This Exclusive Co-Promotion Agreement
(the "Agreement" ),
is entered into effective as of February 14, 2011
(the "Effective Date" ), by and
between QUINNOVA PHARMACEUTICALS, INC. , a Delaware
corporation, having an address of 411 South State Street, Third
Floor, Newton, Pennsylvania 18940 ( "QUINNOVA" ), and
OCULUS INNOVATIVE SCIENCES, INC ., a Delaware corporation,
having an address of 1129 North McDowell Boulevard, Petaluma,
California 94954 ( "OCULUS" ).
In consideration of the foregoing premises, and
the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
As used in this Agreement, the following
definitions shall apply:
"Affiliate" of a person or entity means any individual, sole
proprietorship, firm, partnership, corporation, trust, joint
venture or other entity, whether de jure or de facto
, which, directly or indirectly, controls, is controlled by or is
under common control with such person or entity. As used
in this definition, “control” means the possession,
directly or indirectly, of the power to direct or cause the
direction of the policies and management of a person or entity,
whether by the ownership of stock, by contract or
"Promote" or "Promotion" means the Promotion of the
Product(s) through Quinnova’s sales forces in the
"Detail" (or "Details" and "Detailing" )
shall mean the activity ordinarily and customarily
undertaken by a sales representative during a face-to-face sales
call on Target Professionals with prescribing authority to provide
information on the use, safety, effectiveness, contraindications,
side effects, warnings and other relevant characteristics of the
Product, in a fair and balanced manner consistent with the
requirements of the Good, Drug and Cosmetic Act, as amended,
including, but not limited to, the regulations of 21 CFR Part 202,
and using, as necessary or desirable, Promotional
"FDA" shall mean the United States Food and Drug
Administration or any successor entity.
“Field” means the marketing and promotion of the
Products for chronic wound care sold to podiatrists in the
"GAAP" means generally accepted accounting principles
in the United States.
"Gross Sales" means the total amount of revenue recognized
for the Products on a GAAP basis by Oculus. It is
calculated by multiplying the number of units sold times the price
"Marketing Plan" shall have the meaning provided in Section
"Net Sales" shall mean Gross Sales less:
including bad debts;
distributor charges; and
of goods sold for samples in excess of the mutally agreed sampling
plan further described in Section 3(b).
Net Sales shall
be determined in accordance with Oculus’ standard accounting
methods and GAAP.
Products” shall means the prescription
Products set forth on Exhibit A as same may be amended for time to
"Product Labeling" shall mean the FDA’s approved
language specific to a Product’s use.
"Promotion" means those activities, including without
limitation, provision of marketing materials, recommendations,
congresses, opinion leader management, physicians meetings,
professional education, detailing, advertising and distributing
samples of Products normally undertaken by a pharmaceutical
company’s sales force to implement marketing plans and
strategies aimed at encouraging the appropriate use of a
product. When used as a verb, “Promote”
shall mean to engage in Promotion.
"Promotional Materials" shall mean all Product information,
resources and education items used or intended for use by the Sales
Force in connection with any Detailing of the Products hereunder,
but excluding the Product Labeling.
"Oculus Trademarks" shall mean all trademarks, trade names,
brand names, logos and designs, whether registered or not, used
during the Term in connection with the identification, promotion,
marketing or sale of the Products.
"Regulatory Approvals" shall mean any approvals (including,
but not limited to, the 510(k) approval, labeling approvals),
product, and/or establishment licenses, registrations or
authorizations of any federal, state or local regulatory agency,
department, bureau or other governmental entity, which are
necessary for the commercial manufacture, use, storage,
importation, transport, Promotion or sale of a Product in the
"Sales Force" shall mean the Quinnova sales force involved
in the detail of the Products.
“Target List” means the list of customers
identified by Quinnova as their customers, which is agreed to by
“Target Professionals” shall mean a
podiatrist who is legally authorized to prescribe the
"Term" shall have the meaning provided in Section 8.1
"Territory" shall mean the continental United States, its
territories and Canada.
