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Exhibit 10.32
TIMOLOL DEVELOPMENT AGREEMENT
This Timolol Development Agreement (this "Agreement") is entered into
as of July 18, 1996 (the "Effective Date") by and between InSite Vision
Incorporated ("InSite"), a Delaware corporation, with its principal place of
business at 965 Atlantic Avenue, Alameda, California, and Bausch & Lomb
Pharmaceuticals, Inc. ("B&L"), a Delaware corporation, having offices at 8500
Hidden River Parkway, Tampa, Florida 33637.
WHEREAS, B&L and InSite desire to develop, produce and commercialize a
DuraSite formulation of Timolol (as such terms are defined below);
NOW THEREFORE, the parties agree as follows:
A. Definitions.
1. "Affiliate" shall mean all corporations or business entities
which directly or indirectly are controlled by, control or are under common
control with B&L or InSite, as the case may be.
2. "Allowable Development Costs" shall mean the following (as
determined in accordance with generally accepted accounting principles): (i) all
verifiable out-of-pocket costs directly incurred by InSite or B&L in connection
with the Collaborative Project and budgeted prior to being incurred by the Joint
Development Committee or, if not budgeted, agreed to by the Joint Development
Committee or the party that did not incur the cost (which agreement shall not be
unreasonably withheld); (ii) fixed and variable overhead costs, including costs
incurred for personnel, facilities, supplies and materials ("Labor Costs"),
which shall be reimbursed at the hourly rates set forth on Schedule A.2 hereto;
(iii) Manufacturing Costs, as hereinafter defined; and (iv) Regulatory Costs, as
hereinafter defined. Allowable Development Costs shall not include expenses
relating to corporate management and administration, sales, marketing, and
business development.
3. "Clinical Candidate" shall mean the prototypes developed by
InSite for the Timolol Product following acceptance of the Preclinical Models
for such product in accordance with Section B.6 below.
4. "Collaborative Project" means the joint research and development
collaboration of the parties described in Section B below and in the annual
workplans prepared by the Joint Development Committee.
5. "Commercially Launched" shall mean the initiation of sales of a
Timolol Product in a given country.
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6. The "Effective Date" shall mean the date this Agreement is
executed by the parties as set forth above.
7. "FDA" shall mean the United States Food and Drug Administration
or such other agency or instrumentality of the United States to which the
responsibilities and authority of the FDA are given or delegated from time to
time.
8. "IND" shall mean an Investigational New Drug Application filed
with the FDA, or an equivalent application filed with any foreign regulatory
authority.
9. "Joint Development Committee" means the committee comprised of
three (3) InSite representatives and three (3) B&L representatives appointed by
such respective party to design, direct, monitor and coordinate the research and
development activities with respect to the Timolol Product under the
Collaborative Project, and carry out such other duties as the parties shall
agree in writing from time to time.
10. "Know-How" shall mean all technology, formula, trade secrets,
practices, processes, chemicals, inventions, methods, data, skill, experience,
technology, test data, including but not limited to clinical and non-clinical
data, biological data, chemical data, pharmacological data, toxicological data,
assay data, control and manufacturing data, special ability and information,
including but not limited to improvements thereof, in each case relating to the
Timolol Product (and no other products or research and development).
11. "Major Markets" shall mean France, Germany, Italy, Spain, United
Kingdom, China India, Japan, South Korea, Taiwan, Canada and Mexico.
12. "Market Research" shall mean market research to determine, among
other things, market size, Timolol Product requirements and other appropriate
market data.
13. "Manufacturing Costs" shall mean B&L's standard cost of
manufacturing the Timolol Product, which shall include direct labor, direct and
variable materials (including scrap), freight, variable overhead and an
allocation of fixed overhead, yield losses which do not exceed a mutually agreed
to percentage of the quantity of Timolol Product manufactured by B&L; all
determined in accordance with generally accepted accounting principles applied
consistently and in accordance with existing and demonstrable B&L practices; but
provided that, in determining such allocation, B&L shall use the lowest and most
favorable method of allocation used by B&L for any product manufactured by B&L
at its facility in Tampa, Florida (in volumes similar to the quantity of Timolol
Product manufactured by B&L for InSite) exclusively for sale to, and
distribution by, an unrelated third party.
14. "NDA" shall mean a New Drug Application with the FDA or
equivalent foreign regulatory filing, as applicable.
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15. "Net Sales" shall mean the amount invoiced by B&L, its
Affiliates and sublicensees to independent third parties for the sale of the
Timolol Product, less cash discounts and/or quantity discounts allowed;
chargebacks, Medicaid rebates and rebates made or taken in amounts customary in
the industry; credit for customer returns and allowances; charges for freight
handling and transportation as well as freight insurance which are separately
billed to B&L, and sales and use taxes and other similar taxes incurred by B&L
all as determined in accordance with B&L's standard accounting practices. Net
Sales shall not include product samples or clinical trial supplies.
16. "Patents" shall mean all of InSite's right, title and interest
in and to any worldwide patents or patent applications, any claim of which would
cover DuraSite(R) or its manufacture or use which are owned by or licensed to
InSite as of the Effective Date, as set forth on Exhibit A hereto, and any
continuations, continuations in part, divisions, re-examinations, re-issues or
extensions of any of the above described patents or patent applications.
17. A "Preclinical Model" shall mean the initial prototype developed
by InSite for the Timolol Product to determine the feasibility of the Product
Specifications as more particularly described in Section B.4.
18. "Pricing Approval" shall mean the determination of an allowable
resale price for the Timolol Product by the applicable governmental authority in
any country or situation in which commercial sales of such product are not
permitted until such Pricing Approval has been obtained.
19. "Product Specifications" shall mean the specifications developed
by the Joint Development Committee and agreed to by B&L and InSite for the
Timolol Product (which agreement shall not be unreasonably withheld) including,
but not limited to, a Target Performance and Characteristics Profile specifying
(i) the designated active ingredient, (ii) release characteristics, (iii)
duration of action, (iv) an expiration date for each batch, and (v) such other
or replacement specifications as the parties shall mutually agree from time to
time.
20. "Proprietary Information" shall mean all Know-How and all
technical and financial information (including forecasts) disclosed by one party
hereunder to the other. Such Proprietary Information shall be deemed the
confidential property of the disclosing party.
21. "Regulatory Approval" shall mean the receipt of all governmental
or regulatory approvals required, if any, for the sale of the Timolol Product in
a given country or jurisdiction in the Territory.
22. "Regulatory Costs" shall mean (i) reasonable out-of-pocket costs
incurred in connection with obtaining Regulatory Approval of the Timolol
Product, or as a result of inspections by regulatory agencies or compliance with
applicable regulations prior to obtaining approvals (collectively, "Regulatory
Compliance Costs"), and shall include the cost of any Phase
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IV clinical studies required as a condition to approval or, in the reasonable
judgment of the Joint Development Committee necessary in order to commercially
exploit the Timolol Product, and (ii) an allocation of direct regulatory labor
costs (based on actual hours spent in connection with obtaining Regulatory
Approvals), all using a labor rate as set forth on Schedule A.2 attached hereto.
23. "Royalty Period" shall be determined on a country-by-country
basis and shall mean that period beginning on the date of first commercial sale
of the Timolol Product by B&L in any country and ending upon the later of the
expiration of all Patents in such country or * * * from the first commercial
sale of the Timolol Product in such country. [* 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.]
