EXHIBIT 10.5.1
LICENSE AGREEMENT
BY AND BETWEEN
CIBA VISION AG
AND
PRESBY CORP.
DATED MARCH 6, 2002
TABLE OF CONTENTS
1. Definitions.....................................................................................1
2. Grant...........................................................................................3
2.1 Exclusive License.........................................................................3
2.2 Territory Expansion.......................................................................4
2.3 Manufacturing.............................................................................4
2.4 Trademarks................................................................................4
2.5 Exclusive Marketing Rights................................................................5
2.6 Conduct of CIBA...........................................................................5
3. Compensation....................................................................................6
3.1 Prepaid Royalties.........................................................................6
3.2 Milestone Payments........................................................................6
3.3 Royalties.................................................................................6
3.4 Minimum Royalties and Loss of Exclusivity.................................................8
3.5 Equity Investments........................................................................9
(a) Initial Equity Investment...............................................................9
(b) Stage II Equity Investment.............................................................10
(c) Conditions Precedent...................................................................10
3.6 Taxes....................................................................................11
4. Product Development and Registration...........................................................11
4.1 Joint Technical Committee................................................................11
4.2 US Product Registration..................................................................12
4.3 Post-FDA Approval Registration; Non-US Product Registrations.............................13
4.4 Registrant Designation...................................................................13
4.5 Notice and Participation.................................................................13
5. Representations and Warranties.................................................................14
5.1 By Presby................................................................................14
5.2 By CIBA..................................................................................15
6. Covenants and Indemnification..................................................................16
6.1 Certain Actions..........................................................................16
6.2 Indemnification..........................................................................16
7. Maintenance, Prosecution and Ownership of Patent Rights........................................18
7.1 Maintenance and Prosecution..............................................................18
7.2 Ownership................................................................................18
8. Assertion or Defense of Patent Rights..........................................................19
8.1 Patent Litigation Committee..............................................................19
8.2 Notification of Claims...................................................................19
8.3 Assertion of Claims Against Third Parties................................................19
8.4 Defense Against Claims by Third Parties..................................................20
8.5 Settlement Approval......................................................................21
9. Negotiation Right..............................................................................21
10. Term and Termination...........................................................................22
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10.1 Term.....................................................................................22
10.2 Termination..............................................................................22
10.3 Waiver; Board Resignation................................................................22
10.4 No Release...............................................................................22
10.5 Product Registrations upon Termination...................................................22
10.6 Termination by Presby in the Event of Non-Exclusivity....................................22
10.7 Survival of Indemnification..............................................................23
11. Confidentiality................................................................................23
12. Limitation of Liability........................................................................23
13. Miscellaneous Provisions.......................................................................24
SCHEDULE A: Patent Rights................................................................................
SCHEDULE B: Products and Royalty Rates...................................................................
SCHEDULE C: Trademarks...................................................................................
SCHEDULE D: Series C Certificate of Designation..........................................................
SCHEDULE E: Presby Agreements............................................................................
SCHEDULE F: Known Infringements of Patent Rights.........................................................
SCHEDULE G: Secrecy Agreement............................................................................
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LICENSE AGREEMENT
THIS
LICENSE AGREEMENT, having an effective date of March 6, 2002, (the
"Effective Date") is made by and between PRESBY Corp., a Delaware corporation,
formerly known as RAS Holding Corp., with offices located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("PRESBY") and CIBA VISION AG, a
Swiss corporation having its principal place of business at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇("▇▇▇▇").
WHEREAS, PRESBY possesses patent rights and other intellectual property
relating to certain ophthalmic medical devices used in the treatment of
presbyopia, hyperopia, ocular hypertension and glaucoma; and,
WHEREAS, CIBA desires to acquire a license to utilize such patent rights
and other intellectual property rights in connection with the manufacture,
marketing and sale of such medical devices and PRESBY has agreed to grant such a
license under the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth below, the receipt and sufficiency of which are hereby acknowledged
and confessed, the parties agree as follows:
1. DEFINITIONS
The following terms used in this Agreement shall have the meanings set
forth in this Section:
1.1. "AFFILIATE" shall mean an entity in control of, controlled by, or
under common control with a party to this Agreement. For purposes of
this definition, "control" shall mean the direct or indirect
ownership of a majority of the voting shares or other securities
entitled to vote for the election of directors or other governing
authority.
1.2. "DATE OF FIRST SALE" shall mean the date on which CIBA, an Affiliate
of CIBA or a sublicensee of CIBA bills a third party for the first
unit of the first Product sold pursuant to a commercial sale.
1.3. "EXECUTIVE OFFICERS" shall mean the Chief Executive Officer of
PRESBY and the Head, Refractive Surgical Business Unit of CIBA (or
their respective executive officer level designees).
1.4. "FDA" shall mean the US Food and Drug Administration.
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1.5. "INITIAL EQUITY INVESTMENT" shall mean CIBA's purchase of Presby
Preferred Stock under the terms and conditions set forth in Section
3.5(a) and such additional terms and conditions as shall be mutually
agreed upon by the parties and set forth in such additional
transaction documents as are reasonable and customary for such an
equity investment.
1.6. "KNOW-HOW" shall mean all technology, formulae, trade secrets,
technical data, clinical data, toxicological data, manufacturing
processes and any other information or experience, possessed by
PRESBY or any Affiliate of PRESBY, in tangible or intangible form,
relating to, or useful in connection with, the manufacture of
Products.
1.7. "NET SALES" shall mean the gross amounts billed by CIBA, its
Affiliates and approved sublicensees to third parties for the sale
or other disposition of Products less (i) returns, (ii) the cost of
samples distributed, and (iii) discounts, credits or allowances
actually granted in the ordinary course of business and consistent
with CIBA's general practices. All non-US sales shall be converted
into US Dollars using the exchange rate quoted in the Wall Street
Journal as of the last day of the calendar quarter for which the
calculation of Net Sales is made.
1.8. "PATENT RIGHTS" shall mean rights in the patent applications and
patents listed in the attached SCHEDULE A, any claim of which would
read on the Products, their importation, exportation, manufacture,
use, or sale, including such additional patent applications as may
be filed from time to time during the term of this Agreement whether
filed originally as a related patent application or filed as
continuations, continuations-in-part, divisions, re-examinations,
reissues or extensions of any of the above-described patents and
patent applications. SCHEDULE A may be amended from time to time by
the agreement of the parties.
1.9. "PRESBY PREFERRED STOCK" shall mean Series A convertible preferred
stock to be issued by PRESBY having rights and preferences to be
agreed upon by the parties; provided that in no event shall any such
rights and preferences for the Presby Preferred Stock be subordinate
or junior to any rights for any prior or subsequent class of stock.
1.10. "PRODUCTS" shall mean ophthalmic medical devices used in the
treatment of presbyopia, hyperopia, ocular hypertension and
glaucoma, the manufacture, use or sale of which, would, but for this
Agreement, constitute or would result in an infringement of the
Patent Rights in any country including, but not limited to, the
products set forth in the attached SCHEDULE B and any enhancements
or improvements thereto.
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1.11. "PRODUCT REGISTRATIONS" shall mean such registrations, approvals,
licenses or other governmental authorizations required by any
Regulatory Authority in order to manufacture, market or sell
Products.
1.12. "REGULATORY AUTHORITY" shall mean the FDA or any other governmental
agency in a country or region with jurisdiction over the Products,
including their manufacture.
