[*] indicates that a confidential portion of the text of this agreement has been
omitted and filed separately with the Securities and Exchange Commission
SUPPLY AGREEMENT
CHARLES RIVER BIOTECHNICAL SERVICES
FOR THE PRODUCTION OF ASCITES FOR
XOMA CORPORATION
AS OF DECEMBER 8, 1988
THIS SUPPLY AGREEMENT ("Agreement") made as of this 8th day of December, 1988,
by and between CHARLES RIVER BIOTECHNICAL SERVICES, INC., a Delaware company
with its principal offices located at 251 Ballardvale Street, Wilmington,
Massachusetts 01887 ("CRBS") and XOMA CORPORATION, a Delaware company with its
principal offices located at 2910 Seventh Street, Berkeley, CA 94710 "XOMA".
PURPOSE
XOMA desires to engage the facilities and services of CRBS for the production of
ascites (the "Product" or "Products") from the cell line owned by XOMA described
in the Statement of Work attached hereto as Exhibit A (the "Statement of Work"),
and CRBS desires to undertake such production, all according to the terms and
conditions set forth in this Agreement, the Statement of Work and a certain
Purchase Order hereinafter described.
Intending to be legally bound hereby, CRBS and XOMA hereby agree as follows:
1.0 TERM; SCOPE
1.1 The effective date of this Agreement (the "Effective Date") shall
be February 27, 1989, such date being the date on which this Agreement, the
Statement of Work and the Purchase Order (as hereinafter described) are mutually
agreed to and accepted by XOMA and CRBS. The initial term of this Agreement
shall be for one (1) year from the Effective Date.
1.2 The parties may extend the term of this Agreement for one or more
additional terms (an "Additional Term") by a written renewal agreement entered
into no later than the eight (8) month anniversary of the Effective Date,
revising the provisions hereof as they may agree for each Additional Term.
1.3 This Agreement, including the Statement of Work and the Purchase
Order attached hereto and made a part hereof, covers the purchase by XOMA of
Products produced by CRBS during the Initial Term and any Additional Term. A
description of the Product is set forth in the Statement of Work.
2.0 PURCHASES; COMMITMENTS; PURCHASE ORDER
2.1 XOMA shall be obligated to purchase a guaranteed amount of Products
during the Initial Term as specified in the Purchase Order and CRBS guarantees
it will produce and deliver the guaranteed amount (the "Guaranteed Amount"). In
addition, XOMA may in its discretion order additional Products in excess of the
Guaranteed Amount as provided in the Purchase Order by giving written notice to
CRBS of such increase at least one hundred
-2-
twenty (120) days prior to the requested delivery date for the additional
Products.
2.2 XOMA shall initially order Products under the Agreement by issuing
to CRBS an initial purchase order (the "Purchase Order") which references this
Agreement, a copy of which is attached hereto as Exhibit B. The Purchase Order
shall contain the ordered amount, the Guaranteed Amount, estimated delivery
dates, definitive prices and any other specific terms agreed to by the parties.
3.0 PRICES; PAYMENT
3.1 XOMA will pay a price for the Product as set forth in the Statement
of Work and the Purchase Order. Terms of the payment are One Hundred Percent
(100%) of the invoiced amount due net thirty (30) days from the later of the
date of invoice or the receipt of Product provided the shipped Product has been
tested and is acceptable. If XOMA gives notice to CRBS to retain an agreed upon
shipment of Product, then XOMA will pay for that shipment of Product within 30
days from the later of the date of invoice or the receipt of samples of Product,
provided the Product sample is found to be acceptable.
3.2 The agreed upon prices for Product as set forth in the Purchase
Order includes the cost to CRBS of production, bulk product packaging, and
internal quality assurance activities as set forth in the Statement of Work. The
prices do not include sales, use, excise or any other similar taxes imposed by
Federal, state or local governments, and accordingly such taxes shall be paid by
XOMA.
3.3 The prices for the Product shall be in accordance with the Pricing
Schedule attached hereto as Exhibit C.
3.3.1 Pricing will be adjusted retroactively in relation to
the amount of Product ordered by XOMA and shipped by CRBS within a
one-year term of the Agreement wherein the first one year begins with
the initial shipment made under the Purchase Order issued December 13,
1988.
3.3.2 The price for Product shall be reduced [*] percent [*]
if XOMA finds after testing three or more successive lots or five lots
cumulatively unacceptable due to failure of the Product to meet the
specifications set forth in the Statement of Work. The price for
Product shall also be reduced [*] percent [*] for each shipment which
is not "timely" (as defined in Sections 4.2 and 7.0). This reduction in
price shall apply only to the replacement(s) for each unacceptable lot
and/or untimely Product shipment and shall not affect XOMA's right of
termination set forth in Section 6.
-3-
3.3.3 XOMA shall pay CRBS a "bonus" of an additional [*]
percent [*] over and above the price for Product where such Product is
delivered by CRBS at the request of XOMA on advance notice of 60 days
or less. This bonus shall apply only to each advance shipment.
3.4 XOMA agrees to pay CRBS [*] percent [*] per month on any monies not
paid when due, or the legal maximum monthly rate; if lower, where the Products
are delivered.
