UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
ON
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 28, 1999
XOMA LTD.
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(Exact name of registrant as specified in its charter)
BERMUDA
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(State or other jurisdiction of incorporation)
0-14710 94-2756657
(Commission File Number) (IRS Employer Identification No.)
2910 Seventh Street, Berkeley, California 94710
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (510) 644-1170
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On June 28, 1999, XOMA Ltd. announced that it had entered into a license
agreement with Allergan Sales, Inc., a copy of which is attached hereto as
Exhibit 1 and incorporated herein by reference. Under the terms of the license
agreement and the related supply agreement, a copy of which is attached hereto
as Exhibit 2 and incorporated herein by reference, Allergan will have exclusive
rights to use XOMA's recombinant BPI in combination with other anti-infectives
in products to treat ophthalmic infections and a XOMA affiliate will manufacture
rBPI for Allergan.
Item 7. Exhibits
1. Press Release dated June 28, 1999.*
2. License Agreement dated as of June 25, 1999 between XOMA Ireland Limited
and Allergan Sales, Inc. (with certain confidential information omitted,
which omitted information is the subject of a confidential treatment
request and has been filed separately with the Securities and Exchange
Commission).
3. Supply Agreement dated as of June 25, 1999 between XOMA (US) LLC and
Allergan Sales, Inc. (with certain confidential information omitted, which
omitted information is the subject of a confidential treatment request and
has been filed separately with the Securities and Exchange Commission).
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* Previously filed
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: July 19, 1999 XOMA LTD.
By: /s/ Christopher J. Margolin
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Christopher J. Margolin
Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
Number Description
1. Press Release dated June 28, 1999.*
2. License Agreement dated as of June 25, 1999 between XOMA Ireland Limited
and Allergan Sales, Inc. (with certain confidential information omitted,
which omitted information is the subject of a confidential treatment
request and has been filed separately with the Securities and Exchange
Commission).
3. Supply Agreement dated as of June 25, 1999 between XOMA (US) LLC and
Allergan Sales, Inc. (with certain confidential information omitted, which
omitted information is the subject of a confidential treatment request and
has been filed separately with the Securities and Exchange Commission).
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* Previously filed
[*] indicates that a confidential portion of this Agreement has been omitted and
filed separately with the Securities and Exchange Commission.
LICENSE AGREEMENT
This License 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 Ireland Limited, a company with limited liability organized and
existing under the laws of Ireland, having a place of business at 1 Earlsfort
Centre, Hatch Street, Dublin 2, Ireland ("XOMA"), and Allergan Sales, Inc., a
California corporation, having a place of business at 2525 Dupont Drive, Irvine,
California 92612, United States ("ALLERGAN").
WITNESSETH THAT:
WHEREAS, XOMA owns "XOMA Know-How" (as hereinafter defined) and "Patent
Rights" (as hereinafter defined) relating to Compound (as hereinafter defined)
and/or ophthalmic pharmaceutical compositions containing Compound; and
WHEREAS, ALLERGAN desires to develop one or more anti-infective, ophthalmic
pharmaceutical compositions containing Compound; and
WHEREAS, ALLERGAN is engaged in the business of, and has the facilities
for, developing, registering, manufacturing and marketing ophthalmic
pharmaceutical products in the "Territory" (as hereinafter defined); and
WHEREAS, ALLERGAN desires to obtain from XOMA and XOMA is willing to grant
to ALLERGAN an exclusive license for the Field (as hereinafter defined) in the
Territory relating to the XOMA Know-How and Patent Rights in respect of the
Products (as hereinafter defined),
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.
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1.2 "ALLERGAN Information" shall mean all information developed or acquired
by or on behalf of or under the control of ALLERGAN or an ALLERGAN Affiliate
subsequent to the Effective Date, including pharmaceutical chemistry, analytical
chemistry and biochemistry reports, clinical trials reports, drug adverse
effects, pre-clinical reports, including toxicology, and summaries of regulatory
activities of ALLERGAN, relating to the Compound and/or Products which ALLERGAN
has access to and is free to disclose without restriction or compensation to any
Third Party.
1.3 "Antibacterial Agent" shall mean any chemical substance produced by a
microorganism or a synthetic substance (but excluding Compound and [*]) that has
the capacity to inhibit the growth of or to kill bacteria.
1.4 "Compound" shall mean any recombinant human bactericidal/permeability
increasing protein (BPI) that is: [*].
1.5 "Field" shall mean the mitigation, treatment or prevention of
ophthalmic bacterial infection in humans and other mammals.
1.6 [*]
1.7 "Major Market Country" shall mean one of the following countries:
France, Germany, Italy, Japan, Spain, United Kingdom or the United States.
1.8 "NYU License" shall mean that certain Amended and Restated License
Agreement between New York University ("NYU") and XOMA Corporation dated
September 1, 1993, which has been assigned to XOMA.
1.9 "Net Sales" shall mean the amount invoiced by ALLERGAN, its Affiliates
or sublicensees to Third Parties for the sale of Products less (i) cash
discounts and/or quantity discounts allowed; credits and allowances for returns,
rejections and recalls; (ii) charges for freight, insurance and transportation
specifically included in the amount invoiced; (iii) trade discounts, credits or
allowances; (iv) sales and use taxes, duties or other government tariffs and
similar taxes incurred and government mandated rebates; and (v) accruals for
estimated contract rebates, bid rebates, Medicaid rebates and any other similar
rebates as ALLERGAN may be required to pay from time to time, all of which shall
be determined in accordance with GAAP and ALLERGAN's standard accounting
methods. From time to time, but not less often than annually, ALLERGAN will
determine the actual amount of rebates paid under clause (v) above and any
differences between the estimates accrued under (v) above and the actual amounts
paid will be treated as adjustments to Net Sales subject to royalty in the
period in which such differences are determined by ALLERGAN.
