EXHIBIT 10.38
BAUSCH & LOMB PHARMACEUTICALS, INC.
CONTRACT MANUFACTURING SUPPLY AGREEMENT
THIS CONTRACT MANUFACTURING SUPPLY AGREEMENT (the "Agreement"), made this
November 25, 2002, (the "Effective Date") by and between BAUSCH & LOMB
PHARMACEUTICALS, INC., a Delaware corporation, having its principal office
located at 8500 Hidden River Parkway, Tampa, Florida 33637 ("BLP"), and ISTA
PHARMACEUTICALS, INC., having its principal office located at 15279 Alton
Parkway, Suite 100 Irvine, CA 92618 ("ISTA").
WHEREAS, ISTA desires that BLP be appointed the contract manufacturer for
certain Product (as defined herein);
WHEREAS, BLP is willing to manufacture and supply to ISTA such Product (as
defined herein) under the terms and conditions of this Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
AGREEMENT
ISTA and BLP, therefore agree the terms defined in this section shall have the
meanings stated as follows:
1. Definitions.
A. "ACT" means the United States Federal Food, Drug and Cosmetic Act,
as amended, and the regulations promulgated thereunder.
B. "API" means bromfenac sodium in active pharmaceutical ingredient
form as more fully described in the Specifications.
C. "Applicable Laws" means all laws, ordinances, rules and regulations
within the United States applicable to the manufacturing of Product
and the obligations of BLP or ISTA, as the context requires, under
this Agreement, and includes, without limitation, (i) all applicable
federal, state and local laws, rules, ordinances and regulations,
(ii) the ACT, and (iii) the cGMPs.
D. "cGMP" means current good manufacturing practices, as defined in the
ACT.
E. "Commercial Year" means each consecutive twelve (12) month period
commencing on the date that ISTA receives written FDA approval of
the Product.
F. "Confidential Information" means any information disclosed by either
party to the other party hereunder which is designated in writing as
"confidential". ISTA Confidential Information shall include without
limitation: (i) all information relating to the Product and API, and
all licenses, technology, processes and business plans
- -------------------------
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
relating to the Product and (ii) all notes, analyses, studies or
other documents which contain or are based on the information or
material described in (i). BLP Confidential Information shall
include without limitation: (x) all information owned by BLP and
pertaining to BLP's manufacture of the Product, including all plans,
programs, processes, equipment, apparatuses, and all licenses and
technology owned by BLP and pertaining to the manufacture of the
Product and (y) all notes, analyses, studies or other documents
owned by BLP that contain or are based on the information or
material described in (x), and in all events excluding subject
matter owned by ISTA pursuant to Article 18.
G. "Technology Transfer Activities" means the technology transfer
activities set forth in Appendix C.
H. "FDA" means the United States Food and Drug Administration or any
successor entity thereto.
I. "Firm Order" shall have the meaning set forth in Section 9.B.
J. "Labeling" means all labels and other written, printed or graphic
matter upon (i) the Product or any container or wrapper utilized
with the Product or (ii) any written material accompanying the
Product, including without limitation, package inserts.
K. "Master Batch Record" shall mean the master production and control
records required by the FDA to be kept for the Product pursuant to
21 CFR Section 211.186.
L. "Pharmaceutical Price Index" means that particular index within the
U.S. Department of Labor's Producer Price Index - Commodities, which
is categorized under the Group, "Chemicals and Allied Products,"
item "Pharmaceutical preparations" and having the Series ID of
WPU0638.
M. "Raw Materials" means bottles, tips, caps, Labeling, chemicals other
than API, and other components needed to manufacture the Product in
accordance with the Specifications.
N. "Specifications" means the product requirements set forth in the
Master Batch Record for the Product and Appendix D, as amended by
the parties hereto during the Term of this Agreement, which may
include but not be limited to, the specifications for Labeling,
storage, chemical composition, physical characteristics, biological
characteristics and quality control procedures for the Product.
O. "Validation Activities" means the validation activities set forth in
Appendix C.
2. Product. The term "Product" shall mean the product listed on Appendix A.
3. Term. Subject to Article 19, this Agreement shall become effective on the
Effective Date and shall expire on the fourth (4th) anniversary of ISTA's
receipt of written FDA approval of the NDA for the Product (the
"Expiration Date"), provided that BLP notifies ISTA in writing that it
does not intend to renew this Agreement at least two (2) years prior to
the Expiration Date or ISTA notifies BLP
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in writing it does not intend to renew this Agreement at least ninety (90)
days prior to the Expiration Date (the "Term"). In the absence of any such
notice, this Agreement shall automatically renew for additional successive
two (2) year renewal periods (each a "Renewal Period") unless BLP notifies
ISTA in writing that it does not intend to renew this Agreement at least
two (2) years prior to the end of any Renewal Period or if ISTA notifies
BLP in writing that it does not intend to renew this Agreement at least
ninety (90) days prior to the end of any Renewal Period, subject to
Article 19. For purposes of this Agreement, references to Term shall
include any Renewal Periods hereunder.
