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EXHIBIT 10.28
ISV-205 LICENSE AGREEMENT
This Agreement ("Agreement") is made this 28th day of May, 1996 by and
between InSite Vision Incorporated, a Delaware corporation, having offices at
965 Atlantic Avenue, Alameda, California 94501 ("InSite") and CIBA Vision
Ophthalmics, a division of CIBA Vision Corporation, a Delaware corporation,
having offices at 11460 Johns Creek Parkway, Duluth, Georgia 30155 ("CVO").
WHEREAS, InSite owns certain proprietary rights and know-how relating
to the manufacture, use and sale of the Compound and the Products (as defined
herein); and
WHEREAS, CVO desires to acquire and InSite is willing to grant to CVO
certain rights with respect to such proprietary rights and know-how under the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants and obligations
set forth herein, the parties agree as follows:
1. DEFINITIONS
The following terms as used in this Agreement shall have the meaning
set forth in this section.
1.1 "Affiliate" shall mean all corporations or business entities
which directly or indirectly are controlled by, control or are
under common control with CVO or InSite as the case may be.
1.2 "Agreement Period" shall mean the period commencing upon the
Effective Date and extending until the expiration or
termination of this Agreement pursuant to Section 17 hereof.
1.3 "Compound" shall mean the compound known as ISV-205, which is
diclofenac sodium suspended in InSite's DuraSite(R)polymer
vehicle covered by the claims of * * *, including all
continuations in part, divisionals, reissuances and the like
of the foregoing patent application. [* INDICATES THAT
MATERIAL HAS BEEN OMITTED AND CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED THEREFOR. ALL SUCH OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24b-2.]
1.4 "CVO Data" shall mean any toxological, pre-clinical, or
clinical data contained in CVO's IND or NDA for Voltaren
Ophthalmic(R) sterile ophthalmic solution which is not in the
public domain and which may not be used or referenced absent a
license from CVO.
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1.5 "DuraSite(R) means any polymer suspension drug delivery
vehicle which is covered by the claims of * * *, including all
continuations in part, divisionals, reissuances and the like
of the foregoing patent. [* INDICATES THAT MATERIAL HAS BEEN
OMITTED AND CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
THEREFOR. ALL SUCH OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION PURSUANT TO RULE 24b-2.]
1.6 "Effective Date" shall mean the date first above written.
1.7 "FDA" shall mean the United States Food and Drug
Administration or any successor entity thereto.
1.8 "FDCA" shall mean the United States Food, Drug and Cosmetic
Act and the regulations promulgated thereunder.
1.9 "Glaucoma Product" shall mean an ophthalmic formulation
containing the Compound which is indicated for the treatment
of glaucoma, or for lowering intraocular pressure or the
prevention of a rise in intraocular pressure after a steroid
challenge.
1.10 "IND" shall mean an Investigational New Drug Application as
defined in the FDCA.
1.11 "Know-How" shall mean all technology, formula, trade secrets,
technical data, pre-clinical and clinical data, toxicological
and pharmacological data and any other information or
experience owned, controlled or in the possession of or used
by Insite in the development, manufacture, use or sale of the
Compound, the Glaucoma Product, the SAC Product, or Other
Products (all as defined herein) as well as any improvements
or modifications to the know-how developed by, or by any third
party for, InSite during the Agreement Period.
1.12 "NDA" shall mean a New Drug Application as defined in the
FDCA.
1.13 "Net Sales" shall mean the amount invoiced by a party hereto,
its affiliates and sub-licensees to independent third parties
for the sale of the Products (as defined herein) less cash
discounts and/or quantity discounts actually allowed; credit
for customer returns and allowances; charges for freight,
handling and transportation which are separately billed to
such party and sales and use taxes and other similar taxes
incurred by such party. Net Sales shall not include the value
of product samples or clinical trial supplies.
1.14 "1984 Act" shall mean the United States Drug Price Competition
and Patent Term Restoration Ac USC Section 355, 35
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USC Section 155-156, 35 USC Section 271 and the regulations
promulgated thereunder.
1.15 "Novel Preservative" shall mean a new proprietary preservative
system developed by either party * * * [* INDICATES THAT
MATERIAL HAS BEEN OMITTED AND CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED THEREFOR. ALL SUCH OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24b-2.]
1.16 "Other Products" shall mean those products containing the
Compound, the primary indications for which are the treatment
of inflammation, pain, or photophobia (light sensitivity).