1.10 "Patent Rights" shall mean the patents and patent applications
included in Exhibit B attached hereto and made a part hereof, and all patents
and patent applications, foreign or domestic, filed by or issued, licensed or
assigned to XOMA during the term of this Agreement in the Territory, together
with any and all patents that may issue or may have issued therefrom, including
any and all divisions, continuations, continuations-in-part, extensions,
provisionals, additions or reissues of or to any of the aforesaid patents and
patent applications, but only insofar as any of the foregoing relate to Compound
or the Products, or the manufacture, use or sale of them, in the Field.
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1.11 "`Products" shall mean pharmaceutical compositions containing a
combination of Compound and an Antibacterial Agent for administration in the
Field.
1.12 "Territory" shall mean the world.
1.13 "Third Party"' shall mean any party other than XOMA, XOMA's
Affiliates, ALLERGAN, or ALLERGAN's Affiliates.
1.14 "Third Party Licenses"' shall mean any and all licenses possessed by
XOMA and its Affiliates pertaining to the Patent Rights and the XOMA Know-How
that relate to the manufacture, use or sale of Products in the Field.
1.15 "Valid Claim" shall mean a claim of an unexpired patent included
within the Patent Rights, which has not been held unenforceable, unpatentable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction and which has not been admitted to be invalid or unenforceable
through reexamination, reissue or disclaimer or otherwise.
1.16 "XOMA Know-How" shall mean all scientific and medical information and
technical data invented, developed or acquired by or on behalf of or under the
control of XOMA as of the Effective Date or during the term of this Agreement
relating to the manufacture, use or sale of Compound and relevant for the
development, manufacturing, registration, marketing and/or sale of Products in
the Field, including, but not limited to, pre-clinical, pharmacological,
toxicological, analytical, stability and clinical data, Compound specifications,
the open part of Drug Master Files and health registration dossiers in the
Territory, and shall further include all Third Party data which XOMA has access
to and is free to disclose without restriction or additional compensation to
such Third Party.
ARTICLE II - REPRESENTATIONS AND WARRANTIES:
2.1 Intellectual Property. XOMA represents and warrants that it is the sole
and exclusive owner or exclusive licensee of all right, title and interest in
and to the XOMA Know-How and the Patent Rights, and that it has the right to
license the same to ALLERGAN in the Field under this Agreement without conflict
with the rights of any Third Party. XOMA further represents and warrants that to
the best of its knowledge, as of the Effective Date, the XOMA Know-How and the
Patent Rights are free of any encumbrances, liens, licenses, judgments and/or
security interests that would affect Compound or its use in the Field, and that
all patents and patent applications included in the Patent Rights are valid and
in full force and effect as of the date hereof and that none of the Patent
Rights are the current subject of any interference or opposition proceeding.
[*].
2.2 Adverse Information. As of the Effective Date, XOMA represents and
warrants that it knows of no adverse effects or other properties that may raise
objections from the Food & Drug Administration (FDA) or other health
registration authorities or may affect the use, effectiveness or merchantability
as to Compound.
2.3 Third Party Licenses. XOMA represents and warrants that the only Third
Party License for Patent Rights or XOMA Know-How as of the Effective Date is the
NYU License, and that an accurate copy of such Third Party License has been
provided to ALLERGAN. As of the Effective Date, such Third Party License is in
full force and effect and neither XOMA, or to
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XOMA's knowledge, NYU is in breach thereof. Such Third Party License is
exclusive to XOMA as is necessary to provide ALLERGAN the exclusive licenses
provided herein and, pursuant to the terms thereof, NYU does not have the right
to grant licenses in the Field of patents or technology contained in the Patent
Rights and the XOMA Know-How.
2.4 XOMA Authority. XOMA represents and warrants that it has full power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated herein. This Agreement and the provisions hereof
constitute valid and legally binding obligations upon XOMA, and do not require
the consent, approval or authorization of any person, public or governmental
authority or other entity except as specified herein.
2.5 XOMA Litigation. XOMA represents and warrants that as of the Effective
Date there is no pending, or to its knowledge threatened, litigation that would
or might adversely affect its right and ability to perform its obligations under
this Agreement.
2.6 ALLERGAN Authority. ALLERGAN represents and warrants that it has full
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated herein. This Agreement and the provisions hereof
constitute valid and legally binding obligations upon ALLERGAN, and do not
require the consent, approval or authorization of any person, public or
governmental authority or other entity except as specified herein.
2.7 ALLERGAN Litigation. ALLERGAN represents and warrants that as of the
Effective Date there is no pending, or to its knowledge threatened, litigation
that would or might adversely affect its right and ability to perform its
obligations under this Agreement.
ARTICLE III - LICENSE GRANT:
XOMA hereby grants to ALLERGAN and its Affiliates an exclusive license
(with the right to grant sublicenses) to manufacture, have made, use and sell
Products in the Territory, using the XOMA Know-How and under the Patent Rights.
The foregoing license rights are subject and subordinate to the terms and
conditions of the NYU License, including without limitation, Sections 15, 16 and
17 thereof. Notwithstanding the first sentence of this paragraph, XOMA retains
all rights to the Compound, XOMA Know-How, and Patent Rights for (i)
manufacture, use or sale of products outside the Field, (ii) manufacture, use or
sale of products other than Products inside the Field and (iii) license or
assignment to an Affiliate of XOMA in connection with any other agreement with
ALLERGAN for Compound.
