Price ” has the meaning set forth in Section 3.1.

 

(tt)           “ Purchased Assets ” has the meaning set forth in Section 2.1(a).

 

(uu)         “ ResiDerm Product ” means a topical formulation utilizing the proprietary zinc technology, exemplified by Zindaclin, a zinc-clindamycin phosphate topical product.

 

(vv)         “ Retained Liabilities ” has the meaning set forth in Section 2.2(b).

 

(ww)       “ Scientific and Regulatory Material ” means all technological, scientific, chemical, biological, pharmacological, toxicological, regulatory and clinical trial materials and

 

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information primarily related to the Products and all rights thereto in any and all jurisdictions to limit the use or disclosure thereof, to the extent such materials are within the possession or control of Access.

 

(xx)          “ Takeda ” means Takeda Chemical Industries, Ltd.

 

(yy)         “ Takeda License Agreement ” means the agreement, dated November 12, 1987, by and between Takeda and Chemex Pharmaceuticals, Inc. (“ Chemex ”), which is currently known as Access, a copy of which is attached hereto as Exhibit F .

 

(zz)          “ Tax ” or “ Taxes ” means any domestic, foreign, national, regional or local income, gross receipts, payroll, withholding, license, unemployment, premium, excise, real or personal property, capital stock, franchise, profits, environmental, unemployment disability, social security, severance, value added, sales, use, transfer, registration, alternative or add-on minimum, estimated or any other tax or similar governmental charge of any kind whatsoever, including interest, penalties, and additions to tax with respect thereto, whether disputed or not.

 

(aaa)       “ Tooth Whitening Product ” means a Mucoadhesive Product formulated with an active ingredient which adheres to the surface of teeth to enhance the whiteness of the tooth surface.

 

(bbb)      “ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

(ccc)       “ Trademarks ” means all U.S. and other trademarks, trade names, brand names, logotypes, symbols, service marks, designs, domain names, URLs and tradenames, including registrations and applications for registrations thereof and all renewals, modifications and extensions thereof.

 

(ddd)      “ Transition Team ” shall have the meaning set forth in Section 8.2.

 

(eee)       “ ULURU ” shall have the meaning set forth in the Preamble.

 

(fff)         “ U.S. ” means the United States of America, its territories and possessions, including without limitation the Commonwealth of Puerto Rico and the District of Columbia.

 

In this Agreement, words importing the singular number shall include the plural and vice versa, words importing a specific gender shall include the other genders and references to persons shall include corporations and one or more persons, their heirs, executors, administrators or assigns as the case may be. References to “including” shall mean “including but not limited to”.

 

1.2           Currency . All currency amounts referred to in this Agreement are in U.S. Dollars.

 

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1.3          Headings, Etc . The division of this Agreement into Sections and the insertion of headings are for convenience of reference only and shall not affect the interpretation hereof.

 

SECTION 2
PURCHASED ASSETS; LIABILITIES

 

2.1          Assets to Be Sold and Purchased.

 

(a)           Upon the terms and subject to the conditions of this Agreement, Access agrees to sell, assign, transfer, convey and deliver to ULURU and ULURU agrees to purchase from Access, all rights, title and interest of Access and its Affiliates in and to the following assets, regardless of where such assets are situated (the “ Purchased Assets ”), free and clear of all Encumbrances, except as set forth on Schedule 5.3 :

 

(i)            all Product Intellectual Property;

 

(ii)                                   the Product Registrations, to the extent transferable;

 

(iii)                                the Inventory;

 

(iv)          the existing lists of all current trade/wholesale customers (including the address and contact information for each such customer) for the Products and the pricing of the Products for such customers; provided , however , that Access shall retain all rights of access and ownership of such information with respect to sales of Access’s and Access’s Affiliates’ other products;

 

(v)           copies of Access’s files pertaining to the Product Registrations and correspondence with the FDA and other Agencies, in each case such as is in existence and in the possession or control of Access, as of the Closing Date;

 

(vi)          all Marketing Materials;

 

(vii)         all Scientific and Regulatory Material;

 

(viii)        the equipment, telephone numbers, internet or domain names or URL’s associated with Access’s development, manufacture or commercialization of any Product, as set forth on Schedule 2.1(a)(viii) ;

 

(ix)           all contracts or agreements associated with the development, manufacture, sale, license or commercialization of the Products that are by their terms assignable, except as set forth on Schedule 2.1(a)(ix) ;

 

(x)            records and files that relate to the Products manufacturing and manufacturing processes;

 

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(xi)           all communications to and from third parties relating to the Products or the Product Intellectual Property; and

 

(xii)          all laboratory notebooks specifically related to the Purchased Assets and copies of pages from notebooks which are not specifically related to the Purchased Assets which include scientific data and results related to the Purchased Assets.