4.0 DELIVERY; ACCEPTANCE
4.1 Delivery shall be F.O.B. Raleigh, NC, with all freight and dry ice
expenses being prepaid by CRBS and added to CRBS's invoice to XOMA for payment
by XOMA. CRBS shall arrange insured common carrier transportation of the
Products to XOMA's specified plant or other designated destination. CRBS shall
arrange for adequate transportation insurance coverage for the replacement value
of the shipped Products. Title to and risk of loss of the Products shall pass to
XOMA at the time of delivery to XOMA. CRBS shall promptly following delivery
invoice XOMA for all Products tendered. Invoices shall be accompanied by the
commercial bills of lading.
4.2 CRBS shall ship the Products in accordance with the Delivery
Schedule attached hereto as Exhibit D. For purposes of this Agreement, a timely
shipment shall be a shipment received by XOMA not later than two (2) weeks after
the agreed upon delivery date, subject to allowances for special delays set
forth in Section 7.
4.3 XOMA shall give notice to CRBS as to the acceptance or rejection of
Product within thirty (30) days of receipt of Product or a representative
sample. The warranty on the Product under this Agreement shall survive such
acceptance.
5.0 WARRANTY; QUALITY ASSURANCE
5.1 CRBS warrants that the Product is produced from XOMA's cell lines
as provided to CRBS and manufactured according to the Statement of Work. Upon
notification by XOMA that the Product is not acceptable, CRBS shall replace the
Product or remit to XOMA an amount equal to the price actually paid by XOMA to
CRBS for the unacceptable Product. Any modification of the Product by XOMA shall
void this warranty. The foregoing warranty shall be subject to XOMA maintaining
the Product in accordance with CRBS's instructions. THIS WARRANTY IS IN LIEU OF,
AND CRBS SPECIFICALLY DISCLAIMS AND EXCLUDES ALL OTHER WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS
-4-
FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF A PATENT, TRADEMARK OR OTHER
INTELLECTUAL PROPERTY RIGHT. CRBS shall not, under any circumstances, be liable
for any special, indirect, consequential or incidental damages arising out of or
in connection with the Product.
5.2 CRBS shall maintain a manufacturing and quality assurance program
that meets all applicable FDA/GMP requirements.
5.3 CRBS agrees to notify XOMA within 48 hours of learning of the
failure of any batch of Products to meet the specifications set forth in
Statement of Work.
5.4 XOMA shall have the right during normal business hours to audit
CRBS's facility for the purpose of observing production and quality control and
ensuring that CRBS's activities comply with FDA regulatory GMP requirements,
upon at least 24-hour advance notice. XOMA acknowledges that all information
learned from said audit, whether received in writing, orally or by observation,
is confidential and proprietary pursuant to a Secrecy Agreement between XOMA and
CRBS dated as of December 8, 1988 (the "Secrecy Agreement").
5.5 In the event XOMA concludes following an audit pursuant to Section
5.4 that CRBS has been or is presently engaging in activities which reasonably
appear to XOMA to amount to a material violation of FDA/GMP requirements, then
CRBS shall either correct such violation or commence reasonable corrective
action pursuant to a corrective action plan deemed appropriate by XOMA within 30
days.
6.0 TERMINATION
6.1 Either party shall have the right to terminate this Agreement
during the Initial Term or any Additional Term if:
6.1.1 the other party fails to remedy or to commence
reasonable corrective action to remedy any default in the performance of any
material condition or obligation under this Agreement within thirty (30) days of
written notice thereof, or
6.1.2 the other party files a petition in bankruptcy, or
enters into an arrangement with its creditors, or applies for and consents to
the appointment of a receiver or trustee, or makes an assignment for the benefit
of creditors, or suffers or permits the entry of an order adjudicating it to be
bankrupt or insolvent.
6.2 The failure of either party to terminate this Agreement by reason
of the breach of any of its material provisions by the
-5-
other party shall not be construed as a waiver of the rights or remedies
available for any subsequent breach of the terms and provisions of this
Agreement.
7.0 FORCE MAJEURE
7.1 Neither party shall be responsible for any failure to comply with
the terms of this Agreement, except for failure to make timely payments
hereunder, where such failure is due to force majeure, which shall include,
without limitation, fire, flood, explosion, strike, labor disputes, labor
shortages, picketing, lockout, transportation embargo or failures or delays in
transportation, strikes or labor disputes affecting supplies, or acts of God,
civil riot or insurrection, acts of the Federal Government or any agency
thereof, or judicial action. The time for performance where delay is excusable
hereunder shall be extended by a period of time equal to the time lost by reason
of the excused delay, provided that all reasonable efforts are taken by a party
to overcome the delay.
8.0 RECORDS INSPECTION; SAMPLE RETENTION
8.1 All records relating to the manufacture of Products shall be
retained for a period of not less than five (5) years from the date of
manufacture of ascites or six (6) months from the expiration of the final
released Product, whichever is later. Prior to the destruction of any record,
written notice shall be provided to XOMA and XOMA shall have the right to
request and retain said record.
