Exhibit 10.1
AMENDMENT No. 1
to
DEVELOPMENT & LICENSE AGREEMENT
This Amendment No. 1 to Development & License Agreement (this
"Amendment"), dated September 16, 1999 is entered into by and among OPTEX
OPHTHALMOLOGICS, INC. ("Optex") and BAUSCH & LOMB SURGICAL, INC. ("B&L").
R E C I T A L S
WHEREAS, Optex and B&L are parties to a Development & License Agreement
entered into on May 14, 1998 (the "Development Agreement") pursuant to which the
Parties reached agreement relating to the joint development and
commercialization by B&L of the Catarex Products on a worldwide basis; and
WHEREAS, the Parties desire to amend the Development Agreement in
accordance with the terms of this Amendment.
NOW, THEREFORE, in consideration of the promises, mutual covenants and
agreements set forth in this Amendment, and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the Parties
agree as follows:
1. Capitalized terms used herein, and not otherwise defined herein,
shall have the respective meanings specified in the Development Agreement.
2. Section 1 of the Development Agreement is amended as follows:
(1) by adding at the end of Section 1.5 the words "not specially sized for
use with the Catarex Unit";
(2) by deleting Section 1.6 in its entirety, and substituting in lieu
thereof the following:
1.6 "Catarex Consumable" means any single-use disposable or
reusable component used in the operation of the Catarex Unit, which
components include, based upon the Catarex Unit as currently configured,
(1) the Catarex Handpiece, (2) the concentrix cartridge, (3) the
concentrix collection bag, (4) the irrigation and aspiration tube set,
(5) the Catarex Handpiece tube set, (6) the capsulotomy sizing probe,
(7) the capsulorhexis probe, (8) the Catarex hydrodissection needle, (9)
the bottle or pouch of sterile balanced salt solution, and (10) any
surgical knife specially sized for use with the Catarex Unit.
1.7 "Catarex Handpiece" means a single-use, disposable, cataract
vortex emulsification device incorporating a high-speed rotary
impeller-based fragmenter
using integrated irrigation aspiration, the current configuration of
which device is represented by Optex part number 50022 Revision A.
(3) by renumbering Sections 1.7 through 1.10 as Sections 1.8 through 1.11;
(4) by deleting Section 1.11 in its entirety, and substituting in lieu
thereof the following:
1.12 "Catarex Product" means the Catarex Unit, any Catarex
Combination Product, any Catarex Consumable, the Catarex Standalone
Unit, the Catarex/Millennium Unit, the Catarex Module, any Catarex
Plugin, and any other product the manufacture, use, importation, or sale
of which would infringe Optex
Patents.
(5) by renumbering Sections 1.12 and 1.13 as Sections 1.13 and 1.14;
(6) by deleting Section 1.14; and
(7) by adding the following sentence at the end of Section 1.24: "Optex
Critical Technology includes the Catarex Handpiece."
3. Sections 4.4, 4.5 and 4.6 of the Development Agreement are hereby
amended by deleting them in their entirety, and substituting in lieu thereof the
following:
4.4 Responsibilities of Optex.
4.4.1 Optex has the following responsibilities:
(1) Optex shall deliver to B&L as soon as reasonably possible the
items listed in Schedule 4.4.1(1), which may be amended by
agreement of Optex and B&L (the delivery of these items and the
work involved in preparing them is referred to as "Phase O");
(2) by the date 10 months from the date of Amendment No. 1 to this
Agreement, Optex shall produce and deliver to B&L 2,400 Catarex
Handpieces that conform to the specifications then in effect
(this obligation is referred to as "Phase I");
(3) by the date 18 months from the date of Amendment No. 1 to this
Agreement, Optex shall produce and deliver to B&L 20,000 Catarex
Handpieces (this obligation is referred to as "Phase II"); and
(4) Optex shall from the date of this Agreement provide B&L with
reasonable cooperation, assistance, consultation and support,
including the services listed in Schedule 4.4.1(4), in connection
with development of manufacturing processes for scale-up of the
manufacture of Catarex Handpieces (these
services, the "Manufacturing Services").
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4.4.2 Optex shall make the Phase I and Phase II
deliveries of Catarex Handpieces F.O.B. any B&L facility designated by
B&L (the "F.O.B. Point"), and Optex bears all risk of loss or damage to
the Catarex Handpieces from any cause whatsoever until delivery to B&L
at the F.O.B. Point.
4.4.3 During Phase I, Optex and B&L shall agree in
writing upon the specifications for the Catarex Handpiece, which must
thereafter be modified to reflect changes in design of the Catarex
Handpiece. Catarex Handpieces that Optex delivers to B&L must comply
with those specifications. Subject to Section 4.4.4, if B&L determines
that any of those Catarex Handpieces do not conform to those
specifications and within 30 days of delivery to B&L of any Catarex
Handpieces B&L notifies Optex in writing that it has so determined and
returns to Optex those non-conforming Catarex Handpieces, Optex shall
replace those non-conforming Catarex Handpieces. Subject to Section
4.4.4, if thereafter B&L determines that any Catarex Handpieces have a
latent defect that could reasonably cause those Catarex Handpieces to
not conform to the specifications in effect at the time of delivery, and
notifies Optex in writing that it has so determined, Optex shall replace
those defective Catarex Handpieces.