4. Price.
A. Product Prices. The purchase price per unit of Product to be paid by
ISTA to BLP shall be in accordance with the terms of the price
schedule set forth in Appendix A, which is attached hereto and
incorporated herein by reference, as adjusted pursuant to Section
4.B. below. Prices for Product sold to ISTA during the Term are
F.O.B. BLP's shipping point located in Tampa, Florida.
B. Price Increase. The purchase price per unit of Product shall remain
fixed until the [*] of ISTA's receipt of written FDA approval for
the Product. Thereafter, but no more than [*] during any Commercial
Year, BLP may increase the prices for the Product, upon [*] written
notice to ISTA, by an amount which is in proportion to, and not to
exceed, [*] period preceding the effective date of such price
increase.
C. Order Payment. BLP will invoice ISTA for each order of Product upon
shipment of the Product. Invoices shall be due and payable within
forty-five (45) days of the date of BLP's invoice. In the event that
any undisputed invoice is not paid when due, ISTA agrees to pay a
"late charge" on the unpaid delinquent balance at an interest rate
of [*], but in no event more than the maximum rate permitted by law.
D. Project Prices. ISTA will pay for Technology Transfer Activities and
Validation Activities in accordance with the terms set forth in this
Agreement and in Appendix C attached hereto. It is understood and
agreed that the prices set forth in Appendix C with respect to
Technology Transfer Activities or Validation Activities are
contingent on the successful manufacture of Product Validation
Batches (as defined in Section 5.C. below) and Submission Batches
(as defined in Appendix C) in accordance with the Specifications as
part of the Technology Transfer Activities or Validation Activities.
E. Project Payment. BLP will invoice ISTA for each project, as follows:
(1) For BLP's performance of the Technology Transfer Activities,
BLP shall invoice ISTA for (i) [*] of the fee for such
activities upon the commencement of the Technology Transfer
Activities, (ii) [*] of the fee for such activities upon
ISTA's acceptance of the last Submission Batch, and (iii) [*]
ISTA's acceptance of the completed report of the stability
study for NDA submission.
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(2) For BLP's performance of the Validation Activities, BLP shall
invoice ISTA for [*] of the fee for such activities upon the
commencement of the Validation Activities and [*] upon ISTA's
acceptance of the process validation report.
F. Additional Project Work. BLP will invoice ISTA for any additional
work requested by ISTA which is not defined in the original project
scope specified on Appendix C hereto, provided that ISTA agrees, in
advance in writing, to the additional work, and such invoice shall
be due and payable within [*] after ISTA's receipt of the invoice.
5. Product Technical Transfer.
A. Technology Transfer and Validation Activities. BLP agrees to perform
the Technology Transfer Activities and Validation Activities set
forth in Appendix C. The parties shall cooperate with one another to
transfer the Specifications, supplies and test methods for the
Product in a manner that meets the mutually agreed upon project
requirements. ISTA will be responsible for providing to BLP all
information (i.e., Specifications, MSDS, methods, process & Product
development, validation, and regulatory correspondence with the FDA)
necessary to manufacture the Product as part of the technology
transfer assessment process. BLP will be responsible for evaluating
the Product information from ISTA to confirm that it meets BLP
policies and cGMP requirements. BLP will be responsible for weekly
communications with ISTA, via conference call, relating to the
progress of the project and on a monthly basis, providing to ISTA a
project status report once the project is initiated until the
termination of the project technical transfer process.
B. Submission Batches. ISTA shall pay to BLP the fee set forth in
Appendix C for BLP's performance of the Technology Transfer
Activities; provided that if any such batch does not meet the
Specifications due to BLP's negligence, the failure of BLP's
Processing equipment, or BLP's failure to adhere to the batch
records, BLP shall, at its own expense, manufacture additional
batches of Product until the successful completion of a total of [*]
and [*] which meet the Specifications. BLP shall not be responsible
for any batch failures directly caused by Product formulation,
container compatibility and testing methods developed or provided by
ISTA to BLP hereunder. ISTA may, at its own expense, request BLP to
manufacture additional batches of Product attributed to such
failures.
C. Validation Batches. Each batch of Product manufactured as part of
the Validation Activities will be considered to be an "Experimental
Batch" until BLP has manufactured [*] that meets the Specifications
applicable to such Product upon which such consecutive batches shall
be considered "Validation Batches." ISTA shall pay to BLP the
Product price set forth in Appendix A for each Experimental Batch
manufactured as part of the Validation Activities; provided that if
any such Experimental Batch does not meet the Specifications due to
BLP's negligence, the failure of BLP's Processing equipment, or
BLP's failure to adhere to the batch records, validation protocols
or other similar documentation, BLP shall, at its own expense,
manufacture additional Experimental Batches of Product until the
successful completion of a total of [*] which meet the
Specifications. BLP shall not be
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responsible for any batch failures directly caused by Product
formulation, container compatibility and testing methods developed
or provided by ISTA to BLP hereunder. ISTA may, at its own expense,
request BLP to manufacture additional batches of Product attributed
to such failures. BLP and ISTA shall cooperate in good faith to
resolve any problems causing any out-of-Specification batch. It is
understood and agreed that the Validation Batches will, upon ISTA's
receipt of written FDA approval of the Product, be sold as
commercial Product.
