[*] indicates that a confidential portion of this Agreement has been omitted and
filed separately with the Securities and Exchange Commission.
SUPPLY AGREEMENT
by and among
XOMA(US) LLC
and
ALLERGAN SALES, INC.
effective as of June 25, 1999
ARTICLE I - DEFINITIONS......................................................1
ARTICLE II - COMPOUND SUPPLY
2.1 Supply..............................................................2
2.2 Price...............................................................3
2.3 Records.............................................................3
2.4 Audits..............................................................3
2.5 Payment Terms.......................................................3
2.6 Compound Supply.....................................................4
2.7 Orders; Forecasts...................................................4
2.8 Warranties..........................................................4
2.9 Development Supplies................................................5
ARTICLE III - ADDITIONAL COVENANTS
3.1 Cooperative Research................................................5
3.2 Additional Consultation.............................................5
ARTICLE IV- TRANSFER OF RIGHTS AND OBLIGATIONS...............................5
ARTICLE V - INDEMNIFICATION AND INSURANCE
5.1 Indemnification by ALLERGAN.........................................6
5.2 Indemnification by XOMA(US).........................................6
5.3 Procedure...........................................................6
5.4 Insurance...........................................................6
ARTICLE VI - TERM OF AGREEMENT...............................................6
ARTICLE VII - GENERAL
7.1 Public Disclosure...................................................6
7.2 Notices.............................................................7
7.3 Governing Law.......................................................7
7.4 Severability........................................................7
7.5 Headings............................................................7
7.6 Entire Agreement; Amendment.........................................7
7.7 Force Majeure.......................................................7
7.8 Non-Waiver..........................................................8
7.9 Disclaimer of Agency................................................8
7.10 Limitation of Liability.............................................8
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SUPPLY AGREEMENT
This Supply Agreement (this "Agreement") is made and effective as of this
25th day of June, 1999 (hereinafter referred to as the "Effective Date"), by and
among XOMA(US) LLC, a limited liability company organized and existing under the
laws of Delaware, having a place of business at 0000 Xxxxxxx Xxxxxx, Xxxxxxxx,
XX 00000 ("XOMA(US)"), and Allergan Sales, Inc., a corporation organized and
existing under the laws of California, having a place of business at 0000 Xxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx ("ALLERGAN").
WITNESSETH THAT:
WHEREAS, ALLERGAN is entering into a License Agreement, effective as of the
Effective Date (the "License Agreement"), with XOMA Ireland Limited, a company
organized and existing under the laws of Ireland, relating to Products (as
defined therein) for use in the Field (as defined therein); and
WHEREAS, in connection with the License Agreement, ALLERGAN desires to
purchase from XOMA(US), and XOMA(US) desires to supply to ALLERGAN, Compound (as
defined below) for use in Products (as defined in the License Agreement);
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and considerations set forth herein, the parties hereto mutually agree as
follows:
ARTICLE I - Definitions:
The following terms shall have the meanings set forth in this Article I:
1.1 "Affiliate" of a particular party shall mean all corporations or
business entities which, directly or indirectly, are controlled by, control, or
are under common control with such party. For this purpose, the meaning of the
word "control" shall mean the ownership of fifty percent (50%) or more of the
voting shares or interest of such corporation or business entity, or any
corporation or business entity in which the party seeking to demonstrate
Affiliate status can demonstrate, even though the extent of ownership of such
shares or interest in such corporation or business entity is less than (50%),
that the operation and management of such corporation or business entity is
carried out in conformity with the particular party's standing policy; such
corporation or business entity to be deemed an Affiliate only so long as such
ownership of voting shares or interest or adherence to such standing policy
continues.
1.2 "Compound" shall have the meaning set forth in Section 1.4(i) of
the License Agreement, provided, that if either party hereto desires to change a
compound or add an additional compound or compounds, the parties agree to
negotiate in good faith an amendment to this Agreement to include such changed
or additional compound(s) on mutually acceptable terms.