4.4.4 If within 15 days of a notice from B&L that any
Catarex Handpieces do not conform to specifications or are defective
Optex does not notify B&L that it disagrees with B&L's determination,
B&L's determination shall apply. In the event Optex does timely notify
B&L that it disagrees with B&L's determination, Optex and B&L shall in
good faith attempt to resolve their differences. In the event Optex and
B&L are unable to resolve their differences, they shall submit the
dispute to an independent expert selected jointly by them whose
conclusion regarding the validity of B&L's determination will be
conclusive and binding on both Optex and B&L. In the event Optex and B&L
cannot agree on an independent expert, they shall each appoint one
independent expert and the two appointees must select a third
independent expert, whose conclusion regarding the validity of B&L's
determination will be conclusive and binding on both Optex and B&L. B&L
and Optex shall each pay the fees and expenses of any independent expert
appointed by them, and shall share equally the fees and expenses of any
independent expert selected jointly by them or by independent experts
appointed by each of them, as the case may be.
4.4.5 Optex shall construct at its expense a suitable
environmentally-controlled room at Optex's facility for the Phase I and
Phase II production of Catarex Handpieces, and during normal business
hours and upon reasonable advance notice in writing shall from time to
time grant B&L employees access to that room for training purposes.
4.4.6 Optex shall design and produce all prototype and
production tooling and molds necessary to satisfy its obligations under
Section 4.4.1. Subject to Section 8.3.2, Optex hereby transfers to B&L
all right, title and interest in and to that tooling and those molds as
and when developed by Optex, and shall deliver that tooling and those
molds to B&L upon the reasonable request of B&L. Optex may at
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its cost manufacture and retain for its use in connection with the Optex
Field one or more duplicate sets of that tooling and those molds.
4.5 Responsibilities of B&L.
4.5.1 B&L shall use commercially reasonable efforts to do
the following as expeditiously as practicable:
(1) develop all elements of Catarex Products other than those to be
developed by Optex pursuant to Section 4.4;
(2) obtain regulatory approval of Catarex Products in the Key Markets
and China, India, Brazil and Indonesia; and
(3) manufacture and market Catarex Products in the Key Markets.
4.6 Funding.
4.6.1 B&L shall as follows pay Optex for Optex's
performance of its responsibilities under Section 4.4:
(1) B&L shall reimburse Optex for all costs it incurs in connection
with Phase O, up to a maximum of $2,500,000;
(2) B&L shall pay Optex an amount equal to 125% of all costs it
incurs in connection with Phases I and II and Manufacturing
Services it performs during Phases I and II until the aggregate
amount of those costs equals $6,400,000, and shall reimburse
Optex for all such costs it incurs in excess of $6,400,000; and
(3) B&L shall pay Optex an amount equal to all costs it incurs in
connection with Manufacturing Services it performs after
completion of Phase II.
4.6.2 For purposes of Section 4.6.1, "costs" include,
without limitation, costs relating to labor, professional services and
materials.
4.6.3 The procedures to be followed in connection with the
payments required by Section 4.6.1 are as follows. Within 30 days after
the end of each calendar month, Optex shall provide B&L with a written
report of all costs incurred by it during that calendar month in
performing its responsibilities under Section 4.4, as well as any
supporting documentation B&L reasonably requests. B&L shall promptly
thereafter make any payment required by Section 4.6.1 with respect to
those costs, unless it wishes to dispute any statement of costs
contained in Optex's written report, in which case Optex and B&L shall
promptly cause the Joint Review Committee to consider and attempt to
resolve the dispute.
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4.6.4 If at any time Optex anticipates that performance of
its obligations under clauses (2) and (3) of Section 4.4.1 will require
that it incur costs (excluding the 25% Optex profit component) that
exceed $7,040,000 or $1,760,000, respectively, Optex shall immediately
notify B&L and B&L will have the option to have B&L rather than Optex
perform all or part of the work that would cause any such excess costs.
Optex may not incur any such excess costs without the prior written
consent of B&L, which shall not unreasonably withhold.
4. Sections 4.7 of the Development Agreement is hereby deleted in its
entirety.