D. Designated Product Contact. BLP and ISTA will each designate a
specific contact for communications relating to supply of Product by
BLP pursuant to this Agreement ("Product Contact"). The Product
Contact will be the primary contact for discussions relating to the
Product or its manufacture.
E. Analytical Methods and Data Transfer. Upon ISTA's request, BLP will
(i) assist ISTA in the transfer of all analytical methods related to
the Product or its manufacture to another manufacturing site and
(ii) transfer to ISTA all data reasonably requested by ISTA for use
in the preparation of FDA filings for the Product; provided that
ISTA shall bear any costs of such transfers pre-approved in writing
by ISTA.
6. Product Manufacture and Supply.
A. Manufacture and Supply. BLP agrees to manufacture at its facility
located at 8500 Hidden River Parkway, Tampa, Florida, the Product,
in accordance with Applicable Laws, the Specifications, and BLP
policies and procedures to the extent that such policies and
procedures do not conflict with any terms or conditions of this
Agreement or with Applicable Laws. During the Term of this Agreement
and [*] thereafter, BLP agrees that it shall not manufacture or
supply to any third party any ophthalmic product containing
bromfenac.
B. Ingredients, Supplies and Packaging Materials. BLP agrees to supply
at its expense all of the Raw Materials (excluding the active
Bromfenac, which will be supplied by ISTA) in accordance with the
Specifications for the Product that are necessary to manufacture and
supply the finished, packaged Product.
C. Testing and Inspection of Materials. BLP shall analyze and evaluate
all Product materials to confirm that they satisfy the
Specifications. The cost of all such analyses and evaluations shall
be borne by [*].
D. Testing and Inspection of Product. BLP shall conduct all quality
control and other tests required to ensure that the Product as
manufactured meets the Specifications. The cost of all such analyses
and evaluations shall be borne by BLP. During the commercial phase
of the project, BLP shall conduct stability testing on [*] for each
fill size of the Product annually, and shall provide ISTA with
on-going stability reports. BLP will place each of the Validation
Batches into on-going stability studies and will provide interim
stability reports to ISTA, as required by cGMP regulations. BLP will
perform annual product reviews of the Product and will promptly
provide ISTA with the information from the annual product reviews as
required by the FDA,
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for ISTA's inclusion in annual reports to the FDA. BLP shall provide
ISTA, [*], with all regulatory support and documentation required by
the FDA to support the NDA for the Product.
E. BLP Obligation to Supply. BLP shall supply ISTA such quantities of
Product ordered by ISTA pursuant to any Firm Order. Furthermore, BLP
agrees to reserve manufacturing capacity sufficient to supply ISTA
with at least such quantities of Product that ISTA is required to
purchase as an Annual Minimum pursuant to Section 9.A.
7. Product Changes.
A. Changes by ISTA. During the Term of this Agreement, BLP agrees to
manufacture and package the Product in accordance with the
Specifications, Applicable Laws, and using approved or mutually
agreed upon material suppliers. If ISTA at any time requests a
change to a Product, including without limitation, any changes to
the Raw Materials, provided that such change does not impose a
material adverse impact on BLP's manufacture of the Product, (i)
such change shall be incorporated into the Specifications, (ii) BLP
shall adjust, with ISTA's prior approval, the price of the Product
set forth in Appendix A, if necessary, to reflect increased costs of
such change, (iii) BLP shall implement such change at the earliest
opportunity and (iv) subject to ISTA's prior approval, ISTA shall
pay BLP the costs associated with such change, including, for any
additional development work, a reasonable mutually agreed upon
charge based upon BLP's then-prevailing research and development
rates. ISTA shall reimburse BLP for BLP's actual cost of procurement
of Raw Materials rendered obsolete solely due to the implementation
of such change up to certain inventory levels for each Raw Material
to be mutually determined by the parties prior to the commercial
launch of the Product; provided that ISTA's liability under this
Section 7.A. shall only apply to the extent such materials cannot
reasonably be allocated to manufacturing other products.
B. Changes by BLP. BLP agrees that any changes developed by BLP that
may be incorporated into the manufacture of a Product shall require
the written approval of ISTA prior to such incorporation. At the
time of such incorporation and FDA approval, if required, such
changes shall become part of the Specifications.
C. Changes by Regulatory Authorities. If BLP is required by a
regulatory authority to perform validation studies for purposes of
validating new manufacturing procedures, new Raw Material or
finished Product assay procedures with respect to a Product, in each
case which are unique to the manufacture of the Product, in order to
continue to engage in the manufacture of the Product for ISTA, BLP
shall promptly provide ISTA with notice that such validation studies
are required, such notice to include an estimate of all related
validation study expenses. ISTA shall notify BLP whether it desires
BLP to continue manufacturing the Product, and all direct expenses
borne by BLP and pre-approved by ISTA in writing in the conduct of
any such validation study shall be reimbursed to BLP by ISTA as
incurred.
