EXHIBIT 10.10(a)
MANUFACTURE AND SUPPLY AGREEMENT
between
ALLERGAN SALES, INC.
and
XXXX ZEISS, INC.
on behalf of
XXXXXXXX SYSTEMS DIVISION
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.
MANUFACTURING AND SUPPLY AGREEMENT
THIS MANUFACTURING AND SUPPLY AGREEMENT (this "Agreement") is effective
as of May 28, 1999 by and between Allergan Sales, Inc., a California
corporation, on behalf of itself and its Affiliates ("Allergan"), having an
address at 0000 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 and Xxxx Zeiss, Inc., a
New York corporation, on behalf of its Xxxxxxxx Systems Division ("Xxxxxxxx"),
having an address at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000.
RECITALS
A. Allergan is engaged in the design, distribution and marketing of
certain phacoemulsification equipment, including the Products described in
Exhibit "A" attached hereto, as amended by the parties from time-to-time, for
use in cataract removal surgery.
X. Xxxxxxxx has the capability and desire to manufacture, service, and
supply the Products to Allergan and Allergan desires that Xxxxxxxx manufacture,
service and supply the Products to it upon the terms and conditions contained
herein.
C. Allergan and Xxxxxxxx desire to enter into this Agreement governing
the manufacture and supply of Products by Xxxxxxxx for Allergan's exclusive use
and purposes.
AGREEMENT
NOW THEREFORE, in consideration of the covenants contained herein, the
above recitals, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS.
1.1 "Affiliates" of a party shall mean any corporation or other business
entity controlling, controlled by, or under common control with such party.
1.2 "Agreement" shall mean this Manufacturing and Supply Agreement.
1.3 "Allergan" shall mean Allergan Sales, Inc., a Delaware corporation.
1.4 "CE Xxxx" shall mean the xxxx of conformity with one or more
applicable directives of the European Union.
1.5 "CFR" shall mean the United States Code of Federal Regulations.
1.6 "cGMPs" shall mean the standards established by the FDA for current
Good Manufacturing Practices, as specified in 21 CFR Section 820 Quality System
Regulations; 21 CFR Section 807 Establishment Registration and Device Listing
for Manufacturers of Devices; 21 CFR Section 803 Medical Device Reporting; 21
CFR Section 801 Labeling; 21 CFR Section 810 Medical Devices Recall
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Authority; 21 CFR Section 806 Medical Devices Reports of Corrections and
Removals; the Federal Food, Drug and Cosmetic Act, as amended; EN46000, 1 and/or
2; ISO 9001 and/or 9002; and the standards established in the European Union's
Council Directive 93/42/EEC of 6/14/93 Concerning Medical Devices (the "MDD").
1.7 "Contract Year" shall mean the twelve- (12) month period following
the Effective Date of this Agreement, and each subsequent twelve- (12) month
period during the term of this Agreement.
1.8 "Control" (including "controlling", "controlled by" and "under
common control with" of any party, corporation, or other business entity) shall
mean the direct or indirect ownership of more than fifty percent (50%) of the
voting or income interest in such party, corporation, or other business entity,
respectively.
1.9 "Device Master Record" shall mean the compilation of records
containing the procedures and specifications for a component, in accordance with
21 CFR 820.
1.10 "Effective Date" shall have the meaning given to it in the
introductory paragraph hereto.
1.11 "EPA" shall mean the United States Environmental Protection Agency.
1.12 "Facility" or "Facilities" shall mean Xxxxxxxx'x manufacturing
facilities at 0000 Xxxxxxxx Xxxxx, Xxxxxx, XX 00000.
1.13 "FDA" shall mean the United States Food and Drug Administration.
1.14 "Xxxxxxxx" shall mean Xxxxxxxx Systems, a division of Xxxx Zeiss,
Inc., a New York corporation.
1.15 "Intellectual Property" shall mean (i) all patents, patent
applications, patent disclosures, records of invention and any patents, U.S. or
foreign, issuing Affiliates, related to the Products; (ii) all trade names,
trademarks, copyrights, logos, symbols, and various applications therefor and
registrations thereof related to the Products; (iii) all inventions,
discoveries, devices, methods, ideas, concepts, processes, know-how, technical
data; financial, marketing, and business data, trade secrets and any other
intellectual property (whether or not patentable, reduced to practice, or
copyrightable) (collectively the "Inventions" resulting from, related to, or
arising out of the manufacturing, development, sale, distribution and marketing
of the Products on or prior to the Effective Date of this Agreement, including,
but not limited to, the Specifications; (iv) all Inventions resulting from,
related to, or arising out of all research, development, manufacturing, sale,
distribution, or marketing activities related to the Products; and (v) any
engineering change or process change proposed by Allergan, whether or not
incorporated into the Specifications.
1.16 "Products" shall have the meaning given to it in Recital A.
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1.17 "Specifications" shall mean the product specifications, test
protocols, packaging specifications, component specifications; and any other
documentation or drawings necessary to produce and service the Products.
1.18 "Term" shall have the meaning given to it in Section 2.1.
1.19 "Transition Plan" shall mean the technology transition plan
developed by the parties hereto, as modified from time-to-time.
SECTION 2. TERM AND TERMINATION.
2.1 Term. The term of this Agreement (the "Term") shall be for four (4)
years, commencing on the Effective Date. This Agreement may be amended or
extended at any time during the Term by a written agreement signed by both
parties. This contract will automatically renew for a one (1) year period or
longer term of agreed upon duration, unless written notification of an intent
not to renew this Agreement is provided by one party to the other at least nine
(9) months before the scheduled expiration of this Agreement.