1.3 "Compound Specifications" shall mean the specifications for
Compound which shall be reasonably agreed upon from time to time by ALLERGAN and
XOMA(US) after consultation and which shall be comparable in scope to the
specifications for Compound provided by
XOMA(US) to ALLERGAN on the date hereof and identified as "Master Report of Xxxx
of Testing (BOT) for rBPI , Effective Date: 4/13/99 R05."
1.4 "FDA" shall mean the U.S. Food & Drug Administration.
1.5 "Field" shall have the meaning set forth in the License Agreement.
1.6 "Major Market Country" shall have the meaning set forth in the
License Agreement.
1.7 "NDA" shall mean a New Drug Application filed under the U.S. Food,
Drug and Cosmetic Act and the regulations thereunder.
1.8 "Products" shall have the meaning set forth in the License
Agreement.
1.9 "Third Party" shall mean any party other than XOMA(US), XOMA(US)'s
Affiliates, ALLERGAN or ALLERGAN's Affiliates.
ARTICLE II - COMPOUND SUPPLY:
2.1 Supply. During the term of this Agreement, ALLERGAN shall be
obligated to purchase exclusively from XOMA(US) and XOMA(US) shall be obligated
to supply exclusively to ALLERGAN, Compound for use in the Field. The parties
agree to negotiate for an extension of this exclusive purchase obligation during
the one year period preceding the expiration of the aforementioned term.
However, any agreement to such an extension is within each party's sole business
judgment. In consideration of ALLERGAN's agreement to exclusively purchase
Compound from XOMA(US) for use in the Field, XOMA(US) agrees, at XOMA(US)'s sole
expense, to validate (a) an approved source of Compound prior to the beginning
of the first Phase III clinical trial of the Product in the United States or the
equivalent of a Phase III trial in any other Major Market Country, and (b) a
second approved source of Compound prior to the filing of an NDA or its
equivalent with the FDA or other drug regulatory agency, respectively, in a
Major Market Country. Such second source may be a second manufacturing facility
of XOMA(US) or its Affiliates. In order for a source of Compound to be
considered a validated source under this Section 2.1, such source must be
capable of supplying compound in accordance with the Compound Specifications and
requirements of Section 2.6 hereof. Thereafter, and during the term of
XOMA(US)'s obligation to supply compound to ALLERGAN under this Section 2.1,
XOMA(US) will maintain both such first and second source of Compound in
condition to supply Compound in accordance with the Compound Specifications and
requirements of Section 2.6, hereof. In lieu of establishing and maintaining a
second source, XOMA(US) may maintain an inventory of Compound, designated
specifically for ALLERGAN, in an amount at least equal to [*] of ALLERGAN's
forecasted needs for the ensuing twelve (12) months. Prior to the filing of an
NDA or its equivalent with the FDA or other drug regulatory agency,
respectively, in a Major Market Country, the parties shall confer and in good
faith establish an initial forecast for the ensuing twelve (12) months, which
shall be updated quarterly as provided in Section 2.7.
On reasonable notice and during normal business hours, XOMA(US) shall allow
an ALLERGAN representative and an FDA and/or other health regulatory
representative access to the manufacturing, filling, packaging, labeling,
warehousing, storage and quality control
2
equipment and facilities utilized with respect to Compound being produced
pursuant to this Agreement, and to all applicable records relating to
manufacturing, filling, labeling, warehousing, storage, packaging, and quality
control of Compound being produced pursuant to this Agreement. XOMA(US) shall
notify ALLERGAN of any such FDA inspection or inspections by any other
regulatory health agency related to Compound being produced pursuant to this
Agreement and shall allow an ALLERGAN representative to be present during same.
2.2 Price. ALLERGAN shall pay XOMA(US) for Compound a price of [*].
2.3 Records. XOMA(US) shall maintain and keep for a period of at least
three (3) years complete and accurate records in sufficient detail to enable its
actual cost of manufacture to be determined.