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D. Regulatory Responsibility. ISTA will be responsible for all
regulatory submissions and correspondence with the FDA related to
the Product. BLP will be responsible for providing ISTA, as needed,
with documentation typically included in the CMC section of
regulatory submissions, for the preparation of regulatory
submissions.
8. Inspections and Manufacturing Compliance.
A. Inspections by ISTA. Representatives from ISTA shall be permitted
access, at reasonable times during BLP's normal business hours and
upon reasonable advance notice to BLP, to visit, in the company of a
BLP representative, the manufacturing and/or packaging facility
where ISTA's Product will be or is being manufactured and/or
packaged for the purposes of auditing BLP's processes to ensure that
ISTA's Product is being manufactured, packaged, stored and handled
in accordance with the Specifications and all Applicable Laws.
B. Inspection by Regulatory Agencies. Each party shall promptly notify
the other party upon being contacted by the FDA for any purpose or
reason directly relating to the manufacture of the Product,
including without limitation, any announced or unannounced FDA
inspection. At BLP's request, ISTA will provide BLP with copies of
all correspondence and documentation provided to the FDA which
relate to BLP's scale-up manufacturing activities. At ISTA's
request, BLP will provide ISTA with copies of all correspondence and
documentation provided to the FDA which relate to the Product or the
manufacture of the Product. BLP shall permit an ISTA representative
to be present at BLP's facilities during any such inspection
directly relating to manufacture of the Product. Duly authorized
representative(s) from the FDA or other applicable regulatory
agencies shall be permitted access, at reasonable times during BLP's
normal business hours, to visit, in the company of a BLP
representative, the manufacturing and/or packaging facility or
facilities where the Product will be or is being manufactured and/or
packaged for the purposes of auditing BLP's processes to ensure that
the Product is being manufactured, packaged, stored and handled in
accordance with the Specifications, Applicable Laws, and BLP
policies and procedures to the extent that such policies and
procedures do not conflict with any terms or conditions of this
Agreement or with Applicable Laws.. BLP shall, at its own expense,
promptly respond to all inquiries and questions resulting from such
visits and inspections and, at its own expense, promptly correct any
deficiencies reported as a result of such inspections. BLP shall
immediately notify ISTA if an authorized agent of the FDA or other
governmental agency visits BLP's manufacturing facility for the
purposes of inspecting the manufacturing and testing of the
Products.
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9. Ordering and Rolling Forecasts.
A. Annual Minimum. Beginning on [*], ISTA shall purchase from BLP a
minimum annual amount of Product as set forth in Appendix B attached
hereto (the "Annual Minimum"). If ISTA does not purchase such Annual
Minimum during any calendar year thereafter, ISTA shall pay to BLP
[*] of the difference between (i) the total amount ISTA would have
paid to BLP if the Annual Minimum had been fulfilled and (ii) the
total amount actually paid to BLP during the applicable calendar
year. After ISTA's obligation to purchase the Annual Minimum
commences pursuant to this Section 9.A., the parties shall meet at
least once annually to discuss in good faith reasonable adjustments
to the Annual Minimum taking into consideration the market
conditions for the Product. Any such adjustment to the Annual
Minimum shall be mutually agreed upon in writing and shall be
subject to this Agreement.
B. Monthly Forecast. Beginning not less than [*] after ISTA submits the
NDA for the Product to the FDA, and thereafter on the first day of
each month, ISTA will deliver to BLP a rolling forecast of its
estimated need for Product for the following [*] period (each, a
"Rolling Forecast"). The quantities of Product to be delivered in
the first [*] of each Rolling Forecast shall be a binding, firm
order for Product ("Firm Order") and the remainder of the Rolling
Forecast shall be for advisory purposes only and non-binding.
C. Purchase Orders. ISTA will initiate an order for Product by sending
to BLP a purchase order for Product at least [*] prior to the
requested delivery date for the Product covered by the purchase
order ("Purchase Order"). If there is a conflict between the terms
of this Agreement and any Purchase Order, the terms of this
Agreement will control. Purchase Orders should be submitted for
ordered quantities of Product in full batch size; provided that BLP
agrees that such batch size shall include, but not be limited to, a
[*] batch size. ISTA may submit Purchase Orders for Product in
excess of the quantities specified in the rolling forecasts. BLP
shall use its commercially reasonable efforts to accept and fill
such orders consistent with efforts used by BLP to fill excess
orders for other customers of contract manufactured Product. BLP
will deliver to ISTA a written order acknowledgment form within [*]
of BLP's receipt of each rolling forecast, confirming the quantities
of which BLP shall exercise commercially reasonable efforts its
ability to fill. Only those amounts of such orders in excess of the
quantities of ISTA's Firm Order, confirmed by BLP in its written
order acknowledgment, shall be binding on BLP.
D. Failure to Supply. Notwithstanding any other provision in this
Agreement, if BLP fails to supply to ISTA at least [*] of the
quantity of Product ordered pursuant to a Firm Order during any [*],
ISTA's obligations to meet the Purchase Requirement and Annual
Minimum shall terminate and ISTA shall be entitled to purchase any
quantity of Product from any third party.