2.2 Termination for Cause. This Agreement may be immediately terminated
by either of the parties by giving concurrent written notice of such termination
to the other party, if:
2.2.1 Monetary Breach. The other party breaches any monetary term
of this Agreement and fails to remedy such breach within twenty-five (25) days
following the receipt from the non-breaching party of a written notice of such
breach; which notice reasonably specifies the extent and nature of such breach;
and/or
2.2.2 Other Breach. The other party breaches any other term of
this Agreement and fails to remedy such breach within sixty (60) days following
the receipt from the non-breaching party of a written notice of such breach;
which notice reasonably specifies the extent and nature of such breach; and/or
2.2.3 Other Events. The other party (i) commences a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to its debts under any bankruptcy, insolvency, or other similar law
now or hereafter in effect; (ii) makes a general assignment for the benefit of
creditors, (iii) becomes insolvent, (iv) ceases doing business, and/or (v) takes
any corporate action to authorize any of the foregoing.
2.3 Continuing Obligations. Upon expiration or termination of this
Agreement, the rights and obligations of the parties pursuant to this Agreement
shall cease, except as follows:
2.3.1 The obligations of confidentiality and use of information
under Section 10 of this Agreement shall survive such expiration or termination.
2.3.2 The indemnity obligations under Section 11 shall survive
such expiration or termination.
2.3.3 Expiration or termination of this Agreement for any reason
by a party shall not relieve the parties of any obligation accruing prior to
such expiration or termination.
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2.3.4 Upon expiration of this agreement, Allergan will purchase
at the prevailing standard cost, the raw materials and finished goods held at
Xxxxxxxx. The raw materials repurchased would be in the quantity mutually agreed
upon to support required delivery times and manufacturing lead-time.
2.3.5 Upon the expiration of this agreement Xxxxxxxx agrees to
support in good faith and provide the necessary resources to transfer the
Product technologies to the supplier designated by Allergan.
SECTION 3. PRICING AND PAYMENT.
3.1 Determination of Price. The pricing for the Products during the
first Contract Year are estimated in the table set forth immediately below and
shall be supported by a "costed" xxxx-of-material to be provided to Allergan by
Xxxxxxxx. The costs reflected in the "costed" xxxx-of-materials are based on the
following categories: (i) * (ii) * and (iii) *.
2000
1999 1999 Z-H ALLERGAN ST
PRODUCT FORECAST PRICING 2000 B COST
------- -------- ------- ---- -----------
Diplomax(TM) Consoles * * * *
Sovereign(TM) Consoles * * * *
Prestige(TM) Consoles * * * *
Electric IV Pole * * * *
Diplomax(TM) Remote Control * * * *
Console Footswitch, 3 CPI * * * *
Sovereign(TM) Footpedal * * * *
Sovereign(TM) Remote Control * * * *
Prestige(TM) Foot Pedal * * * *
Command Power Pole * * * *
Sovereign(TM) Signature Cart * * * *
*Estimated pricing based on Allergan's material standard cost and labor
estimate. Final pricing to be determined within 30 days after the product
technology is successfully transferred to Xxxxxxxx.
3.2 Written Estimates. For budgeting purposes, Xxxxxxxx shall provide
Allergan a written estimate of all Product pricing by September l of each year.
Based upon such written estimate and the guidelines contained in Sections 3.1
and 3.4, the parties shall set and fix the prices of all Products by October 1
of each year, which prices shall be effective on January 1 of the new year.
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* Certain information may have been omitted from this page and has been filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions, which
have been designated as *.
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3.3 Subsequent Years. Pricing for subsequent Contract Years may be
increased or decreased once per year due to changes in forecasted volume and
changes in material cost. Markup and purchase parts overhead will remain
constant for the term of the agreement.
3.4 Demand Forecast Fluctuations. In any given year, if the labor hours
for the total forecasted volume of all products increases or decreases by more
than ten percent (10%), the two parties will renegotiate the allocation of
overhead and the impact to price. Based on this renegotiation the new price will
increase or decrease for the next contract year in direct relationship to the
volume change. If the labor hours associated with the annual forecast changes
less than ten percent (10%), the overhead cost will remain unchanged. Raw
material cost will be reviewed during the renegotiation for increases and/or
decreases. Reasonable supporting documentation will be provided as required to
support the adjustment. These agreed upon changes in the component prices will
become the new "costed" xxxx of material used in establishing the frozen cost
for the upcoming year.
3.5 Cost Savings. Cost savings shall be determined by comparison of the
frozen "costed" Xxxx-of-Material, with the "going to" costed Xxxx of Material as
supported by reasonable levels of documentation Allergan shall be responsible
for the tooling cost and shall retain the title and exclusive control of said
tooling. For any cost saving generated by Xxxxxxxx and agreed to in writing by
Allergan, Allergan agrees to share the cost savings with * percent (*%) of the
savings going to each party until the standard cost is reset. When the standard
cost is reset the cost savings will be incorporated in the new standard cost and
*% will be passed on to Allergan.
3.6 ECR Price Adjustments. If Allergan increases the cost of the product
as the result of an ECR the cost of the Product will be increased immediately.
If Xxxxxxxx increases the cost of the product through the implementation of an
ECR the standard cost will not increase until the annual re-roll of the standard
cost.
3.7 Payment Terms. Terms of payment shall be made net * (*) days from
the date of receipt of acceptable Product at Allergan's Irvine, California
location, or net * (*) days from date of shipment to Allergan's customer, as
appropriate.
3.8 Shipping Terms. All Products shall be shipped FOB Xxxxxxxx'x
shipping point at Dublin, California.
3.9 Failure to Purchase. At the end of three (3) consecutive calendar
months, if Allergan has purchased less than * dollars (US$*) of Product,
Allergan shall, at Xxxxxxxx'x request, compensate Xxxxxxxx for the costs of
money for materials and labor for that month less any amount of Product
purchased. However, that said cost shall in no case exceed $* per month or $* in
aggregate in any calendar year. Said costs of materials and labor shall be
determined based upon actual costs and calculated in accordance with standard
accounting principles.
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* Certain information may have been omitted from this page and has been filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions, which
have been designated as *.
Page 5
SECTION 4. PRODUCT AND MANUFACTURING SPECIFICATIONS AND TEST METHODS.
4.1 Specifications. Allergan shall provide Xxxxxxxx with the Device
Master Record and Specifications for all Products and shall update such
Specifications from time-to-time as necessary. Xxxxxxxx shall manufacture,
service and supply the Products in accordance with the most current
Specifications and Device Master Record.