ARTICLE IV - ROYALTIES:
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ALLERGAN shall pay to XOMA royalties equal to [*] of the Net Sales of the
Products sold by ALLERGAN, its Affiliates and sublicensees, the manufacture, use
or sale of which, absent this Agreement, would constitute an infringement of a
Valid Claim of the Patent Rights. Such royalty rate shall be subject to
adjustment pursuant to Sections 11.2, 11.3 and 11.5. ALLERGAN shall pay to XOMA
royalties at a percentage rate [*] of those set forth in the foregoing sentence
for Net Sales in any country in which the manufacture, use or sale of the
Product giving rise to such Net Sales would not constitute infringement of a
Valid Claim.
ARTICLE V - PAYMENT OF ROYALTIES:
5.1 Sales. A Product shall be determined to have been sold when invoiced;
provided, however, that transfers of Products between ALLERGAN and its
Affiliates or sublicensees, shall not be deemed to have been sold until it shall
have been sold to a purchaser independent of ALLERGAN and its Affiliates or
sublicensees in a bona fide, arm's length transaction between unrelated parties.
Royalties shall accrue hereunder only once in respect of the same unit of
Product.
5.2 Payment. Royalties accruing hereunder shall be reported by Product and
by country of sale, and shall be due and payable on the sixtieth (60th) day
following the close of each calendar quarter, payable in U.S. dollars. When the
currency of sale is not in U.S. dollars, the U.S. dollar equivalent will be
calculated using the same exchange rate(s) that ALLERGAN uses for its own U.S.
dollar financial statement reporting purposes prepared in accordance with GAAP.
ALLERGAN will report to XOMA the exchange rates used for conversion.
5.3 Withholding of Taxes. Any withholding of taxes levied by tax
authorities on the payments to XOMA hereunder shall be borne by XOMA and
deducted by ALLERGAN from the sums otherwise payable by it hereunder for payment
to the proper tax authorities on behalf of XOMA. ALLERGAN agrees to cooperate
with XOMA to make reasonable efforts to minimize any such taxes recognizing the
respective interests of the parties. In the event XOMA claims exemption from
such withholding under any double taxation or other similar treaty or agreement
from time to time in force, and provides ALLERGAN with appropriate documentation
of such exemption, ALLERGAN shall not withhold any such taxes. In the event of
any withholding under this Section 5.3, ALLERGAN shall provide receipts of
payment of such withheld tax or other documents reasonably available to
ALLERGAN.
5.4 Full Payment. Upon the later of the expiration of all Patent Rights in
a country or [*] years after the first sale of a Product in a country in which
no Patent Rights then exist, and upon payment of all applicable royalties, fees
and milestones due pursuant to this Agreement, and assuming that this Agreement
is not otherwise earlier terminated by either party hereto, ALLERGAN's license
hereunder shall be paid-up, perpetual and irrevocable for such country. For
purposes of this Section 5.4, all of the countries of the European Patent
Convention as listed on Exhibit C shall be considered as a single country and
such expiration shall be determined by the expiration of the last Patent Right
in such countries.
ARTICLE VI - ROYALTY REPORTS:
6.1 Records. ALLERGAN shall maintain and keep for a period of at least
three (3) years complete and accurate records in sufficient detail to enable any
royalties which shall have accrued hereunder to be determined.
6.2 Audits. Upon the request of XOMA, but not exceeding once in any one (1)
year period, ALLERGAN shall permit an independent certified accountant, selected
by XOMA and acceptable to ALLERGAN which acceptance shall not be unreasonably
withheld, to have access to such records of ALLERGAN as may be necessary to
verify the accuracy of the royalty reports and payments submitted to XOMA
hereunder. Said independent certified accountant shall verify to XOMA the amount
of royalty due hereunder and sales by country and Product, and disclose no other
information revealed in its audit. Any such audit of records shall be at XOMA's
expense; provided that in the event such examination discloses a variance of
more than five percent (5%) between the
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amount of royalties due and the amount of royalties paid to XOMA, ALLERGAN shall
pay the expense of such audit. Any deficiency shall be paid promptly to XOMA,
plus interest at the commercial prime lending rate of the Bank of America from
the date such payment was originally due until the date paid.
ARTICLE VII - FEES AND MILESTONES:
7.1 Initial License Fee. In consideration for the license granted to
ALLERGAN hereunder, ALLERGAN shall pay to XOMA as an initial license fee [*]
Dollars ($[*]) promptly upon the execution of this Agreement.
7.2 Milestones. As additional consideration for the license granted to
ALLERGAN hereunder, ALLERGAN shall pay to XOMA the following amounts upon
achievement (prior to the expiration or termination of this Agreement) of each
of the applicable milestones:
[*]
7.3 Single Payment. Each of the foregoing milestone payments shall be
payable one time only, even if such milestones are subsequently again met for
another Product or variation of a Product.
7.4 Payment of Milestones. ALLERGAN shall promptly and, in any case, within
ten (10) days, notify XOMA in writing of the occurrence of the milestones set
forth above. Within fifteen (15) business days after the date of such notice,
ALLERGAN shall pay to XOMA by check, wire transfer or other means acceptable to
XOMA, the milestone payments set forth above.
ARTICLE VIII - DEVELOPMENT:
ALLERGAN shall be responsible for the development of Products at its sole
cost. ALLERGAN shall exclusively own all rights to, and bear the cost and
expense of, any submissions required to obtain pre-marketing government
approvals or any other approvals necessary to commercialize the Products in each
country of the Territory. ALLERGAN shall use reasonable efforts to develop,
register, manufacture, market, and sell the Products. Attached as Exhibit D is
ALLERGAN's preliminary research and development plan. Such plan may be changed
in such manner as ALLERGAN reasonably finds necessary in light of scientific,
technical, regulatory and commercial factors. The parties agree to meet
approximately every six to nine months, and in no event less than one time per
calendar year, to review the progress of development with attendance, in person
or by video or telephone conference, of appropriate personnel.