10. Inventory & Delivery. Unless otherwise agreed in writing by the parties,
BLP will ship the Product F.O.B. BLP's loading dock at its facility in
Tampa, Florida (the "F.O.B. Point"), to arrive at ISTA's designated
destination point within [*] of the date a Purchase Order is
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received by BLP. At the request and expense of ISTA, BLP shall ship the
Product ordered by ISTA by such carrier or carriers as ISTA may designate.
Such shipping instructions shall be submitted by ISTA to BLP. Unless
otherwise agreed by the parties hereto, all risk of loss or damage to the
Product from any cause whatsoever shall be borne by ISTA after delivery to
ISTA or ISTA's carrier at the F.O.B. Point. BLP shall not be obligated to
maintain an inventory of the Product.
11. Warranties; Acceptance and Claims.
A. BLP Warranties. BLP represents and warrants to ISTA that (i) at the
time of delivery, the Product supplied hereunder will conform to the
Specifications and all Applicable Laws, (ii) all Product supplied by
BLP under this Agreement shall be merchantable, free from defects
and shall not be adulterated or misbranded within the meaning of the
ACT, as amended, (iii) BLP shall manufacture the Product in
accordance with the Specifications and in a facility that complies
with all Applicable Laws, and is covered by all necessary
registrations and licenses, and BLP shall maintain all such
registrations and licenses during the Term hereof, (iv) when
applicable to the work performed by BLP, BLP will adhere to
Applicable Laws, and (v) BLP shall store all API and Product in a
secure facility and in accordance with the Specifications and all
Applicable Laws. THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF
ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. EXCEPT WHERE BLP COMMITS A WILLFUL, INTENTIONAL
BREACH OF ANY MATERIAL PROVISION UNDER THIS AGREEMENT, BLP SHALL NOT
BE RESPONSIBLE OR LIABLE UNDER ANY PROVISION OF THIS AGREEMENT OR
UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY RESULTANT INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO LOSS OF REVENUES
AND LOSS OF PROFITS FROM BLP'S FAILURE TO PROVIDE THE PRODUCT TO
ISTA OR OTHERWISE.
B. Notification of Defects. All Products shall be received subject to
ISTA's inspection and may be rejected if any such Product fails to
conform to the Specifications. ISTA shall be deemed to have accepted
each order of Product if BLP does not receive written notice to the
contrary (i) within [*] after the later of receipt by ISTA or by its
customers of any non-conforming Product containing obvious defects
discoverable without affecting the integrity of the Product's
packaging and (ii) within [*] of ISTA's discovery of any latent
defects. At BLP's request, ISTA shall promptly supply either a
sample of the allegedly defective Product, or some other evidence of
deficiency, which ISTA or BLP shall specify. In the event of any
dispute between BLP and ISTA as to whether any of the Product
conforms to the warranties hereunder, a sample of the units in
dispute shall be sent by ISTA and BLP to an independent third party
testing laboratory mutually agreed to in writing by BLP and ISTA
whose findings will be binding on the parties except in cases of
gross and
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manifest error. The cost of such testing and Product shall be borne
by the party against which the determination was made.
C. Warranty Limited to ISTA. ISTA shall deliver to its customers its
own warranty concerning the Product. If permissible under Applicable
Law, ISTA's warranty to its customers shall state conspicuously that
the same is the sole and exclusive warranty to customers.
D. Returns. The nonconforming shipment of Product, or the nonconforming
portion thereof, shall be held for BLP's disposition, or shall be
returned to BLP, at BLP's expense, as directed by BLP. BLP shall
replace, at BLP's cost, each nonconforming shipment of Product, or
the nonconforming portion thereof, with conforming Product as soon
as reasonably practicable after receipt of notice of rejection
thereof, and in any event shall do so within [*] after receipt of
notice of rejection thereof.
E. Indemnification of ISTA. At ISTA's request, BLP shall indemnify,
defend, save and hold ISTA and each of its Affiliates, officers,
directors, employees and agents harmless from and against any and
all liabilities, damages, costs, or expenses, including without
limitation reasonable attorney's fees and disbursements ("Loss" or
"Losses") resulting from, or arising out of: (a) any material breach
of any warranty hereunder or material non-fulfillment or
non-performance by BLP of any agreement, covenant or obligation of
BLP under this Agreement; (b) any actual or alleged defect in any
Product manufactured and delivered to ISTA hereunder arising out of
BLP's failure to manufacture Product in accordance with the terms of
this Agreement; (c) any actual or alleged infringement or violation
of any patent, trade secret or proprietary rights used by BLP in
manufacturing Product; (d) FDA enforcement action, inspection or
Product recalls or market withdrawals resulting from BLP's failure
to manufacture the Product in accordance with the terms of this
Agreement; and (e) any personal injury arising out of BLP's failure
to manufacture Product in accordance with the terms of this
Agreement.