24. "Secondary Royalty Period" shall be determined on a country-by
country basis and shall mean that period beginning on the date the Royalty
Period for such country expires and ending upon the expiration of this
Agreement, including any extension thereof.
25. "Territory" shall mean anywhere in the world.
26. "Timolol" shall mean an ophthalmic formulation containing
timolol maleate as the active ingredient, along with such other active
ingredients, if any, as shall be developed by the parties during the term of the
Collaborative Project.
27. "Timolol Product" shall mean an ophthalmic formulation
containing Timolol in the DuraSite polymer suspension vehicle.
B. Product Development.
1. Joint Development Committee.
a. Appointment; Duties. InSite and B&L shall each promptly
appoint its representatives to the Joint Development Committee. Each of InSite
and B&L shall delegate the powers and authority to the Joint Development
Committee that each party deems desirable to allow the Joint Development
Committee to effectively coordinate and communicate the research and the
preclinical, clinical development efforts through Phase IV clinical trials and
the precommercialization pursuit of Regulatory Approvals under the Collaborative
Project; provided, that such Committee shall not have the power to enter into
contracts or otherwise bind either of the parties. Without limitation, the Joint
Development Committee shall be responsible for (i) establishing the Product
Specifications; (ii) coordinating the research and development activities with
respect to the Collaborative Project; (iii) preparing annual workplans for the
implementation of the Collaborative Project; (iv) preparing annual budgets for
the Collaborative Project in accordance with such workplans; (v) establishing,
at least quarterly, a budget for the
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Collaborative Project; (vi) monitoring performance under the Collaborative
Project in relation to the annual workplans and expenditures in relation to the
corresponding budgets; (vii) determining the appropriate course of action if so
requested by either party pursuant to Section B.4 or 5; (viii) appointing the
party or parties to conduct the clinical development and testing of the Timolol
Product and the filing any IND therefor in the Territory; (ix) the determination
of which party or parties shall perform any task required under the
Collaborative Project not otherwise assigned hereunder; and (x) reviewing and
approving all Reconciliation Payments and other payments made pursuant to
Section C(1) below. Notwithstanding the fact that either B&L or InSite has been
specifically directed hereby to perform any act or control any activity in
connection with the Collaborative Project, the Joint Development Committee shall
have the right to review and comment on all acts and activities. Each party may
change any of its representatives at any time and from time to time by written
notice to the other party prior to appointing a new representative to the Joint
Development Committee. Any vacancy on the Joint Development Committee caused by
death, resignation, disability or otherwise shall be filled within thirty (30)
days following the occurrence of such vacancy.
b. Meetings of the Joint Development Committee. The Joint
Development Committee shall meet, during the term of this Agreement, at least
every three (3) months beginning as soon as possible after the Effective Date of
this Agreement, and thereafter upon request by either party, at sites which
shall be designated by each party's committee members in alternating sequence.
Meetings are expected to be held either at the offices of InSite or B&L or at
some other mutually agreeable site. Each party shall pay its own costs in
attending meetings of the Joint Development Committee. Executive officers from
InSite or B&L may attend such meetings at their discretion.
Once each year during the term of this Agreement, the Joint
Development Committee will conduct an annual review of the progress of the
Collaborative Project, will review and approve the projected, estimated
development plans, workplans and budgets for the next four (4) quarters and
objectives for the Collaborative Project for the following year, and will take
such mutually agreeable actions as may be reasonable to facilitate the
commercial success of the Collaborative Project.
c. Procedure. A hosting party shall designate a member to act as
Chairman of each Joint Development Committee meeting. Each such Chairman shall
be responsible for developing an agenda for the meeting to be chaired by him or
her and shall distribute such agenda no later than fourteen (14) days prior to
the scheduled meeting. The Chairman shall promptly, after each meeting, prepare
and distribute to the members minutes reflecting the discussions of the Joint
Development Committee.
d. Dispute Resolution. In the event that the Joint Development
Committee is unable to resolve any disagreement, either party shall use its best
efforts to resolve the dispute amicably based upon the efficient achievement of
the objectives of the Collaborative Project, and shall, prior to proceeding with
any dispute resolution mechanisms, conduct a
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meeting of the President of B&L and the Chief Executive Officer of InSite to
attempt in good faith to resolve such dispute.
2. Joint Obligations.
a. Prioritization of Efforts; All Work Performed Through
Collaborative Project. InSite and B&L mutually agree that during the term of
this Agreement, each (i) shall use its commercially reasonable efforts to carry
out its responsibilities under the Collaborative Project; (ii) shall accord the
Collaborative Project at least as high a priority as its other past and present
research programs at similar stages with similar technical and commercial
potential; and (iii) shall cooperate with each other in the Collaborative
Project for the development of the Timolol Product. All work performed by either
party to formulate, develop and test (preclinically and clinically), obtain
Regulatory Approval and Pricing Approval, market and sell the Timolol Product
shall be performed through and shall be deemed to have been performed through
the Collaborative Project.
b. Exchange of Technical Information During Research Period. During
the term of this Agreement, InSite and B&L shall each (i) inform the Joint
Development Committee, to the extent they have not already done so, of such
information as is necessary or useful for the Joint Development Committee to
carry out its obligations under this Agreement ("Technical Information"); to
monitor the other party's progress; and to permit access at reasonable times and
with reasonable frequency to the relevant scientific, manufacturing,
preclinical, clinical, regulatory and other appropriate personnel of the other
party to accomplish such information exchange. Each party shall, at least at
each meeting of the Development Committee, (i) provide the other party with a
progress report on its efforts and results on the Collaborative Project and (ii)
inform the other party of any Technical Information obtained by them to the
extent and at the time required by this Section C.1.b.
3. Development of Timolol Product. InSite shall be responsible for,
subject to the oversight and ultimate control of the Joint Development
Committee, all activities regarding the preclinical development of the Timolol
Product, including without limitation, all formulation work, preclinical testing
and the manufacture of preclinical lots. B&L shall be responsible for, subject
to the oversight and ultimate control of the Joint Development Committee, all
activities regarding the application for Regulatory Approval and Pricing
Approval, the manufacture of clinical lots and commercial quantities and
commercialization of, the Timolol Product, including all process/validation
activities (e.g., the manufacture and validation of stability batches) required
in order to manufacture the Timolol Product pursuant to the approved NDA. The
clinical development and testing of the Timolol Product, including without
limitation, the preparation and submission of any IND in the Territory, shall be
controlled by the party or parties designated by the Joint Development
Committee. If the parties mutually agree, InSite and B&L shall, in mutual
cooperation with one another, establish a development plan for the Timolol
Product with respect to the development and regulatory approval of such product
on a worldwide basis (the "Development Plan"). In the event that both parties
are unable to agree on the Development Plan, B&L's President and InSite's Chief
Executive Officer shall meet within
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ten (10) days to jointly determine the appropriate action. The parties shall use
their diligent efforts, through the Joint Development Committee, to coordinate
their respective development plans and to create and maintain a single worldwide
safety database and shall share the results of each party's respective clinical
trials in order to facilitate such development by both parties, including, when
feasible, elimination of duplicative development efforts. Each party shall
immediately inform the other at such time as it receives notice of any
governmental or regulatory approvals and disapprovals for the Timolol Product.