5. Sections 8.1 and 8.2 of the Development Agreement are hereby amended
by deleting them in their entirety, and substituting in lieu thereof the
following:
8.1 Termination. This Agreement shall remain in full force and
effect from the Effective Date until the expiration of the last to
expire U.S. Optex Patent on Exhibit B, unless earlier terminated as
follows (such termination an "Early Termination"):
8.1.1 by written agreement of Optex and B&L;
8.1.2 by B&L at any time upon six months' written notice;
8.1.3 by either Party, if B&L declares the Clinical
Demonstration to be a complete failure;
8.1.4 by B&L, if B&L declares the Clinical Demonstration
to be a partial success; provided, however that B&L shall have the
option upon such determination to request good faith negotiations toward
an appropriate amendment to this Agreement, in which case the Parties
shall in good faith attempt to negotiate an amendment to this Agreement;
provided, further, however, that if, after six months from the date of
such request for negotiations, the Parties have been unable to reach
agreement on the terms of an amendment to this Agreement, either Party
may terminate this Agreement; or
8.1.5 by either party upon breach by the other party of
any material provision of this Agreement which remains uncured 60 days
after written notice of that breach.
8.2 Effect of Early Termination. Upon Early Termination, the
following applies:
8.2.1 B&L shall return to Optex all data generated by
Optex under this Agreement, and shall also transfer to Optex all FDA and
other regulatory approvals and submissions and any data necessary or
useful for purposes of applying for and securing regulatory approvals of
the Catarex Handpiece, on condition that
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Optex reimburse B&L for any reasonable out-of-pocket costs reasonably
incurred by B&L in obtaining or preparing those approvals, submissions
and data.
8.2.2 B&L may only use for non-infringing purposes any
tooling and molds used by Optex in Phase I or Phase II and delivered to
B&L pursuant to Section 4.4.6.
8.2.3 All intellectual property, including without
limitation developmental improvements, that is specific to the Catarex
Unit but are not specific to the Millennium(TM) system will become or
will remain, as the case may be, the property of Optex.
8.2.4 Optex shall grant B&L a fully-paid nonexclusive
license to Know-how.
8.2.5 To the extent necessary to allow Optex and Optex
licensees to commercialize Catarex Products, B&L shall grant to Optex a
worldwide sub-licensable license to B&L Patents, B&L Inventions and
Know-how containing a royalty provision that reasonably compensates B&L
for its expenses in developing the technologies granted back to Optex,
as well as taking into consideration the royalties paid or to have been
paid by B&L to Optex for the technology licensed by Optex to B&L.
8.3 Non-U.S.Patents. Upon termination of this Agreement other
than as a result of Early Termination, Optex shall grant B&L a
fully-paid nonexclusive license to any non-U.S. Optex Patents.
8.4 Survival. Sections 9.1 (Confidentiality), 12.2 (General
Indemnification) and 12.3 (Patent Indemnification) of this Agreement
shall survive termination of this Agreement.
6. Section 11.1 of the Development Agreement is hereby amended by adding
at the end thereof the following:
Upon the request of Optex, B&L shall grant to Optex a permanent,
exclusive license to use, on a royalty-free basis, the Catarex name and
any associated trademark rights in connection with sale by Optex of
Catarex Products in the Optex Field.
7. Section 12.3 of the Development Agreement is hereby amended by adding
at the end the following:
12.3.3 If prior to payment of Milestones II and III B&L
and Optex agree that the Catarex Handpiece infringes any third-party
intellectual property rights, B&L may suspend payment of Milestones II
and III until the earlier of (1) First Commercial Use and (2) Optex or
B&L obtains a license to those third-party intellectual property rights.
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8. Except as expressly provided for in this Amendment, the Development
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties have caused this Amendment to be
executed by the duly authorized representatives as of the date and year first
above written.
OPTEX OPHTHALMOLOGICS, INC. BAUSCH & LOMB SURGICAL, INC.
By:______________________________ By:____________________________
Name:____________________________ Name:__________________________
Title:___________________________ Title:_________________________
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Schedule 4.4.1(1)
PHASE 0 ITEMS
Status
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I. DESIGN DOCUMENTS
2-D Component Drawings Delivered
3-D Component Drawings Delivered
Assembly Drawings Delivered
▇▇▇▇ of Materials Delivered
II. MANUFACTURABILITY
Work Instructions Delivered
Assembly Fixture Drawings Delivered
Manufacturing Aid Specifications Delivered
III. DEVELOPMENT HANDPIECES
10 Handpieces Delivered
70 Handpieces
(B&L Will Participate in Assembly)
IV. DESIGN VERIFICATION
Test Reports
V. QUALITY SYSTEMS
First Article Inspection Data
(All dimensions; n=1; Fabricated Parts)
VI. JOINT DESIGN REVIEW Delivered
Schedule 4.4.1(4)
MANUFACTURING SERVICES
Complete development and implementation of fixturing and automation needed to
support Phase I build at Optex
Complete transfer to B&L of duplicate fixtures and test stations utilized for
Phase I production
Complete development and implementation of fixturing and automation needed to
support Phase II build at Optex
Complete transfer to B&L of duplicate fixtures and test stations utilized for
Phase II production
Complete engineering design development support for B&L automation scale-up to
10,000 units/month
Complete engineering design development support for B&L automation scale-up to
20,000 units/month
Complete engineering design development support for B&L automation scale-up
beyond 20,000 units/month