Exclusive Distribution Agreement

EXHIBIT 10.11


SECOND AMENDMENT TO
EXCLUSIVE DISTRIBUTION AGREEMENT


THIS SECOND AMENDMENT TO EXCLUSIVE DISTRIBUTION AGREEMENT (the "Amendment") is effective as of this June 3, 1999 by and between ZIMMER, INC., a Delaware corporation ("Distributor"), and ANIKA THERAPEUTICS, INC., a Massachusetts corporation ("Company"). Reference is hereby made to that certain Exclusive Distribution Agreement effective as of November 7, 1997, as amended by First Amendment to Exclusive Distribution Agreement effective as of June 1, 1998, together with all Annexes and Exhibits thereto (as so amended, the "Agreement"), by and between Distributor and Company. All capitalized terms used herein and not defined shall have the meanings given to them in the Agreement.


WHEREAS, Distributor and Company have previously entered into the Agreement providing for the exclusive right of Distributor to distribute and sell the Product in accordance with the terms set forth therein, and the Parties desire to amend the terms of the Agreement as provided herein.


NOW, THEREFORE, in consideration of the mutual covenants and agreements of the Parties contained herein and in the Agreement, the Parties hereby agree as follows:


SECTION 1. AMENDMENTS. The Agreement is hereby amended as follows:


1.1 Section 2 of the Agreement shall be amended as follows: (i) the heading of Section 2(c) shall be changed to "(c) CERTAIN REGULATORY APPROVALS"; and (ii) there shall be added the following additional paragraph at the end of such Section:


"(c) (iv) DISTRIBUTOR RESPONSIBLE COUNTRIES. Notwithstanding anything contained in this Agreement to the contrary, Distributor shall use commercially reasonable efforts to obtain all regulatory approvals required to market, sell and distribute the Product in the countries set forth on Annex C-1 attached hereto marked with a + (the "Distributor Responsible Countries").


1.2 Sections 2(d.2), 2(d.3) and 2(d.4) shall be deleted in their entirety and replaced with the following:


(d.2) Upon receipt of a Reimbursement Approval(s) for use of the
Product in the Field of Use by the appropriate governmental body
and/or private insurers representing in aggregate more than fifty
percent (50%) of the population in Germany, Distributor shall pay
Company the one-time nonrefundable sum of $500,000.


(d.3) Upon receipt of the first Reimbursement Approval(s) for use of
the Product in the Field of Use by the appropriate governmental body
and/or private insurers representing in aggregate more than fifty
percent


(50%) of the population in either of the United Kingdom or France,
Distributor shall pay Company the one-time nonrefundable sum of
$250,000, and thereafter upon receipt of such Reimbursement
Approval(s) in such other country, Distributor shall pay Company the
one-time nonrefundable sum of $125,000.


(d.4) Upon receipt of the first Reimbursement Approval(s) for use of
the Product in the Field of Use by the appropriate governmental body
and/or private insurers representing in aggregate more than fifty
percent (50%) of the population in any one of the following countries
(Italy, Sweden or the Netherlands), Distributor shall pay Company the
one-time nonrefundable sum of $125,000.


1.3 Section 3 of the Agreement shall be amended to include the following additional paragraph at the end of such Section:


"(c) The Company grants to Distributor a right of first offer to
acquire the rights to market, distribute and sell the Product in Israel,
Turkey, Spain, Portugal and Egypt (the "Additional Territory") on the
following terms: If the Company seeks to change its current distributor in
any of the countries in the Additional Territory, the Company will notify
Distributor in writing (the date of such notification the "Notification
Date") before commencing any negotiations with any third party regarding
such rights. Distributor will have sixty (60) days from the Notification
Date to indicate its interest in acquiring the right to market, distribute
and sell the Product in any of such countries. If Distributor does not wish
to pursue negotiations for the right to market, distribute and sell the
Product in any such country, or if such sixty (60) day period expires
without Distributor notifying Company as to its interest, then Company
shall be free to enter into an agreement with another Person with respect
to such rights. If prior to the expiration of the sixty (60) day period,
Distributor expresses in writing its interest in obtaining the right to
market, distribute and sell the Product in any such country, the parties
shall enter in to good faith negotiations regarding such rights within the
ninety (90) day period immediately following the Notification Date. In any
proposal to acquire the rights to market, distribute and sell the Product
in any Additional Territory, Distributor shall produce a supplement to the
Marketing Plan with respect to such country which shall include a
reasonable incremental increase to the Territory-wide Purchase Requirement
(up to a maximum of five percent (5%) of Distributor's marketing forecast
for actual Product sales for such countries). If at the end of such ninety
(90) day period the parties are unable to reach an agreement and Company
does not wish to continue the negotiations, as Company shall determine in
its sole discretion, Company shall be free to enter into an agreement with
any other Person with respect to such rights. Notwithstanding anything
contained in this Agreement to the contrary, the Company shall have no
obligation to seek to change its current distributor in any of the
countries in the Additional Territory."


2


1.4 The table comprising part of Section 4(a) of the Agreement shall be amended by deleting such table in its entirety and replacing it with the following:


CALENDAR TERRITORY-WIDE INCREMENTAL
YEAR UNITS REQUIREMENT* MINIMUM*
-------- ------------------ --------

1998 (Year 1) 30,000 Units 30,000 Units
1999 (Year 2) 90,000 Units 30,000 Units
2000 (Year 3) 150,000 Units 30,000 Units
2001 (Year 4) 290,000 Units 40,000 Units
2002 (Year 5) 520,000 Units 45,000 Units
2003 (Year 6) 550,000 Units 50,000 Units
2004 (Year 7) 570,000 Units 70,000 Units
2005 (Year 8) and 580,000 Units 80,000 Units
thereafter annually


* Exclusive of Samples and Demonstration Units


1.5 Section 4(b) of the Agreement shall be deleted in its entirety and replaced with the following:


"(b) Notwithstanding the provisions of Section 4(a), Distributor shall not be obligated to purchase ...