4. Development of Preclinical Model. If the Joint Development
Committee determines that a Preclinical Model is required, InSite shall use its
reasonable efforts consistent with the effort that would be expended by a
similarly situated company in light of the existing business opportunity, to
design and develop a Preclinical Model for the Timolol Product in conformance
with the Product Specifications therefor and the Joint Development Committee's
annual workplans submitted hereunder. If required, the parties will work closely
together in the development of the Preclinical Model and InSite shall use its
reasonable efforts, consistent with the effort that would be expended by a
similarly situated company in light of the existing business opportunity, to
complete such Preclinical Model. In the event that InSite is unable to complete
the Preclinical Model within * * * of the Effective Date, the Joint Development
Committee shall meet within ten (10) days of such date and in good faith discuss
the most appropriate means of proceeding. In the event the Joint Development
Committee cannot agree upon the appropriate means of proceeding within ten (10)
days of commencing such discussions, either party may request that InSite's
Chief Executive Officer and B&L's President determine the appropriate action by
mutual agreement. If such officers are unable come to an agreement within ten
(10) days, InSite may terminate this Agreement upon ten (10) days written
notice. Upon such termination, all rights to the Timolol Product and DuraSite,
including without limitation, all rights to the Patents and Know-How, shall
revert to Insite * * *. [* 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. Acceptance of Preclinical Model. Upon completion of the
Preclinical Model, InSite will submit the Preclinical Model to B&L for its
evaluation. B&L shall have up to three (3) months from the date of submission of
the Preclinical Model to determine whether (a) to approve the Preclinical Model
as a Clinical Candidate; or (b) it desires InSite to further develop and
resubmit the Preclinical Model. In the event that B&L indicates that it desires
InSite to further develop and resubmit the Preclinical Model, the Joint
Development Committee shall meet within ten (10) days of such date and in good
faith discuss the most appropriate means of proceeding. In the event the Joint
Development Committee cannot agree upon the appropriate means of proceeding
within ten (10) days of commencing such discussions, either party may request
that InSite's Chief Executive Officer and B&L's President resolve the matter by
mutual agreement. If such officers are unable to resolve the matter within ten
(10) days, either party may terminate this Agreement upon ten (10) days written
notice. Upon such termination, all rights to Timolol, the Timolol Product and
DuraSite, including without limitation, all rights to the Patents and Know-How,
shall revert to Insite, * * * . B&L will periodically, and in no
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event less than monthly, provide InSite with a summary of all of the test data
and other information collected during such evaluation process. [* 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.]
6. Commercial Development. Upon B&L's acceptance of the
Preclinical Model as the Clinical Candidate, B&L will use its reasonable efforts
consistent with the effort that would be expended by a similarly situated
company in light of the existing business opportunity, to proceed with (i)
completing, or arranging for the conduct and completion of, any clinical trials
required to be conducted in order to obtain approval of the NDA, including, but
not limited to, conducting all statistical analysis and preparation of any
registration summary documents required by any regulatory authority in each
country of the Territory requiring such an application as directed by the Joint
Development Committee, (ii) obtaining all Regulatory Approvals and Pricing
Approvals in the Territory as directed by the Joint Development Committee, and
(iii) following FDA approval of the NDA, manufacturing, commercialization,
marketing and sale of the Timolol Product in the Territory, and (iv) subject to
the terms and conditions of this Agreement, B&L shall use reasonable efforts to
from time to time perform Market Research deemed by B&L in its reasonable
discretion to be necessary or appropriate relating to the Timolol Product, or as
otherwise agreed and directed by the Joint Development Committee. To the extent
B&L undertakes Market Research, B&L will periodically, and in no event more than
sixty (60) days after receipt of Market Research, provide InSite with a summary
of all of the data and information collected through the Market Research, until
filings for Regulatory Approvals in the country subject to the Market Research
is made.
B&L shall promptly submit copies of all documentation related
to each application and registration (including regulatory approvals) for review
by InSite. The clinical development and testing of the Timolol Product,
including without limitation, the preparation and submission of any IND in the
Territory, shall be performed by the party or parties, and in the manner,
designated by the Joint Development Committee. B&L and InSite shall each
exercise reasonable efforts and diligence in conducting all activities with
respect to the Timolol Product in accordance with each party's business, legal,
medical and scientific judgment and normal practices and procedures for products
with similar technical and commercial potential.
7. Loss of Exclusive License in Major Markets. In the event
that B&L elects not to file applications for Regulatory Approval or Pricing
Approval for the Timolol Product in any Major Market within six (6) months of
the date the Timolol Product NDA is approved by the FDA, or fails to use
reasonable efforts to cause any such applications to be approved by the
necessary regulatory authorities, or fails to maintain such approvals, upon
thirty (30) days advanced written notice by InSite, the license granted by
InSite to B&L in Section D below shall no longer be exclusive in any country in
such Major Market. In such event, the royalty paid by B&L on sales of the
Timolol Product in countries within the Major Market for which the license is no
longer exclusive shall continue to be calculated in accordance with Section D
below; provided, however, * * *. [* INDICATES THAT MATERIAL HAS BEEN
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OMITTED AND CONFIDENTIAL TREATMENT HAS BEEN REQUESTED THEREFOR. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24b-2.]
8. Use of and Access to Clinicals. Notwithstanding anything
else in this Agreement, InSite, may, at its option, at any time, obtain full
rights to use all documentation, approvals, information and data (including, but
not limited to, Market Research Summaries which shall be provided solely to the
Joint Development Committee until such time as the filing for Regulatory
Approval in the relevant country has been made) developed by B&L relating to the
Timolol Product and InSite shall have the right to fully use and cross reference
all submissions, approvals, information and data (collectively, the "Clinical
Materials").
9. Marketing Obligations. B&L, for itself and its Affiliates,
agrees:
a. unless otherwise requested by InSite and to the extent
practicable, to place on the outside of the Timolol Product packaging and on
promotional materials (in readable, non-obscured type that is of reasonable size
in light of the other names and notices thereon) the DuraSite mark or logo
designated by InSite, and any patent numbers or notices of InSite Patents which
cover the Timolol Product sold by B&L.
b. to use its reasonable efforts to diligently market,
sell, distribute and support the Timolol Product and to comply with good
business practices and all laws and regulations relevant to the regulatory
authorities in each country where the Timolol Product is sold, and to conduct
its business in a manner which favorably reflects upon the Timolol Product, B&L
and InSite.
c. to keep InSite informed as to any material problems
encountered with the Timolol Product and any resolutions arrived at for those
problems, and to communicate promptly to InSite any and all significant (in the
reasonable, good faith judgment of B&L) modifications, design changes or
improvements of the Timolol Product suggested by any customer, employee or
agent.
d. to maintain and provide InSite with such sales and other
information customarily maintained by B&L for purposes of monitoring sales
progress on a country-by-country basis.
e. to comply with all export laws and restrictions and
regulations of the Department of Commerce or other United States or foreign
agency or authority, including any laws or regulations relating to the export or
reexport of any Proprietary Information or Timolol Product or any direct product
thereof in violation of any such restrictions, laws or regulations, or, without
obtaining all necessary approvals and authorizations, to Afghanistan, the
People's Republic of China or any Group Q, S, W, Y or Z country specified in the
then current Supplement No. 1 to Section 770 of the U.S. Export Administration
Regulations (or any successor supplement or regulations).