4.2 Engineering Change Request. Either party, by means of an ECR may
propose changes to the Specifications or the general manufacturing process, from
time to time. Such ECRs shall be communicated in writing to the other party, and
the receiving party shall determine arid advise the proposing party in writing
if the proposed change is acceptable. Non-urgent ECRs shall be processed by the
receiving party within ten (10) working days, and acceptance or rejection of the
request shall be acknowledged by the proposing party within that time. In the
event that the proposing party considers the ECR urgent, notice of such urgency
shall be made at the time of request to the receiving party, and the parties
shall agree on a priority for the ECR. To expedite the implementation of
approved/urgent ECRs, it may be necessary for Xxxxxxxx to use redlined drawings
and/or documentation to initiate the change; however, the use of any redlined
drawings or documents for manufacturing purposes shall be permitted only upon
the written approval of Allergan's Director of Operations for Engineering or his
or her designee. No changes to the Specifications or significant change to the
manufacturing process shall be made without the prior approval of the both
parties hereto, which shall be evidenced by their signatures on the final ECR.
All costs associated with an ECR, including field retrofits, scrapping of
existing component inventory or rework costs shall be agreed to in writing by
the parties prior to implementing any change.
4.3 Improvements/Retrofits. Product changes that require field retrofit
shall be authorized by an approved ECR that is agreed to by both parties prior
to its implementation. Any ECRs which are the result of sustaining engineering
activities such as process improvements, cost savings, and substitution for
obsolete or unavailable components shall be the responsibility of Xxxxxxxx, and
Xxxxxxxx shall pay for all costs of implementing such changes. Xxxxxxxx agrees
to pay for any costs associated with field retrofits that are caused by its
actions. Allergan agrees to pay for any costs associated with field retrofits
that are caused by its actions.
4.4 Certificate of Conformance; Device History Record. Each Product
shipment shall be accompanied by a Certificate of Conformance ("COC") in the
form of Exhibit "B" attached hereto. Xxxxxxxx shall maintain a copy of each such
COC, along with a Device History Record ("DHR") for the actual life of the
Product, consistent with cGMP requirements. A copy of the COC and/or DHR shall
be provided by Xxxxxxxx to Allergan within forty-eight (48) hours of any request
for such. Upon the expiration or sooner termination of this Agreement, Xxxxxxxx
shall return all COC's and DHR's to Allergan.
4.5 Quality Materials. Xxxxxxxx shall continually qualify sufficient new
sources of supply and utilize only qualified, approved sources for all raw
materials, components and sub assemblies used in the manufacture of the
Products, so as to ensure the continuity of supply of Products hereunder. No
change may be made in the supplier or grade of any such raw material, component,
or sub-assembly without the prior written approval of Allergan.
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4.6 Official Correspondence. Xxxxxxxx shall provide to Allergan, within
24 hours after receipt, a copy of any letter, document, or similar instrument
submitted to or received from the FDA, any governmental authority or any other
national health agency with regard to the Products or their manufacture,
including ISO Audit Observations, Warning Letters and/or Form 483s.
4.7 Third Party Lab. Any third party or contract laboratory used for the
testing of Products or service must have been qualified by Xxxxxxxx and approved
by Allergan prior to its use for that purpose.
4.8 Artwork Changes. Allergan shall communicate all changes in copy and
artwork for the Products to Xxxxxxxx in writing. Any additional costs due to
copy and artwork changes shall be borne by Allergan.
SECTION 5. PLACE OF MANUFACTURE; RIGHT OF INSPECTION.
5.1 Place of Manufacture. Xxxxxxxx shall perform all manufacturing,
storage, handling, and testing of Product at the Facilities.
5.2 Allergan Inspection. Xxxxxxxx shall permit Allergan or its agents,
during reasonable business hours and upon at least twenty-four (24) hours
advance notice, access to inspect the Facilities where the Products arc
manufactured, handled, stored, or tested, as well as all processes relating to
the manufacture, storage, handling, or testing of the Products and all
manufacturing, handling, storage, and test records regarding the Products; and
shall reasonably assist Allergan with such inspections. Where possible, Xxxxxxxx
shall correct any significant deficiencies found within thirty (30) days of
their written notification of such deficiencies by Allergan, or provide Allergan
with a detailed corrective action plan specifying the required timeframe for
correction of the deficiencies.
5.3 Government Inspections. Xxxxxxxx shall extend the same inspection
privileges set forth in Section 5.2 to agents of the FDA or other governmental
authorities, as required. Xxxxxxxx shall notify Allergan within 24 hours of any
such inspection related to the Products. In addition, Xxxxxxxx shall provide
Allergan with copies of any and all inspection reports from the FDA or other
relevant governmental authorities regarding the manufacture of the Products
within three (3) days of receipt of such reports.
5.4 Validation. Xxxxxxxx shall support Allergan requests for validation,
and shall conduct such work as is required to validate all processes, equipment,
and test methods required to ensure the conformance of the Products to the
Specifications and cGMPs.
SECTION 6. TERMS OF SUPPLY.
6.1 Conformance with Specifications. Xxxxxxxx shall supply Allergan with
Products produced, packaged, tested and shipped according to the Specifications
under the terms and conditions of this Agreement and manufactured in accordance
with cGMP's and all appropriate laws, regulations, and requirements.