 

The Parties expressly agree and acknowledge that the Purchased Assets shall not include the Excluded Intellectual Property and the Excluded Assets and the Takeda License Agreement.

 

(b)           ULURU acknowledges and agrees that Access, at its own expense, may retain one (1) copy of all or part of the documentation that it delivers to ULURU in confidential, restricted ULURU files, for use in the event a dispute arises between the Parties hereunder, in connection with fulfilling its obligations under this Agreement or in order to comply with applicable law.

 

2.2           Liabilities . Except as set forth on Schedule 2.2(1) attached hereto:

 

(a)           ULURU agrees to assume, be responsible for and pay, perform and discharge, when due and whenever asserted, all Liabilities (other than the Retained Liabilities) existing or arising in connection with the Purchased Assets and the Products, but only to the extent that such Liabilities arise in respect of circumstances or events occurring on or after the Closing Date (collectively, the “ Assumed Liabilities ”). In addition, ULURU shall assume, be responsible for and pay, perform and discharge, when due and whenever asserted, all costs, expenses, exchanges and rebates related to customer returns of any of the Products, including, without limitation, Finished Goods, which occur or arise after the Closing Date. The foregoing costs, expenses, exchanges and rebates related to customer returns of the Products shall be included within the definition of Assumed Liabilities. ULURU shall not assume any Liabilities relating to a breach contract, breach of warranty, tort, infringement or violation of law by Access, its Affiliates and/or its or their respective directors, officers, employees and agents occurring prior to the Closing Date and arising out of any charge, complaint, action, suit, proceeding, hearing, investigation, claim or demand.

 

(b)           Access agrees to retain, be responsible for and pay, perform and discharge, when due and whenever asserted, all Liabilities (other than the Assumed Liabilities) arising in connection with the Purchased Assets and the Products, but only to the extent such Liabilities arise in respect of circumstances or events occurring prior to the Closing Date (collectively, the “ Retained Liabilities ”). Notwithstanding the foregoing, Access shall not be responsible for any costs, expenses, exchanges and rebates relating to customer returns of the Products, including, without limitation, Finished Goods, occurring after the Closing Date. Access shall not retain any Liabilities relating to a breach of contract, breach of warranty, tort, infringement or violation of law by ULURU, its Affiliates and/or its or their respective directors, officers, employees, agents

 

(1)           Schedule 2.2 to list deviations from the pre(Access)/post(ULURU)-Closing allocation of Liabilities, as mutually agreed to by the Parties.

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or Licensees, occurring as of and after the Closing Date and arising out of any charge, complaint, action, suit, proceeding, hearing, investigation, claim or demand.

 

(c)           Subject to the provisions of Section 9 below, ULURU shall be responsible for all Liabilities whatsoever other than the Retained Liabilities.

 

(d)           Subject to the provisions of Section 9 below, Access shall be responsible for all Liabilities whatsoever other than the Assumed Liabilities.

 

2.3          Proration . Access and ULURU agree to prorate as of the Closing Date any amounts under any license agreement or other agreement relating to the Products which become due and payable after the Closing Date to the extent the benefit is attributable to the period prior to the Closing Date.

 

2.4          Ancillary Agreements . Access and ULURU acknowledge that this Agreement does not act as a conveyance, transfer or assignment of any property but that all of the Purchased Assets and the Takeda License Agreement are conveyed, transferred or assigned by way of the Bill of Sale and Assignment Agreement, the Product Patents Assignment, the Product Trademarks Assignment and other documents delivered pursuant to the terms of this Agreement.

 

2.5          Takeda License Agreement .

 

(a)           Upon the terms and subject to the conditions of this Agreement, and notwithstanding anything to the contrary contained herein, Access agrees to assign, transfer, convey and deliver to ULURU and ULURU agrees to assume from Access, on the Closing Date, all rights, Liabilities (other than the Retained Liabilities), title and interest of Access and its Affiliates in and to the Takeda License Agreement, free and clear of all Encumbrances, except as set forth in Schedule 5.3 .