1.13. "ROYALTY PERIOD" for a particular country shall mean the period
commencing upon the Effective Date and extending until the later of
(i) the expiry or invalidation of the Patent Rights in such country
or (ii) twenty (20) years from the Effective Date.
1.14. "STAGE II" shall mean receipt in writing by PRESBY of approval from
the FDA to begin clinical trials for the treatment of presbyopia
which permits expansion of the clinical study beyond 128 human eyes.
1.15. "STAGE II EQUITY INVESTMENT" shall mean CIBA's purchase of Presby
Preferred Stock under the terms and conditions set forth in Section
3.5(b) and such additional terms and conditions as shall be mutually
agreed upon by the parties and set forth in such additional
transaction documents as are reasonable and customary for such an
equity investment.
1.16. "TERRITORY" shall mean the entire world, excluding the United
States, provided that the Territory shall be expanded to include the
United States under the terms and conditions set forth in Section
2.2.
1.17. "THIRD PARTY EQUITY INVESTMENT" shall mean the closing of the sale
or a series of sales by PRESBY of equity securities, with the
aggregate gross proceeds to Presby equal to at least Ten Million
Dollars ($10,000,000), excluding any funds received by PRESBY from
CIBA or any Affiliate of PRESBY.
1.18. "TRADEMARKS" shall mean the trademarks set forth in the attached
SCHEDULE C.
1.19. "TRANSITION SUPPLY AGREEMENT" shall mean an agreement, in a form to
be agreed upon by the parties, pursuant to which PRESBY shall
provide for the manufacture and supply of Products to CIBA on a
transitional basis.
1.20. "YEAR" shall mean four successive calendar quarters.
2. GRANT
2.1. EXCLUSIVE LICENSE. Subject to all the terms and limitations of this
Agreement, PRESBY hereby grants to CIBA an exclusive license under
the Patent Rights, Know How and Trademarks, to make, have made, use,
and sell Products in the
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Territory. The rights granted to CIBA hereunder shall include the
right to sublicense; provided that (a) each sublicensee must agree
in writing to be bound by the terms and conditions of this Agreement
in the same capacity as CIBA and (b) each sublicensee has been
approved in writing by PRESBY, which approval shall not be
unreasonably withheld by PRESBY. PRESBY shall provide CIBA with all
Know-How covered by this license and any other information which
PRESBY, or any Affiliate of PRESBY, possesses and which may be
necessary or useful to assist CIBA to develop, manufacture and
improve Products, including any improvements to such Know-How
developed by PRESBY or any PRESBY Affiliate following the execution
of this Agreement.
2.2. TERRITORY EXPANSION. Provided that CIBA has made all royalty
payments (including minimum royalty payments, if applicable)
required to maintain its exclusive license, the parties agree that
the Territory shall be expanded as follows:
(i) Upon closing of the Initial Equity Investment, the grant of
rights to CIBA under this Agreement shall be automatically
expanded to include the right to make, have made, use, and sell
Products in the United States for the treatment of ocular
hypertension and/or glaucoma;
(ii) Upon closing of the Stage II Equity Investment, the grant of
rights to CIBA under this Agreement shall be automatically
expanded to include the right to make, have made, use, and sell
Products in the United States for the treatment of presbyopia
and/or hyperopia.
2.3. MANUFACTURING. During the term of the Transition Supply Agreement,
PRESBY shall supply Products to CIBA in accordance with the terms
set forth therein. Upon the expiration or termination of the
Transition Supply Agreement, CIBA shall be solely responsible for
and use reasonable commercial efforts to manufacture Products
sufficient to meet its marketing obligations herein, provided that
CIBA shall have the right to subcontract some or all of the
manufacturing process and, upon CIBA's request, PRESBY shall provide
CIBA, and any subcontractor of CIBA, with such assistance as may be
reasonably requested by CIBA from time to time to facilitate the
transfer of manufacturing operations without additional charge. CIBA
shall provide PRESBY with Product samples in such quantities as may
be reasonably requested by PRESBY from time to time.
2.4. TRADEMARKS. CIBA shall have the sole right and responsibility for
the selection, registration and maintenance of any and all brand
names and trademarks to be utilized by CIBA in connection with the
sale of Product, provided that the labeling for Products shall
include a reference to PRESBY, the form of which the parties shall
mutually agree. CIBA shall only use the Trademarks in connection
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with the advertising, promotion and distribution of the Products in
the Territory and in accordance with Presby's written standards,
specifications and instructions provided to CIBA no later than the
expiration or termination of the Transition Supply Agreement and
from time to time thereafter. CIBA will have no rights in the
Trademarks other than this limited right to use and all of CIBA's
use of the Trademarks will inure to the benefit of PRESBY. To the
extent CIBA uses any of the Trademarks, CIBA will (i) ▇▇▇▇ the
Products and related materials to which any such Trademarks are
affixed to properly designate the source of the goods, and (ii)
provide PRESBY, upon PRESBY's request, with samples of marked
Products and related materials prepared by CIBA bearing any such
Trademarks. CIBA agrees that upon termination or expiration of this
Agreement for any reason, it will cease all use of the Trademarks.
2.5. EXCLUSIVE MARKETING RIGHTS. CIBA shall have the sole and exclusive
right and responsibility for all marketing activities relating to
the Products in the Territory, including, but not limited to,
development and distribution of all sales and promotional materials,
physician training, pricing and positioning strategies, post-market
clinical studies, development of technical presentations, selection,
retention and compensation of speakers, development and publication
of scientific abstracts and articles, customer service, technical
assistance, repair and replacement of Products, and all other usual
and customary activities associated with the promotion and sale of
surgical medical devices and all customer service associated
therewith. Presby shall provide such reasonable support and
assistance as may be requested from time to time by CIBA, provided
that PRESBY shall not independently engage in any of the activities
set forth above without CIBA's prior written consent. CIBA shall
provide PRESBY with periodic marketing updates, at such times and in
such form as shall be mutually agreed upon by the parties, and shall
provide PRESBY with copies of product literature, promotional
materials and other Product related information and materials as may
be reasonably requested by PRESBY from time to time.
2.6. CONDUCT OF CIBA. In marketing the Products hereunder, CIBA will use
reasonable commercial efforts to: (a) avoid deceptive, misleading or
unethical practices that are detrimental to Presby or the Products;
(b) not make any false representations, warranties or guarantees to
third parties regarding the Products that are imputable to Presby;
(c) not make false remarks imputable to PRESBY about competitive
products which are inaccurate, misleading or otherwise disparaging;
and (d) in all matters relating to this Agreement, act as an
independent contractor and not represent to any party that CIBA has
any authority to assume or create any obligation, express or
implied, on behalf of PRESBY.
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3. COMPENSATION
3.1. PREPAID ROYALTIES. Upon execution of this Agreement by both parties,
CIBA shall pay PRESBY Two Million Dollars ($2,000,000) as prepaid
royalties. The prepaid royalties shall be credited against royalties
otherwise payable under Section 3.3, or 3.4, as applicable,
beginning in Year 2, as defined in SCHEDULE B, and continuing until
the credit has been fully utilized, provided that the amount to be
applied as a credit against royalties due in any one calendar
quarter shall not exceed One Hundred Twenty Five Thousand Dollars
($125,000). The foregoing prepaid royalty shall be deemed fully
earned upon the expiration or termination of this Agreement for any
reason other than as a result of termination by CIBA pursuant to
Section 10.2.