1.17 "Patent Rights" shall mean all of InSite's right, title and
interest in and to any patent or patent applications in the
Territory (as herein defined), any claim of which would cover
the Compound, the Products or their manufacture, use, sale,
offer for sale or import including, but not limited, to those
listed in Appendix A attached hereto, and any continuations,
continuations in part, divisions, re-examinations, re-issues
or extensions of any of the above described patents or patent
applications as of the date of this Agreement or arising
during the Agreement Period.
1.18 "Products" shall mean collectively the Glaucoma Product, the
SAC Product, and Other Products.
1.19 "SAC Product" shall mean an ophthalmic formulation containing
the Compound, the primary indication for which is the
treatment of seasonal allergic conjunctivitis, or other forms
of ocular allergies.
1.20 "Territory" shall mean the United States of America, including
its territories and possessions.
2. GRANT
2.1 InSite hereby grants to CVO during the Agreement Period an
exclusive license subject to all the terms and conditions of
this Agreement and to InSite's rights under Section 2.3
hereof, under the Patent Rights and with the right to
sub-license, to develop, make, have made, use and sell the SAC
Product and the Other Products in the Territory and to develop
and manufacture or have manufactured the SAC Product and Other
Products outside the Territory solely for sale and use within
the Territory and for no other purpose.
2.2 In addition to the rights granted in Section 2.1, and without
any limitation
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thereof, InSite hereby grants to CVO during the Agreement
Period an exclusive license subject to all the terms and
conditions of this Agreement and to Section 2.4 hereof with
the right to sub-license, to practice the Know-How in the
Territory and outside the Territory solely to develop and
manufacture or have manufactured the SAC Product and the Other
Products for use and sale in the Territory.
2.3 InSite hereby reserves for itself (i) all rights under the
Patent Rights or the Know-How to manufacture, have
manufactured, use and sell all products other than the SAC
Product and the Other Products in the Territory; and (ii) the
right, without the right to further license or sub-license,
under the Patent Rights and Know-How to manufacture, have
manufactured, use and sell the SAC Product and the Other
Products in the Territory. The rights of InSite reserved in
clause (ii) above of this Section 2.3 shall not in any way be
assigned or transferred to any third party; provided however
that such rights may be assigned without CVO's consent in a
merger, reorganization or sale of all or substantially all of
InSite's assets or a transaction whereby control of InSite
changes to InSite's successor in interest in such transaction;
provided further that, upon the occurrence of any such
transaction, if InSite is not then marketing such product,
then InSite or its successor in interest shall not have the
right to sell the SAC Product or Other Products in the
Territory until the end of 36 months following the date of the
CVO's first commercial sale of the applicable Product in the
Territory (or, if there has been no commercial sale of the
applicable Product in the Territory during the first year
following the date of any FDA or similar registration for sale
of such Product in such country in the Territory ("Product
Approval"), then 48 months after Product Approval).
2.4 In the event CVO elects not to commercialize the SAC Product
or Other Product, then upon ninety (90) days prior written
notice from InSite, the exclusive right and license granted to
CVO under Sections 2.1 and 2.2 with respect to such SAC
Product and/or Other Product shall terminate and shall revert
to InSite, provided that such rights shall not be assigned or
transferred to any third party, whether by way of license,
merger, reorganization or sale of all or substantially all of
InSite's assets, for a period of 24 months following CVO's
election not to pursue commercialization or to cease marketing
such Product. Following such 24 month period, Insite may
assign or transfer such rights without CVO's consent. In the
event that CVO has not (i) initiated clinical studies of at
least one SAC Product or Other Product within three (3) years
after the Effective Date; or (ii) filed for FDA approval for
such SAC Product or Other Product within four (4) years after
initiation of clinical trials of such product, or (iii)
commercialized such SAC Product or Other Product within one
(1) year after FDA approval therefor whether such approval was
obtained by CVO or by InSite (if InSite thereafter transferred
commercialization to CVO) and CVO is marketing a product
competitive with either the SAC
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Product or Other Product, then CVO's exclusive right and
license under Sections 2.1 and 2.2 with respect to such SAC
Product and/or Other Product shall immediately terminate and
revert to InSite, unless CVO can in good faith show that its
inability to meet the foregoing timelines was beyond its
reasonable control. CVO shall be deemed to have elected not to
commercialize the SAC Product or Other Product if CVO fails to
use such level of efforts, in accordance with CVO's business,
legal, medical and scientific judgment and CVO's normal
practices and procedures, to continue the development of the
SAC Product or Other Product pursuant to this Agreement
through pre-clinical and clinical studies and other
registration directed activities with the FDA or other
corresponding federal or state government agencies.