F. Insurance. Each of the parties shall maintain Commercial Liability
Insurance, during the Term of this Agreement, including contractual
and product liability, in amounts of not less than [*] per
occurrence and [*] annual aggregate naming the other party as an
additional insured. The parties shall exert their best efforts to
obtain such insurance with respect to contractual liability on a
date of occurrence basis (not a date of claim basis) and all
insurance companies providing such insurance shall have an A.M. Best
rating of A- or better. Upon request, either party shall submit a
certificate of insurance evidencing such insurance to the other
party, and providing that it may not be canceled or reduced in
amount without [*] prior notification to the other party.
G. Manufacture. For purposes of this Article 11 above, Section 5.E. and
Articles 12 and 18 below, "manufacture" shall include without
limitation the manufacturing process for the product, bulk solution
manufacturing, filling, filtering, inspection, testing, Labeling and
packaging of Product.
12. ISTA's Obligations.
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A. Indemnification of BLP. ISTA shall (and BLP shall give ISTA the
right to) indemnify, defend, save and hold BLP and each of its
Affiliates, officers, directors, employees and agents harmless from
and against Loss or Losses resulting from, or arising out of: (a)
claims brought by third parties alleging any bodily injury arising
as a result of a negligent act or omission of ISTA; (b) FDA
enforcement action, inspections or Product recalls or market
withdrawals except where arising out of or resulting from BLP's acts
or omissions or BLP's failure to manufacture Product in accordance
with the terms of this Agreement; (c) ISTA's acts relating to the
promotion, marketing and/or distribution of Product, except where
arising out of or resulting from BLP's acts or omissions or BLP's
failure to manufacture Product in accordance with the terms of this
Agreement; and (d) any actual or alleged infringement or violation
of any composition of matter patent, or trade secret in the
composition of matter of the Product; except, in all cases, to the
extent such Losses are subject to indemnification by BLP pursuant to
Section 11.E.
B. Registration. Any FDA or governmental approvals necessary for sale
of the Product shall be the responsibility of ISTA. ISTA shall use
its commercially reasonable efforts to maintain all necessary FDA or
governmental approvals for sale of the Product and to ensure that
the packaging and Labeling of such Product comply with all
applicable FDA or governmental and rules and regulations.
13. Indemnification Procedures. Any party seeking indemnification under this
Agreement shall give prompt written notice to the indemnifying party of
any third party claim, complaint, suit, proceeding or cause of action
(collectively and individually referred to as an "Action") providing
reasonable details of the nature of the event and basis of the Action, and
the other party's indemnification obligations shall be conditioned upon
the foregoing if lack of such notice to the indemnifying party is
prejudicial or otherwise adversely affects the indemnifying party. The
indemnifying party shall then have the right, at its expense and with
counsel of its choice, to defend, contest, or otherwise protect against
any such Action. The indemnified party shall also have the right, but not
the obligation, to participate at its own expense in the defense thereof
with counsel of its choice. The indemnified party shall cooperate to the
extent reasonably necessary to assist the indemnifying party in defending,
contesting or otherwise protesting against any such Action provided that
the reasonable cost in doing so shall be paid by the indemnifying party.
The indemnifying party shall not enter into any settlement without the
indemnified party's consent if such settlement would be prejudicial to, or
otherwise constitute any admission of fact or liability by, the
indemnified party.
14. Product Recalls. In the event that a Product recall results from the
breach by BLP of its warranties under this Agreement, defective
manufacture by BLP or other actions of BLP, BLP shall be responsible for
the reasonable expenses of the recall. In the event the recall results
from the actions of ISTA (not including the recall order), ISTA shall be
responsible for the expenses of the recall and any costs associated with
the distribution of replacement Product.
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15. Product Complaints. Product complaints shall be received by ISTA and at
its own expense, ISTA will promptly respond to all reasonable inquires
from customers pertaining to Product complaints.
16. Confidentiality. Except as otherwise expressly permitted herein (including
Article 18), each party hereto agrees to keep all Confidential Information
of the other party furnished under this Agreement confidential within its
respective company and agrees not to disclose same to third parties
without the prior written consent of the other party hereto, except as
required by law or to the extent such information (i) was already in the
rightful possession of a party prior to its receipt from the other party
as evidenced by written records, (ii) becomes generally known to the
public otherwise than as a result of the breach of this Article 16, (iii)
is disclosed by a third party having no obligation to keep such
information confidential, or (iv) was independently developed by such
party or its agent(s) as evidenced by written records. During the Term of
this Agreement, both ISTA and BLP agree to keep the subject matter of this
Agreement confidential and not disclose it to any third party except as
required by law, in which instance prompt notice shall be given to the
party not making the disclosure, or except as mutually agreed to. The
receiving party will, upon the written request of the disclosing party
after any expiration or termination of this Agreement, promptly destroy or
return to the disclosing party all Confidential Information (including
notes, writings and other material developed therefrom) and all copies
thereof and retain none for its files, except that each party may retain
one (1) copy for its legal files. The return or retention of such
information will not relieve the receiving party of its continuing
obligation of confidentiality hereunder.
17. Public Announcements. Neither ISTA nor BLP shall use the name of the other
firm in any publicity or advertising and may not issue a press release,
public announcement or otherwise publicize or disclose the existence of
this Agreement, any information related to this Agreement or the terms or
conditions hereof, without obtaining the other party's prior written
approval and consent.