2.4 Audits. Upon the request of ALLERGAN, but not exceeding once in
any one (1) year period, XOMA(US) shall permit an independent certified
accountant, selected by ALLERGAN and acceptable to XOMA(US), which acceptance
shall not be unreasonably withheld, to have access to such records of XOMA(US)
as may be necessary to verify the actual cost of manufacture of the Compound.
Said independent certified accountant shall verify to ALLERGAN only the actual
cost of manufacture and disclose no other information revealed in its audit. Any
such audit of records shall be at ALLERGAN's expense; provided, that in the
event such examination discloses an overpayment by ALLERGAN of more than five
percent (5%), XOMA(US) shall pay the expense of such audit. Any overpayment
shall be repaid promptly to ALLERGAN, plus interest at the commercial prime
lending rate of the Bank of America until the date paid.
2.5 Payment Terms. Payment to XOMA(US) for any supply of Compound
shall be due and payable thirty (30) days after shipment by XOMA(US) to ALLERGAN
of such Compound.
2.6 Compound Supply. XOMA(US) shall supply exclusively all of
ALLERGAN's requirements of the Compound, in accordance with Section 2.7 below,
to enable ALLERGAN to manufacture the Products. If XOMA(US) is unable to supply
[*] of ALLERGAN's requirements of the Compound for more than ninety (90)days,
ALLERGAN shall have the right to manufacture or purchase from Third Parties its
requirement of Compound. XOMA(US) shall cooperate in obtaining such alternate
supply source, including, without limitation, transferring such technology and
know-how, and license rights as are reasonably necessary for ALLERGAN or a third
party to manufacture Compound.
2.7 Orders; Forecasts. At least ninety (90) days prior to the start of
each calendar quarter, ALLERGAN shall provide XOMA(US) with a purchase order for
the total amount of the Compound to be ordered for shipment during each month of
such quarter and an estimate of its Compound requirements for each of the next
three (3) quarters (each such estimate updating previous estimates and adding an
estimate for the next succeeding quarter). Each quarterly purchase order will be
within [*] of the preceding quarter's estimate for such quarter. XOMA(US) shall
ship Compound to a facility or facilities designated by ALLERGAN within each
such month of such quarter after the receipt of such purchase order from
ALLERGAN. Title to the Compound shall pass to ALLERGAN upon receipt by ALLERGAN
at such facility.
3
2.8 Warranties. XOMA(US) represents and warrants that all Compound
supplied to ALLERGAN hereunder shall (i) meet the applicable Compound
Specifications as of the time the Compound is received by ALLERGAN and (ii) will
not be adulterated or misbranded within the meaning of the U.S. Food, Drug and
Cosmetic Act and the regulations thereunder. XOMA(US) shall deliver a
certificate of analysis with each lot of Compound specifying the results of
analysis to show conformance with the applicable Compound Specifications. Upon
receipt, each lot of Compound shall be tested by ALLERGAN, and thereafter
ALLERGAN shall provide XOMA(US) with written notice of its acceptance or
rejection of the lot. Each such lot shall be deemed accepted by ALLERGAN
(subject to Section 5.2) unless XOMA(US) receives written notice of rejection of
the lot (due to the failure of Compound to comply with the Compound
Specifications as of the time the lot was received by ALLERGAN) within thirty
(30) days after ALLERGAN's receipt of the Compound. At ALLERGAN's option,
XOMA(US) shall replace any nonconforming Compound at XOMA(US)'s expense with a
like amount of the Compound conforming to the Compound Specifications. For
purposes hereof, replacement may include reprocessing of the Compound, so long
as such reprocessing is mutually agreed upon by the parties and conforms to
applicable law and regulation, including FDA current Good Manufacturing
Practices. If XOMA(US) does not agree with ALLERGAN that the supplied lot fails
to conform to the Compound Specifications, the matter may be submitted to an
independent laboratory acceptable to both parties in order to resolve the
discrepancy in the analysis of the Compound rejected. The cost of assay by the
independent laboratory shall be borne by the party whose analysis was in error.
