EXCLUSIVE LICENSE
AGREEMENT
This Exclusive License Agreement (the
“Agreement”), dated as of 15 th day of
February 2007 (the “Effective Date”), is entered into
by and between Pfizer Inc., a Delaware corporation and Pfizer
Products, Inc., a Connecticut corporation (hereinafter collectively
defined as “Licensor”), and InSite Vision Incorporated,
a Delaware corporation (“Licensee”).
WHEREAS, Licensee desires to obtain from
Licensor, and Licensor wishes to grant to Licensee, an exclusive,
royalty bearing license under certain patents as more particularly
set forth below.
THEREFORE, Licensor and Licensee agree as
follows:
1.
Definitions .
a. “Affiliate” shall mean any person,
corporation, or business entity that directly or indirectly
controls, is controlled by, or is under common control with a
Party. As used herein, “control” means ownership or
other beneficial interest in 50% or more of the voting stock or
other voting interest of a corporation or other business entity, or
the ability to direct an entity’s affairs or
actions.
b. “Business Day” means a day that is
not a Saturday, Sunday or a day on which banking institutions in
New York, New York, United States of America are authorized or
obligated by law or executive order to close.
c. “Confidential Information” means all
trade secrets or other proprietary information, including without
limitation any proprietary data and materials (whether or not
patentable or protectable as a trade secret), regarding a
party’s technology, products, business or objectives or
regarding the Licensed Product, including without limitation the
terms of this Agreement. Notwithstanding the foregoing, there shall
be excluded from the foregoing definition of Confidential
Information any of the foregoing that:
(i) was known by the receiving party or its
Affiliates prior to its date of disclosure to the receiving party
as shown by the receiving party’s written records;
or
(ii) either before or after the date of the
disclosure to the receiving party is lawfully disclosed to the
receiving party or its Affiliates by a Third Party not in violation
of any obligation to the disclosing party; or
(iii) either before or after the date of the
disclosure to the receiving party becomes published or generally
known to the public through no fault or omission on the part of the
receiving party or its Affiliates; or
(iv) is independently developed by or for the
receiving party or its Affiliates without reference to or reliance
upon the Confidential Information as demonstrated by
contemporaneous written records of the receiving party;
or
(v) is required to be disclosed by the receiving
party to comply with applicable laws or to comply with governmental
regulations or the regulations or requirements of any
internationally-recognized stock exchange including the NASDAQ,
provided that the party required to make such disclosure provides
prior notice of such disclosure to the other party (and takes
reasonable and lawful actions to avoid or minimize the degree of
such disclosure).
d. “First Commercial Sale” shall mean
the first sale of a Licensed Product to a Third Party after the
first regulatory approval of a Licensed Product by the U.S. Food
and Drug Administration or foreign counterpart.
e. “Licensed Patents” shall mean United
States Patent No. 6,861,411 and [***] and the foreign counterpart
patents and patent applications thereof as well as the specific
patents and patent applications identified in Exhibit A hereto,
together with any reissues, extensions or supplementary protection
certificates, including continuations, divisions or continuation
in-part applications.
f. “Licensed Products” shall mean the
ocular anti-infective product candidate known as AzaSite
TM or ISV-401, containing azithromycin as its sole
active ingredient, and AzaSite TM Plus or ISV-502, an
ocular anti-infective product candidate containing azithromycin and
dexamethasone as its sole active ingredients or other ophthalmic
products agreed to by both parties.
g. “Licensor” shall mean Pfizer Inc as
holder of the United States Licensed Patent and Pfizer Products Inc
as holder of the foreign counterpart patents thereto and all
references to Licensor shall be construed jointly to mean both
companies or individually to mean either company where the context
requires.
h. “Net Sales” shall mean the gross
amount of Licensed Products invoiced by Licensee, any Sublicensee,
or any Affiliate of Licensee or any Sublicensee, less sales
returns, and allowances actually paid, granted or accrued,
including trade, quantity and cash discounts, chargebacks, rebates,
and customary trade discounts actually taken, outbound freight,
value added tax, sales or use taxes, and custom or excise duties.
Net sales shall be determined from the books and records or
Licensee, Sublicensee or the applicable Affiliate of either
Licensee or a Sublicensee, as maintained in accordance with U.S.
generally accepted accounting principles consistently
applied.
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*Indicates that
certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
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i. “Sublicensee” shall mean any Third
Party to whom Licensee or its Affiliates has granted a sublicense,
or other rights, under the Licensed Patents.
j. “Territory” shall mean the entire
world.
k. “Third Party” shall mean all persons
and companies other than Licensor, Licensee, and their respective
Affiliates.
2.
License Grant; Exclusivity .
a.
Licensor hereby grants Licensee,
and Licensee accepts from Licensor, an exclusive, royalty bearing
license under the Licensed Patents to make, have made, use, sell,
offer for sale, import and make regulatory filings with respect to
Licensed Products in the Territory and export components of
Licensed Products from any country in the Territory for the purpose
of making Licensed Products outside that country, but not to the
extent that such components are covered by Pfizer patents other
than Licensed Patents, together with the right to grant sublicenses
subject to Section 2(b).
b.