2.5 Unless this Agreement is terminated for cause by InSite under
Section 17.2 or by CVO under Section 17.3, at the end of the
Agreement Period, CVO shall have the unrestricted perpetual
right to practice the Know-How free of charge, to manufacture,
have manufactured and use such Agreement Product anywhere in
the world and to sell such Agreement Product in the Territory.
3. DEVELOPMENT
3.1 InSite shall use commercially reasonable efforts to conduct
the development work for the Products. It is understood by the
parties that the formulations of the SAC Product, the Other
Products and the Glaucoma Product may be identical, or there
may be different formulations for the different Products.
3.2 In the event InSite elects not to complete the initial
development of either the SAC Product or any of the Other
Products, CVO shall be entitled to proceed with the
development of such Product(s) as InSite has abandoned and
InSite will make available, subject to the terms of the
license granted in Section 2.2 above, to CVO at the time of
InSite's election, all of its Know-How relating only to the
development of the Product(s) that InSite elects not to
proceed with. CVO shall have the right to reference relevant
data in InSite submissions on the Glaucoma Product in order to
conduct the development of the SAC or Other Products. InSite
shall make such election within one year of the Effective
Date. InSite shall be deemed to have elected not to complete
development of the SAC Product or any of the Other Product if
InSite fails to use such level of efforts, in accordance with
InSite's business, legal, medical and scientific judgment and
InSite's normal practices and procedures, to continue the
development of such SAC Product or such Other Product pursuant
to this Agreement through pre-clinical and clinical studies
and other registration directed activities with the FDA or
other corresponding federal or state government agencies.
3.3 With respect to its submissions to the FDA for any of the
Products, InSite shall
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be entitled, but not obligated, to reference the CVO Data. In
Data. In the event InSite elects to reference CVO Data, CVO
will cooperate and provide any and all documentation necessary
to permit InSite to reference and include such data in its own
filings.
3.4 Each party will, upon request, make available to the other,
under a secrecy agreement, such know-how relating to such
party's Novel Preservative systems as shall be necessary to
allow the requesting party to incorporate such Novel
Preservative for use in the Products.
4. ROYALTIES
4.1 In consideration of the rights granted in Section 2 hereof,
CVO shall pay InSite the royalties set forth in this Section
4. In consideration of, and in the event InSite exercises, the
right to reference CVO Data set forth in Section 3.3 hereof,
InSite shall pay CVO the royalties set forth in this Section
4.
4.2 In the event InSite completes the development of the SAC
Product or Other Product using a different formulation than
the Glaucoma Product, and obtains approval for the NDA
therefor, CVO shall pay InSite a royalty * * * of CVO Net
Sales of the applicable Product until the later to occur (i)
ten (10) years after the date of first commercial sale of such
Product; or (ii) until the expiration of the last to expire
patent in the Patent Rights ("CVO Royalty Period").
Notwithstanding the foregoing, in the event InSite chooses to
reference the CVO Data in its regulatory filings, and InSite
obtains approval for an NDA for the SAC Product or Other
Product, CVO shall pay InSite a royalty * * * of CVO's Net
Sales of the applicable Product during the CVO Royalty Period.
[* INDICATES THAT MATERIAL HAS BEEN OMITTED AND CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED THEREFOR. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO RULE 24b-2.]
4.3 On the other hand, in the event InSite completes the
development of the SAC Product or Other Product and the
formulation for any such Product is sufficiently similar to
the formulation for the Glaucoma Product as to legally allow
prescription substitution of one product by the other, CVO
shall pay to InSite a royalty * * * of CVO's Net Sales of such
Product if InSite has referenced the CVO Data in obtaining
approval of the NDA therefor, or * * * of such Net Sales if
InSite has not referenced CVO Data in obtaining approval of
the NDA therefor. [* INDICATES THAT MATERIAL HAS BEEN OMITTED
AND CONFIDENTIAL TREATMENT HAS BEEN REQUESTED THEREFOR. ALL
SUCH OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO RULE 24b-2.]
