EXHIBIT 10.28
EXECUTION COPY
AGREEMENT dated as of November 20, 1995, among VISX, INCORPORATED,
a Delaware corporation ("VISX"), ALCON LABORATORIES, INC., a
Delaware corporation ("ALI"), and ALCON PHARMACEUTICALS, LTD., a
corporation organized and existing under the laws of Switzerland
("APL" and, together with ALI, "Alcon") (VISX, ALI and APL being
referred to herein as the "Parties").
WHEREAS the Parties are parties to the Amended and Restated Marketing
Agreement dated as of April 21, 1987 (the "First Agreement"), the Second Amended
and Restated Marketing Agreement dated as of December 22, 1989 (the "Second
Agreement") and certain letter agreements dated as of December 11, 1989 and May
22, 1990 (the "Letter Agreements" and, together with the First Agreement and the
Second Agreement, the "Marketing Agreements");
WHEREAS the Parties, CAP Advisers Limited, Charles R. Munnerlyn, Alan R.
McMillen, William L. Bennett, Daniel J. Kunst, Karen Brenner, Robert B. Samuels,
Robert R. Montgomery, Timothy R.G. Sear, Edgar H. Schollmaier, Anthony M.
Pilaro, Richard S. Braddock and Osterfak, Ltd. simultaneously with the execution
of this Agreement, are entering into a Settlement Agreement dated the date
hereof (the "Settlement Agreement"), which provides for the settlement of
certain litigation in Case No. 744052 in the Superior Court of California and
relating to claims between the parties to the Settlement Agreement and certain
other parties; and
WHEREAS the Parties desire to terminate the Marketing Agreements and restate
the terms of their relationship presently and subsequent to the "Effective
Date", as defined in the Settlement Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. SPECIFIC DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
"Affiliate" of any Party shall mean any other Person which owns or
controls, is owned or is controlled by, or is under common ownership or
control with, such Party. As used herein, "control" shall mean the
possession, direct or indirect, of the power to direct or cause the
direction of management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Effective Date" shall mean the Effective Date as set forth in the
Settlement Agreement.
"FDA" shall mean the United States Food and Drug Administration or its
successor.
"Hyperopia Module" shall mean that hardware and software necessary to
enable a VISX System to perform hyperopia.
"Model B Units" shall mean the VISX Excimer Laser System, Model B.
"Model C Units" shall mean the VISX Excimer Laser System, Model C.
"Operating Committee" shall mean the Operating Committee established
under the terms of the Second Agreement.
"Person" shall mean any natural person, entity, corporation, business
trust, joint venture, association, company, partnership, trust or
government, or any agency or political subdivision thereof.
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"PRK" shall mean photorefractive keratectomy.
"Procedure Royalty" shall mean an amount, whether in the form of
license, use fees or otherwise, charged to each purchaser and/or user of a
VISX System for the use of such VISX System.
"Representatives" of any Person shall mean such Person's directors,
officers, employees, agents and representatives, distributors, sales agents,
attorneys, accountants, financial advisers and other consultants.
"Transition Period" shall mean the period from and including October 27,
1995 to and including the Effective Date, unless this Agreement is earlier
terminated in accordance with its terms.
"Unit" shall mean an individual VISX System as manufactured by VISX.
"United States" shall mean the 50 states of the United States of
America, the District of Columbia, Puerto Rico and the other territories and
possessions of the United States of America.
"VisionKey Card" shall mean the cards which contain the proprietary
software necessary to perform procedures with a VISX System.
"VISX System" shall mean any laser system manufactured by VISX for
correcting the refractive optical property of an eye through photoablative
sculptured change in the cornea, or for the treatment of eye disorders
involving corneal opacities, including, without limitation, the treatment of
superficial corneal scars, epithelial irregularities and fungal and
bacterial ulcers.