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f. to immediately notify InSite of any adverse or
unexpected reaction or results or any actual or potential government action
relevant to the Timolol Product.
g. to keep for the greater of thirty-six (36) months after
termination of this Agreement or the maximum period required by applicable law,
records of all Timolol Product sales and customers sufficient to adequately
administer a recall of the Timolol Product and to fully cooperate in any
decision to recall, retrieve and/or replace such Timolol Product.
C. Payment of Allowable Development Costs.
1. Responsibilities and Procedures. Except as otherwise provided
elsewhere in this Agreement, B&L and InSite shall bear equally all Allowable
Development Costs. Not later than the beginning of each quarter, the Joint
Development Committee shall establish a workplan and budget which shall allocate
the tasks to be performed and the projected costs to be incurred by each of the
parties during the next quarter. Each budget shall be prepared, and the
expenditures necessary to carry out the tasks to be performed shall be
estimated; provided that a budget and the estimated expenditures shall in no
event include any costs other than Allowable Development Costs. Each party shall
keep complete and accurate records (in accordance with generally accepted
accounting principles) reflecting all information necessary or useful in
determining its Allowable Development Costs incurred in each month and shall
submit a report detailing such expenses to the other party within twenty (20)
days of the end of each month (the "Report"). Within ten (10) days of the date
each Report is submitted, the party with the lower actual Allowable Development
Costs for the preceding month shall make a payment to the other in an amount
equal to * * *, InSite's Chief Executive Officer and B&L's President shall meet
to determine whether to continue the Collaborative Project, and if so, to
negotiate the terms of such continuation. Within twenty (20) days of the
termination of this Agreement for any reason, the parties shall each submit to
the other a Report setting forth such party's Allowable Development Costs
incurred since the end of the period to which the last Reconciliation Payment
pertained. Notwithstanding anything contained herein to the contrary, neither
party shall be required to reimburse the other for in excess of * * *. Neither
party shall incur costs under Section A.2(i) other than pursuant to its
customary and past practices throughout the term of this Agreement. Within ten
(10) days of the date such final Reports are submitted, * * * for such period
shall make a Reconciliation Payment to the other. [* 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.]
2. Payment Terms. All payments required under this Section C shall
be made in United States dollars via wire transfer of same day funds to such
account as shall be designated by the receiving party not later than five (5)
days prior to the date such payment is due.
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3. Records and Audit Rights. Each party shall have the right to hire
an independent certified public accountant to inspect all the above required
records (who shall agree in writing to keep all information confidential except
as needed to disclose any discovered discrepancies); provided, such audit: (i)
is conducted during normal business hours, (ii) is conducted no more often than
twice per year (unless a discrepancy is discovered in favor of the auditing
party), and (iii) is conducted only after the audited party has been given
thirty (30) days prior notice. The auditing party shall bear the full cost and
expense of such audit, unless a discrepancy in excess of ten percent (10%) in
favor of the auditing party is discovered, in which event the audited party
shall bear the full cost and expense of such audit. Regardless of the amount of
discrepancy discovered, all discrepancies (and interest thereon) shall be
immediately due and payable.
D. License and Marketing Obligations.
1. Exclusive License. Subject to the terms and conditions of this
Agreement and during the term hereof, InSite hereby grants B&L an exclusive
product license or sublicense under the Patents and unpatented Know-How to
manufacture, have manufactured, use, import, sell and sublicense the Timolol
Product in the Territory.
2. Right to Sublicense. B&L shall make all payments to InSite on
behalf of its Affiliates and sublicensees. In addition, B&L will cause such
Affiliates or sublicensees to satisfy and honor all the obligations, limitations
and restrictions of or on B&L under this Agreement.
3. Royalties.
a. In consideration of the rights granted above, during the
Royalty Period in any country, B&L shall pay InSite royalties consisting of * *
* of Net Sales of the Timolol Product in such country. In the event that during
the Royalty Period for any country, any of InSite's Patents expire or are
invalidated and generic versions of the Timolol Product are being sold in such
country (and such generic sales are not in contravention of any governmental,
judicial or private regulatory rules, regulations, laws, orders or judgments in
effect in such country), the royalty rate paid by B&L shall be reduced to * * *
of Net Sales in such country. During the Secondary Royalty Period in any
country, B&L shall pay InSite the following royalties on Net Sales of the
Timolol Product: (i) * * * of Net Sales of the Timolol Product during the first
year of the Secondary Royalty Period; (ii) * * * of Net Sales of the Timolol
Product for the second year of the Secondary Royalty Period; and (iii) * * * of
Net Sales of the Timolol Product during the third year of the Secondary Period
and during any subsequent year in which this Agreement or any extension thereof
is in effect. In addition, during the Secondary Royalty Period in any country,
B&L shall pay InSite royalties of * * * of Net Sales of the Generic (as defined
below) unless B&L's sale of the Generic was pursuant to the filing of an ANDA
(as hereinafter defined) and without any cooperation from InSite whatsoever, in
which event B&L's obligation to pay a royalty of * * * shall terminate after the
passage of * * * years after the commencement of the Secondary Royalty Period.
Notwithstanding anything contained
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herein to the contrary, B&L shall not be required to pay InSite any royalty on
Net Sales of the Generic after the end of the * * * year of the Secondary
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.]
b. Notwithstanding anything in this Agreement to the contrary,
if any of the Patents expire or are invalidated, or if InSite is unable or
elects not to obtain a patent in such country, and generic versions of the
Timolol Product are being sold in such country (and such generic sales are not
in contravention of any governmental, judicial or private regulatory rules,
regulations, laws, orders or judgments in effect in such country), B&L shall
have the right to manufacture, use, sell and distribute a generic equivalent of
the Timolol Product by either submitting and receiving approval of an
abbreviated new drug application, and, with respect to countries other than the
United States, the equivalent abbreviated application ("ANDA") or obtaining from
InSite, if necessary, the right to supplement or amend any Regulatory Approval
to introduce a generic form of the Timolol Product (the "Generic"). If B&L
submits an ANDA for the Generic, it shall notify InSite in writing at least
ninety (90) days prior to the date of submission and InSite shall cooperate with
B&L in the preparation of such submission. Alternatively, if B&L elects to
submit a supplement to the NDA with respect to the Generic, B&L may request from
InSite, and InSite shall grant B&L, such specific rights to the Regulatory
Approval as are necessary to enable B&L to submit such supplement to introduce
and sell the Generic. If B&L elects to launch the Generic in any country prior
to the end of the Royalty Period in such country, in anticipation of the entry
of a third party generic competitor, the royalty due on sales of such Generic by
B&L shall be * * * of Net Sales until the end of the Royalty Period. InSite
hereby covenants not to sue B&L for patent infringement relating to sales of the
Generic which are in accordance with this Section D.3.1(b) during the Royalty
Period in such country. [* 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.]
c. Sales of the Timolol Product between or among B&L, its
Affiliates and sublicensees shall not be subject to any royalty hereunder, and
in such cases royalties shall be calculated upon B&L or its Affiliates' or
sublicensees' Net Sales to an independent third party. B&L shall be responsible
for payment of any royalty accrued on Net Sales of the Timolol Product to such
independent third party through B&L's Affiliates or sublicenses. Royalties shall
accrue hereunder only once in respect of the same unit of the Timolol Product.