18. Intellectual Property. BLP acknowledges that ISTA owns or possesses
certain ISTA Confidential Information, inventions, technologies,
processes, know-how, trade secrets, improvements, other intellectual
property and other assets relating to the Product, which have been
independently developed or licensed by ISTA (collectively "ISTA
Technology"). ISTA shall own, and BLP hereby assigns and agrees to assign
to ISTA, all inventions, developments, or improvements to the ISTA
Technology, whether or not patentable, that arise from, or are based upon
the Product, its manufacture or ISTA Technology, together with any
analytical methods for testing the Product, modifications to the Product
formulation or Product container, methods of mixing the Product solution
and all data (e.g., label qualification data) incorporated into FDA
filings (collectively, "ISTA Developments"); provided, however, that BLP
shall retain a nonexclusive, perpetual, royalty-free, fully paid-up,
worldwide license, under all inventions, developments, or improvements
assigned to ISTA except inventions, developments, or improvements relating
to Product formulation, to make, have made, use, offer for sale, import
and otherwise exploit any products other than Product. BLP agrees to
execute all documents necessary to perfect title in the ISTA Developments
in ISTA.
Page 12 of 22
19. Termination.
A. For Default. Without prejudice to any other legal or equitable
remedy or remedies either party may have, this Agreement may be
terminated by either party by written notice for breach of any
material provision of this Agreement if such breach remains uncured
after the giving of not less than [*] prior written notice to the
breaching party of the existence of such breach and intent to
terminate.
B. For Failure to Meet Timelines. Without prejudice to any legal or
equitable remedy or remedies either party may have, this Agreement
may be immediately terminated at the option of ISTA, immediately
upon written notice, in the event of the BLP does not achieve any
project milestone within [*] after the deadline specified in
Appendix C.
C. For Insolvency. Either party may terminate this Agreement
immediately in the event of the insolvency of the other party if
such insolvent party fails to pay any amounts due pursuant to the
terms of this Agreement within [*] following the date on which such
amount is due and payable, provided that the terminating party first
serves written notice of the failure to pay on the insolvent party
and such default is not cured within [*] after receipt of such
notice.
D. For Failure of Batches. In the event that prior to the approval of
the Process Validation report specified in Appendix C the parties
are unable to successfully produce, within [*] after first
discovering any problems related to any out-of-Specification batches
attributed to Product formulation, container compatibility and
testing methods developed by or provided by ISTA to BLP, a Product
batch within the Specifications, the parties shall [*]. In the event
[*], this Agreement may be terminated at the option of either party
upon [*] advance written notice to the other party.
E. Effect of Termination. Expiration or termination of this Agreement
for any reason shall not relieve the parties of any obligation that
accrued prior to such expiration or termination. Within [*]
following the effective date of termination of this Agreement, BLP
will provide ISTA with a detailed accounting of (i) the amount of
Raw Materials held by BLP for manufacturing into Product under this
Agreement, (ii) the amount of Product in the process of being
manufactured by BLP for ISTA under this Agreement and (iii) the
amount of finished Product then held in inventory by BLP (including
Product which has not be subjected to BLP's quality assurance
testing procedures) under this Agreement. Upon ISTA's request, BLP
shall deliver to ISTA or to such other person or place as ISTA shall
direct in writing, at ISTA's sole cost and expense (except at BLP's
sole cost and expense, if ISTA terminated the Agreement pursuant to
Section 19.A., 19.B. or 19.C.), all Raw Materials and Product
described above and ISTA shall pay BLP, within [*] after such
delivery, the Product price owing to BLP for finished Product and
BLP's verifiable out-of-pocket costs incurred in procuring
Page 13 of 22
such delivered Raw Materials, unless such termination is initiated
by ISTA pursuant to Section 19.A., 19.B. or 19.C., in which event
ISTA shall not be obligated to pay such amounts. No termination of
this Agreement shall have any effect on, or relieve either party
from, the obligation to make any payment or perform any act arising
prior to the effective date of termination. Without limiting the
foregoing, at ISTA's request, BLP shall also be obligated to provide
the services described in Section 5.E. above upon expiration or any
termination of this Agreement; provided that if such termination is
by ISTA pursuant to Section 19.A., 19.B. or 19.C., BLP shall bear
the costs incurred in performing under Section 5.E.
F. BLP Obligations upon Expiration or Termination. Upon the expiration
of this Agreement or its earlier termination, BLP will transfer all
Product-manufacturing technology and information to ISTA's
designated manufacturer and provide full cooperation and assistance
to assure smooth transition. ISTA will reimburse BLP for BLP's
reasonable costs and expenses incurred in providing the foregoing
services that are pre-approved in writing by ISTA, unless such
termination is initiated by ISTA pursuant to Section 19.A., 19.B. or
19.C., in which event all such costs and expenses shall be borne
solely by BLP.