ARTICLE II
SECTION 2.01. SUSPENSION OF MARKETING AGREEMENTS. During the Transition
Period, the Marketing Agreements shall be suspended and shall not be deemed to
define the rights or obligations of the Parties with respect to the subject
matter thereof, and the only rights and obligations of the Parties with respect
to the subject matter of the Marketing Agreements shall be as set forth in this
Agreement. If this Agreement shall terminate in accordance with Section 5.01,
then the Marketing Agreements shall continue in full force and effect from the
date of such termination. Any action taken pursuant to this Agreement, and any
failure to take any action not required by this Agreement, during the Transition
Period shall be deemed to be and have been consistent with and not in violation
or breach of the Marketing Agreements even if this Agreement should be so
terminated and the Marketing Agreements so continued; provided, however, that
any arrangement or transaction entered into by a Party during the Transition
Period pursuant to Section 2.07(a) shall be capable of being modified or
terminated by such Party without the consent of any third party to the extent
necessary to permit such Party to resume compliance with the Marketing
Agreements if this Agreement is terminated.
SECTION 2.02. EXISTING UNIT ORDERS. (a) Alcon will withdraw its request
that VISX repurchase (***) Units shipped to it on or before (***), and shall
pay to VISX (***) of any currently outstanding balance of the purchase price
for the last ten units shipped in (***), by each of (***), (***), (***), (***),
(***) and (***). VISX shall install, at VISX's sole cost, in each Model C Unit
shipped to Alcon on or before (***), (i) (***) and (ii) (***). These payment
and upgrade obligations shall survive the Effective Date and the termination
of this Agreement.
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(b) During the Transition Period and after the Effective Date, Alcon shall
not have any obligation to purchase any Units in addition to those shipped by
VISX to Alcon on or before (***), notwithstanding any orders for Units that may
have been placed by Alcon or which any of the Parties may have forecasted for
purchase by Alcon after (***).
SECTION 2.03. BUDGETS. The supplemental budget for the quarter ending
December 31, 1995, previously submitted to the Operating Committee in September
1995 (a copy of which is attached as Exhibit I hereto) (the "Supplemental
Budget") is hereby approved, except that no amounts shall be deemed to have been
budgeted for Alcon to perform service of Units or physician training as provided
therein. In the event that the FDA grants approval for PRK use of the VISX
Systems on or prior to December 31, 1995, VISX and Alcon agree to negotiate a
modification of such supplemental budget to take account of such approval. VISX
shall, no later than 30 days following receipt of Alcon's invoice, make payment
to Alcon for all marketing costs and expenses relating to the quarter ended
September 30, 1995 included in budgets previously submitted to the Operating
Committee but not yet paid. Alcon shall perform all tasks that are specifically
provided by the Supplemental Budget, except that it shall not be obligated to
perform service of Units or physician training. VISX shall pay, no later than 30
days following receipt of Alcon's invoice, all documented costs and expenses
incurred by Alcon pursuant to the original and supplemental budgets submitted to
the Operating Committee for the quarter ending December 31, 1995 as such budgets
are modified as provided above.
SECTION 2.04. INTERNATIONAL USERS MEETING. Alcon and VISX hereby agree
that the international users meeting previously scheduled for February 8-10,
1996 shall be cancelled.
SECTION 2.05. CERTAIN CLAIMS. Each Party shall fully cooperate and provide
to the other Party, upon request, all relevant documents and other materials and
information relating to any claims against insurers, carriers or other third
parties for damage caused to any Units previously sold to Alcon during shipping,
transporting or handling of such Units. This Section 2.05 shall survive the
Effective Date and the termination of this Agreement.
SECTION 2.06. HIRING OF EMPLOYEES. During the Transition Period and for
the period until 5 years after the Effective Date, VISX and Alcon agree that
neither VISX nor Alcon shall solicit for employment any person then employed by
the other Party; and neither VISX nor Alcon shall employ any individual who is
or was employed by the other Party if such employment is known by such Party to
be in violation of any employment or non-competition agreement to which the
other Party is a signatory. VISX and Alcon agree to make reasonable inquiries as
to the existence of any such agreement.