ALLERGAN shall procure or produce, and where appropriate shall quality control
test, all other raw materials and packaging components needed to manufacture the
Products.
2.9 Development Supplies. Notwithstanding the foregoing, XOMA(US)
shall supply ALLERGAN's reasonable requirements of the Compound for all
formulation, development, clinical supplies and non-commercial manufacturing at
a price of [*]. XOMA(US) shall supply Compound at a quality presently used in
XOMA(US)'s clinical studies until ALLERGAN begins the first Phase III clinical
trial of Compound in the United States or the equivalent of a Phase III clinical
trial in another Major Market Country and, thereafter, Compound will be supplied
in accordance with the Compound Specifications and requirements of Section 2.6
hereof.
ARTICLE III - ADDITIONAL COVENANTS:
3.1 Cooperative Research. The parties acknowledge that XOMA(US) and/or
its Affiliates possess special knowledge and expertise with respect to the
Compound and that in some circumstances cooperation between ALLERGAN and
XOMA(US) would expedite the development by ALLERGAN of Products. The parties
shall, from time to time, consider cooperative research and development on
reasonable terms to be negotiated in good faith.
3.2 Additional Consultation. XOMA(US) shall make available to
ALLERGAN, on a reasonable consultation basis, such advice of its technical
personnel as may reasonably be requested by ALLERGAN in connection with its
development of any Products. ALLERGAN agrees to reimburse XOMA(US) for the
reasonable and customary charges or the time of such personnel when consulting
for ALLERGAN at ALLERGAN's facilities or at any place other than XOMA(US)'s
facilities. Upon receipt by ALLERGAN of copies of receipts or other appropriate
evidence of expenditures by XOMA(US), ALLERGAN shall reimburse XOMA(US) for
reasonable travel expenses (coach class airfare in the United
4
States, and business class airfare outside the United States, ground
transportation, lodging and meals) for travel incurred by XOMA(US) at the
request of ALLERGAN while rendering services hereunder.
ARTICLE IV - TRANSFER OF RIGHTS AND OBLIGATIONS:
This Agreement, in whole or in part, shall not be assignable by either
party hereto to any Third Party without the prior written consent of the other
party hereto, except that either party may assign this Agreement to an Affiliate
or the successor or assignee of that portion of its business to which this
Agreement relates. In any event, ALLERGAN may assign this Agreement to Allergan
Specialty Therapeutics, Inc., a special purpose corporation of which ALLERGAN
owns 100% of the outstanding Class B Common Stock. It is expressly understood
and agreed by the parties hereto that the assignor of any rights hereunder shall
remain bound by its duties and liable for its obligations hereunder. Any
assignment or attempt at same, except as provided for herein, shall be void and
of no effect.
ARTICLE V - INDEMNIFICATION AND INSURANCE:
5.1 Indemnification by ALLERGAN. ALLERGAN agrees to defend, indemnify
and hold harmless XOMA(US), its agents and employees, against claims for loss,
liability, damage and costs for personal injury or recall attributable to the
development, manufacture, marketing use or sale of any Product by ALLERGAN or
its sublicensees or Affiliates.
5.2 Indemnification by XOMA(US). XOMA(US) agrees to defend, indemnify
and hold harmless ALLERGAN, its agents and employees, against claims for loss,
liability, damage and costs for personal injury or recall (i) attributable to
the manufacture of the Compound by XOMA(US) or its sublicensees or Affiliates,
and/or (ii) resulting from the failure of such Compound to conform to the
warranties set forth herein.
5.3 Procedure. As to any claim or lawsuit with respect to which either
party seeks indemnification hereunder, that party shall provide prompt notice
thereof to the other party and the other party shall have the right to control
the defense of said lawsuit, including the selection of attorneys, and any
settlement thereof, provided that no settlement which impairs the rights of an
indemnified party shall be made without its prior written consent , which
consent shall not be unreasonably withheld.