3.2. MILESTONE PAYMENTS. In addition to the royalty payments set forth
herein, CIBA shall pay PRESBY the amounts set forth below upon the
achievement of the following milestones, which amounts shall be
fully earned by PRESBY upon achievement of such milestones:
(a) Two Million Dollars ($2,000,000) within thirty (30) days
following CIBA's receipt of an approval letter from the FDA for
Products which includes an indication for the treatment of
glaucoma or ocular hypertension.
(b) Two Million Dollars ($2,000,000) within thirty (30) days
following CIBA's receipt of an approval letter from the FDA for
Products which includes an indication for the treatment of
presbyopia.
3.3. ROYALTIES. During the Royalty Period, CIBA shall pay PRESBY
royalties in an amount equal to the percentage of Net Sales of the
Products set forth as the royalty rate for such Product in SCHEDULE
B.
(a) CIBA shall calculate royalty payments due to PRESBY on a
quarterly basis and shall pay such royalties in US Dollars
within sixty (60) days following the last day of each calendar
quarter.
(b) CIBA shall submit a statement, certified as true and correct by
an Executive Officer of CIBA, with each quarterly royalty
payment setting forth on a country by country basis in
reasonable detail (i) gross unit and dollar sales by Product,
(ii) detailed deductions utilized in calculating Net Sales,
(iii) Net Sales, (iv) total royalties due for the applicable
payment period.
(c) CIBA shall maintain full and accurate books and records
prepared in accordance with international accounting standards
reflecting the consolidated data in a reasonable level of
detail utilized to calculate the royalties payable pursuant to
this Agreement for no less than three (3) years after the end
of each payment period. PRESBY shall have the right, at
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PRESBY's expense (except as otherwise provided below), to have
CIBA's supporting books and records examined during regular
business hours upon reasonable advance notice by Presby or a
nationally recognized independent certified public accounting
firm designated by PRESBY and reasonably acceptable to CIBA.
The right of examination granted to PRESBY hereunder must be
exercised, with respect to any payment period, prior to the
expiration of the applicable three (3) year record retention
period, and shall not be exercised more frequently than once
each calendar year. Each person participating in an examination
shall agree not to disclose any information obtained during
such examination which does not directly relate to the
calculation of royalties under this Agreement. If as a result
of any such examination it is determined that CIBA paid less
than the full amount of any royalty required to be paid to
PRESBY hereunder, CIBA shall immediately pay PRESBY the amount
of such underpayment, plus interest at the rate equal to the
higher of 1.5% per month or the maximum legal interest rate,
from the date such amount should have been paid through the
date of payment; provided further that if it is determined that
CIBA paid less than 95% of the full amount due, (i) CIBA shall
also reimburse PRESBY for all reasonable fees and expenses
incurred in connection with such examination and (ii) PRESBY's
right of examination may be exercised more frequently than once
each calendar year thereafter.
(d) Intracompany sales of Product between or among CIBA and its
Affiliates or approved sublicensees shall not be subject to any
royalty hereunder, provided that CIBA shall pay royalties on
sales by such Affiliates and approved sublicensees to third
parties. Royalties shall accrue only once with respect to the
same unit of Product.
(e) The royalty rates set forth in SCHEDULE B shall apply to all
sales of Products in the Territory. In the event that the
Patent Rights expire or are invalidated in any country during
the Royalty Period, CIBA shall pay PRESBY a Know How royalty of
three percent (3%) of Net Sales in such country for the
remainder of the Royalty Period. Following the expiration of
the Royalty Period in any country, the license granted
hereunder shall become fully paid up and royalty free with
respect to all future sales of Products in such country.
(f) In the event that CIBA sells any new Products in the Territory
which are covered by the scope of this license but which are
not identified in SCHEDULE B, the parties shall amend SCHEDULE
B to include such new Products, provided that the royalty rates
for such new Products shall be reasonably consistent with the
rates for the Products currently listed on SCHEDULE B.
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(g) The parties shall establish by mutual agreement a reasonable
methodology for identifying the Net Sales of Products which are
sold by CIBA as part of a kit, bundle or similar arrangement
which includes products which are not within the scope of the
license granted hereunder. Once agreed upon, CIBA shall
consistently apply such methodology in its calculation of
royalties and appropriately reflect such items as mutually
agreed by the parties in the statements to be provided by CIBA
pursuant to Section 3.3(b).
3.4. MINIMUM ROYALTIES AND LOSS OF EXCLUSIVITY.
(a) In the event that the royalties paid by CIBA in accordance with
Section 3.3 above do not equal or exceed the minimum royalties
set forth for any Year identified in the attached SCHEDULE B,
PRESBY shall have the right, upon forty five (45) days prior
written notice, to convert the exclusive license granted
hereunder to a non-exclusive license, provided that CIBA shall
have the right to retain the exclusive rights granted hereunder
by timely payment of the difference between the actual
royalties paid for such Year and the applicable minimum royalty
amount determined as set forth in SCHEDULE B.
(b) In the event that CIBA's rights become non-exclusive pursuant
to Section 3.4(a):
(i) PRESBY shall have the right, but not the obligation, to
terminate this Agreement subject to the terms set forth
in Section 10.6;
(ii) CIBA's rights under Sections 2.3 and 2.5 shall become
non-exclusive;
(iii) CIBA shall be released from any further obligation to
pay minimum royalties under Section 3.4(a);
(iv) The Joint Technical Committee, as defined in Section
4.1, shall be discontinued and Section 4, other than
Section 4.5, shall have no force and effect;
(v) The Patent Litigation Committee, as defined in Section
8.1, shall be discontinued and Sections 7.1 and 8 shall
have no force and effect; and
(vi) CIBA's rights under Section 9 shall be waived.
(c) CIBA's obligation to pay minimum royalties shall be waived in
the event that PRESBY fails to cure any material breach of this
Agreement within thirty days following CIBA's delivery to
PRESBY of written notice of such breach. In the event that (i)
any of the independent claims contained in the Patent Rights
are invalidated or held unenforceable by a court of competent
jurisdiction or patent office ("Invalidation"), (ii) as a
proximate result of
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such Invalidation, a third party is allowed to sell an
ophthalmic device for the treatment of presbyopia, hyperopia,
ocular hypertension or glaucoma which would have otherwise
infringed the Patent Rights in the country or countries in
which such Invalidation occurred ("Affected Countries"), and
(iii) the percentage of CIBA's aggregate world wide sales of
Products in the 12 months prior to the Invalidation ("Prior
Sales") derived from the Affected Countries equals at least ten
percent (10%), then, the minimum royalties identified in
SCHEDULE B shall be reduced by a percentage equal to the
percentage of worldwide Prior Sales derived from the Affected
Countries; provided that in the event that the United States is
an Affected Country, the FDA Approval Incentive set forth in
SCHEDULE B shall no longer be included as part of the minimum
royalties.
(d) CIBA shall continue to exercise reasonable business efforts to
market and sell the Products following expiration of the
minimum royalty period.
3.5. EQUITY INVESTMENTS. As additional consideration for the rights
granted to CIBA under this Agreement, CIBA agrees to purchase shares
of Presby Preferred Stock under the following terms and conditions:
(a) INITIAL EQUITY INVESTMENT. The purchase price for the Initial
Equity Investment shall be Two Million Five Hundred Thousand
Dollars ($2,500,000). In exchange for such payment, CIBA shall
receive Presby Preferred Stock representing no less than a
Three and one-half percent (3.5%) and no more than a five
percent (5%) post money ownership interest in PRESBY on an as
converted fully diluted basis, as shall be mutually agreed upon
by the parties.