4. Timing of Royalty Payments; Records.
a. Within 45 days after the end of each calendar quarter, B&L shall
pay InSite the royalty payment due for such quarter in U.S. dollars. All royalty
payments shall be made via wire transfer of same day funds to such account as
shall be designated by InSite not
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later than five (5) days prior to the date such payment is due. Such royalty
shall be converted, where applicable, from the currency of the country in which
the sale was made into U.S. dollars at the average month-end exchange rate for
such quarter as calculated based on the daily exchange rates published in The
Wall Street Journal.
b. Together with each quarterly royalty payment, B&L shall submit to
InSite a written accounting showing its computation of royalties due under this
Agreement for such quarter. Said accounting shall set forth gross sales, Net
Sales, the exchange rate applied, if any, and the total royalties due for the
quarter in question.
c. B&L shall keep full and accurate books and records reflecting the
sales of the Timolol Product and the data used in arriving at Net Sales and the
amount of royalties payable to InSite hereunder for no less than one year after
the end of each such quarter. B&L shall permit InSite, at InSite's expense, to
have such books and records examined by independent certified public accountants
retained by InSite and reasonably acceptable to B&L, during regular business
hours upon reasonable advance notice, but not later than one year following the
rendering of any such reports, accounting and payments, and no more often than
one time per year. Such independent accountants shall keep confidential any
information obtained during such examination and shall report to InSite only the
amounts of royalties which the independent accountant believes to be due and
payable hereunder.
E. Ownership.
1. Ownership. As between the parties, the parties shall have the
ownership rights set forth below:
a. (i) Subject to the rights of B&L set forth in Section E.1.c.,
InSite shall have all right, title and interest (including all patent rights
throughout the world) in any inventions, ideas or information made or conceived
or reduced to practice by either InSite or B&L in the course of development of
the Timolol Product hereunder which relate to the DuraSite delivery system (an
"Improvement"); and (ii) subject to the rights of InSite set forth in Section
E.1.d., B&L shall have all right, title and interest (including all patent
rights throughout the world) in any inventions, ideas or information made or
conceived or reduced to practice by either InSite or B&L in the course of
development of the Timolol Product hereunder which relate to Timolol. B&L shall
have the right to acquire a nonexclusive license to any such Improvement on
terms reasonably agreed to by the parties.
b. Provided, as to any inventions, ideas or proprietary
information made or conceived or reduced to practice by either party prior to
the Effective Date of this Agreement that relates directly or indirectly to the
Timolol Product ("Precollaborative Inventions"), InSite (if such
Precollaborative Invention is made, conceived or reduced to practice by B&L) or
B&L (if such Precollaborative Invention is made, conceived or reduced to
practice by InSite) shall have a paid-up, non-exclusive license to exploit such
invention, idea or information as it relates to and solely for use with the
Timolol Product and the Collaborative
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Project. Provided, however, that neither party, as the case may be, shall use
such idea, invention or proprietary information for the development or
manufacture of products for any entity other than the other party or an assignee
permitted under this Agreement. Such non- exclusive license shall terminate upon
termination of this Agreement. Provided, that either party, as the case may be,
shall be free to use for any purpose, without any accounting to the other party,
any information of the types described below in Section F(i)-(iv).
c. Provided, as to any inventions, ideas or information conceived
or reduced to practice by InSite or the parties jointly in the course of
development of the Timolol Product in connection with this Agreement which
relates to Timolol and which may be exploited in a delivery system other than
DuraSite (which are provided for in Sections E.1.d. and E.1.e., below), B&L
shall have a perpetual, paid-up, exclusive right to exploit (by itself or with a
third party) such invention, idea or information as it relates to Timolol for
all purposes other than delivery through the DuraSite system.
Provided further, consistent with patent law and sound patent
practice, B&L in good faith will seek to separate from other patent applications
any applications for any invention claiming Timolol exclusive of DuraSite.
Provided, however, B&L shall not be required to take any action which would in
any way detract from, jeopardize or limit any patent application resulting from
the development of the Timolol Product under this Agreement. Provided, further,
in the event that a patent is issued the claims of which include Timolol but do
not include the DuraSite delivery system in any respect, B&L may obtain the
rights to an assignment of such patent and InSite shall facilitate such
assignment; in such case, B&L shall reimburse InSite for all costs and expenses
associated with the preparation and prosecution of such patent application.
d. Provided, as to any inventions, ideas or information conceived
or reduced to practice by B&L or the parties jointly in the course of
development of the Timolol Product in connection with this Agreement which
relates to the DuraSite delivery system, InSite shall have a perpetual, paid up
exclusive right to exploit (by itself or with a third party) such invention,
idea or information as it relates to the DuraSite delivery system.
Provided further, consistent with patent law and sound patent
practice, InSite in good faith will seek to separate from other patent
applications any applications for any invention relating to the DuraSite
delivery system. Provided, however, InSite shall not be required to take any
action which would in any way detract from, jeopardize or limit any patent
application resulting from the development of the Timolol Product under this
Agreement. Provided, further, in the event that a patent is issued the claims of
which include the DuraSite delivery system, but do not include other delivery
systems in any respect, InSite may obtain the rights to an assignment of such
patent and B&L shall facilitate such assignment; in such case, InSite shall
reimburse B&L for all costs and expenses associated with the preparation and
prosecution of such patent application.
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e. Provided, as to any Joint Invention relating in whole or
in part to the DuraSite delivery system (with or without Timolol), InSite shall
have a perpetual, paid up exclusive right to exploit (by itself or with a third
party) such Joint Invention, idea or information as it relates to the DuraSite
delivery system (with or without Timolol).
2. Assignments. B&L and InSite hereby agree to make any
assignments necessary to accomplish the foregoing ownership provisions. In
addition, each party will have the exclusive right to, and, at its expense, the
other party agrees to assist in every proper way (including, without limitation,
becoming a nominal party) to evidence, record and perfect any such assignments
and to apply for and obtain recordation of and from time to time enforce,
maintain, and defend such proprietary right.
F. Confidentiality. InSite and B&L shall keep any Proprietary
Information or other business information provided or made available by the
other party or its Affiliates hereunder confidential, and neither InSite nor B&L
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 for
the purposes of this Agreement), or disclose to any third party, any Proprietary
Information or other 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 otherwise known by it from a source (other than the
other party or its agents or Affiliates), lawfully having possession of such
information, or (iv) have been developed by it or its Affiliates independently
of the disclosure by the other party or its Affiliates.
The foregoing shall not preclude the disclosure of Proprietary
Information or other business information by InSite or B&L:
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 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, so as 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 Regulatory Approval or
Payment Approval or other necessary governmental authorization for the clinical
testing or marketing of the Timolol Product or of prosecuting or defending
litigation.
15.
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Notwithstanding the foregoing, all Proprietary Information
related to a matter assigned to a party hereunder pursuant to Section E shall be
deemed Proprietary Information of the assignee and exceptions (i) through (iv)
set forth above will not be applicable thereto.
G. Limited Liability.
1. Incidental and Consequential Damages. NEITHER PARTY WILL BE
LIABLE UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT.
2. Limited Liability. NEITHER PARTY WILL BE LIABLE WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER THEORY FOR COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES,
TECHNOLOGY OR RIGHTS OR FOR ANY AMOUNTS AGGREGATING IN EXCESS OF AMOUNTS PAID TO
IT HEREUNDER.