20. Jurisdiction and Venue. All actions or proceedings brought by BLP against
ISTA arising out of or related to this Agreement shall be brought in a
state or federal court of competent jurisdiction located within Orange
County, California, and each of the parties to this Agreement consents to
the exclusive personal jurisdiction and venue of those courts. All actions
or proceedings brought by ISTA against BLP arising out of or related to
this Agreement shall be brought in a state or federal court of competent
jurisdiction located within Hillsborough County, Florida, and each of the
parties to this Agreement consents to the exclusive personal jurisdiction
and venue of those courts.
21. Force Majeure and Allocation. The obligations of either party hereunder
are contingent upon, and BLP shall not be liable for, acts of God, war,
terrorist activities, riots, floods, fires, storms, strikes, catastrophes
or any other acts of force majeure, FDA or governmental restrictions,
prohibitions, regulations, and requisitions, or other interferences beyond
the reasonable control of such party (but excluding acts or omissions of
subcontractors) to the extent that the same prevent or delay the
performance of the obligations herein contained, always provided that such
party shall use its best efforts in the event of force majeure to fulfill
the obligations under this Agreement and provide the other party with
prompt notice of the occurrence of any such event of force majeure.
22. Assignment or Transfer of Rights. This Agreement will inure to the benefit
of and be binding upon each of the parties hereto and their respective
successors and assigns. Neither this Agreement, nor any of the rights and
obligations under this Agreement, may be assigned, transferred or
otherwise disposed of by either party without the prior written consent of
the other party, unless such assignment, transfer or disposition is to a
successor to all or substantially all of the businesses and assets of such
party pertaining to the subject matter hereof. Any assignment made in
contravention of the foregoing shall be void and of no effect.
Page 14 of 22
23. Notices. All notices or communications required or permitted hereby shall
be sent to the respective addresses set forth below by overnight delivery,
facsimile (which will promptly be confirmed in writing sent by registered
or certified mail, return receipt requested) or registered or certified
mail, return receipt requested and shall be effective upon delivery.
As to BLP: Bausch & Lomb Pharmaceuticals, Inc.
8500 Hidden River Parkway
Tampa, Florida 33637
Attention: J. Robert Hernandez
Director of Plant Operations
Contract Manufacturing Facsimile: (813) 975-7788
With a copy to: Bausch & Lomb Incorporated
One Bausch & Lomb Place
Rochester, New York 14604-2701
Attention: General Counsel
As to ISTA: ISTA Pharmaceuticals, Inc.
15279 Alton Parkway, Suite 100
Irvine, CA 92618
Attention: Kirk McMullin
Vice President of Operations
Facsimile: (949) 788-6010
The address to which notice to either party shall be sent may be changed by such
party by written notice to the other party.
24. Relationship of the Parties. The parties are independent contractors.
Nothing in this Agreement is intended or will be deemed to constitute a
partnership, agency or employer-employee relationship between the parties.
Neither party has any authority to assume or create any obligation on
behalf of the other party.
25. Order of Preference. All sales by BLP to ISTA of Product shall be subject
to the provisions of this Agreement and any provision of any Purchase
Order placed by ISTA or order acknowledgment sent by BLP which is
inconsistent herewith or in addition hereto shall be
Page 15 of 22
null and void unless accepted by the receiving party in writing and signed
by one of its authorized representatives.
26. Applicable Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida, without reference to its
conflicts of law principles.
27. Survival. The obligations in Sections 5.E., 6.A., 11.A., 11.E., 11.G.,
12.A., 19.E. and 19.F. and Articles 1, 2, 14, 16, 18 and 20-29 shall
survive the expiration or termination of this Agreement for any reason
whatsoever.
28. Entire Agreement. This Agreement and the Appendices contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes any prior agreements made between the parties regarding the
Product. No prior statement, representation, promise or agreement, written
or verbal, shall be of any force to vary, expand or diminish the
provisions hereof. The Agreement may be modified or amended only by an
instrument in writing, executed by both parties. No waiver or other
failure to exercise any right under, or default or extension of time for
performance under, any provision of this Agreement will affect the right
of any party to exercise any subsequent right under or otherwise enforce
said provision or any other provision hereof or to exercise any right or
remedy in the event of any other default, whether or not similar.
29. Counterparts. This Agreement may be executed in two counterparts, each of
which shall be deemed an original, and all of which together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have hereunto set forth their signatures
effective as of the Effective Date.
BAUSCH & LOMB
PHARMACEUTICALS, INC.
By:
-------------------------------------------------
Title:
----------------------------------------------
ISTA PHARMACEUTICALS, INC.
By:
-------------------------------------------------
Title:
----------------------------------------------
Page 16 of 22
APPENDIX A
PRICE SCHEDULE
Bromfenac Ophthalmic Solution Price
1. [*] [*]
2. [*] [*]
A-1
APPENDIX B
ANNUAL MINIMUM
BROMFENAC OPHTHALMIC SOLUTION
Production Year Starting: Annual Minimum:
- ------------------------ --------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
B-1
APPENDIX C
PROJECT MILESTONES
[*]
PROJECT BUDGET
[*]
C-1
APPENDIX D SPECIFICATIONS
[*]
D-1