(i) Except as provided in subparagraph (ii) below, the
closing of the Initial Equity Investment shall be
contingent upon, and close contemporaneously with,
PRESBY's closing of the Third Party Equity Investment.
(ii) In the event PRESBY fails to close the Third Party
Equity Investment within 180 days following the
Effective Date, CIBA shall be released from any
obligation, but shall retain all rights, to close the
Initial Equity Investment until 60 days after the
earlier of (A) the date PRESBY closes a Third Party
Equity Investment thereafter, or (B) three (3) years
following the Effective Date.
(iii) If the Third Party Equity Investment has closed and
includes Presby Preferred Stock, then the Presby
Preferred Stock issued in the Initial Equity Investment
shall have substantially the same terms and conditions
applicable to the Third Party Equity Investment. If the
Third Party Investment has not closed or does
9
not include Presby Preferred Stock, then the Presby
Preferred Stock issued in the Initial Equity Investment
shall have such terms and conditions as shall be
mutually agreed upon by the parties.
(b) STAGE II EQUITY INVESTMENT. The purchase price for the Stage II
Equity Investment shall be Two Million Five Hundred Thousand
Dollars ($2,500,000). In exchange for such payment, CIBA shall
receive Presby Preferred Stock.
(i) Except as provided in subparagraph (ii) below, the
closing of the Stage II Equity Investment shall be
contingent upon and close within 60 days following the
enrollment of the first patient in PRESBY's Stage II
clinical trial.
(ii) In the event PRESBY fails to enroll the first patient
in PRESBY's Stage II clinical trial within one (1) year
following the Effective Date, CIBA shall be released
from the obligation, but shall retain all rights, to
close the Stage II Equity Investment until 60 days
after the earlier of (A) the date PRESBY enrolls the
first patient in PRESBY's Stage II clinical trial, or
(B) three (3) years following the Effective Date.
(iii) If the Initial Equity Investment has closed, the Presby
Preferred Stock issued in the Stage II Equity
Investment shall represent the same number of shares of
equity securities (subject to proportionate adjustment
to reflect any stock split, consolidation,
reclassification, share exchange or other reorganiation
following the closing of the Initial Equity Investment)
and have substantially the same terms and conditions
applicable to the Initial Equity Investment as
determined under Section 3.5(a)(iii). If the Initial
Equity Investment has not closed, then the Presby
Preferred Stock issued in the Stage II Investment shall
have such terms and conditions as shall be mutually
agreed upon by the parties.
(c) CONDITIONS PRECEDENT. Notwithstanding any provision of this
Agreement to the contrary, CIBA's obligation to close either
the Initial Equity Investment or the Stage II Equity Investment
shall be contingent upon and subject to the following
conditions precedent, which must be satisfied at or prior to
closing:
(i) PRESBY shall have a single class of common stock and a
single class of preferred stock, which shall be the
Presby Preferred Stock, and no other shares of PRESBY
stock shall be issued and outstanding other than the
Series C Convertible Preferred Stock, as more fully
described in the Certificate of Designation, Rights and
Preferences
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of Series C Convertible Preferred Stock of RAS Holding
Corp., attached hereto as SCHEDULE D.
(ii) PRESBY shall not be a party to any agreement which
provides for the direct or indirect payment by PRESBY
to any shareholder, immediate family member or entity
controlled by any such shareholder of PRESBY, except
under (A) this Agreement, (B) any certificate of
designation for the Presby Preferred Stock or (C) the
agreements attached hereto as SCHEDULE E.
(iii) PRESBY's stockholders shall have caused its amended and
restated Certificate of Incorporation and stockholders
agreement to be amended such that the Board of
Directors of PRESBY shall consist of no more than seven
(7) directors, with at least one (1) director to be
designated by CIBA, until the date on which (A) PRESBY
closes an initial public offering of securities; (B)
CIBA no longer holds at least ninety percent (90%) of
the equity securities of PRESBY acquired pursuant to
this Agreement; or (C) this Agreement is terminated as
a result of an uncured material breach by CIBA.
In the event that the foregoing conditions precedent are not
satisfied as of the time of any closing requested by CIBA
following no less than sixty (60) days prior written notice,
CIBA's obligation to purchase the Presby Preferred Stock shall
be waived and, provided that CIBA has made all royalty payments
(including minimum royalty payments, if applicable) required to
maintain its exclusive license and is not otherwise in default
hereunder, the Territory shall be immediately expanded to
include the United States and PRESBY shall assign all FDA
filings to CIBA effective as of the date of the closing
requested by CIBA.
3.6 TAXES. All payments to be made pursuant to this Agreement to Presby
will be paid to Presby in United States Dollars in a country
designated by PRESBY and represent net amounts that Presby is
entitled to receive, and shall not be subject to withholding or
deduction for any reason whatsoever. In the event that such payments
become the subject of duties, taxes or charges of whatever kind or
nature levied by any country other than the designated country, such
payments will be increased to such an extent as to allow Presby to
receive the net amounts due under this Agreement.
4. PRODUCT DEVELOPMENT AND REGISTRATION
4.1 JOINT TECHNICAL COMMITTEE. The parties shall establish a Joint
Technical Committee ("JTC"). So long as CIBA holds an exclusive
license under this Agreement, the JTC shall have responsibility for
coordination, review and approval of Product development efforts,
clinical trials, regulatory submissions
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and selection and retention of any third party consultants. The JTC
shall specifically approve all clinical protocols, selection and
training of participating surgeons, evaluate the outcomes of all
clinical trials, determine the significance of such outcomes and
make the final decision regarding when and whether to seek Product
Registrations in any country within the Territory. The JTC shall
also approve the sale of any Products in countries for which a
Product Registration is not required by law and determine whether
any of the Patent Rights should be permitted to lapse or become
abandoned.
(a) The parties shall each appoint 2 voting members to serve on the
JTC. All approvals, determinations or other actions by the JTC
shall require the affirmative votes of at least 3 of the 4
members. In the event of a deadlock on any issue requiring a
vote of the JTC, such issue shall be referred to the respective
Executive Officers of each party for resolution by good faith
negotiations.
(b) The JTC shall maintain minutes of meetings signed by all voting
members, which record the items presented for consideration by
the JTC and the outcome of all votes or other actions taken.
Copies of such minutes shall be provided to all voting members.
All files, documents or other records created or maintained by
or behalf of the JTC shall be available to both parties upon
request, subject to the terms of Section 11.
(c) The JTC will meet periodically and as required, but no less
frequently than once every six (6) months, unless otherwise
mutually agreed by the parties. The JTC will meet within ten
(10) business days following the request of either party. Such
meetings may be held either in person or via any
telecommunications medium acceptable to the parties. Each party
shall bear its own personnel, travel, lodging, and other
expenses relating to JTC meetings. Either party may change one
or more of its representatives to the JTC at any time. Members
of the JTC may be represented at any meeting by another member
of the JTC, or by a deputy. Either party may permit additional
employees to attend and participate (on a non-voting basis) in
the JTC meetings. Consultants or other third parties shall also
be permitted to attend, subject to the prior approval of each
party, which approval shall not be unreasonably withheld.
4.2 US PRODUCT REGISTRATION. Subject to the oversight of the JTC as
provided in accordance with Section 4.1 above:
(a) PRESBY shall be responsible for, diligently pursue and bear all
costs associated with all product development efforts,
including all clinical trials, required to obtain FDA approval
in the United States to market the Products
12
for the treatment of presbyopia, hyperopia, ocular
hypertension, and glaucoma.