 

(b)           ULURU agrees to assume, be responsible for and pay, perform and discharge, when due and whenever asserted, all Liabilities existing or arising in connection with the Takeda License Agreement, but only to the extent that such Liabilities arise in respect of circumstances or events occurring on or after the Closing Date.

 

(c)           Access agrees to retain, be responsible for and pay, perform and discharge, when due and whenever asserted, all Liabilities arising in connection with the Takeda License Agreement, but only to the extent such Liabilities arise in respect of circumstances or events occurring prior to the Closing Date.

 

(d)           ULURU shall be solely responsible for accounting and payment to Takeda, in accordance with Article VIII of the Takeda License Agreement, of any royalties payable to Takeda under the Takeda License Agreement on Access’s Net Sales (as defined in the Takeda License Agreement) of the Aphthasol Product after the Closing Date. ULURU shall deliver to Access a copy of any statement or royalty report required to be provided to Takeda which accounts for royalties payable to Takeda on Access’s Net Sales (as defined in the Takeda License Agreement) of the Aphthasol Product.

 

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2.6          Third Party Consents . Notwithstanding anything herein to the contrary, the Parties acknowledge and agree that Access will not assign to ULURU any contract or agreement that by its terms requires, prior to such assignment, the consent of any other contracting party thereto unless such consent has been obtained. With respect to each such contract or agreement not assigned on the Closing Date, after the Closing Date Access shall, at ULURU’s sole expense, continue to deal with the other contracting party(ies) to such contract or agreement as the prime contracting party, and ULURU and Access shall use their best efforts to obtain the consent of all required parties to the assignment of such contract or agreement. Such contract or agreement shall be promptly assigned by Access to ULURU after receipt of such consent after the Closing Date, and upon such assignment shall be deemed a Purchased Asset. Notwithstanding the absence of any such consent, ULURU shall be entitled to the benefits and subject to the burdens of any such contract or agreement accruing after the Closing Date, and ULURU agrees to perform all of the obligations of Access to be performed under any such contract or agreement after the Closing Date and to indemnify the Access Indemnified Parties (as defined in Section 9.1) against any Losses (as defined in Section 9.1) as a result of such performance or any non-performance by ULURU of any such contract or agreement.

 

SECTION 3
PURCHASE PRICE AND OTHER PAYMENTS

 

3.1          Purchase Price . The Purchase Price payable in consideration for the acquisition of the Purchased Assets shall be Thirteen Million Four Hundred Thousand Dollars ($13,400,000) (the “ Purchase Price ”). Such Purchase Price shall be paid by ULURU to Access as follows:

 

(a)           Eight Million Seven Hundred Thousand Dollars ($8,700,000) delivered to Access by ULURU at the Closing; provided that ULURU may deliver on behalf of Access an aggregate of up to $2,994,766.80 of such amount to Cornell Capital Partners, LP and Highgate House Funds, Ltd. (plus an additional $504.96 for each day after October 11, 2005) in order to retire the Secured Debentures of Access due March 30, 2006 held by Cornell Capital Partners, LP and Highgate House Funds, Ltd.;

 

(b)           Three Million Seven Hundred Thousand Dollars ($3,700,000) delivered to Access by ULURU on the date that is twelve (12) months after the Closing Date; provided that Three Hundred Thousand Dollars ($300,000) of such amount shall be accelerated and paid earlier upon the occurrence of any of :

 

(i)            Notification from the FDA that no PDUFA fees are payable for the Products for the fiscal year ending September 30, 2006, or

 

(ii)           ULURU entering into an agreement or understanding (oral or written) with either Takeda or Zambon Group to defer amounts due and payable by ULURU to such parties under the agreements with such parties that are Purchased Assets hereunder, or

 

(iii)          The consummation by ULURU on or prior to January 30, 2006 of the sale by ULURU in a Private Placement or PIPE offering, in one or

 

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more related transactions, of securities for an aggregate purchase price of at least Three Million Dollars ($3,000,000).          For purposes of clarity this excludes any proceeds related to any sale of securities under a Standby Equity Distribution Agreement with Cornell Capital or the initial financing of ULURU.

 

(c)           One Million Dollars ($1,000,000) upon the earliest to occur of:

 

(i)            The U.S. launch of OraDisc A (or its substantial equivalent); or

 

(ii)           The U.S. launch of OraDisc B (or its substantial equivalent); or

 

(iii)          The two (2) year anniversary of the date of this Agreement.