Licensee and its Affiliates shall
have the right to grant sublicenses to any of the rights granted to
Licensee under Section 2(a), subject to Licensee’s prior
approval in each instance, such approval not to be unreasonably
delayed, withheld or conditioned.
c.
Licensee shall notify Licensor in
writing within ten (10) business days of entering into any
agreement with a Sublicensee or any agreement whereby a Third Party
acquires all or substantially all of the assets of Licensee or the
right through assignment or sublicense to development or
commercialize Licensed Products, and shall with such notification
provide Licensor with full and complete copies of any such
agreement, which agreements Licensor shall maintain confidential
pursuant to Section 11 of this Agreement.
3.
Royalties and Payments .
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*Indicates that
certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
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In consideration of the license granted under
this Agreement, Licensee shall pay Licensor [***] of Net Sales of
Licensed Products in each country in the Territory in which a
Licensed Patent is in force.
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4.
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Reports and Payments
.
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a. Within thirty (30) days after the conclusion of
each calendar quarter commencing with the calendar quarter in which
the First Commercial Sale of a Licensed Product occurs, Licensee
shall submit to Licensor a written report for such quarter stating,
to the extent applicable:
i.
Total amounts invoiced for Licensed
Products, broken down by Licensed Product, the entity rendering
such invoice, and the country in the Territory in which such sales
were made, and showing the details of all deductions taken as part
of the calculation of Net Sales; and
ii.
A calculation of the amounts due to
Licensor.
b. Simultaneously with the submission of each such
report, Licensee shall make payment to Licensor of the amount due.
Each payment hereunder shall be made by electronic transfer in
immediately available funds via either a bank wire transfer, an ACH
(automated clearing house) mechanism, or any other means of
electronic funds transfer, at Licensee’s election, to the
bank account set out below or to such other bank account as
Licensor shall designate in a notice at least five (5) Business
Days before the payment is due.
Bank:
[***]
Swift Code:
[***]
Account Name:
[***]
Account #:
[***]
Licensee also
agrees to use best efforts or cause any Sublicensee or the
applicable Affiliate of either Licensee or any Sublicensee to use
best efforts to provide estimated monthly net sales of Licensed
Products sufficient for Pfizer to record royalties in the period
earned in accordance with US GAAP and to meet SEC reporting
requirements.
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*Indicates that
certain information contained herein has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
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c. Licensee shall maintain at its principal office
usual books of account and records showing its actions under this
Agreement. Upon reasonable notice, and at Licensor’s sole
cost and expense, such books and records shall be open to
inspection and copying not more than once per year, during usual
business hours, by an independent certified public accountant to
whom Licensee has no reasonable objection, for three years after
the calendar quarter to which they pertain, for purposes of
verifying the accuracy of the amounts paid by Licensee under this
Agreement. The determination of such certified public accountant
shall be binding on the parties save for instances of manifest
error. Any understatement of payments due to Licensor shall be made
by Licensee within ten (10) business days after demand by Licensor.
Any overstatement of payment due shall be credited against the next
payment due to Licensor under Section 4 hereof. In the event that
such review reveals that any payment to Licensor was understated by
more than 5%, Licensee shall also pay, within ten (10) business
days after demand by Licensor, the reasonable cost of such review.
Each agreement with a Sublicensee shall contain analogous
provisions that also allow Licensee to conduct audits of the
Sublicensee. Upon reasonable request by Licensor, Licensee shall
permit an independent accounting firm selected by Licensor to
conduct audits of the Sublicensee on Licensor’s
behalf.
d. All payments due under this Agreement shall be
made in U.S. dollars. Payments arising from transactions conducted
in currency other than U.S. dollars shall first be determined in
such currency and then converted to U.S. dollars using the average
exchange rates for the month in which the transactions occurred, as
published by the U.S. Federal Reserve in Federal Reserve
Statistical Release G5 - Foreign Exchange Rates (
http://www.federalreserve.gov/releases/G5 ). If the average
exchange rate for a currency is not published by the Federal
Reserve, conversion shall be made based on the average mid closing
rate of exchange quoted by Bloomberg (or its successor) for the
same time period.
e. Any payments made under Section 4 of this
Agreement are exclusive of any VAT or similar tax imposed upon such
payments. The parties agree to co-operate with one another and use
reasonable efforts to avoid or reduce withholding tax or similar
obligations is respect of any royalties, however, in the event any
of the payments made by Licensee pursuant to Section 4 become
subject to withholding taxes under the laws of any jurisdiction,
Licensee shall deduct and withhold the amount of such taxes for the
account of Licensor to the extent required by law, such amounts
payable to Licensor shall be reduced by the amount of taxes
deducted and withheld, and Licensee shall pay the amounts of such
taxes to the proper governmental authority in a timely manner and
promptly transmit to Licensor an official tax certificate or other
evidence of such tax obligations together with proof of payment
from the relevant governmental authority of all amounts deducted
and withheld sufficient to enable Licensor to claim such payment of
taxes. Licensee will provide Licensor with reasonable assistance to
enable Licensor to recover such taxes as permitted by
law.
f. All payments under any provision of this
Agreement shall bear interest from the date due until paid at a
rate equal to three percentage points above the prime rate of
Citibank, N.A. (or its successor) in New York, New York, as
announced on the date such payment was due, compounded monthly. In
addition, Licensee shall reimburse Licensor for all reasonable
costs and expenses, including without limitation reasonable
attorneys’ fees and legal expenses, incurred in the
collection of late payments.