ARTICLE IX - TERMINATION:
9.1 Term. This Agreement, unless sooner terminated as elsewhere provided in
this Agreement, shall continue in full force and effect for the time commencing
with the Effective Date and continuing (a) with regard to the patent licenses
granted herein, until expiration of the last to expire patent (including any
modification, extension or reissue thereof) within the applicable Patent Rights,
and (b) with regard to the license granted to use the XOMA Know-How herein, for
the term of the royalty-bearing years specified in Section 5.4, subject to the
perpetual, irrevocable license set forth in such Section.
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9.2 Termination of NYU License. This Agreement, to the extent it includes a
sublicense of rights under the NYU License, shall terminate upon the termination
of XOMA's rights under the NYU License; provided, that upon such termination,
ALLERGAN shall have the right to enter into a licensing agreement with NYU upon
the same terms and conditions as in the NYU License.
9.3 Breach. Upon the failure of either party hereto to comply with any of
their respective obligations and conditions contained herein, the other party
shall be entitled, without prejudice to any other rights conferred on it herein,
to terminate this Agreement upon not less than ninety (90) days notice of such
default, provided that the party in default has failed to cure such default
within such ninety (90) day period.
9.4 ALLERGAN Right to Terminate. ALLERGAN shall have the right to terminate
this Agreement in its entirety or with regards to any licenses granted herein as
to any Product in any country or countries of the Territory at any time upon
three (3) months prior written notice to XOMA. For purposes of this Section 9.4,
all of the countries of the European Patent Convention, as listed on Exhibit C,
shall be considered as a single country and such termination shall apply to all
such countries. In the event ALLERGAN terminates this Agreement pursuant to this
Section 9.4, XOMA shall be entitled to use the ALLERGAN Information for purposes
outside the Field in the country or countries in which the termination is
effective for no additional consideration. In addition, in such event, XOMA may
elect to enter into a license agreement with ALLERGAN to utilize the ALLERGAN
Information in the Field in the country or countries in which the termination is
effective in exchange for a royalty of [*] of net sales of products in the
Field. Such license shall contain terms consistent with the terms of the license
grant to ALLERGAN and the royalty payment and report provisions herein.
9.5 XOMA Right to Terminate. XOMA shall have the right to terminate this
Agreement if [*].
9.6 [*]
9.7 Sale of Inventory. In the event of any early termination of any
licenses granted herein in any country or countries of the Territory, ALLERGAN
shall promptly make an accounting to XOMA of the inventory of all Products which
it and its Affiliates and sublicensees and their respective agents and
distributors have on hand in such country or countries, if any, as of the date
of such termination and said parties shall thereafter have the right for a
period of six (6) months after said termination to sell such inventory of
Products provided that the Net Sales thereof shall be subject to the royalty
provisions of Article IV and so payable to XOMA.
9.8 Effect of Termination. Termination of this Agreement, either in whole
or in part, for any reason, shall be without prejudice to:
(1) XOMA's right to receive all royalties fees and/or milestones accrued to
it and unpaid on the effective date of such termination or thereafter in
accordance with Articles IV, V, VII, and Sections 9.5 and 9.6 of this Article
IX;
(2) the rights and obligations of the parties provided in Articles VI, X
and XV of this Agreement; and
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(3) any other rights or remedies then or thereafter available to either
party under this Agreement or otherwise.
9.9 Waiver of Defaults. The rights granted either party to terminate this
Agreement, either in whole or in part, prior to the expiration of its term,
shall not be affected in any way by that party's waiver of or failure to take
action with respect to any previous default hereunder.
ARTICLE X - INFORMATION TRANSFER; COOPERATION:
10.1 Information Transfer. Promptly following execution of this Agreement,
XOMA shall provide to ALLERGAN copies of and/or access to all then existing XOMA
Know-How and, throughout the term of this Agreement, shall continue to furnish
ALLERGAN with copies of any subsequently developed XOMA Know-How which may be
useful for the development, registration, manufacturing, marketing, or sale of
Products in the Field. XOMA shall also grant ALLERGAN the right to reference any
regulatory files, including Drug Master Files that are a part of XOMA Know-How
in any country in the Territory to enable ALLERGAN to obtain pre-marketing
approval to commercialize the Products in such country.
10.2 ALLERGAN Information. ALLERGAN on an annual basis throughout the term
of this Agreement, shall provide to XOMA copies of all ALLERGAN Information.
Without limiting XOMA's rights under Section 9.4, XOMA shall have the right to
use only that ALLERGAN Information related to the safety of the Product and only
to the extent that such use is limited to and required for safety reporting to
regulatory authorities, and for no other purpose.
10.3 Confidentiality. All XOMA Know-How or ALLERGAN Information provided by
either party (hereinafter "Disclosing Party") to the other party (hereinafter
the "Receiving Party"), hereunder, shall be used by the Receiving Party only in
accordance with this Agreement and shall be kept confidential, whether so
designated or not, by the Disclosing Party for the term of this Agreement and
for a period of ten (10) years thereafter, except that the obligations of the
Receiving Party set forth in this Section 10.3 shall not extend to any
information, data and material which:
(1) Can be shown, by written records, to have been already known by the
Receiving Party at the time of its receipt by the Receiving Party from the
Disclosing Party; or
(2) Is public knowledge at the time of its receipt by the Receiving Party
from the Disclosing Party or subsequent thereto becomes public knowledge through
no fault of the Receiving Party; or
(3) Is received by the Receiving Party from a Third Party having a legal
right to disclose such information and data to others; or
(4) Is independently developed by the Receiving Party without access to the
Disclosing Party Know-How.
Further, the obligations contained herein shall not restrict, limit or
prevent the Receiving Party from disclosing information as required by law or as
can be shown to be necessary to gain government registration or approval to
market the Product in the Territory, provided that the
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Receiving Party uses its commercially reasonable efforts to limit such
disclosure to the extent that the Receiving Party may legally do so.