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4.4 (a) In the event InSite elects not to complete the development
of the SAC Product or Other Product, and CVO completes
such development and obtains an approval for the NDA
therefor, and such Product has a different formulation
from and cannot be legally substituted for the Glaucoma
Product, CVO shall pay the following royalties depending
on the stage at which InSite has stopped development of
the applicable Product:
Prior to Commencement of Phase II *
Prior to Commencement of Phase III *
After Commencement of Phase III *
[* INDICATES THAT MATERIAL HAS BEEN OMITTED AND
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED THEREFOR. ALL
SUCH OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO RULE 24b-2.]
For purposes of this Agreement, "Phase II" and "Phase III"
shall have the meaning given them in the United Stated
Food and Drug Act and any rules or regulations promulgated
thereunder.
(b) Nothwithstanding the foregoing, if after InSite has
initiated but not completed Phase III, CVO completes the
development of the SAC Product or Other Product, and such
Product can be legally substituted for the Glaucoma
Product, then the royalty rate payable to CVO for such
Product shall be * * * spent by CVO in development costs
for such Product down to a minimum rate of * * * [*
INDICATES THAT MATERIAL HAS BEEN OMITTED AND CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED THEREFOR. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO RULE 24b-2.].
4.5 In the event InSite has referenced CVO Data in obtaining
approval of the NDA for the Glaucoma Product, whether or not
such Product is the same formulation as the SAC or Other
Products, InSite shall pay CVO a royalty of * * * InSite's Net
Sales of the Glaucoma Product until the expiration of the last
to expire of the patents covering Voltaren Ophthalmic. [*
INDICATES THAT MATERIAL HAS BEEN OMITTED AND CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED THEREFOR. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO RULE 24b-2.]
4.6 The royalties payable by CVO to InSite in Section 4.2, 4.3 and
4.4 hereof, shall
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be adjusted by adding an additional * * * of Net Sales to the
otherwise applicable royalty rate if the SAC Product or Other
Product is formulated with an InSite Novel Preservative. Such
royalties shall be reduced by * * * if the applicable Product
is formulated and developed with a CVO Novel Preservative, * *
* and by * * *, if formulated and developed with both a CVO
Novel Preservative and CVO's novel * * * replacement provided
these formulations are not covered by any patent issuing from
* * *. It is agreed and understood that the parties will have
to mutually agree on the best formulation for such product
with respect to preservative, based on the most desirable
product and the ability to expedite development of the
product. InSite shall pay to CVO a royalty of * * * of
InSite's Net Sales of the Glaucoma Product if InSite utilizes
CVO's Novel Preservative in the Glaucoma Product, * * * if the
Glaucoma Product utilizes CVO's novel * * * replacement and *
* * if the Glaucoma Product is formulated and developed with
both a CVO Novel Preservative and CVO's novel * * *
replacement, provided these formulations are not covered by
any patent issuing from * * *. Such additional royalties shall
be paid by InSite until the expiration of the last patent
covering such preservative. [* INDICATES THAT MATERIAL HAS
BEEN OMITTED AND CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
THEREFOR. ALL SUCH OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION PURSUANT TO RULE 24b-2.]
5. TIMING OF ROYALTY PAYMENTS; RECORDS
5.1 Within forty-five (45) days after the end of each calendar
quarter, CVO shall pay to InSite and InSite shall pay to CVO
the royalty payments due, if any, for that quarter in U.S.
dollars.
5.2 Together with each quarterly royalty payment, the party paying
the royalty shall submit to the other a written accounting
showing its computation of royalties due under this Agreement
for such quarter. Said accounting shall set forth gross sales,
Net Sales, and the total royalties due for the quarter in
question.
5.3 Each party shall keep full and accurate books and records
reflecting its sales of the Products and the data used in
arriving at Net Sales and the amount of royalties payable to
the other party hereunder for no less than one (1) year after
the end of each such quarter. Each party shall permit the
other, at the other party's expense, to have such books and
records examined by independent certified public accountants
retained by the other party and acceptable to such party,
during regular business hours upon reasonable advance notice,
but not later than one (1) year following the rendering of any
such reports, accounting and payments, and no more often than
one (1) time per year. Such independent accountants shall keep
confidential any information obtained
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during such examination and shall report to the party who
retained each accountant only the amounts of royalties which
the independent accountant believes to be due and payable
hereunder. If errors of ten percent (10%) or more in the
auditing party's favor are discovered as a result of such
examination, the audited party shall reimburse the auditing
party for the expense of such examination and pay the
deficiency immediately.