5.4 Insurance. XOMA, at its own expense, shall maintain product
liability insurance, including broad form contractual liability coverage, in an
amount consistent with industry standard practices during the term of this
Agreement and for three years thereafter. XOMA shall provide certificates of
insurance evidencing such coverage in respect of this Agreement, from time to
time as reasonably requested by ALLERGAN. ALLERGAN, at its own expense, shall
maintain product liability insurance, including broad form contractual liability
coverage, in an amount consistent with industry standard practices during the
term of this Agreement and for three years thereafter. ALLERGAN shall provide
certificates of insurance evidencing such coverage in respect of this Agreement,
from time to time as reasonably requested by XOMA.
ARTICLE VI - TERM OF AGREEMENT:
5
This Agreement shall continue in full force and effect for the time
commencing with the Effective Date and continuing until the License Agreement
expires or is terminated in accordance with its terms.
ARTICLE VII - GENERAL:
7.1 Public Disclosure. Except for such disclosure as is deemed
necessary, in the reasonable judgment of a party, to comply with applicable laws
or regulations, no public announcement, news release, public statement or
publication relating to the existence of this Agreement, or the terms hereof,
will be made without the other party's written approval, which approval shall
not be unreasonably withheld.
7.2 Notices. Any notice or report required or permitted to be given or
made under this Agreement by either party to the other shall be in writing, sent
by hand or by registered or express mail or courier, postage prepaid, addressed
to such other party "Attention: General Counsel", at its address indicated at
the beginning of this Agreement, or to such other address as the addressee shall
have last furnished in writing to the addressor, and shall be effective upon
receipt by the addressee.
7.3 Governing Law. This Agreement shall be governed by the laws of the
State of California, without reference to its conflicts of laws rules, and in
connection with any dispute hereunder, the parties consent to exclusive
jurisdiction and venue in the state and federal courts in the State of
California.
7.4 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement should be prohibited or
invalid under applicable law, such provision shall be ineffective to the extent
of such invalidity without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
7.5 Headings. The subject headings of the Articles and Sections of
this Agreement are included for the purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
7.6 Entire Agreement; Amendment. This Agreement contains the entire
understanding of the parties with respect to the matters contained herein and
supersedes any previous agreements and may be altered or amended only by a
written instrument duly executed by both parties hereto.
7.7 Force Majeure. No party shall be liable for any delay or failure
of performance to the extent such delay or failure is caused by circumstances
beyond its reasonable control and that by the exercise of due diligence it is
unable to prevent, provided that the party claiming excuse used its commercially
reasonable efforts to overcome the same.
7.8 Non-Waiver. The failure of a party in any one or more instances to
insist upon strict performance of any of the terms and conditions of this
Agreement shall not constitute a waiver or relinquishment, to any extent, of the
right to assert or rely upon any such terms or conditions on any future
occasion.
6
7.9 Disclaimer of Agency. Neither party is, or will be deemed to be,
the legal representative or agent of the other, nor shall either party have the
right or authority to assume, create, or incur any third party liability or
obligation of any kind, express or implied, against or in the name of or on
behalf of another except as expressly set forth in this Agreement.
7.10 Limitation of Liability. NO PARTY SHALL BE LIABLE TO ANOTHER FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES, INCLUDING BUT
NOT LIMITED TO LOST PROFITS, ARISING FROM OR RELATING TO ANY BREACH OF THIS
AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. Nothing
in this Section is intended to limit or restrict the indemnification rights or
obligations of any party.
7.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
7
WITNESS WHEREOF, the parties here executed this Agreement this 25th day of
June, 1999.
XOMA(US) LLC ALLERGAN SALES, INC.
/s/ Xxxxxxxxxxx X. Xxxxxxxx By: /s/ Xxx Xxxxxx
---------------------------------------- ------------------------
Xxxxxxxxxxx X. Xxxxxxxx, Vice President, Name: Xxx Xxxxxx
General Counsel and Secretary Title: Corporate Vice
President, Science
& Technology