10.4 Patent Information. XOMA shall provide to ALLERGAN a copy of each
patent and patent application within the Patent Rights.
ARTICLE XI- INFRINGEMENT:
11.1 Infringement Claims of Third Parties. XOMA and ALLERGAN shall each
give to the other prompt written notice of any claim or action made against
either of them alleging that the manufacture, use or sale of any Product in any
country(ies) of the Territory infringe the rights of a Third Party. XOMA and
ALLERGAN agree to cooperate and collaborate with each other in undertaking a
full investigation of the situation and in taking such action as they shall
agree is appropriate in the circumstances.
11.2 Expenses of Defense. In the event that any legal action is commenced
against ALLERGAN for, or based upon an alleged patent infringement relating to
the manufacture, use or sale of Compound, any costs, including outside legal
fees, and court awarded damages actually paid by ALLERGAN in connection with
such action shall be creditable against royalties due XOMA hereunder in such
country or countries; provided, however, that XOMA's liability to ALLERGAN under
this Section 11.2 shall not exceed [*] of the total amount of royalties due XOMA
hereunder in such country or countries, during the period subsequent to the
commencement of such action.
11.3 [*]
11.4 Credits. Any amounts that ALLERGAN is entitled to credit against
royalties under this Article XI shall be carried forward until all such amounts
are credited.
11.5 Infringement by Third Parties. XOMA and ALLERGAN shall promptly notify
the other in writing of any alleged or threatened infringement of any patent
included in the Patent Rights of which they become aware that would affect the
Compound or its use in the Field. Both parties shall use their best efforts in
cooperating with each other to terminate such infringement without litigation.
XOMA shall have the first right to bring and control any action or proceeding
with respect to infringement at its own expense and by counsel of its own
choice, and ALLERGAN shall have the right, at its own expense, to be represented
in such action by counsel of its own choice. If XOMA fails to bring an action or
proceeding within: (i) one hundred and twenty (120) days following the notice of
alleged infringement or (ii) ten (10) days before the time limit, if any, set
forth in the appropriate laws and regulations for the filing of such actions,
whichever comes first, and if [*], ALLERGAN shall have the right to bring and
control any such action at its own expense and by counsel of its own choice, and
XOMA shall have the right, at its own expense, to be represented in any such
action by counsel of its own choice. In the event a party brings an infringement
action, the other party shall cooperate fully, including if required to bring
such action, the furnishing of a power of attorney. Neither party shall have the
right to settle any patent infringement litigation under this Section 11.5 in a
manner that diminishes the rights or interests of the other party without the
consent of such other party. Except as otherwise agreed to by the parties as
part of a cost sharing arrangement, any recovery realized as a result of such
litigation, after reimbursement of any litigation expenses of ALLERGAN and XOMA,
shall belong to the party who
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brought the action. In the event that any such legal action is commenced by
ALLERGAN, any costs, including outside legal fees, actually paid by ALLERGAN in
connection with such action shall be creditable against royalties due XOMA
hereunder in such country or countries or reimbursed by XOMA; provided, however,
that XOMA's liability to ALLERGAN under this Section 11.5 shall not exceed [*]
of the total amount of royalties due XOMA hereunder, during the period
subsequent to the commencement of such action.
11.6 Oppositions and Appeals. ALLERGAN hereby agrees not to enter into any
non-U.S. opposition to or any non-U.S. appeal from any decision on the Patent
Rights and shall not assist or otherwise cooperate with any other party in any
such opposition or appeal.
ARTICLE XII - MAINTENANCE OF PATENT RIGHTS:
XOMA covenants that it will take all necessary steps to prevent the
abandonment of any patent or patent application included in the Patent Rights
and that during the term of the Agreement it will cooperate fully with ALLERGAN
to prevent the abandonment of any patent or patent application included in the
Patent Rights. XOMA covenants that it shall maintain all Third Party Licenses in
full force and effect during the term of this Agreement as is necessary to
provide Allergan the rights initially granted and to be granted hereunder. XOMA
shall be solely responsible for and bear the cost of the prosecution and
maintenance of the Patent Rights. In the event XOMA determines not to file,
prosecute or maintain any patent included in the Patent Rights or covering any
XOMA Know-How, in any country or countries, XOMA shall notify ALLERGAN of such
determination at least ninety (90) days prior to any applicable deadline. In
such event, ALLERGAN may elect to file, prosecute or maintain any such patent in
such jurisdiction at its own expense, and XOMA shall provide reasonable
assistance. ALLERGAN shall have an exclusive, perpetual, fully-paid up license
for all uses in the Field for any such patents and patent applications,
prosecuted or maintained at ALLERGAN's expense
ARTICLE XIII - 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 XIV - INDEMNIFICATION:
14.1 Indemnification by ALLERGAN. ALLERGAN agrees to defend, indemnify and
hold harmless XOMA, 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.
-10-
<PAGE>
14.2 Indemnification by XOMA. XOMA 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 or its sublicensees or Affiliates, and/or
(ii) resulting from the failure of such Compound to conform to the warranties
set forth herein.
14.3 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.
ARTICLE XV- GENERAL
15.1 Public Disclosure. Except for such disclosure as is deemed necessary,
in the reasonable judgement 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. The parties agree that they will use reasonable
efforts to coordinate the initial announcement of press release relating to the
existence of this Agreement in the form attached as Exhibit F, so that such
initial announcement or press release by each is made contemporaneously.
15.2 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" in the case of ALLERGAN and to
the Secretary in the case of XOMA, 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.
15.3 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.
15.4 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.
15.5 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.
-11-
<PAGE>
15.6 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.