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6.2 Forecast and Supply Amounts. Allergan shall, on a monthly basis,
provide Xxxxxxxx with a rolling twelve-month, non-binding forecast of estimated
Products needed by the tenth (10th) working day of each month. Xxxxxxxx shall
use Allergan's forecast to plan and build Products to support the forecast as
provided. Lead-time for Products shall be so more than forty-five (45) work days
from receipt of Allergan's Purchase Order to shipment of Product(s). However, it
is understood that, in the case where the requested shipping date is sooner than
such period, Xxxxxxxx shall make all reasonable effort to comply with Allergan's
requested shipping date, as specified on the applicable Purchase Order. Should
Allergan request more Product than projected in the appropriate forecast,
Xxxxxxxx shall produce at least the following percentage. of the incremental
increase in quantity of Product requested over the forecasted amount, depending
on the number of days of lead-time requested by Allergan as follows: (i) one
hundred percent (100%) for more than 90 work days of lead-time (ii) thirty
percent (30%) for lead-times between 60 and 90 work days; (iii) twenty percent
(20%) for lead-times between 30 and 60 work days; and (iv) zero percent (0%) for
lead-times less than 30 work days. There shall be no minimum annual order
quantities. Xxxxxxxx and Allergan shall continually seek ways to reduce
manufacturing lead-time for the Products to m ultimate target of less than
fifteen (15) work days, and to agree upon an appropriate level of safety stock
to be maintained by Xxxxxxxx to cover monthly variations in Product sales. Such
safety stock levels may be adjusted only by mutual written agreement of the
parties.
6.3 Purchase of Inventories. Except for all unique production test
equipment, tooling, fixtures, jigs, etc., including any custom vendor tooling
used in the manufacture and service of Products, for which Allergan shall retain
ownership, as the manufacture of each Product is transferred from Allergan to
Xxxxxxxx, Xxxxxxxx shall purchase all of the remaining active component
inventories for that Product from Allergan at standard cost, subject to the
mutual agreement of the parties as to the nature and quantity of components.
6.4 Allergan-Approved Suppliers. Xxxxxxxx shall purchase any custom
designed components and materials only from the suppliers approved by Allergan
in writing. Off-the-shelf components that conform to the established
Specifications may be purchased from existing Xxxxxxxx suppliers, or Xxxxxxxx'x
choice of suppliers. Allergan must approve any change of supplier for a
custom-designed component in writing prior to making such a change. Xxxxxxxx
shall take the lead in the qualification of alternate suppliers and the transfer
of manufacturing technology to them: (i) in the event that supply from the
existing approved supplier becomes unavailable, (ii) to implement cost savings
projects, and (iii) to support new product development projects. During the
technology transfer Allergan shall provide Xxxxxxxx with advance notification of
any materials, components, or Products that are scheduled to become obsolete.
Upon the technology transfer, as defined in the Transition Plan, Xxxxxxxx shall
monitor and manage supply to ensure the timely availability of purchased
materials.
6.5 Label or Copy Changes. Xxxxxxxx shall promptly implement any and all
label or copy changes submitted by Allergan, based on timetable established on
the ECR as agreed by the parties.
6.6 New Products. Xxxxxxxx shall provide reasonable support, including
quality control, document control, sustaining engineering, purchasing and
planning to facilitate the introduction, launch and post launch activities of a
new Product, at no cost to Allergan. Any
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decision between Allergan and Xxxxxxxx to jointly develop new Products or
Product enhancement or technologies must: (i) have the prior written approval of
Allergan's Director of Phaco Engineering as well as the Vice-President of
Research and Development at Xxxxxxxx; and (ii) the financial responsibilities of
both parties must be clarified in writing and signed by both parties.
6.7 Limited Research and Development. During the Term of this Agreement,
Xxxxxxxx shall not perform any research and/or development activities for
equipment, supplies or Products that would compete with Products covered by this
Agreement. Xxxxxxxx reserves the rights to design, research, develop,
manufacture, and sell products, as long as such products do not compete with the
Products covered by this Agreement.
SECTION 7. REJECTIONS AND CLAIMS.
7.1 Product Resection. Upon receipt of Products, if Allergan shall
determine that a particular Lot of Product does not conform to the
Specifications, Allergan shall have the sole right to reject the lot for
replacement by Xxxxxxxx. Upon such a rejection, Allergan shall notify Xxxxxxxx
in writing of the reasons for rejection and shall provide Xxxxxxxx with the
opportunity to rework or replace the Products with conforming Products at
Xxxxxxxx'x expense. However, if rejection is based upon design, specification or
software defect, then Allergan shall bear all costs of rework or replacement.
7.2 Return of Rejected Products. Rejected Products caused by workmanship
defects shall be returned to Xxxxxxxx by Allergan at Xxxxxxxx s expense. Any
rejection that is based solely upon a design or software defect, shall be
returned and reworked at Allergan's expense; and any reworked or replacements
Product(s) shall be re-tested by Xxxxxxxx prior to its shipment to Allergan. Any
rework procedure to be used on Products must have been validated by Xxxxxxxx and
approved in writing by Allergan prior to the rework.
7.3 Rejection Dispute. In the event of a dispute between the parties
over the validity of a rejection, Allergan and Xxxxxxxx agree to submit a sample
of the rejected Lot to an independent test facility to be agreed upon by both
parties. Further, both Allergan and Xxxxxxxx shall accept the results of the
testing performed by that facility as binding with regard to that Lot. The
expense of such testing shall be borne by the losing party.
7.4 Customer Complaints. Allergan shall be responsible for the receipt,
investigation, trending, and reporting of any and all customer complaints
regarding the Products; including all MDR reporting to the FDA and other
governmental and regulatory authorities. Allergan agrees to provide complaint
data and trending to Xxxxxxxx, on a monthly basis. Xxxxxxxx shall: (i) support
Allergan's efforts on this behalf, and shall perform failure investigations or
other appropriate evaluations of suspect components or Products upon Allergan's
request; and shall report initial findings to Allergan in writing within ten
(10) working days from receipt of request, (ii) advise Allergan of the facts
surrounding an unreported customer complaint in writing within ten (10) working
days after Xxxxxxxx becomes aware of such an unreported customer complaint
during the field service of Allergan's Products, and (iii) provide Allergan with
a (open and closed) repair report for product evaluations resulting from field
service or depot repair to Allergan electronically within ten (10) working days
of the new month.