H. Term and Termination.
1. Term. Unless terminated earlier as provided below or elsewhere in
this Agreement, this Agreement shall have a term extending from the Effective
Date to the later of: (i) the expiration of the last Patent, or (ii) ten (10)
years from the date the Timolol Product was first commercially sold in the last
country in which it is commercially exploited. Provided, that B&L shall have the
right upon 180 days written notice to InSite, to renew the provisions of this
Agreement relating to the license granted hereunder, and the payment of
royalties therefor, for an unlimited number of five (5) year terms (each a
"Renewal Term"). B&L shall have the right to terminate any Renewal Term upon 180
days prior written notice to InSite.
2. Termination by Either Party for Cause. This Agreement may be
terminated by either party for cause immediately upon the occurrence of any of
the following events:
a. If the other ceases to do business, or otherwise terminates
its business operations;
b. If the other shall fail to promptly secure or renew any
license, registration, permit, authorization or approval which materially
affects the conduct of its business in the manner contemplated by this Agreement
in any Major Market Country or if any such license, registration, permit,
authorization or approval is revoked or suspended and not reinstated within
sixty (60) days (or if the applicable authority revoking or suspending such
license, registration, permit, authorization or approval does not, in its
ordinary course, reinstate such license, registration, permit, authorization or
approval within sixty (60) days, then the party shall exercise its diligent
efforts to have such license, registration, permit, authorization or approval
16.
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reinstated, and so long as such party is diligently pursuing reinstatement of
such license, registration, permit, authorization or approval, and it can
reasonably be assumed that such license, registration, permit, authorization or
approval will be reinstated in due course, then such failure to obtain
reinstatement will not be grounds for termination of this Agreement (this clause
applies solely on a country-by-country basis);
c. If the other materially breaches any material provision of
this Agreement and fails to cure such breach within sixty (60) days (twenty (20)
days in the case of a failure to pay any amounts due hereunder) of notice
describing the breach, provided, however, that if such a cure can be achieved
and the breaching party is diligently pursuing a cure, then such a breach shall
not be grounds for termination of this Agreement; or
d. If the other shall seek protection under any bankruptcy,
receivership, trust deed, creditors arrangement, or comparable proceeding, or if
any such proceeding is instituted against the other (and not dismissed within
one hundred and twenty (120) days).
3. Termination by Either Party for Other Reasons.
a. In the event that either party hereto assigns any part of this
Agreement, by operation of law or otherwise, except as specifically permitted
under this Agreement, it shall notify the other party hereto at least thirty
(30) days prior to such assignment, and the other party shall have thirty (30)
days from the date of such notice to terminate this Agreement, effective
immediately upon receipt of such notice. Failure to give such notice within such
thirty (30) day period shall be deemed to be a waiver of such party's
termination right under this Section H.3. with respect to such assignment.
b. B&L shall have the right to terminate this Agreement if, in the
reasonable discretion of B&L, the results of Phase II clinical testing of the
Timolol Product indicate that the FDA is unlikely to eventually approve the
Timolol Product for marketing and sale in the United States. In the event B&L
terminates this Agreement pursuant to this Section H.3.b., all rights to the
Timolol Product shall revert to InSite and Insite shall be free to fully
exploit, without approval or accounting, all of the information developed
hereunder with respect to the Timolol Product.
4. Effect of Termination. The following provisions shall survive the
termination of this Agreement, and any extensions thereof: Sections D.3 (to the
extent inventories of the Timolol Product in existence upon the date of
termination are sold in any country after termination of this Agreement), E, F,
H.4., I, and K.4, K.6, K.7, K.8, K.9 and K.13. Remedies for breaches will also
survive. Each party will promptly return all Proprietary Information of the
other (and all copies and abstracts thereof) that it is not entitled to use
under the surviving terms of this Agreement. Termination of this Agreement with
respect to the Timolol Product in a particular country shall have the same
effect as termination of this entire Agreement, but with respect to such country
only.
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5. Termination Not Sole Remedy. Termination is not the sole
remedy under this Agreement and, whether or not termination is effected, all
other remedies will remain available.
I. Indemnity.
1. Joint Indemnification Obligations. Each party shall defend,
indemnify and hold the other party, any Affiliate of the other party, any
officer, director or employee of such other party or of any of its Affiliates
(individually, an "Exculpated Party") harmless from and against any claim,
action, damage, loss, liability or expense (including, without limitation,
reasonable attorneys' fees, settlement costs, litigation costs and costs on
appeal regardless of outcome) ("Claims") incurred or suffered by any Exculpated
Party due to: (a) the material breach of any covenant or agreement by such
party; (b) any material misrepresentation or breach of warranty made by such
party pursuant to this Agreement; (c) any claim arising from the gross
negligence or intentional misconduct of such party; or (d) the operations or
activities of such party's Affiliates, licensees or sublicensees in material
contravention of the requirements of this Agreement (and such party shall
terminate immediately any such sublicense where a breach of its obligations by a
sublicensee cannot be readily compensated through monetary damages). In
addition, B&L and InSite each specifically acknowledge and shall comply with
their respective indemnification obligations set forth in that certain
Manufacturing and Supply Agreement between B&L and InSite of even date herewith,
which indemnification obligations are hereby incorporated by reference herein.
2. Patent Indemnity. InSite shall defend and hold B&L and its
officers, directors, agents and employees harmless from any claim or liability
resulting from infringement by DuraSite of any United States patent issued as of
the date of approval of the Timolol Product by the FDA for sale in the United
States or, if no FDA approval is required, upon Commercial Launch in the United
States, provided InSite is promptly notified in writing of any and all threats,
claims and proceedings related thereto. InSite and B&L shall confer promptly (in
no event more than five (5) days after receipt by either party of such threat,
claim or proceeding) to discuss any such threats, claims or proceedings. InSite
shall have the exclusive authority to evaluate, defend and settle such patent
claim or litigation. After such discussions, InSite at its own expense and
option may then (i) settle or defend such claim, (ii) procure for B&L the right
to sell the Timolol Product, (iii) modify the Timolol Product to avoid
infringement, (iv) request B&L to cease further sale of the Timolol Product, or
(v) do any combination of the above. B&L shall provide InSite with assistance
and all relevant information necessary to pursue any such action.
3. Notice of Claim for Indemnification. The indemnities of Sections
I.1 and I.2 above shall not apply (i) if the indemnified party fails to give the
indemnifying party prompt notice of any Claim it receives and such failure
materially prejudices the indemnifying party, or (ii) unless the indemnifying
party is given the opportunity to approve any settlement, which approval shall
not be unreasonably withheld. Furthermore, the indemnifying party shall not be
liable for attorneys' fees or expenses of litigation of the indemnified party
unless the indemnified
18.
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party gives the indemnifying party the opportunity to assume control of the
defense or settlement. In addition, if the indemnifying party assumes such
control, it shall only be responsible for the legal fees and litigation expenses
of the attorneys it designates to assume control of the litigation. However, in
no event shall the indemnifying party assume control of the defense of the
indemnified party without the consent of the indemnified party (which consent
shall be given or not at its sole discretion).
J. Maintenance and Enforcement of Patents.
1. Maintenance and Enforcement. InSite shall undertake and shall
bear all costs of the prosecution and maintenance of the Patents in the
Territory. InSite shall employ reasonable efforts to keep B&L fully and timely
informed with respect to the course and conduct of patent application
prosecution matters within the scope of the Patents.