6. WARRANTIES
6.1 InSite warrants and represents that:
(a) it is the owner or licensee with the right of
sublicense of the Patent Rights and Know-How and has
the right to license said Patent Rights and Know-How
free of any lien or encumbrance in the Territory in
the manner set forth in this Agreement;
(b) it has not assigned or conveyed any interest in the
Patent Rights or Know-How which may be inconsistent
with the rights granted hereunder; and
(c) it is a corporation duly incorporated and in good
standing in its state of incorporation and has all
requisite power to enter into and perform this
Agreement. Upon execution by the parties hereto, this
Agreement shall constitute a valid and legally binding
obligation of InSite, enforceable in accordance with
its terms.
6.2 CVO warrants and represents that:
(a) it is the owner of the CVO Data and has the right to
grant a right of reference to such Data as set forth
herein.
(b) it is a corporation duly incorporated and in good
standing in its state of incorporation and has all
requisite power to enter into and perform this
Agreement. Upon execution by the parties hereto, this
Agreement shall constitute a valid and legally binding
obligation of CVO enforceable in accordance with its
terms.
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7. TRANSFER AND OWNERSHIP OF KNOW-HOW
7.1 As part of the license granted in Section 2.1 and 2.2,
and in order to enable CVO to develop, make, have
made, use and sell the SAC Product and the Other
Products, InSite shall either (i) make available to
CVO all Know-How related to the development of such
SAC Product or Other Products at the time that InSite
elects not to complete the development of such Product
and to turn the development of such Product over to
CVO, or (ii) make available to CVO all Know-How
related to marketing of such SAC Product or Other
Products at the time CVO launches such Product(s). All
Know-How related to the development and/or marketing
of the SAC Product or Other Products generated or
obtained by InSite during the Agreement Period shall
be made available to CVO within thirty (30) days of
its generation or receipt by InSite; provided,
however, InSite shall have no obligation to make
available any Know-How to CVO prior to InSite's
election not to complete development of the SAC
Product or one of the Other Products. All Know-How
provided to CVO shall be deemed confidential
information and shall be subject to the
confidentiality restrictions set forth in this
Agreement.
7.2 In the event CVO takes over the development of the SAC
or Other Products, InSite shall assign to CVO the IND
for such Product and the data contained therein, and
all pre-clinical data and regulatory submissions for
such Product, but InSite shall retain rights to use
any data contained in the IND for such Product and any
pre-clinical data and the right to access the same
subject to the terms of this Agreement. CVO shall own
all subsequent regulatory submissions for such
Product, including the NDA therefor and the data
contained therein, subject to InSite's rights to
access the same. InSite shall be authorized to
reference such submissions with respect to its other
products and in the event it wishes to manufacture or
market such Products pursuant to Section 2.3 hereof.
8. CONFIDENTIALITY
8.1 InSite and CVO shall keep any Know-How or business
information provided or made available by the other
party or its Affiliates hereunder confidential, and
neither InSite nor CVO shall, without the prior
written consent of the other party or its Affiliates,
as the case may be, use (except as expressly permitted
by this Agreement), or disclose to any third party,
any Know-How or business information provided or made
available by the other party or its Affiliates
hereunder; provided, however, that the foregoing shall
not apply to information which the party receiving
such information can establish by written
documentation to (i) have been publicly known at the
time of disclosure by the other party or its
Affiliates, as the case may be, (ii) have become
publicly known, without fault on its part, subsequent
to such disclosure, (iii) have been
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otherwise known by it from a source (other than the
other party or its agents or Affiliates), lawfully
having possession of and the right to disclose such
information, or (iv) have been developed by it or its
Affiliates independently of the disclosure by the
other party or its Affiliates without use of the other
party's Confidential Information.
The foregoing shall not preclude the disclosure of
information by InSite or CVO:
(a) to its legal representatives, Affiliates,
consultants, outside contractors and (if it
has the right to grant the license or
sublicense) its licensees and sublicensees,
under like written confidentiality obligations
on the part of the recipients, or
(b) to the extent required by law or regulation,
provided that, to the extent reasonably
possible, it shall give prompt written notice
of the proposed disclosure to the other party
or its Affiliates, as the case may be, to
allow the other party or its Affiliates, as
the case may be, an opportunity to object to
such requirement and, if applicable, assure
that confidential treatment will be accorded
to such information, or
(c) to the extent that such information is
reasonably required to be disclosed for the
purpose of securing necessary governmental
authorization for the clinical testing or
marketing of Products, or for the purpose of
conducting clinical testing or marketing of
Products, or of prosecuting or defending
litigation.