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7.5 Product Recall. Allergan has the sole authority to recall any
Products, if it believes that there is a potential significant health hazard or
non-compliance with applicable government regulations. Xxxxxxxx shall, in the
event of such a recall, be responsible for all expenses related to the recall if
the recall results from a breach of its duties hereunder or a defect in their
manufacturing or servicing of the Products. Allergan shall be responsible for
all expenses relating to a recall if the recall results from design or
specification defects in the Products, or other items not covered under
Xxxxxxxx'x duties under warranty, as provided in Section 8 of this Agreement.
SECTION 8. MANUFACTURER'S WARRANTY.
8.1 Facilities and Employee Warranties. Xxxxxxxx warrants that the
Facilities have been inspected by the FDA, and any other governmental authority,
that they are; to the best of their knowledge, fully compliant with cGMPs, and
that all employees working on the Products whose responsibilities involve work
which must be performed under cGMPs have been properly trained in the
requirements of cGMPs. Xxxxxxxx additionally warrants that the Facilities hold
all necessary permits from local, State, Federal, and other governmental
authorities required for it to manufacture and test the Products. Xxxxxxxx shall
supply Allergan with Products produced, packaged, tested and shipped according
to the Specifications under the terms and conditions of this Agreement and
manufactured in accordance with cGMP's and all appropriate laws, regulations,
and requirements.
8.2 Product Warranties. Xxxxxxxx warrants that: (i) all Products shall:
(i) be free from defects of workmanship, (ii) be in conformance with the
Specifications, (iii) be produced under cGMP's, (iv) comply with subsections
(i), (ii) and (iii) for a * (*) year period for Products shipped domestically,
for a * (*) month period for Products shipped for export. Such periods shall
commence upon the date the Product is originally shipped to Allergan's customer
as documented on the customers invoice for domestic shipments, and from the date
of shipment from Xxxxxxxx'x distribution center for export shipments. Neither
this warranty nor any other warranty, express or implied, including implied
warranty of merchantability and fitness for a particular use, shall extend
beyond the warranty period. No responsibility is assumed for any incidental or
consequential damages.
8.3 Depot Warranty. Xxxxxxxx warrants that all Products covered by their
Depot support operation shall comply with the warranties contained in Sections
8.2(i), (ii) and (iii) for a period of * (*) days from the date of shipment of
the repaired Product. As the product return rate drops below *% Xxxxxxxx shall
extend the depot warrant to * days.
8.4 Warranty Repairs. Xxxxxxxx shall complete all manufacturer's
warranty repairs work within fifteen (15) days of receipt of the Product to be
repaired, and shall ship the Product back to the customer at no cost to Allergan
or the customer.
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* Certain information may have been omitted from this page and has been filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions, which
have been designated as *.
Page 10
8.5 No Design or Software Warranty. Xxxxxxxx does not warrant the design
of the Products, or any software used with the Products.
8.6 Excessive Repair. Should workmanship or material defects covered by
the manufacturer's warranty, require that any particular Product be serviced
more than three (3) times within the 1 year manufacturer's warranty period,
Xxxxxxxx shall replace said Product with a new Product at its expense. The
warranty period for the replacement Product shall commence upon the replacement
Product's shipment.
8.7 Warranty Reporting. On a monthly basis Xxxxxxxx shall report to
Allergan, in a satisfactory format, all work, which is covered by the
Manufacturer's Warranty.
SECTION 9. DEPOT REPAIRS.
9.1 Warranty Repairs. Xxxxxxxx shall perform both warranty and
non-warranty repairs at their Facility. In the event of a warranty or
non-warranty repair request, Xxxxxxxx shall provide Allergan with a written
estimate within forty-eight (48) hours of the receipt of the Product to be
repaired. If Allergan approves the non-warranty repair, Xxxxxxxx shall complete
the repair and ship the Product back to Allergan's customer within fifteen (15)
working days of the receipt of the approval to proceed with the repair from
Allergan.
9.2 Warranty Shipments. Warranty and non-warranty repairs shall be
shipped FOB Origin, prepaid and add invoiced to Allergan. The time to ship
product back is not included in the fifteen (15) day repair period. Xxxxxxxx may
use reconditioned materials in the repair of Product, as long as such materials
conform to the Specifications and perform equivalently to new materials.
9.3 Billing. Billing for Depot Service (i) for USA requirements shall be
between Allergan's customer and Allergan. Allergan shall act on behalf of
Allergan's customers and issue payment to Xxxxxxxx for any Allergan authorized
non-warranty repair and (ii) for export requirements shall be between Xxxxxxxx
and Allergan's Affiliate or approved agent. Xxxxxxxx shall be responsible for
the cost of any repair that is covered by the Manufacturer's Warranty.
9.4 Spare Parts. Xxxxxxxx shall sell spare parts and provide service
only to Allergan's Affiliates or authorized Distributor and 3rd Party Agents.
The sale price for spare parts shall be based on Xxxxxxxx'x standard *. The
Purchased Parts Overhead covers the cost for purchasing, scrap, excess and
obsolete material and inventory carrying. The cost of packaging and
transportation to Allergan's Subsidiary shall be paid by Allergan and added to
the spare parts invoice.
9.5 Spare Part Forecasting. Xxxxxxxx shall be responsible for
forecasting and maintaining the appropriate component and sub-assembly inventory
for Allergan's global spare part requirements and service and repair of the
Products.
----------
* Certain information may have been omitted from this page and has been filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions, which
have been designated as *.
Page 11
SECTION 10. CONFIDENTIALITY.
10.1 Obligation of Confidentiality. The parties hereto agree not to use
Confidential Information (as defined in Section 10.2) except for the purposes of
this Agreement and the parties hereto agree not to disclose or transfer
Confidential Information to any other person or entity.
10.2 Confidential Information. The parties hereto agree that
"Confidential Information" shall mean all information disclosed to one another
in connection with this Agreement which is marked "Confidential" or
"Proprietary" or, if orally disclosed, is summarized and confirmed as
Confidential or Proprietary in writing within thirty (30) days after such
disclosure. However, "Confidential Information" shall not include information:
(i) which a party can demonstrate by written records was known to it before the
date of disclosure or development hereunder, or (ii) which at the time of
disclosure or development was in the public domain; or (iii) which becomes part
of the public domain except by breach of this Agreement; or (iv) which is
lawfully disclosed to that party on a non-confidential basis by a third party
who is not obligated to either party or any other party to retain such
information in confidence.