15.7 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, provide that the party claiming excuse uses its best efforts
to overcome the same.
15.8 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.
15.9 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.
15.10 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.
15.11 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.
-12-
<PAGE>
WITNESS WHEREOF, the parties here executed this Agreement this 25th day of
June, 1999.
XOMA Ireland Limited ALLERGAN SALES, INC.
/s/ By: /s/
- --------------------------------------------- ---------------------
Alan Kane, Director, Name:
duly authorized and on behalf of XOMA Ireland Title:
Limited in the presence of:
Witness:
/s/
- --------------------------------------
-13-
<PAGE>
Exhibit A - [*]
Exhibit B - Patent Rights
Exhibit C - Countries of the European Patent Convention
Exhibit D - ALLERGAN's Preliminary Research and Development Plan
Exhibit E - [*]
Exhibit F - Form of Press Release
-14-
<PAGE>
EXHIBIT A
[*]
-15-
<PAGE>
Exhibit B
Patent Rights
1) Title: Stable Bactericidal/Permeability-Increasing Protein Products and
Pharmaceutical Compositions Containing the Same
Inventors: Theofan, Horwitz, Burke, Baltaian, Grinna
- --------------------------------------------------------------------------------
[*] PCT/US94/01235 [WO 94/18323] [*].
Country Serial No. Status/Patent No.
United States 08/013,801 Issued 5,420,019
United States 08/361,191 [*]
United States 08/430,417 Issued 5,674,834
United States 08/466,822 Issued 5,827,816
[*]
Australia 61702/94 Issued 693089
Canada 2,155,004 [*]
China 94191672.3 [*]
Europe 94908704.3 [*]
Hong Kong 98115811.8 [*]
Finland 933,658 [*]
Japan 6-518210 [*]
South Korea 703197/95 [*]
Mexico 941544 [*]
Norway 953033 [*]
New Zealand 262284 Granted 262284
South Africa 94/0703 Granted 94/0703
<PAGE>
2) Title: Pharmaceutical Compositions Containing Bactericidal Permeability
Increasing Protein and a Surfactant
Inventors: McGregor, Stubstad, Chang
- --------------------------------------------------------------------------------
[*] PCT/US94/01239 [WO 94/17819] [*].
Country Serial No. Status/Patent No.
United States 08/012,360 [*]
United States 08/190,869 Issued 5,488,034
United States 08/472,995 Issued 5,696,090
[*]
Australia 61330/94 Granted 695125
Canada 2,155,005 Granted 2,155,005
China 94191355.4 [*]
Europe 94907963.6 [*]
Hong Kong 98115456.8 [*]
Japan 6-518213 [*]
Mexico 942023 [*]
South Africa 94/1531 Granted 94/1531
3) Title: Improved Therapeutic Compositions Comprising Bactericidal/
Permeability-Increasing (BPI) Protein Products
Inventors: Lambert
- --------------------------------------------------------------------------------
[*] PCT/US96/01095 [WO 96/21436] [*].
Country Serial No. Status/Patent No.
United States 08/372,104 [*]
[*]
Australia 47705/96 [*]
Canada 2,210,390 [*]
Europe 96903710.0 [*]
Hong Kong 99100251.6 [*]
Japan 8-521883 [*]
4) Title: Improved Methods for the Preparation of Endotoxin-Binding Proteins
Inventors: Grinna
- --------------------------------------------------------------------------------
[*] PCT/US93/04752 [WO 93/23540] [*].
<PAGE>
Country Serial No. Status/Patent No.
United States 07/885,501 [*]
United States 08/072,063 Issued 5,439,807
Australia 43820/93 Granted 669723
Canada 2,136,208 [*]
China 93109452.6 [*]
Europe 93913992.9 Granted 0642579
Austria 93913992.9 Granted EP/0642579
Belgium 93913992.9 Granted EP/0642579
Denmark 93913992.9 Granted EP/0642579
France 93913992.9 Granted EP/0642579
Germany 93913992.9 Granted EP/0642579
Great Britain 93913992.9 Granted EP/0642579
Greece 93913992.9 Granted EP/0642579
Ireland 93913992.9 Granted EP/0642579
Italy 93913992.9 Granted EP/0642579
Luxembourg 93913992.9 Granted EP/0642579
Monaco 93913992.9 Granted EP/0642579
Netherlands 93913992.9 Granted EP/0642579
Portugal 93913992.9 Granted EP/0642579
Spain 93913992.9 Granted EP/0642579
Sweden 93913992.9 Granted EP/0642579
Switzerland 93913992.9 Granted EP/0642579
Hong Kong 98115464.8 [*]
Japan 6-503617 [*]
Mexico 933651 [*]
South Africa 93/4093 Granted 93/4093
<PAGE>
5) Title: Method of Treating Gram-Negative Bacterial Infection By
Administration of Bactericidal/Permeability-Increasing (BPI)
Protein Product and Antibiotic
Inventors: Cohen, Kung, Lambert, Little
- --------------------------------------------------------------------------------
[*] PCT/US94/11225 [WO 95/08344] [*].
Country Serial No. Status/Patent No.
United States 08/125,651 [*]
United States 08/273,401 [*]
United States 08/311,611 Issued 5,523,288
[*]
Australia 80740/94 Granted 695814
Canada 2,172,245 [*]
Europe 94931793.7 [*]
Hong Kong 98115454.0 [*]
Japan 7-509977 [*]
Mexico 947310 [*]
New Zealand 275205 Granted 275205
South Africa 94/7394 Granted 94/7394
6) Title: Anti-Gram-Positive Bacterial Methods and Materials
Inventors: Horwitz, Lambert, Little
- --------------------------------------------------------------------------------
[*] PCT/US95/00656 [WO 95/19180] [*].
Country Serial No. Status/Patent No.