2. Termination of Prosecution or Maintenance. If InSite elects to
terminate either the prosecution or maintenance of any of the Patents prior to
the completion of normal prosecution before the patent examiner or prior to the
end of the term for maintenance, as the case may be, it will give B&L sixty (60)
days prior written notice of such election prior to any time limit on any action
due. B&L, upon receipt of such notice, shall have the option to undertake the
continuation of such prosecution or maintenance and InSite will transfer title
to B&L for such patent application or patent.
3. Infringement of Patents.
a. If either party shall become aware of any infringement or
threatened infringement of any Patents, including that contained in a notice
provided under the 1984 Act, 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.
b. InSite shall have the first right but not an obligation to
bring an enforcement action or to take any other reasonable steps to defend the
Patents against infringement and B&L shall in such event give all reasonable
assistance to InSite with respect to patent and legal questions. The costs of
such patent enforcement shall be borne by InSite. If InSite does not commence a
particular infringement action within ninety (90) days after it has received
notice of such infringement, B&L, after notifying InSite in writing, shall be
entitled to bring such infringement action or other appropriate action or claim
at its own expense but shall request in writing that InSite fund 50% of such
expenses. If InSite declines to pursue such action or fails to respond to B&L
within sixty (60) days after receipt of B&L's notice that it will do so, B&L
shall have the right to undertake such action and if InSite fails to fund 50% of
B&L's expenses in pursuing such action, then B&L shall be entitled to 100% of
all recoveries and B&L shall no longer be required to pay royalties to InSite
for the Timolol Product in the country in which such action was prosecuted.
Recovery from any settlement or judgement from any such action in the Territory
either pursued by InSite or co-funded by InSite shall go first to reimburse the
expenses of the parties and the remainder shall be shared by the parties on a
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50%/50% basis. Notwithstanding the foregoing, if the monetary recovery is less
than the out-of-pocket expenses of InSite and B&L, reimbursement shall be on a
pro rata basis, based upon cost incurred. In any event, InSite and B&L shall
assist one another and reasonably cooperate in any such litigation at the
other's request without expense to the requesting party.
c. If InSite and B&L, after consultation with each other, elect
not to bring suit, individually or jointly, or if InSite and B&L, as the case
may be, are/is not able to stop such infringing activities in any country, the
applicable royalty for such country shall be adjusted as set forth in Section
B.4.a, if at all.
K. General.
1. Amendment and Waiver. Except as otherwise expressly provided
herein, any provision of this Agreement may be amended and the observance of any
provision of this Agreement may be waived (either generally or in any particular
instance and either retroactively or prospectively) only with the written
consent of the parties. However, it is the intention of the parties that this
Agreement be controlling over additional or different terms of any purchase
order, confirmation, invoice or similar document, even if accepted in writing by
both parties, and that waivers and amendments shall be effective only if made by
non-pre-printed agreements clearly understood by both parties to be an amendment
or waiver. The failure of either party to enforce its rights under this
Agreement at any time for any period shall not be construed as a waiver of such
rights.
2. Dispute Resolution. Except that either party may seek equitable
relief from a court, if any dispute arises between InSite and B&L with respect
to the interpretation or breach of this Agreement, either party shall notify the
other of the dispute in writing and shall attempt to resolve the dispute through
discussions between InSite's Chief Executive Officer and B&L's President. If
such officers are unable to resolve the dispute within thirty (30) days after
the date written notice of the dispute is delivered, the parties shall seek to
resolve the dispute by initiating an Alternative Dispute Resolution ("ADR") in
which the Judicial Arbitration and Mediation Services ("JAMS"), Oakland,
California shall select the mediator. Such mediator shall hold a hearing to
resolve the dispute within sixty (60) days of his or her selection. The location
of the hearing shall be Oakland, California. Each party may be represented by
counsel and shall have the right to make a presentation of evidence at such
hearing. The mediator shall render a disposition on the proposed rulings as
expeditiously as possible but not later than fifteen (15) days after the
conclusion of the hearing. If the parties are unable to resolve the dispute, the
dispute may, upon the agreement of the parties, be settled by arbitration. If
the parties agree to arbitrate the dispute, such arbitration shall take place in
Alameda County, California in accordance with the then current commercial
arbitration rules of the American Arbitration Association and judgment upon the
award rendered by the Arbitrator(s) shall be binding on the parties and may be
entered by either party in the court or forum, state or federal, having
jurisdiction. Notwithstanding anything to the contrary nothing in this Agreement
shall be deemed as preventing either party from seeking injunctive relief (or
any other provisional remedy) from any court having jurisdiction over the
parties and the subject matter of the dispute
20.
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as necessary to protect either party's name, proprietary information, trade
secrets, know-how or any other proprietary rights. Further, in the event the
parties do not agree to arbitrate any dispute hereunder, either party may seek
such other remedy, at law or in equity, as it may deem necessary or appropriate.
3. Governing Law; Attorneys' Fees; Legal Actions. This Agreement shall
be governed by and construed under the laws of the State of California without
regard to conflicts of laws provisions thereof. In any action or proceeding to
enforce rights under this Agreement, including without limitation, any
arbitration, the prevailing party shall be entitled to recover costs and
attorneys' fees.
4. Headings. Headings and captions are for convenience only and are not
to be used in the interpretation of this Agreement.
5. Notices. Any and all notices or other communications required or
permitted under this Agreement must be in written form 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, and shall be deemed to have been made three (3) days after the date
of mailing, 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 to
the address set forth below or to such other address as either party may from
time to time specify in a notice to the other in the manner herein provided.
Bausch & Lomb Pharmaceuticals, Inc.
8500 Hidden River Parkway
Tampa, Florida 33637
Attn: President
with a copy to:
Bausch & Lomb Incorporated
One Bausch & Lomb Place
Rochester, New York 14604
Attn: General Counsel
InSite Vision Incorporated
965 Atlantic Avenue
Alameda, CA 94501
Attn: Chief Executive Officer
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with a copy to:
Brobeck, Phleger & Harrison LLP
2200 Geng Road
Two Embarcadero Place
Palo Alto, CA 94303
Attn: J. Stephan Dolezalek, Esq.
6. Entire Agreement. This Agreement supersedes all proposals, oral or
written, all negotiations, conversations, or discussions between or among
parties relating to the subject matter of this Agreement and all past dealing or
industry custom.
7. Severability. If any provision of this Agreement is held to be
illegal or unenforceable, that provision shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable.
8. Relationship of Parties. The parties hereto expressly understand and
agree that the other is an independent contractor in the performance of each and
every part of this Agreement, and is solely responsible for all of its employees
and agents and its labor costs and expenses arising in connection therewith.
Nothing in this Agreement shall be construed to give either party the power or
authority to act for, bind or commit the other party.
9. Assignment. This Agreement and the rights hereunder are not
transferable or assignable, except as specifically permitted in this Agreement,
without the prior written consent of the parties hereto, except for rights to
payment and except to a person or entity who acquires all or substantially all
of the assets, capital stock or business of a party, whether by sale, merger or
otherwise.
10. Publicity, Press Releases and Terms of Agreement. Except to the
extent necessary under applicable laws or for ordinary marketing purposes, the
parties agree that (i) no press releases or other publicity relating to the
substance of the matters contained herein will be made without joint approval,
and (ii) the terms of this Agreement shall be treated by each party as
Proprietary Information. A press release announcing this Agreement will be
jointly developed and released by the parties.