10.3 Return of Confidential Information. Upon expiration or sooner
termination of this Agreement or any extension hereof, or at any time either
party so requests, both parties agree to return to the other party any written,
printed or other materials embodying Confidential Information, including all
copies or excerpts thereof, developed by or given to the other party in
connection with that party's work under this Agreement. The sole exception shall
be that both parties may retain copies of such manufacturing documentation as is
required by the FDA or other governmental authorities, including ell
documentation retention required by cGMPs.
10.4 Survival. The obligations of confidentiality and non-use contained
in this Section 10 shall survive the expiration or sooner termination of this
Agreement for a period of five (5) years.
SECTION 11. INDEMNIFICATION.
11.1 Xxxxxxxx Indemnification. Xxxxxxxx shall indemnify, defend, release
and hold Allergan and its directors, officers, employees, agents, and Affiliates
harmless from and against any and all liabilities, losses, injuries, damages,
expenses (including attorneys' fees, without regard to outcome), settlement
costs, costs of product corrections or recalls, market recovery of Product,
product liability claims, or judgments, resulting from Xxxxxxxx'x failure to
manufacture the Product in accordance with Allergan's designs or specifications,
meet the terms and conditions of Section 8 or any other material breach of any
of its obligations or warranties under this Agreement.
11.2 Allergan Indemnification. Allergan shall indemnify, defend, release
and hold Xxxxxxxx and its directors, officers, employees, agents, and Affiliates
harmless from and against any and all liabilities, losses, injuries, damages,
expenses (including attorneys' fees, without regard to outcome), settlement
costs, costs of product corrections or recalls, market recovery of Product,
product liability claims, or judgments, resulting from Allergan's material
Page 12
breach of any of its obligations under this Agreement or from design,
specification or software defects in the Products.
11.3 Claims. A party (the "indemnitee") which intends to claim
indemnification under this Section 11 shall promptly notify the other party (the
"indemnitor") in writing of any action, claim or other matter in respect of
which the indemnitee or any of its directors, officers, employees, agents and
Affiliates intend to claim such indemnification. The indemnitee shall permit,
and shall cause its directors, officers, employees, agents and Affiliates to
permit, the indemnitor, at its discretion, to settle any such action, claim or
other matter and agrees to the complete control of such defense or settlement by
the indemnitor; provided, however, that such settlement does not adversely
affect the indemnitee's rights hereunder or impose any obligations on the
indemnitee in addition to those set forth herein in order for it to exercise
such rights. No such action, claim, or other matter shall be settled without the
prior written consent of the indemnitor and the indemnitor shall not be
responsible for any legal fees or other costs incurred other than as provided
herein. The indemnitee, its directors, officers, employees, agents and
Affiliates shall cooperate fully with the indemnitor and its legal
representatives in the investigation and defense of any action, claim or other
matter covered by this indemnification. The indemnitee shall have the right, but
not the obligation, to be represented by counsel of its own selection and
expense.
SECTION 12. MISCELLANEOUS.
12.1 Notices. Any and all notices permitted or required to be given
hereunder shall be deemed duly given: (i) upon actual delivery, if delivery is
by hand; (ii) upon the third business day after delivery into the United States
mail if the postage is properly prepaid and delivery is by first class,
registered, or certified (return receipt requested) mail; or (iii) upon
facsimile transmission, so long as the original is then sent by overnight
delivery or first class mail. Each such notice shall be sent to the respective
party at the address indicated below or to any other address that the respective
parties may designate from time to time.
If to Xxxxxxxx: Xxxxxxxx Systems
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Vice President of Operations
Fax: (000) 000-0000
If to Allergan: Allergan
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Director of Worldwide Surgical Logistics
With a copy to the General Counsel at the same address.
12.2 Force Majeure. Neither party shall be responsible or liable for any
default in performance of this Agreement arising directly or indirectly from any
cause beyond such party's
Page 13
control, including fire, flood, earthquake, acts of God, war (declared or
undeclared), enemy action, embargo, governmental order, proclamation or
regulation, accident, explosion, riot, insurrection, or expropriation of the
property by government authority.
12.3 Assignment. Neither party shall assign or subcontract its rights
and obligations under this Agreement without the prior written consent of the
other party. In the event that either party is acquired, wholly or in part, by a
third party during the term of this Agreement, the rights and responsibilities
of the acquired party under this Agreement shall be preserved intact, and shall
become the rights and responsibilities of the acquiring party, subject to the
non-acquired party's prior written consent.
12.4 Governing Law. This Agreement shall be construed, and the rights of
the parties determined, in accordance with the laws of the State of California,
without regard to that State's rules regarding choice or conflict of laws.
12.5 Dispute Resolution. The parties hereto agree that they shall first
attempt to resolve any dispute arising out of this Agreement by mutual agreement
of the parties. If the parties are unable to agree, within a reasonable time, on
a resolution of the dispute, the dispute will be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (AAA). Nothing in this Agreement shall prevent either party from
seeking injunctive or interim relief against the other party from a judicial or
administrative authority pending the resolution of a dispute or controversy by
arbitration.
12.6 Independent Contractor. Xxxxxxxx is and at all times shall be
deemed to be an independent contractor and shall be wholly responsible for the
goods supplied and services performed under this Agreement. Nothing contained
herein shall be construed as creating the relationship of employer/employee or
principal/agent. Xxxxxxxx shall assume full responsibility for the actions of
its employees as related to the products and services provided under this
Agreement.
12.7 Intellectual Property. Allergan maintains, and shall maintain, the
sole ownership of all Product registrations, pre-market notifications, and CE
xxxx authorizations for its Products. Xxxxxxxx shall support Allergan by
providing any documentation needed to obtain or maintain Product registrations.