SECTION 2.07. PREPARATION FOR TERMINATION OF MARKETING AGREEMENTS. (a) In
anticipation of the termination of the Marketing Agreements but subject to the
proviso to Section 2.01, during the Transition Period Alcon shall be free and
clear to make any and all arrangements, and to effect any transactions in order
to arrange, for the sale (or the facilitation or financing of the sale) of
systems competitive with VISX Systems by Alcon or any of its Affiliates or
Representatives or for the purchase (or the facilitation or financing of the
purchase) of such competitive systems by Alcon or its Affiliates,
Representatives or customers subsequent to the Effective Date. In anticipation
of the termination of the Marketing Agreements but subject to the proviso to
Section 2.01, during the Transition Period VISX shall be free and clear to make
any arrangements, and to effect any transactions in order to arrange, for the
sale of VISX Systems by VISX or through third parties subsequent to the
Effective Date.
(b) Alcon agrees to provide to VISX, on or prior to November 27, 1995, all
material information relating to the quotation of prices and leads for sales of
VISX Systems in Alcon's possession, with respect to VISX Systems to be sold in
the United States and, upon the sale or other disposition by Alcon of all Units
currently held by Alcon in its inventory (such date being the "Transfer Date"),
to provide to VISX all material information relating to the quotation of prices
and leads then in Alcon's possession with respect to sales of VISX Systems
outside the United States.
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SECTION 2.08. VISIONKEY CARDS FOR PREVIOUSLY SHIPPED UNITS. During the
Transition Period, Alcon shall have the right to purchase from VISX VisionKey
Cards for use on the Units sold and shipped to Alcon on or prior to (***) and
set forth in Exhibit II hereto at the prices currently being charged to Alcon
by VISX. On and after the Effective Date, Alcon shall have the right to purchase
VisionKey Cards for use on such Units, as well as any Unit which Alcon provides
to its customers in exchange for a defective Unit (including without limitation
any Unit provided in exchange for a Unit which is not able to perform
hyperopia), at the following initial prices for each VisionKey Card: (a)
(***) for Units in use in (***) or (***) or sold from Alcon's existing inventory
for use in (***) or (***); (b) (***) for Units in use by Alcon end customers
(***); and (c) (***) for all other Units currently in use (***); PROVIDED
that the initial price for each VisionKey Card for use on (x) (***) and
(y) (***); PROVIDED FURTHER, HOWEVER, that clause (y) of the immediately
preceding proviso shall not apply to (1) (***) or (2) (***) VisionKey Cards
purchased by Alcon's end users for (***) shall include (***). On or after
each annual anniversary of the Effective Date, VISX shall have the right to
increase the prices for VisionKey Cards sold to Alcon; PROVIDED, HOWEVER, that
(***) such cost increases to be substantiated by VISX by providing Alcon with
written proof of such price increases by such manufacturer.
SECTION 2.09. SALES OF VISX STOCK BY ALCON. Alcon agrees that it will not
sell any of the 224,000 shares of Common Stock of VISX currently owned by Alcon
before January 24, 1996.
SECTION 2.10. USE OF INFORMATION FOR MARKETING BY ALCON. During the
Transition Period and after the Effective Date, Alcon shall have the right to
use any information obtained from purchasers and users of VISX Systems sold by
Alcon for the marketing and sale of any equipment or other products manufactured
by Alcon or any of its Affiliates or purchased by Alcon or any of its Affiliates
from third parties for resale; PROVIDED that Alcon shall not use any such
information which Alcon knows or has reason to believe to be confidential
proprietary information of VISX without the prior permission of VISX, such
permission by VISX not to be unreasonably withheld or delayed.
SECTION 2.11. NOTICE OF ADVERSE MEDICAL EVENTS. Alcon shall promptly
notify VISX of any material adverse medical events reported to Alcon which
relate to VISX Systems sold by Alcon. This Section 2.11 shall survive the
Effective Date. Alcon agrees to use commercially reasonable efforts to forward
to VISX on a monthly basis all copies of service reports regarding the VISX
Systems serviced by Alcon, coded with the problem and "work done" codes agreed
to with VISX.
ARTICLE III
SECTION 3.01. EFFECTIVENESS OF ARTICLE III. Except as provided in the last
sentence of Section 3.04, the provisions of this Article III shall only become
effective upon, and shall be conditioned upon the occurrence of, the Effective
Date.