"Third Party" shall mean any entity other than Quinnova or
Oculus or an Affiliate of either party.
"TRx" shall mean total prescriptions of a Product generated
by Target Professionals.
Promotion of Product .
Exclusive Grant . During the Term of this Agreement, and
subject to the terms and conditions of this Agreement, Oculus
hereby grants to Quinnova the exclusive right to Detail, or
otherwise Promote, the Products under the Oculus Trademark, in the
Field in the Territory, it being acknowledged and agreed that
during the Term, Oculus shall not grant to any Third Party similar
rights to Detail, or otherwise Promote, the Products in the Field
within the Territory. In order to maintain the exclusive
right to Detail under this Agreement, Quinnova must attain the
Minimum Units to Maintain Exclusivity set forth on Exhibit B for
the applicable Calendar Year. If Quinnova fails to
achieve the Minimum Units to Maintain Exclusivity in any Calendar
Year, then Quinnova shall have the right and option to pay Oculus
an amount equal to the net profits Oculus (the difference in units
times average net sales price per unit during the period times
[ ]*%) would have earned on the difference
between the actual number of units sold and the Minimum Units to
Maintain Exclusivity (the "Exclusivity Retention Payment" );
and upon Quinnova’s payment of the Exclusivity Retention
Payment, the exclusive nature of the Agreement shall continue for
an additional Calendar Year. Such grant to Quinnova does not
include the right to assign all or any portion of the rights and
obligations under this Agreement without Oculus’ prior
consent, not to be unreasonably
withheld. Notwithstanding the foregoing Oculus and
Quinnova acknowledge and agree that Advocos shall continue to
market and provide services with respect to the Products in the
same manner as heretofore provided by Advocos.
Quinnova's Obligations .
shall support training and deploy, supervise, motivate (through
appropriate and customary Quinnova incentives), and direct the
Quinnova Sales Force to Detail the Products to the appropriate
Targeted Professionals using Promotional Materials supplied by
Oculus in accordance with this Agreement.
shall be responsible for ensuring that the Detail by the Sales
Force of the Product in the Territory and other conduct of Quinnova
and the Sales Force is consistent with customary pharmaceutical
business practices and in compliance with all applicable laws,
rules and regulations.
of Quinnova’s employees or agents will represent or hold
themselves as employees of Oculus at any time.
as required by law or regulation, any material information
mentioning the Products (i) by name, (ii) by describing the
Product, or (iii) via an internet link to the Product, which
Quinnova intends to publish, disclose or otherwise distribute must
be approved in advance by Oculus, which approval may not be
shall pay all costs associated with managing the Detail of the
Product by its Sales Force, including without limitation, expenses
for reporting of Details, sample accountability, laptops and other
Detail reporting equipment and salaries, training and
information redacted and separately filed with the
the launch meeting for the Products and any subsequent Quinnova
plan of action meetings, live training and direction for the
promotion of the Products shall be provided to the Sales Force. The
launch meeting shall occur prior to the initiation of the Detailing
of the Products by the Sales Force. The launch meeting shall
include training on the Products and coordinating effective
presentation of the Products with any other products in the
Detail. Quinnova shall provide at least fifteen (15)
days notice of the launch and each plan of action meeting and shall
invite representatives of Oculus to attend.
shall cause each sales representative in the Sales Force to have
completed prior to his or her deployment both live training on the
Product, including training on FDA regulations and other applicable
laws, and “Home Study” (as defined below in Section
3.3(e)). Quinnova shall include testing as part of live
training and Home Study. Quinnova shall provide verification of
completion of training and testing on request of Oculus.
Sales Force shall Detail each Product to the appropriate Target
Professionals and rotate, as appropriate, the Products in a First
Position Detail or Second Position Detail during each sales
shall be responsible for ensuring that all samples of the Products
will be stored, managed, and distributed in compliance with all
PDMA, FDA, and other regulations and