(b) CIBA shall be responsible for, diligently pursue and bear all
costs associated with the preparation of all regulatory
submissions in the United States, including but not limited to
statistical and clinical reports, clinical product
manufacturing, packaging and shipping, FDA filing fees, and any
regulatory consulting fees and expenses related thereto. CIBA
shall also be responsible for any legal fees incurred by CIBA
and expenses related thereto. CIBA shall also provide, at
CIBA's expense, such reasonable administrative and technical
support services to PRESBY as may be mutually agreed upon by
the parties from time to time.
4.3 POST-FDA APPROVAL REGISTRATION; NON-US PRODUCT REGISTRATIONS.
Subject to the oversight of the JTC as provided in accordance with
Section 4.1 above, CIBA shall be responsible for, and bear all costs
associated with, (a) maintaining Product Registrations in the United
States, including but not limited to clinical trials, after receipt
of an approval letter from the FDA for Products which includes an
indication for the treatment of presbyopia, hyperopia, glaucoma
and/or ocular hypertension, as applicable, and (b) obtaining and
maintaining Product Registrations for all countries in the Territory
outside of the United States. PRESBY shall provide CIBA such data
and assistance as may be reasonably requested by CIBA from time to
time without additional charge.
4.4 REGISTRANT DESIGNATION. All Product Registrations shall be in the
name of CIBA (or a CIBA affiliate designated by CIBA); provided that
FDA filings shall, subject to Section 3.5, be in the name of PRESBY
(i) for the treatment of glaucoma or ocular hypertension, until the
closing of the Initial Equity Investment and (ii) for the treatment
of presbyopia or hyperopia until the closing of the Stage II Equity
Investment, following which PRESBY shall assign such FDA filings to
CIBA.
4.5 NOTICE AND PARTICIPATION. Each party will (a) provide the other with
copies of any communication to or from any Regulatory Authority,
including, but not limited to, copies of submissions,
correspondence, minutes of meetings and teleconference reports and
(b) be entitled to participate in all meetings with Regulatory
Authorities; provided that CIBA shall automatically relinquish
rights under this Section with respect to a particular country if it
no longer holds an exclusive license under this Agreement.
Furthermore, upon such time as CIBA no longer holds an exclusive
license under this Agreement, CIBA shall take all acts, do all
things, execute all documents and render all assistance reasonably
required to assign or transfer Product Registrations for such
country to PRESBY.
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5. REPRESENTATIONS AND WARRANTIES
5.1 BY PRESBY. PRESBY represents and warrants that, as of the Effective
Date:
(a) PRESBY is the owner of the Patent Rights, Know-How and
Trademarks and has the right to license the same to CIBA as
provided in this Agreement free of any third party claims,
liens or encumbrances;
(b) PRESBY has not assigned or conveyed any interest in the Patent
Rights, Trademarks or Know-How inconsistent with the rights
granted CIBA hereunder;
(c) To the best knowledge of the officers, directors and management
of PRESBY, the practice of the Patent Rights and Know-How does
not infringe any rights of any third parties;
(d) Except as set forth on SCHEDULE F, to the best knowledge of the
officers, directors and management of PRESBY, no third party
has infringed or is infringing the Patent Rights;
(e) All patent applications within the Patent Rights have been
prepared and prosecuted in good faith and, to the best
knowledge of the officers, directors and management of PRESBY
there is no reason to believe that any patent included within
the Patent Rights would be invalid or would be held to be
unenforceable by a court of competent jurisdiction.
(f) The execution and delivery of this Agreement and the
consummation by PRESBY of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate
action on the part of PRESBY, except for the issuance of the
Presby Preferred Stock and the specific rights and preferences
relating thereto which shall be determined in accordance with
Section 3.5 of this Agreement and authorized by all necessary
corporate action by PRESBY prior to the closing of the equity
investments described in Section 3.5.
(g) Neither the execution and delivery of this Agreement by PRESBY,
nor the consummation of the transactions contemplated by this
Agreement to be performed by PRESBY, other than the issuance of
the Presby Preferred Stock, will violate or conflict with any
provision of its certificate of incorporation or by-laws or
violate or conflict with any provision of any law, rule,
regulation, order, permit, certificate, writ, judgment,
injunction, decree, determination, award or other decision of
any court, government, governmental agency or instrumentality,
domestic or foreign, or arbitrator, or any contract or
agreement, binding on PRESBY that is material to PRESBY and its
business.
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(h) This Agreement (assuming the due authorization, execution and
delivery thereof by CIBA) constitutes the legal, valid and
binding obligation of PRESBY, enforceable against PRESBY in
accordance with its terms, subject to the effect of applicable
bankruptcy, insolvency, fraudulent transfer or conveyance,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject as to
enforceability to general principles of equity, including to
the extent applicable principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity); and
(i) PRESBY is a corporation duly organized and existing in good
standing under the laws of the State of Delaware, and is duly
qualified and is in good standing in all other states in which
it is doing business, and, to the best of PRESBY's knowledge,
information and belief, has complied with any applicable filing
or other requirements of state and federal laws necessary and
material to enable it to conduct its business.
(j) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED FOR HEREIN, PRESBY
EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES, CONDITIONS
AND REPRESENTATIONS, EITHER EXPRESS OR IMPLIED, BY OPERATION OF
LAW OR OTHERWISE, WITH RESPECT TO THE PRODUCTS, PATENT RIGHTS,
KNOW HOW, TRADEMARKS, ROYALTIES OR ANY PART THEREOF INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, OR THE AMOUNT OF ROYALTIES
WHICH MAY ACCRUE HEREUNDER.
5.2 BY CIBA. CIBA represents and warrants that, as of the Effective
Date:
(a) The execution and delivery of this Agreement and the
consummation by CIBA of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate
action on the part of CIBA;
(b) Neither the execution and delivery of this Agreement by CIBA,
nor the consummation of the transactions contemplated by this
Agreement to be performed by CIBA, will violate or conflict
with any provision of its certificate of incorporation or
by-laws or violate or conflict with any provision of any law,
rule, regulation, order, permit, certificate, writ, judgment,
injunction, decree, determination, award or other decision of
any court, government, governmental agency or instrumentality,
domestic or foreign, or arbitrator, or any contract or
agreement, binding on CIBA that is material to CIBA and its
business;
(c) This Agreement (assuming the due authorization, execution and
delivery thereof by Presby) constitutes the legal, valid and
binding obligation of
15
CIBA, enforceable against CIBA in accordance with its terms,
subject to the effect of applicable bankruptcy, insolvency,
fraudulent transfer or conveyance, reorganization, moratorium
and similar laws affecting creditors' rights and remedies
generally, and subject as to enforceability to general
principles of equity, including to the extent applicable
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity);
(d) CIBA Vision AG is a corporation duly organized and existing in
good standing under the laws of Switzerland, and, to the best
of CIBA's knowledge, information and belief, has complied with
any applicable filing or other requirements of all applicable
laws necessary and material to enable it to conduct its
business.