Allergan retains the sole rights to all Intellectual Property existing or
developed by Allergan for the Products unless otherwise mutually agreed to by
the parties. Allergan shall have the sole option of determining whether to file
a patent or patents for the technologies developed for the products under this
Agreement. If Allergan and Xxxxxxxx choose to jointly develop new product
technologies, any such project must have prior written approval from Allergan's
Director of Phaco Engineering; and the financial responsibilities of both
parties shall be clarified in writing and signed by both parties. Xxxxxxxx shall
provide reasonable support, including quality control, document control, and
sustaining engineering, to facilitate the introduction of a new product or at no
cost to Allergan.
12.8 Modification. This Agreement cannot be changed orally, and no
modification of this Agreement shall be recognized nor have any effect, unless
the writing in which it is set forth is signed by Allergan and Xxxxxxxx, nor
shall any waiver of any of the provisions of this Agreement be effective unless
in writing and signed by the party to be charged therewith.
Page 14
12.9 Severability. If any provision of this Agreement is adjudged to be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired, and
the parties shall use their best efforts to substitute a valid, legal, and
enforceable provision which, insofar as practical, implements the purposes of
this Agreement.
12.10 Waiver. The failure of either party to enforce, at any time or for
any period of time, the provisions hereof, or the failure of either party to
exercise any option herein shall not be construed as a waiver of such provision
or option and shall in no way affect that party's right to enforce such
provisions or exercise such option. No waiver of any provision hereof shall be
deemed a waiver of any succeeding breach of the same or any other provisions of
this Agreement.
12.11 Entire Agreement. This Agreement contains the sole and entire
understanding of the parties related to its subject matter, and supersedes all
oral or written agreements concerning this subject matter made prior to the date
of this Agreement.
12.12 Business Review Process. To promote a business relationship that
builds off of the strengths of each company, Allergan and Xxxxxxxx shall meet at
least semi-annually, in January and July of each calendar year, during the Term
of this Agreement. During this meeting the parties shall (i) share their
company's sales and marketing plans, (ii) cost savings ideas, (iii) review key
business performance metrics including but not limited to purchase price
variance, shipping performance, service levels (iv) and progress to reduce
manufacturing lead-time. Xxxxxxxx and Allergan agree to explore feasibility of
distributing Products out of Xxxxxxxx'x Facilities. Should the use of Xxxxxxxx'x
Facilities for distribution of the Products prove practicable for both parties,
the parties also agree to explore the feasibility of Xxxxxxxx maintaining
ownership of the Products until they ship to the customer.
12.13 Incorporation of Exhibits. Exhibits "A" and "B" attached hereto
are hereby incorporated herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Manufacturing
and Supply Agreement as of the date first written above.
ALLERGAN, INC. XXXXXXXX SYSTEMS, A DIVISION
OF XXXX ZEISS, INC.
By: /s/ Xxxxxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxx
---------------------------- -----------------------------------
Name: Xxxxxxxxxx Xxxxxxx Name: Xxxxxx Xxxx
Title: Corporate Vice President of Title: President
Worldwide Operations
Page 15
EXHIBIT "A"
PRODUCT LIST
TECH END OF
PRODUCT DESCRIPTION FAMILY TRSFR SERVICE
------- ----------- ------ ----- -------
OM417501 Remote Control, Diplomate(R) MMP Diplomate(R) S 12/2005
OM5201012B Diplomate(R) Black 120V System Diplomate(R) S 12/2005
OM5201012G Diplomate(R) System, 120V Grey Diplomate(R) S 12/2004
OM5201012W1 Diplomate(R) System, 120V White Diplomate(R) S 12/2005
OM5201012W2 Diplomate(R) System, Wht 120V Diplomate(R) S 12/2004
OM5201013B Diplomate(R) Black, 220V System Diplomate(R) S 12/2000
OM5201013G Diplomate(R) System, 220V Grey Diplomate(R) S 12/2000
OM5201013W1 Diplomate(R) System, 220V White Diplomate(R) S 12/2000
OM5201013W2 Diplomate(R) Console Wht 220V Diplomate(R) S 12/2000
OM5201014B Diplomate(R) Black 240V System Diplomate(R) S 12/2000
OM5201014G Diplomate(R) System, 240V Grey Diplomate(R) S 12/2000
OM5201014W1 Diplomate(R) System, 240V White Diplomate(R) S 12/2000
OM5201014W2 Diplomate(R) Console Wht 240V Diplomate(R) S 12/2000
OM5201015B Diplomate(R) System, 220V Black Diplomate(R) S 12/2000
OM5201015G Diplomate(R) System, 220V Grey Diplomate(R) S 12/2000
OM5201015W1 Diplomate(R) System, 240V White Diplomate(R) S 12/2000
OM5201015W2 Diplomate(R) System, 240V White Diplomate(R) S 12/2000
OM528001 Diplomate(R) White Remote Control Diplomate(R) S 12/2004