SECTION 3.02. TERMINATION OF MARKETING AGREEMENTS. (a) Upon the Effective
Date, each of the Marketing Agreements shall terminate immediately and shall
have no remaining effect. Except as specifically provided in this Agreement,
termination of the Marketing Agreements pursuant hereto shall terminate all
rights and obligations of the Parties under the Marketing Agreements, including
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rights and obligations (including without limitation the license granted to VISX
by Alcon pursuant to Section 2.06 of the Second Agreement) that, under the terms
of the Marketing Agreements, would otherwise have survived their termination.
(b) Alcon hereby agrees, following the Effective Date, to sell Alcon
pharmaceutical products to VISX as priced to wholesalers, for (***) and
thereafter on a commercially reasonable basis.
SECTION 3.03. FRENCH AND JAPANESE REGISTRATIONS. Alcon or its Affiliates
shall promptly provide to VISX all pertinent data relating to the registration
of the VISX Systems in France and Japan (the "French Registrations" and
"Japanese Registrations", respectively). Such data shall include data with
respect to the status and the transferability of such registrations and the
out-of-pocket costs and expenses incurred by Alcon or its Affiliates in
connection with seeking such registrations. VISX shall have the option, by
providing written notice to Alcon or Alcon's Appropriate Affiliate no later than
60 days subsequent to the Effective Date, and upon payment to Alcon or its
Affiliates equal to all of Alcon's or its Affiliate's documented costs and
expenses relating thereto, to acquire Alcon's or its Affiliate's rights with
respect to either or both of the French Registrations and the Japanese
Registrations. Alcon shall cooperate fully with VISX in effecting such
transfers.
SECTION 3.04. UNITS SOLD IN CANADA. In consideration of the other terms of
this Agreement, APL and Alcon Canada shall have from VISX (***) relating to the
(***); PROVIDED, HOWEVER, that the (***). Prior to any sale of any Unit not a
Licensed Unit, which to Alcon's or any of its Affiliates' knowledge will be for
use in Canada, and prior to the subsequent sale of any such Unit, including
those listed on Exhibit III, by Alcon or any of its Affiliates to a party not
listed as a user of a Unit on Exhibit III hereto, Alcon or such Affiliate, as
applicable, shall (***).
SECTION 3.05. SERVICE OF UNITS SOLD BY ALCON. Alcon shall be responsible
for the servicing of all Units designated in Exhibit II hereto. Through (***),
VISX shall make available to Alcon parts, manuals, training and other
materials for the servicing of such Units at the same prices and on the same
terms as are available from VISX on the date of this Agreement. Subject to
Section 3.07, after (***), VISX shall make available to Alcon such parts,
manuals, training and other materials on a commercially reasonable basis.
SECTION 3.06. (***)
SECTION 3.07. NONDISCRIMINATION IN SALES OF VISX SYSTEMS. Alcon and any
customer of Alcon shall have the right to purchase VISX Systems, including
VisionKey Cards and any related parts, manuals or services from VISX on terms
that do not discriminate against Alcon or its customers in comparison to other
distributors and end users of VISX Systems similarly situated.
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SECTION 3.08. CANCELLATION OF ALI ADVANCE. In consideration of the other
terms of this Agreement, VISX shall not be obligated to repay the (***)
advanced to VISX by ALI under the Marketing Agreements and ALI shall not seek
any payment from VISX relating to such advance in consideration of the
settlement by VISX of any claims it may assert against ALI.
SECTION 3.09. PURCHASES OF VISX VOTING SECURITIES. During the period
commencing (***) and ending on (***), Alcon shall not purchase or otherwise
acquire any stock or other security issued by VISX that has the general power to
vote in the election of directors of VISX ("Voting Securities").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. VISX. VISX represents and warrants to Alcon that (a) the
execution and delivery by VISX of this Agreement and the performance of the
activities contemplated hereby are duly authorized by all necessary corporate
action on its part and do not contravene its Certificate of Incorporation or
By-laws or any agreement binding upon VISX or VISX's assets; and (b) VISX and
its Affiliates have no prior commitments or agreements with any third party that
might interfere with or preclude the full and complete discharge by VISX of its
obligations and undertakings pursuant to this Agreement.
