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EXHIBIT 10.1
[ALLERGAN LETTERHEAD]
Xxxxxxx X. Xxxxxx, Xx.
Corporate Vice President,
General Counsel
and Secretary
October 23, 1998
Allergan Specialty Therapeutics, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: President and Chief Executive Officer
Dear Xx. Xxxxxxxx:
Reference is made to that certain Research and Development Agreement dated
March 6, 1998 (the "R&D Agreement") by and between Allergan, Inc. ("Allergan")
and Allergan Specialty Therapeutics, Inc. ("ASTI"), and that certain
Collaboration Agreement dated July 22, 1998 (the "Collaboration Agreement") by
and between Allergan and Xxxxxx-Xxxxxxx Company ("Xxxxxx-Xxxxxxx"). Capitalized
terms used but not otherwise defined in this letter agreement shall have the
meanings given such terms in the R&D Agreement.
Allergan and ASTI hereby agree as follows:
1. All payments received by Allergan from Xxxxxx-Xxxxxxx pursuant to Sections
6.1, 6.2, 6.3 and 6.4 of the Collaboration Agreement shall be deemed to
constitute Specialty Royalty Payments for purposes of the R&D Agreement, and
Allergan shall make Pre-Selection Product Payments to ASTI with respect to such
Specialty Royalty Payments pursuant to Section 7.4(b) of the R&D Agreement.
2. Subject to paragraph 3 below, ASTI shall use all Pre-Selection Product
Payments paid by Allergan to ASTI pursuant to the foregoing paragraph 1 that
derive from Sections 6.1, 6.1, or 6.3 of the Collaboration Agreement solely to
fund Research and Development Costs or to make Technology Fee payments under
the R&D Agreement. Without limiting the foregoing, in no event shall ASTI use
any portion of such Pre-Selection Product Payments for any dividend or other
distribution to ASTI stockholders. Any Pre-Selection Product Payments paid by
Allergan to ASTI and deriving from Section 6.4 of the Collaboration Agreement
shall not be subject to the restriction referenced in this paragraph 2.
3. If Allergan does not exercise its right to purchase all of the outstanding
shares of ASTI by the Purchase Option Expiration Time (as that term is defined
in ASTI's Restated
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Allergan Specialty Therapeutics, Inc.
October 15, 1998
Page 2
Certificate of Incorporation) then the restriction referenced in paragraph 2
above on the use of Pre-Selection Product Payments paid by Allergan to ASTI
pursuant to paragraph 1 above shall lapse.
4. ASTI and Allergan acknowledge that this letter agreement shall apply only
to the payments received by Allergan from Xxxxxx-Xxxxxxx pursuant to the
Collaboration Agreement, and this letter agreement shall not be used as an aid
in interpreting the R&D Agreement other than as the R&D Agreement relates to
the Collaboration Agreement.
Except as specifically modified by this letter agreement, the terms and
conditions of the R&D Agreement shall remain in full force and effect. This
letter agreement may be executed in counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
If the foregoing is acceptable to you, please sign and date this letter
agreement in the space provided below and return it to me.
Sincerely,
ALLERGAN, INC.
By: /s/ XXXXXXX X. XXXXXX, XX.
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Xxxxxxx X. Xxxxxx, Xx.
Corporate Vice President,
General Counsel and
Secretary
Agreed to and accepted this 2nd day of November, 1998
ALLERGAN SPECIALTY THERAPEUTICS, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