5.
Diligence .
Licensee shall
use reasonable commercial efforts, either itself or in
collaboration with a Sublicensee, to seek regulatory approval for
and market Licensed Products in countries in the Territory in which
a Licensed Patent is in force.
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Representations and Warranties; Disclaimer of
Warranties; Limitations of Liability
.
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a. Each party represents and warrants to the other
that, as of the date hereof:
(i)
it is duly organized and validly
existing under the laws of its state of incorporation, and has full
corporate power and authority to enter into this Agreement and to
carry out the provisions hereof;
(ii)
it is duly authorized to execute
and deliver this Agreement and to perform its obligations
hereunder, and the person or persons executing this Agreement on
its behalf has been duly authorized to do so by all requisite
corporate action; and
(iii)
once executed by an authorized
officer, this Agreement is legally binding upon it and enforceable
in accordance with its terms.
b. Licensee represents and warrants as of the date
hereof that there are no pending or threatened claims, nor has it
previously received any claims, alleging that use of a Licensed
Product has resulted in death or bodily harm.
c. Nothing in this Agreement shall be construed as
a warranty or representation by Licensor as to the validity or
enforceability of any Licensed Patent or that Licensed Products are
or shall be free from infringement of domestic or foreign patents
or other proprietary interests (including copyright) of any Third
Party. LICENSOR IS LICENSING THE LICENSED PATENTS TO LICENSEE ON AN
" AS IS " BASIS. LICENSOR MAKES NO WARRANTIES EITHER EXPRESS
OR IMPLIED OF ANY KIND, AND HEREBY EXPRESSLY DISCLAIMS ANY
WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND AS TO THE
LICENSED PATENTS, THE SUBJECT OF ANY LICENSE HEREUNDER AND/OR
LICENSED PRODUCTS, INCLUDING BUT NOT LIMITED TO, ANY WARRANTIES OF
MERCHANTABILITY, FITNESS, ADEQUACY OR SUITABILITY FOR A PARTICULAR
PURPOSE, USE OR RESULT, AND ANY WARRANTIES OF FREEDOM OF
INFRINGEMENT OF ANY PATENTS, COPYRIGHTS, TRADE SECRETS OR OTHER
PROPRIETARY RIGHTS. NEITHER LICENSOR, NOR ANY EMPLOYEE OR AGENT OF
LICENSOR, SHALL HAVE ANY LIABILITY TO LICENSEE, ITS AFFILIATES, OR
SUBLICENSEES, OR ANY OTHER PERSON ARISING OUT OF THE USE OF
LICENSED PATENTS OR LICENSED PRODUCTS INCLUDING BUT NOT LIMITED TO
THE LACK OF MERCHANTABILITY, INADEQUACY OR UNSUITABILITY OF THE
LICENSED PATENTS OR LICENSED PRODUCTS FOR ANY PARTICULAR PURPOSE OR
TO PRODUCE ANY PARTICULAR RESULT, OR FOR ANY LATENT DEFECTS
THEREIN.
c. In no event shall Licensor be liable to
Licensee, its Affiliates, or Sublicensees for any loss or damages,
consequential, incidental, indirect or otherwise, including, but
not limited to time, money, or goodwill, arising from the use,
operation or application of the Licensed Patents.
7.
Prohibition Against Use of Licensor’s Name and
Trademarks .
a. Except as may be required by law or regulation,
or in connection with factual reports of its license and
sublicensing rights hereunder, Licensee shall not use the name,
insignia, or symbols of Licensor for any purpose whatsoever without
Licensor's prior written consent.
b. No rights are granted under this Agreement by
Licensor to Licensee to the use of Licensor’s registered
trademark Zithromax, or any other trademark confusingly similar
thereto, and all rights to that trademark are expressly reserved by
Licensor.
8.
Patent Prosecution,
Maintenance and Infringement
.
a. Licensor shall have the right to control the
prosecution and maintenance of the Licensed Patents. Licensor shall
provide Licensee with copies of all material correspondence and
communications filed with or received from a patent office in
connection with prosecution and maintenance of the Licensed
Patents, and shall receive and consider in good faith suggestions
and comments from Licensee on prosecution matters. Licensee shall
reimburse Licensor for invoiced expenses incurred following the
Effective Date of this Agreement in filing, prosecuting and
maintaining Licensed Patents, including attorneys’ fees, the
costs of any interference proceedings, reexaminations, or any other
ex parte or inter partes administrative proceeding before patent
offices, taxes, annuities, issue fees, working fees, maintenance
fees and renewal charges, with payment from Licensee to
L