 

3.2          Milestone Payments .

 

(a)           In further consideration for the transactions contemplated under this Agreement and in addition to the Purchase Price, ULURU shall pay to Access the following non-refundable milestone payments in the form and manner described below:

 

(i)            Within five (5) business days after ULURU commences Phase II clinical testing of any drug Product or pivotal testing of any device Product, other than a Dental Product, utilizing the Licensed Technology that is the subject matter of the License Agreement, ULURU shall pay Access the sum of Three Hundred Seventy Five Thousand Dollars ($375,000);

 

(ii)           Within five (5) business days after ULURU commences Phase II clinical testing of any drug Product or pivotal testing of any device Product, other than (A) any Product for which it makes payment under Section 3.2(a)(i) and/or (B) a Dental Product, utilizing the Licensed Technology that is the subject matter of the License Agreement, ULURU shall pay Access the sum of Three Hundred Seventy Five Thousand Dollars ($375,000);

 

(iii)          Within five (5) business days after ULURU signs a license agreement (with a third party) regarding any Product, other than a Dental Product, utilizing the Licensed Technology that is the subject matter of the License Agreement, ULURU shall pay Access the sum of Three Hundred Seventy Five Thousand Dollars ($375,000);

 

(iv)          Within five (5) business days after ULURU signs a license agreement (with a third party) regarding any Product, other than (A) any Product for which it makes payment under Section 3.2(a)(iii) and/or (B) a Dental Product, utilizing the Licensed Technology that is the subject matter of the License Agreement, ULURU shall pay Access the sum of Three Hundred Seventy Five Thousand Dollars ($375,000);

 

(v)           Within five (5) business days after ULURU signs a license agreement (with a third party) regarding any Product, other than any Product for which it makes payment under Sections 3.2(a)(iii) or (iv), utilizing the Product Intellectual Property relating to the Mucoadhesive Product, ULURU shall pay Access the sum of Three Hundred Seventy Five Thousand Dollars ($375,000);

 

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(vi)          Within five (5) business days after ULURU signs a license agreement (with a third party) regarding any Tooth Whitening Product utilizing the Product Intellectual Property relating to the Mucoadhesive Product, ULURU shall pay Access the sum of Seven Hundred Fifty Thousand Dollars ($750,000); and

 

(vii)         ULURU shall pay to Access the following payments based upon the achievement of the following (including, without limitation, the U.S.) Annual Net Sales or Cumulative Net Sales, as the case may be, of the Products by ULURU, its Affiliates and its and their respective Licensees after the Closing Date (including, without limitation, under the License Agreement):

 

PAYMENT			MILESTONE
$	500,000		On achievement of Annual Net Sales of the Products of $20,000,000
$	1,125,000		On achievement of Annual Net Sales of the Products of $40,000,000
$	1,500,000		On achievement of Annual Net Sales for any one Product of $20,000,000
$	750,000		On achievement of Cumulative Net Sales of the Products of $50,000,000
$	750,000		On achievement of Cumulative Net Sales of the Products of $100,000,000

 

ULURU hereby agrees and acknowledges that it shall not sell, assign, convey or otherwise transfer the Purchased Assets or this Agreement without the permitted assignee or transferee agreeing to be bound by all of the terms of this Agreement, including, without limitation, the payment obligations of this Section 3.

 

(b)           Within ninety (90) days after the end of each calendar quarter, commencing with the first full calendar quarter following the Closing Date, ULURU shall submit to Access a written report setting forth the Annual Net Sales (to-date) and Cumulative Net Sales of each of the Products, respectively, for such quarter; provided , however , that the first such quarterly report shall include only Cumulative Net Sales for each of the Products from the Closing Date to the end of the first full calendar quarter following the Closing Date. In the event that a Licensee sells or distributes any of the Products, the sales report provided to Access by ULURU or its Affiliates pursuant to this Section 3.2(b) shall also include a copy of the sales report from such Licensees for such calendar quarter. ULURU shall permit, and shall cause its Affiliates and its and their respective Licensees to permit, an independent certified public accounting firm (the “ Auditor ”) of nationally recognized standing selected by Access and reasonably acceptable to ULURU, at Access’s expense (except as set forth below), to have access

 

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upon reasonable notice during normal business hours to the records of ULURU and/or its Affiliates and its or their respective Licensees (subject to ULURU’s rights under its license agreements) as may be reasonably necessary to verify the accuracy of the Annual Net Sales and Cumulative Net Sales reported by ULURU pursuant to this Section 3.2(b). When, in any quarterly report, one (1) of the Annual Net Sales or Cumulative Net Sales mileston