8.2 The terms of this Agreement shall not be disclosed by
either party to any third party (other than as
provided in Sub-sections 8.1(a), (b) and (c) or be
published unless both parties expressly agree
otherwise in writing. Furthermore, neither party shall
use the name of the other party or its Affiliates for
commercial purposes without their prior written
consent. However, all of the foregoing restrictions
shall not apply to the disclosure of information set
forth in the form of an agreed upon press release, if
any, which may be prepared in mutually agreeable
format and substance for release when this Agreement
becomes effective, or to disclosures required by law
or regulation including, without limitation, SEC
reporting requirements or FDA documentation relating
to Products.
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9. PATENTS
9.1 CVO acknowledges and agrees that the Regents of the
University of California (the "Regents") is solely
responsible for the prosecution and maintenance of the
Patent Rights in the Territory at InSite's expense.
InSite agrees that it will continue to meet its
reimbursement obligations to the Regents.
10. INFRINGEMENT OF PATENT RIGHTS
10.1 If either party shall become aware of any infringement
or threatened infringement of any Patent Rights,
including that contained in a notice provided under
the 1984 Act by a party filing an ANDA or Paper NDA
for any of the Products, then the party having such
knowledge shall give notice to the other within ten
(10) days of becoming aware of such infringement or
threatened infringement.
10.2 InSite shall have the right to take such action, as it
deems appropriate, whether by action, suit, proceeding
or otherwise, at its own expense to prevent or
eliminate, the infringement of Patent Rights by others
and to collect damages. CVO agrees to cooperate with
InSite in any reasonable manner including, but not
limited to, being named as a co-plaintiff in an action
brought by InSite. InSite agrees to pay all reasonable
out-of-pocket expenses (other than legal fees)
incurred by CVO at the request of Insite, in the
prosecution of any such action, suit or proceeding for
infringement. Except for an action brought by the
Regents, either alone or jointly with InSite, any
damages recovered by the party bringing the action for
patent infringement shall be used first to compensate
that party for its out-of-pocket expenses in the
prosecution of any such action, suit or proceeding for
infringement and any remaining damages recovered by
that party shall be apportioned between InSite and CVO
in proportion to the damage incurred by each party
determined in such action, suit or proceeding as a
result of the infringement.
10.3 In the event of any substantial and adverse
infringement (defined as having a material effect on
the sales or future sales of any of the Products), if
an action for patent infringement is not initiated by
InSite pursuant to Section 10.2 or by the Regents,
either alone or jointly with InSite, to prevent or
eliminate the infringement of Patent Rights within
ninety (90) days of receipt of notice of the
infringement or threatened infringement thereof (or
within thirty (30) days in the event such infringement
is by notice under the 1984 Act) then within said
ninety (90) days (or thirty (30) days, if applicable),
CVO may, at its option, give notice to InSite that
unless InSite undertakes such action, CVO shall
commence an action to terminate such infringement. If
InSite fails to take such action within said ninety
(90) days then CVO shall have the right to take such
action, at its own expense, as it deems appropriate
against any infringer of
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same. Such action by CVO may be undertaken in the name
of InSite, if necessary, and InSite agrees to
cooperate with CVO, and execute any necessary
documents relating to such action. In the event the
parties fail to bring such action to prevent or
eliminate the infringement of Patent Rights within one
hundred eighty (180) days of receipt of notice and
unless InSite believes, based upon an opinion of its
counsel, that the activity in question does not
infringe the Patent Rights, CVO's obligation to pay
patent royalties under Section 3 hereof shall be
abated, only with respect to the specific Products
claimed by the Patent Rights being infringed, until
such time as InSite shall obtain discontinuance of
such infringement.
At any time after commencement of any such
infringement action by CVO, InSite shall have the
right to become a party plaintiff in such action, and
InSite shall have the right to assume the prosecution,
conduct and control of such action at InSite's
expense. Any recoveries in an action commenced by CVO
shall be apportioned as specified by Section 10.2
11. THIRD PARTY RIGHTS
11.1 If either party shall become aware of any action, or
suit, or threat of action or suit, by a third party
alleging that the manufacture, use or sale of the SAC
Product or Other Product or the practice of Know-How
infringes a U.S. patent, or violates any other
proprietary rights in the Territory of any third
party, the party aware shall promptly notify the other
party of the same and fully disclose the basis
therefor.