United States 08/274,299 [*]
United States 08/372,783 Issued 5,578,572
[*]
United States 08/758,116 Granted 5,783,561
[*]
Australia 16822/95 [*]
Canada 2,181,164 [*]
Europe 95908545.7 [*]
Hong Kong 98115461.1 [*]
Japan 7-519190 [*]
South Africa 95/0249 Granted 95/0249
7) Title: Anti-Chlamydial Methods and Materials
<PAGE>
Inventors: Lambert
- --------------------------------------------------------------------------------
[*] PCT/US97/13810 [WO 98/06415] [*].
Country Serial No. Status/Patent No.
United States 08/694,843 Issued 5,888,973
[*]
Australia 39094/97 [*]
Canada 2,263,181 [*]
China 97198452.2 [*]
Europe 97936420.5 [*]
Japan 10-509836 [*]
Mexico 991366 [*]
New Zealand 334041 [*]
8) Title: Treatment of Mycobacterial Diseases by Administration of
Bactericidal/Permeability-Increasing Protein Products
Inventors: Lambert
- --------------------------------------------------------------------------------
[*] PCT/US94/02463 [WO 94/20129] [*].
Country Serial No. Status/Patent No.
United States 08/031,145 [*]
[*]
Canada 2,157,925 [*]
Hong Kong 98111614.6 [*]
Europe 94910876.5 Granted 0690721
Austria 94910876.5 Granted EP/0690721
Belgium 94910876.5 Granted EP/0690721
Denmark 94910876.5 Granted EP/0690721
France 94910876.5 Granted EP/0690721
Germany 94910876.5 Granted EP/0690721
Great Britain 94910876.5 Granted EP/0690721
Greece 94910876.5 Granted EP/0690721
Ireland 94910876.5 Granted EP/0690721
Italy 94910876.5 Granted EP/0690721
Luxembourg 94910876.5 Granted EP/0690721
Monaco 94910876.5 Granted EP/0690721
<PAGE>
Netherlands 94910876.5 Granted EP/0690721
Portugal 94910876.5 Granted EP/0690721
Spain 94910876.5 Granted EP/0690721
Sweden 94910876.5 Granted EP/0690721
Switzerland 94910876.5 Granted EP/0690721
Mexico 941808 [*]
South Africa 94/1772 Granted 94/1772
9) Title: Bactericidal Permeability Increasing Protein (BPI) For Treating
Conditions Associated with Corneal Injury
Inventors: Scannon
- --------------------------------------------------------------------------------
[*] PCT/US96/18632 [WO 97/17990] [*].
Country Serial No. Status/Patent No.
United States 08/557,289 [*]
[*]
Australia 10215/97 [*]
Canada 2,235,626 [*]
Europe 96940562.0 [*]
Hong Kong 99100828.0 [*]
Japan 9-519166 [*]
10) Title: Bactericidal/Permeability-Increasing Protein (BPI) For Treating
Conditions Associated with Corneal
Transplantation
Inventors: Scannon
- -------------------------------------------------------------------------------
[*] PCT/US96/18416 [WO 97/17989] [*].
Country Serial No. Status/Patent No.
United States 08/557,287 Issued 5,686,414
Australia 77361/96 [*]
Canada 2,235,625 [*]
Europe 96940496.1 [*]
Hong Kong 99100829.9 [*]
Japan 9-519125 [*]
<PAGE>
11) [*]
12) Title: Biologically Active Bactericidal/Permeability-Increasing Protein
Fragments
Inventors: Elsbach, Weiss (New York University)
- --------------------------------------------------------------------------------
[*] PCT/US88/02700 [WO 89/01486] [*].
Country Serial No. Status/Patent No.
United States 07/084,355 [*]
United States 07/228,035 [*]
United States 07/762,730 [*]
United States 07/805,031 Issued 5,198,541
United States 08/007,837 Issued 5,641,874
[*]
Canada 574,398 [*]
Europe 88907884.6 Granted 0375724
Austria 88907884.6 Granted EP/0375724
Belgium 88907884.6 Granted EP/0375724
France 88907884.6 Granted EP/0375724
Germany 88907884.6 Granted EP/0375724
Great Britain 88907884.6 Granted EP/0375724
Italy 88907884.6 Granted EP/0375724
Luxembourg 88907884.6 Granted EP/0375724
Netherlands 88907884.6 Granted EP/0375724
Sweden 88907884.6 Granted EP/0375724
Switzerland 88907884.6 Granted EP/0375724
Japan 507146/88 [*]
<PAGE>
EXHIBIT C
COUNTRIES OF THE EUROPEAN PATENT CONVENTION
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Liechtenstein
Luxembourg
Monaco
The Netherlands
Portugal
Spain
Sweden
Switzerland
United Kingdom
<PAGE>
EXHIBIT D
ALLERGAN'S PRELIMINARY RESEARCH AND DEVELOPMENT PLAN
[*]
<PAGE>
EXHIBIT E
[*]
<PAGE>
EXHIBIT F
FORM OF PRESS RELEASE
Allergan:
Investor Relations: Jeff Edwards 714-246-4636
Media Relations: Ira Haskell 714 246-4515
XOMA:
Ellen Martin 510-644-1170 or 1-800-BIO-XOMA
Thomson IR: Juliane Snowden or Tariq Jawad
212-510-9346 XOMA home page @
http://www.xoma.com
XOMA LICENSES TO ALLERGAN USE OF RECOMBINANT BPI IN
COMBINATION ANTI-INFECTIVE OPHTHALMIC PRODUCTS
Antibiotic-Resistant Bacteria Targeted
Berkeley and Irvine, CA -- June 28, 1999 -- XOMA Ltd. (Nasdaq: XOMA) and
Allergan (NYSE: AGN) today announced a licensing agreement under which Allergan
will have exclusive rights to use XOMA's recombinant BPI ("rBPI") in combination
with other anti-infectives in products to treat ophthalmic infections. BPI,
bactericidal/permeability-increasing protein, is a naturally occurring human
host-defense protein with multiple anti-infective properties and XOMA's primary
drug development platform.