6. COVENANTS AND INDEMNIFICATION
6.1 CERTAIN ACTIONS. Each party agrees not to take any actions directly
or indirectly that would be a violation, or cause the other party to
be in violation, of any federal, state and local laws and
regulations as a consequence of this Agreement. CIBA further
covenants and agrees that it shall comply with all applicable
federal, state and local laws and regulations governing its
manufacture, marketing and sale of Products hereunder in all
jurisdictions in which it engages in such manufacturing, marketing
and sales. PRESBY further covenants and agrees that during the term
of this Agreement PRESBY shall not pay, loan or otherwise
distribute, directly or indirectly, any of the funds paid to PRESBY
by CIBA pursuant to this Agreement to any shareholder of PRESBY,
immediate family member or entity controlled by such shareholder,
other than pursuant to the agreements attached as SCHEDULE E,
salaries, bonuses, and expenses in the ordinary course of business,
or any payments made by PRESBY to CIBA pursuant to Sections 10.6 or
10.7, without CIBA's prior written consent, which consent shall not
be unreasonably withheld.
6.2 INDEMNIFICATION.
(a) PRESBY will indemnify, defend and hold harmless CIBA and its
successors, assigns, agents, officers, managers, members,
directors and employees, against all claims, damages, costs
(including but not limited to reasonable attorney's fees and
court costs), charges losses or liabilities ("Losses") arising
out of or resulting from a breach of this Agreement by Presby,
subject in all cases to the proviso contained in Section 6.2(e)
and the limitations set forth in Section 12.
(b) CIBA will indemnify, defend and hold harmless Presby and its
successors, assigns, agents, officers, managers, members,
directors and employees, against all Losses arising out of or
resulting from:
16
(i) a breach of this Agreement by CIBA, subject in all
cases to the proviso contained in Section 6.2(e) and
the limitations set forth in Section 12;
(ii) any claim alleging that any Product not manufactured by
PRESBY violates any applicable safety or regulatory
standard in effect as of the date of manufacture of a
given Product; or
(iii) any claim alleging injury or damage to a person, entity
or property of another arising from (A) the negligence
or misconduct of CIBA, its employees or contractors;
(B) any manufacturing choice made by CIBA, including
selection of device components; or (C) any defect in
design of such Product .
(c) In the event that any judicial, administrative, regulatory or
other proceeding, investigation, inquiry or other
administrative charge or complaint (a "Legal Proceeding") shall
be threatened or instituted or any claim or demand shall be
asserted by a party in respect of which payment may be sought
under the provisions of this Section 6.2 or for breach of any
of the representations and warranties set forth herein, the
party seeking indemnification (the "Indemnitee") shall promptly
cause written notice of the assertion of any such claim of
which it has knowledge which it reasonably believes to be
covered by this indemnity to be forwarded to the other party
(the "Indemnitor"); provided, however, that the failure to give
such notice shall not affect the indemnification provided
hereunder except to the extent the Indemnitor has actually been
prejudiced as a result of such failure. Any notice of a claim
by reason of any of the representations, warranties or
covenants contained in this Agreement shall state specifically
the representation, warranty or covenant with respect to which
the claim is made, the facts giving rise to an alleged basis
for the claim, and the amount of the liability asserted against
the Indemnitor by reason of the claim.
(d) Except as otherwise provided herein, in the event of the
initiation of any Legal Proceeding against an Indemnitee by a
third party, the Indemnitor shall have the absolute right after
the receipt of notice, at its option and at its own expense, to
be represented by counsel (which counsel shall be reasonably
satisfactory to the Indemnitee) and to defend against,
negotiate, settle or otherwise deal with any proceeding, claim,
or demand which relates to any Losses indemnified against
hereunder; provided, however, that (i) the Indemnitor exercises
such option in writing within 30 days of receipt of notice; and
(ii) the Indemnitee may participate in any such proceeding with
counsel of its choice and at its expense. The parties hereto
agree to cooperate fully with each other in connection with the
defense,
17
negotiation or settlement of any such legal proceeding, claim
or demand. To the extent the Indemnitor elects not to defend
such proceeding, claim or demand, and the Indemnitee defends
against or otherwise deals with any such proceeding, claim or
demand, the Indemnitee may retain counsel (reasonably
satisfactory to Indemnitor), at the expense of the Indemnitor
which shall be paid by Indemnitor as and when incurred, the
Indemnitor shall nevertheless indemnify the Indemnitee for the
full amount of the Losses relating to such proceeding, claim or
demand and control the defense of and settle such proceeding;
provided that the Indemnitee shall give the Indemnitor twenty
(20) days written notice prior to entering into any such
settlement and shall not settle any such proceeding, claim or
demand without the consent of the Indemnitor, which consent
shall not be unreasonably withheld. If the Indemnitee shall
settle any such proceeding without the consent of the
Indemnitor, the Indemnitee shall thereafter have no claim
against the Indemnitor under this Section 6.2 with respect to
any Losses occasioned by such settlement.
(e) The exclusive remedy available to a party hereto in respect of
the matters covered by this Section 6.2 shall be to proceed in
the manner and subject to the limitations contained in Sections
6.2 and 10.2; provided, however, that Section 6.2 shall not
apply to any claim for indemnification with respect to Patent
Rights, which shall be governed by the provisions of Sections 8
and 10.2 of this Agreement.
7. MAINTENANCE, PROSECUTION AND OWNERSHIP OF PATENT RIGHTS
7.1 MAINTENANCE AND PROSECUTION. PRESBY shall be responsible for and
shall bear all costs required for the maintenance of the Patent
Rights and the prosecution of the patent applications included
within the Patent Rights. Unless directed to do so by the JTC,
PRESBY shall not permit any of the Patent Rights to lapse or become
abandoned; provided that in the event that PRESBY desires to abandon
any of the Patent Rights, PRESBY shall notify CIBA and CIBA shall
have the right, but not the obligation, to assume such Patent
Rights. In the event CIBA assumes any such Patent Rights, PRESBY
shall assign all right, title and interest in and to such Patent
Rights to CIBA, CIBA shall assume sole responsibility for
prosecution and maintenance of such Patent Rights and CIBA shall be
relieved of any obligation to pay royalties on Products sold in the
country or countries in which such Patent Rights have been assigned.
CIBA shall observe all patent marking requirements with respect to
the Products.
7.2 OWNERSHIP. Except as provided in Section 7.1, Presby shall at all
times retain ownership of all Patent Rights, Trademarks and all
other intellectual property rights it owns , irrespective of whether
or not such rights are used in the treatment of presbyopia,
hyperopia, ocular hypertension or glaucoma. During
18
the term of this Agreement, CIBA will not contest or dispute the
validity of any of the Patent Rights or take any action intended to
adversely affect PRESBY's Patent Rights, Trademarks and other
property rights.
8. ASSERTION OR DEFENSE OF PATENT RIGHTS
8.1 PATENT LITIGATION COMMITTEE. The parties shall establish a Patent
Litigation Committee ("PLC") to facilitate communication and
decision making concerning all pending, threatened and potential
claims relating to patent infringement ("Claims"), including both
Claims against PRESBY and/or CIBA and Claims by CIBA or PRESBY
against any third party based upon the Patent Rights. The PLC shall
have the authority and responsibility to approve the filing of any
Claim by CIBA or PRESBY against any third party. Neither party shall
initiate any Claim or settle any Claim unless approved by the PLC.
(a) The parties shall each appoint 2 voting members to serve on the
PLC. All approvals, determinations or other actions by the PLC
shall require the affirmative votes of at least 3 of the 4
members. In the event of a deadlock on any issue requiring a
vote of the PLC, such issue shall be referred to the respective
Executive Officers of each party for resolution by good faith
negotiations.
(b) The PLC will meet within 10 business days following the request
of either party. Such meetings may be held either in person or
via any telecommunications medium acceptable to the parties.