11.2 InSite shall have the sole right at its own expense to
compromise or defend any such action or suit, or
threat of action or suit, on such basis and on such
terms as InSite may determine as appropriate in its
sole discretion, in its own name, or jointly in the
name of CVO and InSite as may be deemed necessary or
appropriate by InSite, and provided that CVO shall
have the right to participate at its own expense.
InSite shall keep CVO reasonably informed as to the
status of, and basis for, any such claim and shall
consult with CVO from time to time as to the defense
of such suit or action. CVO shall cooperate fully with
InSite in the defense of such suit or action,
including, without limitation, by making all relevant
papers and records available to InSite and by making
CVO's employees available for interviews and
depositions and InSite agrees to pay all reasonable
out-of-pocket expenses incurred by CVO at the request
of InSite. Notwithstanding the foregoing, neither
party shall have the right to settle any such claim
without the prior written consent of the other party,
which consent shall not be unreasonably withheld.
11.3 If, by the terms of any settlement approved by InSite,
which approval shall not be unreasonably withheld, or
if by a judgment, decree or decision of a court,
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tribunal or other authority of competent jurisdiction,
CVO is required to obtain a license from a third party
in order to develop, make, have made, use or sell SAC
Product or Other Products (hereinafter "Third Party
License") and to compensate or pay damages to such
third party and/or pay royalties under such license,
then any royalties payable under Section 4 of this
Agreement shall be reduced by (a) any damages paid or
payable by CVO to such other party and (b) the amount
of royalties payable to the third party on future
sales under such Third Party License, provided the
amount of the reduction in the aggregate shall not be
greater than one-half (1/2) of the royalties
previously and hereafter payable to InSite pursuant to
this Agreement.
The reduction of royalties shall not apply to any SAC
Product or Other Products at issue in such action or
suit, or threat of action or suit, to the extent the
infringement is the direct result of such Product's
being (i) made in whole or in part in accordance to
new specifications delivered after the date of this
Agreement; or (b) combined with other products or
processes. CVO will indemnify InSite and its officers,
directors, agents and employees from all damages,
settlements, attorneys' fees and expenses related to a
claim of infringement or misappropriation excluded
from CVO's right to reduce royalties by this sentence
and related to the sale of Products by CVO.
11.4 Nothing in this Section 11, or in Section 10, shall be
construed as a waiver or cure of any breach of any
warranties set forth in Section 6 or any release of
any claim by CVO as may be appropriate relating
thereto.
12. PRODUCT LIABILITY
12.1 CVO shall defend, indemnify and hold InSite harmless
from any product liability claims and from any product
liability damages arising from the manufacture, use,
sale or importation by CVO of the SAC Product or Other
Products in the Territory, provided that InSite
notifies CVO of any such claims within ten (10) days
of receipt thereof and reasonably cooperates with CVO
in defending against such claims. CVO shall have
complete control and over the defense and/or
disposition of any such claim.
12.2 InSite shall defend and hold CVO harmless from any
product liability claims and from any product
liability damages arising from the manufacture, use,
sale or importation by InSite of the Glaucoma Product,
SAC Product or Other Products, provided that CVO
notifies InSite of any such claims within ten (10)
days of receipt thereof and reasonably cooperates with
InSite in defending against such claims. InSite shall
have complete control over the defense and/or
disposition of any such claim.
13. PATENT TERM EXTENSION
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13.1 InSite shall use its reasonable efforts to cooperate
with the Regents in the filing of an application for
an extension of any United States patent falling
within the Patent Rights and to execute all documents
and take any action reasonably necessary in connection
therewith.
14. LIMITATION OF LIABILITY
EXCEPT AS OTHERWISE PROVIDED BELOW, NEITHER PARTY
SHALL BE RESPONSIBLE OR LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY:
(A) FOR ANY AMOUNTS IN EXCESS OF THE AGGREGATE
OF ROYALTIES PAID TO IT, OR
(B) FOR ANY MATTER BEYOND ITS REASONABLE
CONTROL.
THE LIMITATIONS IN THIS SECTION 14 SHALL NOT APPLY TO
CLAIMS OF INDEMNIFICATION UNDER SECTION 12 HEREOF OR
TO ACTIONS OF CVO BEYOND THE SCOPE OF THE LICENSE
GRANTED HEREUNDER.
15. TRADEMARKS
CVO shall market the SAC Product and the Other Products under a
trademark owned by CVO which shall be different than the trademark
under which InSite markets the Glaucoma Product.