"XOMA's rBPI in combination with Allergan's anti-infectives may offer an
important new approach to developing products that meet the clinical need for
novel weapons against ophthalmic infections," said David E. I. Pyott, President
and Chief Executive Officer of Allergan. "A number of pathogenic bacterial
strains are showing increased resistance to currently available antibiotics,
creating growing concern among the medical community. Allergan intends to
address this need by developing products that make use of rBPI's synergy with
antibiotics, including potential use against resistant strains of bacteria."
Under the terms of the agreement, XOMA will receive an upfront payment and
additional payments upon achievement of certain milestones totaling $11 million.
In addition, Allergan will pay all future development costs for any products
developed under this agreement. XOMA will be entitled to future royalties on net
sales worldwide of Allergan's anti-infective products that include rBPI. Lastly,
the relationship includes a product supply agreement, whereby a XOMA affiliate
will manufacture rBPI for Allergan.
"We are pleased to have signed our first rBPI collaboration, and delighted that
Allergan is our partner," said Jack Castello, Chairman, President and CEO of
XOMA. "Allergan represents an ideal collaborative partner for us in
ophthalmology. They have shown a willingness to make a significant financial
commitment not only in payments to XOMA, but also in future product development
spending. More importantly, they have a track record of developing products that
are successful in the marketplace. They have a number of established product
lines backed by a solid worldwide marketing and sales infrastructure."
<PAGE>
XOMA has been researching ophthalmic applications of BPI since 1995 under its
I-PREX(TM) topical rBPI ophthalmic program. Preclinical studies at XOMA
originally demonstrated rBPI21's antibacterial and anti-angiogenic activities.
Formulations of rBPI21 were also shown to be active in additional studies done
in collaboration with Dr. Mark Abelson and associates at the Schepen's Eye
Research Institute, an affiliate of the Harvard Medical School. Formulations of
rBPI21 have also been shown by XOMA scientists and outside collaborators to act
synergistically with all major classes of antibiotics against many strains of
antibiotic-resistant bacteria.
XOMA Ltd. develops and manufactures biopharmaceuticals at facilities located in
Berkeley and Santa Monica, California. Medical targets include bacterial and
fungal infections, infectious complications, such as those that may follow
trauma or surgery, immunologic and inflammatory disorders. In addition to its
ongoing I-PREX(TM) program, XOMA has several BPI-derived products in
development. NEUPREX(R), a systemic anti-infective product is in Phase III
trials for two indications. Antifungal (Mycoprex(TM)) and antiangiogenic
compounds are in preclinical development. BPI was discovered in white blood
cells by Peter Elsbach, MD, and Jerrold Weiss, PhD, at New York University
School of Medicine (NYU) in 1978. XOMA has collaborated with NYU since 1991 to
extend and apply BPI-related research to pharmaceutical development.
Allergan, headquartered in Irvine, California, is a technology-driven, global
health care company, providing eye care and specialty pharmaceutical products
worldwide. Allergan develops and commercializes products in eye care,
pharmaceutical, ophthalmic surgical device, over-the-counter contact lens care,
movement disorder and dermatological markets that deliver value to customers,
satisfy unmet medical needs and improve patients' lives.
Any of the above statements that refer to estimated or anticipated future
results, such as statements regarding product development and future product
marketing and sales, or that otherwise relate to future periods, are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such
statements reflect each company's current analysis of existing trends and
information. Actual results could differ from current expectations based on a
number of factors, including changing competitive, regulatory and market
conditions, the timing and uncertainty of the results of both research and
development and regulatory processes; uncertainties regarding the legal
standards applicable to biotechnology and pharmaceutical patents; actions by the
U.S. Food and Drug Administration or the U.S. Patent and Trademark Office; and
performance, including the approval, introduction and consumer acceptance, of
new products. Actual results could differ materially from those projected in
this release. As a result, the reader is cautioned not to rely on these
forward-looking statements. Allergan and XOMA each disclaim any intent or
obligation to update these forward-looking statements.
Additional information concerning these factors can be found in news releases as
well as in each company's public periodic filings with the Securities and
Exchange Commission, including XOMA's 1998 Form 10-K and the discussion under
the heading "Certain Factors and Trends Affecting Allergan and Its Businesses"
in Allergan's 1998 Form 10-K as well as other SEC filings. Allergan's filings
are available publicly and upon request from Allergan's Investor Relations
Department: 714-246-4636 or http://www.allergan.com. XOMA's filings are
available publicly, at http://www.xoma.com, and upon request from XOMA Investor
Relations: 510 644 1170.
[*] 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
<PAGE>
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
i
<PAGE>
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 2910 Seventh Street, Berkeley,
CA 94710 ("XOMA(US)"), and Allergan Sales, Inc., a corporation organized and
existing under the laws of California, having a place of business at 2525 Dupont
Drive, Irvine, California 92612, United States ("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
<PAGE>
XOMA(US) to ALLERGAN on the date hereof and identified as "Master Report of Bill
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
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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.
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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
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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:
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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.
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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.
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WITNESS WHEREOF, the parties here executed this Agreement this 25th day of
June, 1999.
XOMA(US) LLC ALLERGAN SALES, INC.
/s/ Christopher J. Margolin By: /s/ Les Kaplan
- ---------------------------------------- ------------------------
Christopher J. Margolin, Vice President, Name: Les Kaplan
General Counsel and Secretary Title: Corporate Vice
President, Science
& Technology