Separate legal counsel for each party shall be present and
participate in all meetings of the PLC. Either party may change
one or more of its representatives to the PLC at any time.
Members of the PLC may be represented at any meeting by another
member of the PLC, or by a deputy. Either party may permit
additional employees to attend and participate (on a non-voting
basis) in the PLC meetings. Consultants or other third parties
shall not be permitted to attend. Each party bear its own
personnel, travel, lodging, legal fees and other expenses
relating to PLC meetings.
8.2 NOTIFICATION OF CLAIMS. If either party shall become aware of any
actual or potential act of infringement, irrespective of any actual
or potential exemption, by any third party which may give rise to a
Claim or receives notice of any Claim by a third party, such party
shall give notice to the other party within 2 days and request a
meeting of the PLC. The party having knowledge of such Claim shall
make available to the PLC all information and documentation in its
possession concerning such Claim.
8.3 ASSERTION OF CLAIMS AGAINST THIRD PARTIES. Subject to the approval
of the PLC, CIBA shall take such action, as it deems appropriate, to
prevent or eliminate any infringement of the Patent Rights and to
collect damages.
19
(a) Any damages recovered shall be applied first to compensate each
party for its reasonable out of pocket expenses paid to third
parties in the prosecution of such action, provided that if the
total recovery is less than the combined total amount of such
expenses paid by the parties, the available funds shall be
apportioned between the parties in proportion to such expenses
paid by each party in connection with the action.
(b) CIBA shall be entitled to apply fifty percent (50%) of any
unrecovered reasonable out of pocket expenses paid to third
parties as an offset against any royalties (including minimum
royalty payments) which otherwise become payable hereunder.
(c) In the event that the recovery exceeds the combined total
amount of reasonable expenses paid to third parties by the
parties, the remaining funds shall be apportioned between the
parties in proportion to the damage incurred by each as a
result of the infringement.
(d) In the event that the PLC does not approve the assertion of a
Claim against a third party, PRESBY shall have the right to
assert the Claim at its own expense and to retain any
recoveries obtained as a result; provided that if PRESBY
exercises such right, (i) the PLC shall be disbanded, (ii)
PRESBY shall thereafter assume sole responsibility, at its own
expense, for the prevention or elimination of any infringement
of the Patent Rights, provided that if thereafter PRESBY fails
to assert any Claim within twenty (20) business days following
notice from CIBA of an act of infringement in accordance with
Section 8.2, CIBA shall have the right to assert such Claim at
its own expense and to retain any recoveries obtained as a
result. Neither party shall enter into any settlement of any
Claim brought pursuant to this Section 8.3(d) without the prior
written consent of the other party, which consent shall not be
unreasonably withheld.
(e) Each party shall execute such documents and provide such other
documentation, data or assistance as shall be reasonably
requested by the other party, including participating as the
named plaintiff or co-plaintiff in any Claim brought by other
party, pursuant to this Section 8.3.
8.4 DEFENSE AGAINST CLAIMS BY THIRD PARTIES. CIBA shall assume control
over, and be responsible for the cost of, the defense of any Claims
brought by a third party. CIBA shall undertake such defense in its
own name, jointly in the name of CIBA and PRESBY, or in the name of
PRESBY, as determined by CIBA. PRESBY shall cooperate fully with
CIBA in the defense of such action and shall have the right to
participate in such litigation at its own expense.
(a) Fifty percent (50%) of all reasonable expenses paid to third
parties by CIBA in connection with such defense shall be
applied as an offset against
20
any payments (including milestone payments, royalties and
minimum royalty payments) which otherwise become payable
hereunder.
(b) If, by the terms of any settlement approved by the PLC or any
final judgment entered by a court or other authority of
competent jurisdiction, CIBA is required to compensate or pay
damages to a third party as a result of a Claim, or, obtain a
royalty bearing license from such third party in order to make,
have made, use, or sell Products, one hundred percent (100%) of
any such payments made by CIBA to such third party shall be
applied as an offset against any milestone payments, royalties
and minimum royalty payments which otherwise become payable
hereunder.
8.5 SETTLEMENT APPROVAL. Except as provided in Section 8.3, neither
party shall agree to any settlement of any Claim without the
approval of the PLC. In the event the parties are unable to agree
upon acceptance of a settlement offer recommended by CIBA
(a) CIBA shall have the right, but not the obligation to transfer
control of such action to PRESBY by written notice;
(b) PRESBY shall be responsible for, and bear all expenses
associated with, the defense or prosecution of such Claim
following the rejection of such settlement; and
(c) CIBA shall be permitted to offset One Hundred percent (100%) of
all additional expenses incurred by CIBA in connection with
such Claim against any payments (including milestone payments,
royalties and minimum royalty payments) which otherwise become
payable hereunder.
9. NEGOTIATION RIGHT
So long as CIBA holds an exclusive license under this Agreement, PRESBY
shall not offer or enter into any negotiations or definitive agreements
with any third party concerning the sale or license of any product or
technology with applications for the treatment of presbyopia, hyperopia,
ocular hypertension or glaucoma (but outside of the scope of this license)
unless PRESBY has first notified CIBA in writing of its intent to sell or
license such product or technology and CIBA has failed to make a bona fide
offer to purchase or license such product or technology within twenty (20)
business days following receipt of such notice. In the event CIBA delivers
such a bona fide offer prior to the expiration of such twenty (20) day
period, PRESBY agrees to negotiate in good faith with CIBA, provided that
if the parties are unable to reach a definitive agreement within twenty
(20) business days after CIBA delivers such bona fide offer, PRESBY shall
be released from any further obligations under this Section 9.
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10. TERM AND TERMINATION
10.1 TERM. The term of this Agreement shall begin as of the Effective
Date and shall remain in effect until the expiration of the last
Royalty Period unless earlier terminated as permitted hereunder.
10.2 TERMINATION. This Agreement may be terminated by the non-breaching
party for cause immediately by written notice upon the
occurrence of any of the following events:
(a) if the other party breaches any material provision of this
Agreement and fails to cure fully such breach within fifteen
(15) business days of written notice of such breach; or
(b) if (i) the other party becomes insolvent, becomes unable to
meet its obligations for any reason (financial or otherwise),
or seeks protection under any bankruptcy, receivership,
creditors arrangement, composition or comparable proceeding, or
(ii) any such proceeding is instituted against the other party
and is not dismissed within sixty (60) days thereafter.
10.3 WAIVER; BOARD RESIGNATION. The right to terminate this Agreement, as
provided in Section 10.2, shall not be affected in any way by a
waiver of, or failure to take action with respect to any previous
grounds for termination. In addition, if PRESBY exercises its right
to terminate this Agreement pursuant to Section 10.2, then CIBA
shall immediately cause its designee to PRESBY's board of directors
to resign.
10.4 NO RELEASE. The termination of this Agreement shall not release
either party from any obligation that matured prior to the effective
date of the termination.
10.5 PRODUCT REGISTRATIONS UPON TERMINATION. Upon the expiration or
termination by PRESBY of this Agreement, or in the event Section
10.6 is applicable, CIBA shall take all action, execute all
documents and do all things necessary to transfer and assign to
PRESBY all Product Registrations and FDA filings, as applicable, as
promptly as possible to permit PRESBY to maintain such Product
Registrations and FDA filings or to permit PRESBY to pursue any
pending applications for same.