11. Force Majeure. No liability or loss of rights hereunder shall
result to either party from delay or failure in performance (other than payment)
caused by force majeure, that is, circumstances beyond the reasonable control of
the party affected thereby, including, without limitation, acts of God, fire,
flood, war, government action, compliance with laws or regulations, strikes,
lockouts or other serious labor disputes, or shortage of or inability to obtain
material or equipment.
12. Remedies. Except as otherwise expressly stated in this Agreement,
the rights and remedies of a party set forth herein with respect to failure of
the other to comply with
22.
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the terms of this Agreement (including, without limitation, rights of full
termination of this Agreement) are not exclusive, the exercise thereof shall not
constitute an election of remedies and the aggrieved party shall in all events
be entitled to seek whatever additional remedies may be available in law or in
equity.
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INSITE VISION INCORPORATED
By: /s/ S.K. CHANDRASEKARAN
----------------------------------
Name: S. Kumar Chandrasekaran
Title: Chief Executive Officer
BAUSCH & LOMB PHARMACEUTICALS, INC.
By: /s/ ALAN P. DOZIER
----------------------------------
Name: Alan P. Dozier
Title: President
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SCHEDULE A.2
HOURLY RATES
Development and Operations Personnel:
Systems Development/Formulations/Documentation *
Pharmacology/Toxicology *
Analytical Chemistry *
Regulatory, Clinical and QA/QC Personnel:
Quality Assurance *
Quality Control/Engineering/Validation *
Microbiology *
Clinical/Regulatory Affairs *
[* 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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EXHIBIT A
PilaSite Patents
INSITE LICENSED PATENTS Patent/Application Date Filed/Issued/Allowed
* J. ROBINSON, BIOADHESIVE COMPOSITION 4,615,697 P 10/07/86 1
AND TREATMENT THEREWITH 4,983,392 P 01/08/91 1
5,225,196 P 07/06/93 1
INSITE PATENTS
* OPHTHALMIC SUSPENSIONS 5,192,535 P 03/09/93 1
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STATUS OF USSN 07/544,518 AND FOREIGN COUNTERPARTS
COUNTRY SERIAL NO. FILING DATE PATENT NO. ISSUE DATE STATUS
United States 07/544,518 June 27, 1990 5,192,535 March 9, 1993 Issued
* * * * * *
* * * * * *
New Zealand 238757 June 27, 1991 238,756 March 16, 1993 Issued
South Africa 914971 June 27, 1991 914971 September 30, 1992 Issued
* * * *
* * * *
* * * *
* * * *
[* 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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SUMMARY
Columbia Patents 1
USA: USSN 551,295 filed 11/14/83 Abandoned
USA: USSN 690,483 filed 12/20/84 US 4,615,697 issued 10/07/86 Priority: WO 84US1827; USSN 551,295
USA: USSN 909,960 filed 09/22/86 US 4,795,436 issued 01/03/89 Priority: USSNs 551,295; 690,483
USA: USSN 287,464 filed 12/20/88 US 4,983,392 issued 01/08/91 Priority: USSNs 551,295; 690,483; 909,960
USA: USSN 638,184 filed 01/07/91 US 5,225,196 issued 07/06/93 Priority: USSNs 551,295; 690,483; 909,960;
287,464
Canada: CA 495209 filed 11/13/85 CA 1260832 issued 09/26/89 Priority: USSN 690,483
PCT: WO 84US1827 filed 11/09/84 WO 8502092 issued 09/26/89 Priority: USSN 551,195
Designated States (national): AU, JP, US
Designated States (regional): AT, BE, CH, DE, FR, GB, LU,
NL, SE
Australia: AU 8436184 filed 11/09/84 AU 565354 issued 06/03/85 Priority: WO 84US1827; USSN 551,295
Japan: JP 84504250 filed 11/09/84 JP 61500612 issued 04/03/86 Priority: WO 84US1827; USSN 551,295
Europe: EP 84904286 A filed 11/09/84 EP 163696 A1 issued 11/25/92 Priority: WO 84US1827; USSN 551,295
Designated States: AT, BE, CH,
DE, FR, GB, LI, LU, NL, SE
Germany: EP 84904286 A filed 11/09/84 DE 3485995 issued 01/07/93 Priority: WO 84US1827; USSN 551,295
Austria: EP 84904286 A filed 11/09/84 AT 82667 issued 12/15/92 Priority: Wo 84US1827; USSN 551,295
Europe: EP 92105052 A filed 11/09/84 EP 501523 A1 issued 09/02/92 Priority: USSN 551,295
Unknown-divisional of EP 84904286
probably
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Columbia Patents 2
* * *
* * *
* * *
* * *
Europe: EP 90300327 filed 01/11/90 EP 429156 issued 05/29/91 Priority: USSN 429,770
Europe: EP 90300340 filed 01/11/90 EP 431719 issued 06/12/91 Priority: USSN 429,755
Europe: EP 91901558 filed 10/24/90 EP 500807 issued 09/02/92 Priority: USSNs 429,770; 429,755
Designated States (same for all three): AT, BE, CH, DE, DK ES, FR, GB, GR,
IT, LI, LU, NL,SE
PCT: WO 90US6087 filed 10/24/90 WO 9106283 issued 05/16/91 Priority USSNs 429,770; 429,755
Designated States (national): AT, AU, BB, BG, BR, CA, CH, DE, DK,
ES, FI, GB, HU, JP, KP, KR, LK, LU,
MC, MG, MW, NL, NO, RO, SD, SE,
SU, US
Designated States (regional): AT, BE, CH, DE, DK, ES, FR, GB, GR,
IT, LU, NL, SE
Australia: AU 9170331 filed 10/24/90 AU 639,069 issued 07/15/93 Priority: 90US6087; USSNs 429,770;
429,755
Brazil: BR 907807 filed 10/24/90 BR 9007807 issued 09/29/92 Priority: 90US6087; USSNs 429,770;
429,755
Canada: CA 2072148 filed 10/24/90 CA 2072148 issued 05/01/91 Priority: USSNs 429,770; 429,755
Spain: EP 90300340 filed 01/11/90 ES 2050096 issued 05/16/94 Priority: USSN 429,755
Finland: FL 921932 filed 04/29/92 FI 9201932 issued 04/29/92 Priority: US6087; USSNs 429,770;
429,755
Hungary: HU 921465 filed 10/24/90 HU 9201465 issued 07/28/92 Priority: USSNs 429,770; 429,755
Israel: IL 96148 filed 10/29/90 IL 964148 issued 07/18/91 Priority: USSNs 429,770; 429,755
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Japan: JP 91501917 filed 10/24/90 JP 5504338 issued 07/08/93 Priority: 90US6087; USSNs 429,770;
429,755
Monaco: MC 6087 filed 10/24/90 MC 2204 issued 11/26/94 Priority: USSNs 429,770; 429,755
Norway: NO 921686 filed 04/29/92 NO 9201686 issued 04/29/92 Priority: 90US6087; USSNs 429,770;
429,755
Portugal: PT 95729 filed 10/29/90 PT 95729 issued 09/13/91 Priority: USSNs 429,770; 429,755
S. Africa: ZA 908603 filed 10/26/90 ZA 9008603 issued 08/28/91 Priority: USSN 429,770
[* 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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