16. NOTICES
All notices required or permitted hereunder shall be given in
writing and sent by facsimile transmission, or mailed postage
prepaid by first class certified or registered mail, or sent by a
nationally recognized express courier service, or hand delivered at
the following addresses:
CIBA Vision Ophthalmics
11460 Johns Creek Parkway
Duluth, Georgia 30155-1518
Attn: President
InSite Vision Incorporated
965 Atlantic Avenue
Alameda, California 94501
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Attn: Chief Executive Officer
Any notice, if mailed properly addressed, postage prepaid,
shall be deemed made three (3) days after the date of mailing
as indicated on the certified or registered mail receipt, or
on the next business day if sent by express courier service or
on the date of delivery or transmission if hand delivered or
sent by facsimile transmission.
17. TERM AND TERMINATION
17.1 The term of this Agreement shall begin as of the date
hereof and shall remain in effect until the expiration
of the last to expire patent among those patents
referred to in Section 4 hereof unless earlier
terminated as permitted hereunder.
17.2 In the event of a breach or default of this Agreement
by either party which is not cured within ninety (90)
days after the receipt of notice thereof from the
other party, the party not in breach or default shall
be entitled (without prejudice to any of its other
rights) to terminate this Agreement by giving notice
to take effect immediately.
17.3 CVO may terminate this Agreement and the licenses
granted hereunder at any time, without cause, at which
time CVO, and its Affiliates and sublicensees, as
applicable, shall return to InSite all documented or
written Know-How previously provided to CVO by InSite
pursuant to Section 7 of this Agreement.
17.4 The termination of this Agreement shall not release
either party from any obligation (including, without
limitation, payment) which matured prior to the
effective date of the termination.
17.5 The obligations set forth in Sections 8 and 12 shall
survive the termination or expiration of this
Agreement.
18. FORCE MAJEURE
18.1 Neither party shall be responsible or liable to the
other hereunder for failure or delay in performance
(except obligations to pay) of this Agreement due to
any war, fire, accident or other casualty, or any
labor disturbance or act of God or the public enemy,
or any other contingency beyond such party's
reasonable control. In addition, in the event of the
applicability of this Section , the party affected by
such force majeure shall use reasonable efforts,
consistent with good business judgment, to eliminate,
cure and overcome any of such causes and resume
performance of its obligations.
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19. ASSIGNMENT
19.1 This Agreement and all rights and obligations
hereunder are personal to the parties hereto and, may
not be assigned, except pursuant to Sections 2.3 and
2.4 hereof, without the express prior written consent
of the other. Notwithstanding the foregoing, either
party may assign this Agreement to an entity
controlled by, or under common control with or
representing a successor in interest without a change
in control of the original party. Any assignment or
attempt at same in the absence of such prior written
consent shall be void and without effect.
20. GOVERNING LAW
20.1 This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York
without regard to conflicts of laws provisions
thereof.
21. SEVERABILITY
21.1 If any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable,
the validity, legality or enforceability of the
remaining provisions hereof shall not in any way be
affected or impaired thereby. In the event any
provision shall be held invalid, illegal or
unenforceable, the parties shall use best efforts to
substitute a valid, legal and enforceable provision
which, insofar as possible, implements the purposes
hereof.
22. NO WAIVER
22.1 The failure of any party hereto at any time or times
to require performance of any provisions hereof shall
in no manner affect its rights to enforce such
provision at a later time.
23. ENTIRE AGREEMENT
23.1 This Agreement constitutes the entire understanding
between the parties relating to the subject matter
thereof, and no amendment or modification to this
Agreement shall be valid or binding upon the parties
unless made in writing and signed by the
representatives of such parties.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
CIBA VISION OPHTHALMICS
a Division of CIBA Vision Corporation
By: /s/ STEPHEN M. MARTIN
--------------------------------------
Name: Stephen M. Martin
Title: President
INSITE VISION INCORPORATED
By: /s/ S.K. CHANDRASEKARAN
-------------------------------------
Name: S. Kumar Chandrasekaran
Title: CEO
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APPENDIX A
Filed/Issued/
INSITE LICENSED PATENTS Patent/Application Date Allowed
J. ROBINSON, BIOADHESIVE 4,615,697 P 10/07/86 I
COMPOSITIONS
AND TREATMENT THEREWITH 4,983,392 P 01/08/91 I
5,225,196 P 07/06/93 I
INSITE PATENTS
OPHTHALMIC SUSPENSIONS 5,192,535 P 03/09/93 I
* * * * *
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