10.6 TERMINATION BY PRESBY IN THE EVENT OF NON-EXCLUSIVITY. In the event
that CIBA's rights become non-exclusive pursuant to Section 3.4(b),
PRESBY shall have the right, but not the obligation, to terminate
this Agreement upon ninety (90) days written notice by (i) paying
CIBA the amount (if any) by which the total amount of all prepaid
royalties and minimum royalties paid by CIBA to PRESBY under this
Agreement exceeds the total amount of royalties that would have been
paid by CIBA to PRESBY under this Agreement had no payment of
22
prepaid royalties or minimum royalties been required, (ii)
purchasing all Presby Preferred Stock purchased by CIBA from PRESBY
hereunder (or any other securities into which the Preferred Stock
may have been converted or exchanged) at a price equal to CIBA's
cost of such Presby Preferred Stock, and (iii) paying CIBA the total
amount of all milestone payments paid by CIBA pursuant to Section
3.2.
10.7 SURVIVAL OF INDEMNIFICATION. Notwithstanding anything in Section 10
to the contrary, the indemnification provisions contained in Section
6.2 of this Agreement shall survive for ten (10) years following the
expiration or termination of this Agreement.
11. CONFIDENTIALITY
The Secrecy Agreement between RAS Holding Corp. and CIBA Vision
Corporation, dated August 21, 2001 (the "Secrecy Agreement"), attached
hereto as SCHEDULE G, is hereby incorporated by reference, and is deemed
amended such that (a) CIBA Vision AG shall be deemed a party to the Secrecy
Agreement, having the same rights and obligations as CIBA Vision
Corporation thereunder and (b) the Secrecy Agreement shall expire or
terminate by its terms, but in no event earlier than two years after the
expiration or termination of this Agreement.
12. LIMITATION OF LIABILITY
NOTWITHSTANDING SECTION 6.2, THE PARTIES TO THIS AGREEMENT AND THEIR
SUCCESSORS, ASSIGNS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, STOCKHOLDERS,
MEMBERS AND MANAGERS WILL NOT BE LIABLE FOR EXEMPLARY, PUNITIVE, INDIRECT,
OR OTHER CONSEQUENTIAL DAMAGES OF ANY KIND UNLESS SUCH CONSEQUENTIAL
DAMAGES (1) RESULT FROM OR ARISE OUT OF (A) GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, OR (B) BREACH OF ANY PROVISION HEREUNDER PERTAINING TO
CONFIDENTIALITY OR PROPRIETARY RIGHTS; OR (2) ARE COVERED BY ANY INDEMNITY
FOR (A) THE INFRINGEMENT OF PROPRIETARY RIGHTS, OR (B) PRODUCTS LIABILITY.
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOST PROFITS, LOST SAVINGS,
LOSS OF GOODWILL, OR RECOVERY OF EXPENDITURES, INVESTMENTS OR COMMITMENTS
IN ANY CIRCUMSTANCE. THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE NO
EXPECTATIONS AND HAVE RECEIVED NO ASSURANCES THAT ANY INVESTMENT, EXPENSE
OR COMMITMENT WILL BE RECOVERED OR RECOUPED OR THAT THEY WILL OBTAIN ANY
ANTICIPATED AMOUNT OF PROFITS BY VIRTUE OF THIS AGREEMENT.
23
13. MISCELLANEOUS PROVISIONS
13.1 NOTICES: All notices required or permitted hereunder shall be given
in writing and mailed postage prepaid by first class certified or
registered mail, or sent by a nationally recognized express courier
service, or hand delivered to the addresses set forth for such party
in the opening paragraph hereof (or such other address as a party
may notify the other party in accordance with this Section 13.1),
provided that a copy of any notice to CIBA shall be sent to:
CIBA Vision Corporation
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Attention: General Counsel
Any such notice or communication shall be deemed to have been
effectively given as of the date so delivered personally or three
(3) days after so mailed, (except that a notice of change of address
shall not be deemed to have been given until received by the
addressee).
13.2 PUBLICITY: Neither party shall issue any press release or other
public statement, whether oral or in written form, relating to this
Agreement, the Products, or the Patent Rights without prior written
consent of the other party, which consent shall not be unreasonably
withheld; provided that (a) CIBA shall be free to produce Product
labeling, sales and marketing materials, advertising and otherwise
engage in sales and promotional activities relating to the Products
without such consent, (b) the parties shall be permitted to make
such disclosures as are required by law, rule, regulation or court
order, without such consent, provided that the party making such
disclosure shall be notify the other party of the necessity of such
disclosure and provide the other party with an opportunity to review
any such disclosure, and (c) either party may disclose the existence
of and a general description of this Agreement, the Products, the
Patent Rights and the relationship of the parties.
13.3 ASSIGNMENT: This Agreement and all rights and obligations hereunder
are personal to the parties and may not be assigned, other than by
CIBA to CIBA Affiliates, without the express written consent of the
other party. Any assignment or attempt to assign the same in the
absence of such prior written consent shall be void and without
effect.
13.4 CHOICE OF LAW AND DISPUTE RESOLUTION: This Agreement shall be
governed by, and construed in accordance with, the laws of the State
of
Texas, excluding any conflict of law provisions. Any dispute
between the parties relating to this Agreement shall be first
referred to the respective Executive Officers of each
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party for resolution by good faith negotiations. In the event such
negotiations fail to result in a resolution of the dispute within 30
days, either party shall have the right to require submission of the
matter for resolution by binding arbitration. Such arbitration shall
be governed by the rules of the American Arbitration Association and
conducted by a single arbitrator, or, if the parties are unable to
agree upon a single arbitrator, a panel of three arbitrators, in
Atlanta, Georgia. The decision of the arbitrator(s) shall be final,
conclusive and binding on the parties and may be entered in any
court of competent jurisdiction. Each party shall bear its own costs
and expenses in connection with such arbitration. Notwithstanding
the foregoing, either party shall be entitled to seek injunctive
relief from any court of competent jurisdiction in response to any
breach or threatened breach of this Agreement by the other party.
13.5 SEVERABILITY: 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.
13.6 ABSENCE OF WAIVER: The failure of either party at any time or times
to require performance of any provisions hereof shall in no manner
affect its rights to enforce such provisions at a later time.
13.7 ENTIRETY OF AGREEMENT: This Agreement and the Secrecy 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. Each of
the parties expressly agrees and acknowledges that, other than those
statements expressly set forth in this Agreement, it is not relying
on any statement, whether oral or written, of any person or entity
with respect to its entry into this Agreement or to the consummation
of the transactions contemplated by this Agreement. This Agreement
shall supercede any prior agreements between the parties, other than
the Secrecy Agreement, which shall be deemed amended in accordance
with Section 11 of this Agreement.
13.8 INTEREST ON PAST DUE PAYMENTS: Any amounts due hereunder that are
not paid when due, including without limitation attorney's fees,
shall bear interest at the rate equal to the higher of 1.5% per
month or the maximum legal interest rate.
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13.9 NO PARTNERSHIP. The parties to this Agreement understand and agree
that (a) this Agreement does not create a fiduciary relationship
between them and (b) nothing in this Agreement is intended to make
either party a partner, employee, joint employer or servant of the
other for any purpose whatsoever. Neither party shall make any
representation to any third party which is inconsistent with this
Section 13.9.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the Effective Date.
CIBA VISION ▇▇ ▇▇▇▇▇▇ CORP.
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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TITLE: Head CV International TITLE: Chief Executive Officer
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BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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TITLE: Member of Board
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EXHIBITS AND SCHEDULES INTENTIONALLY OMITTED.
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