SECTION 4.02. ALCON. Alcon represents and warrants to VISX that (a) the
execution and delivery by Alcon of this Agreement and the performance of the
activities contemplated hereby are duly authorized by all necessary corporate
action on its part and do not contravene its Certificate of Incorporation or
By-laws or any agreement binding upon Alcon or Alcon's assets; and (b) Alcon and
its Affiliates have no prior commitments or agreements with any third party that
might interfere with or preclude the full and complete discharge by Alcon of its
obligations and undertakings pursuant to this Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. TERMINATION. Either Party may elect to terminate this
Agreement if the Effective Date does not occur by February 28, 1996 by providing
written notice to the other Party.
SECTION 5.02. AMENDMENT. This Agreement may not be changed or modified
except as specifically and mutually agreed upon in writing and signed by all the
Parties.
SECTION 5.03. NOTICE. Any notice required hereunder may be served by any
Party on the others by personal delivery, or by sending same post-prepaid, by
registered or by certified mail, return receipt requested, to the following
addresses:
(a) If to Alcon:
Alcon Laboratories, Inc.
6201 South Freeway
Fort Worth, Texas 76134
Attn: E. H. Schollmaier
(b) If to VISX:
VISX, Incorporated
3400 Central Expressway
Santa Clara, California 95051-0703
Attn: Mark B. Logan
or to such other person or at such other place as any Party shall notify the
other Parties in writing.
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SECTION 5.04. WAIVER. The Parties covenant and agree that a waiver by any
Party of a breach of any of the terms of this Agreement by any other Party shall
not be deemed a waiver of any subsequent breach of the same or other terms of
this Agreement. No failure or delay in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder.
SECTION 5.05. SPECIFIC PERFORMANCE. The Parties agree that in the event of
a breach of any provision of this Agreement the aggrieved Party would suffer
irreparable harm and therefore would be without an adequate remedy at law. The
Parties therefore agree that in the event of a breach or threatened breach of
any provision of this Agreement, the aggrieved Party shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of such
provision without the requirement of posting a bond or other security. By
seeking or obtaining any such relief, the aggrieved Party will not be precluded
from seeking or obtaining any other relief to which it may be entitled.
SECTION 5.06. LITIGATION. If any Party institutes legal proceedings with
respect to this Agreement or the transactions contemplated hereby, the losing or
defaulting Party shall pay to the prevailing Party reasonable attorneys' fees,
costs and expenses incurred in connection with the prosecution or defense of
such action.
SECTION 5.07. CAPTIONS. The captions and section headings used in this
Agreement are for convenience only and are not intended to have, nor shall they
be interpreted as having, any substantive effect whatsoever.
SECTION 5.08. EXPENSES. Each of the parties hereto shall be deemed
responsible for all expenses incurred by it in connection with the execution and
performance of this Agreement except as otherwise provided for herein.
SECTION 5.09. GOVERNING LAW. This Agreement is made and entered into and
is to be performed in accordance with the laws of the State of Delaware and
shall be construed and enforced in accordance with the laws of the State of
Delaware, without regard to its principles of conflicts of laws.
SECTION 5.10. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect or limit the validity or
enforceability of any other provision hereof.
SECTION 5.11. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
including the Exhibits referred to herein (a) constitutes the entire agreement
and, subject to Section 2.01, supersedes all prior agreements and undertakings,
both written and oral, among the parties with respect to the subject matter
hereof, including the Marketing Agreements and the term sheet between the
Parties dated October 27, 1995, and (b) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
SECTION 5.12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute a single instrument.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their fully authorized officers as of the date first above written.
VISX, INCORPORATED,
by /s/ Elizabeth Davila
_________________________________
Elizabeth Davila
EXECUTIVE VICE PRESIDENT
AND CHIEF OPERATING OFFICER
ALCON LABORATORIES, INC.,
by /s/ C. Allen Baker
_________________________________
C. Allen Baker
EXECUTIVE VICE PRESIDENT,
SURGICAL
ALCON PHARMACEUTICALS, LTD.,
by /s/ Guido Koller
_________________________________
Guido Koller
GENERAL MANAGER/AREA CONTROLLER
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