OM528501 Diplomate(R) Black Remote Control Diplomate(R) S 12/2005
XX0000000 Diplomax(TM) 100V BlackMax Diplomax(TM) M,S ON GOING
OM4101017 Diplomax(TM) 120V System Diplomax(TM) M,S ON GOING
OM4101018 Diplomax(TM) 220V System Diplomax(TM) M,S ON GOING
OM4101019 Diplomax(TM) 240V System Diplomax(TM) M,S ON GOING
OM4130011 Console Footswitch, 3 CPI Diplomax(TM) M,S ON GOING
OM418501 Diplomax(TM) Remote Control Diplomax(TM) M,S ON GOING
OM418502 Phacompo Black Max Remote Control Diplomax(TM) M,S ON GOING
RFOOTP3 Footswitch 3 CPI Reconditioned Diplomax(TM) M,S ON GOING
RM120 Diplomax(TM) Consol 120V Diplomax(TM) M,S ON GOING
Reconditioned
OM770101P2 Electric IV Pole 120V IV Pole M,S ON GOING
OM770101P3 Electric IV Pole 220V IV Pole M,S ON GOING
OM770101P4 Electric IV Pole 240V IV Pole M,S ON GOING
RES120 Std w/Elec IV Pole 120V IV Pole M,S ON GOING
Reconditioned
RES240 Std W/Elec IV Pole 240V IV Pole M,S ON GOING
Reconditioned
OM5230011 Console Footswitch Opsys(R) S 12/2005
OM66010112 Opsys(R) MMP 3 System, 120V Opsys(R) S 12/2005
OM66010113 Opsys(R) MMP 3 System, 220V Opsys(R) S 12/2002
OM66010114 Opsys(R) MMP 3 System, 240V Opsys(R) S 12/2002
OM6601017 Opsys(R) MMP System, 120V Opsys(R) S 12/2002
OM6601018 Opsys(R) MMP System, 220V Opsys(R) S 12/2002
OM6601019 Opsys(R) MMP System, 240V Opsys(R) S 12/2002
OM667501 Opsys(R) MMP Remote Control Opsys(R) S 12/2002
OM6701017 Opsys(R) 120V System Opsys(R) S 12/2005
OM6701018 Opsys(R) 220V System Opsys(R) S 12/2002
OM6701019 Opsys(R) 240V System Opsys(R) S 12/2002
OM677501 Opsys(R) Remote Control Opsys(R) S 12/2005
RFOOTP Footswitch, Console, Recond Opsys(R) S 12/2005
RMP3120 Opsys(R) MMP3 Console, 120V Opsys(R) S 12/2005
ROP120 Opsys(R) Console, 120V Opsys(R) S 12/2005
SOV680002 Sovereign(TM) Signature Cart Sovereign(TM) M,S ON GOING
SOV680135 Sovereign(TM) Remote Control Sovereign(TM) M,S ON GOING
TECH END OF
PRODUCT DESCRIPTION FAMILY TRSFR SERVICE
------- ----------- ------ ----- -------
XXX000000 Sovereign(TM) System Assembly Sovereign(TM) M,S ON GOING
SOV680700 Sovereign(TM) Footpedal Sovereign(TM) M,S ON GOING
RB120 Diplomate(R) 120V console Diplomate(R) S 12/2005
Refurbished
RB240 Diplomate(R) 240V console Diplomate(R) S 12/2000
Refurbished
RG120 Diplomate(R) 120V xxxx console Diplomate(R) S 12/2002
Refurbished
RW120 Diplomate(R) 120V white console Diplomate(R) S 12/2002
Refurbished
RFOOTP3 Diplomax(TM) Footswitch 3 CPI Diplomax(TM) M,S ON GOING
refurbished
RM120 Diplomax(TM) Console refurbished Diplomax(TM) M,S ON GOING
400-0470 Prestige(TM) Radial Foot Pedal Prestige(TM) M,S ON GOING
400-0475 Prestige(TM) Closed Toe Foot Pedal Prestige(TM) M,S ON GOING
400-0575 Prestige(TM) Control Center Remote Prestige(TM) M,S ON GOING
400-0830 Prestige(TM) Command Power Pole Prestige(TM) M,S ON GOING
400-7000 Prestige(TM) Console, 120V Prestige(TM) M,S ON GOING
400-7010 Prestige(TM) Console, 100V Prestige(TM) M,S ON GOING
400-7022 Prestige(TM) Console, 220V Prestige(TM) M,S ON GOING
400-7024 Prestige(TM) Console, 240V Prestige(TM) M,S ON GOING
RFOOTP3 Diplomax(TM) Footswitch 3 CPI Diplomax(TM) M,S ON GOING
refurbished
000-0000 0000 Series Four Plus S 12/2001
000-0000 0000 Series Four Plus S 12/2001
400-0400 Four Plus Footswitch Four Plus S 12/2001
400-0900 Four Plus Cart Four Plus S 12/2001
000-0000 0000 Series Console Phaco Plus S 12/2003
000-0000 0000 Series Console Phaco Plus S 12/2003
000-0000 0000 Series Console Phaco Plus S 12/2003
000-0000 0000 Series Console Phaco Plus S 12/2003
400-6303 Sensory V Console RU Phaco Plus S 12/2003
400-0910 Phaco Plus Cart with IV Pole Phaco Plus S 12/2003
400-0410 Phaco Plus Footpedal Phaco Plus S 12/2003
400-0850 Power IV Pole 100/120 Phaco Plus S 12/2003
400-0420 Sensory V Footpedal Phaco Plus S 12/2003
400-0920 Sensory V Cart Phaco Plus S 12/2003
EXHIBIT "B"
DIPLOMAX CONFIGURATION SHEET & CERTIFICATE OF CONFORMANCE
AMO P/N OM4101017 120V [ ] NEW AMO P/N AM4101016 100V [ ]
AMO P/N 0M4101018 220V [ ] AMO P/N OM4101019 240V [ ]
AMO P/N RM120 120V [ ] RECONDITIONED
INSTRUMENT S/N SOFTWARE P/N______
INSTRUMENT P/N SOFTWARE REV._____
CHASSIS INSPECTION DATE___
VOLTAGE FOOTPEDAL P/N_____
AMPS HZ FOOTPEDAL S/N_____
REV INITIAL/DATE
CONFIGURATION DATE SHEET (P/N 48801)
IN-PROCESS PROBLEM WORKSHEET (P/N 46124)
IN-PROCESS CHECK SHEET (TLR410101)
P/N DESCRIPTION SERIAL NO.
000000 VALVE DRIVER PCB
000000 CPU PCB
000000 DRIVER PCB
52440 FRONT PANEL PCBA
0000000 EPROM IC REVISION
or
4116012
QA DIPLOMAX INSPECTION CHECK SHEET (TRL410101)
Certification of Conformance
I, the undersigned, hereby declare that the
Product specified above was produced, packaged,
tested and shipped in conformance with the Device
Master Record, and is in full compliance with all
___ SHIPPING CLEARANCE Product Specifications, cGMPs, and other
applicable laws, regulations and requirements.
Place: Dublin, California Signature_____________
Date: __________________ Print Name____________
Title Quality Control
Inspector
Xxxxxxxx Systems