8.2 CRBS shall retain repository samples for a period of not less than
two (2) years from the date of expiration of each batch of the Products. All
such samples shall be available for inspection and testing by XOMA upon
reasonable notice.
9.0 INDEMNITY
9.1 XOMA will defend, at its own expense, any claim made or any suit or
proceeding brought against CRBS so far as it is based on the allegation that the
Product infringes a patent. XOMA will pay any costs, damages and attorney's fees
finally awarded against CRBS in such actions that are attributable to such
claim, provided that (a) CRBS promptly notifies XOMA in writing of such claim,
(b) CRBS gives XOMA such information and assistance as may be necessary to
defend or settle the claim and CRBS otherwise cooperates fully in such defense,
(c) XOMA is given the sole authority to defend or settle the claim at XOMA's
expense, (d) XOMA is afforded the opportunity to participate in the negotiation
of, and the right to approve or disapprove, any settlement of the claim, and (e)
CRBS complies with the terms of any court order or settlement entered with
respect to the claim.
-6-
In no event shall CRBS have any liability for any infringement of patents
resulting from (a) CRBS's compliance with XOMA's specifications or instructions,
or (b) XOMA's modification of the Product. The foregoing states the entire
liability of CRBS for patent infringement for the Product.
9.2 XOMA hereby agrees to indemnify and hold harmless CRBS and its
officers and directors from and against any and all cost, damages, expenses and
attorney's fees incurred by CRBS as a result of any claims of third parties
based on or arising out of or based upon any acts or omissions, breach or
alleged breach of XOMA's agreements, obligations and warranties hereunder, and
CRBS hereby agrees to indemnify and hold harmless XOMA, and its officers and
directors from and against any and all cost, damages, expenses and attorneys'
fees incurred by XOMA as a result of any claims of third parties (other than
patent infringement claims as described in Section 9.1) based on or arising out
of or based upon any acts or omissions, breach or alleged breach of CRBS's
agreements, obligations and warranties hereunder.
10.0 TRADE NAMES AND TRADEMARKS
10.1 XOMA hereby acknowledges that it does not have, and shall not
acquire, any interest in any of CRBS's trademarks or trade names appearing on
the labels or packaging materials for the Products unless otherwise expressly
agreed.
11.0 CONFIDENTIALITY
11.1 The parties hereby acknowledge that any and all information,
knowledge, technology and trade secrets relating to the production, processing
and testing of Products are subject to the Secrecy Agreement and that the
obligations thereunder shall survive termination of this Agreement.
12.0 NOTICES
12.1 Any and all notices permitted or required to be given hereunder
shall be sent by registered or certified mail, postage and fees paid, with
return receipt requested, addressed as follows:
CRBS:
Charles River Biotechnical Services, Inc.
251 Ballardvale Street
Wilmington, Massachusetts 01887
Attention: James C. Foster
President
-7-
XOMA:
XOMA Corporation
2910 Seventh Street
Berkeley, CA 94710
Attention: Steven C. Mendell
Chairman and Chief Executive Officer
Notice shall be deemed given as of the date of mailing.
13.0 ASSIGNMENT
13.1 Neither party shall assign this Agreement in whole or in part
without prior written consent of the other, except that no consent shall be
required to an assignment of this Agreement to a successor corporation in a
merger or acquisition. Once assigned, all of the provisions of this Agreement
and all rights and obligations of the parties hereunder shall be binding upon
and inure to the benefit of and be enforceable by the successors and assigns of
CRBS and XOMA.
14.0 ENTIRE AGREEMENT
14.1 This Agreement, including the Statement of Work and the Purchase
Order, and the Secrecy Agreement, together constitute the entire Agreement
between the parties. Any and all amendments, or releases from any provisions
hereof and of the Statement of Work, Purchase Order and Secrecy Agreement must
be in writing, signed by both parties and specifically state that it is an
amendment or release.
15.0 INDEPENDENT CONTRACTOR
15.1 In all activities under this Agreement, CRBS shall act as and be
deemed an independent contractor with no authorization to in any way obligate or
bind XOMA. This Agreement shall not be deemed held or construed as creating a
copartnership between XOMA and CRBS for any purpose whatsoever.
16.0 GOVERNING LAW
16.1 The rights and obligations of the parties to this Agreement shall
be construed in the event of a dispute in accordance with the laws of the
Commonwealth of Massachusetts where CRBS is the defending party, and in
accordance with the laws of the State of California where XOMA is the defending
party.
-8-
17.0 SEVERABILITY
17.1 If any term or provision of this Agreement shall be held invalid
or unenforceable, the remaining terms hereof shall not be affected, but shall be
valid and enforced to the fullest extent permitted by law.
18.0 HEADINGS
18.1 The headings used in this Agreement are intended for guidance only
and shall not be considered part of the written understanding between the
parties hereto.
19.0 RIGHTS AND REMEDIES
19.1 All rights and remedies, whether conferred hereby or by any other
instrument or by law shall be cumulative, any may be exercised singularly or
concurrently.
20.0 GOVERNMENT APPROVALS; EXPORT
20.1 Each party represents and warrants to the other party that any and
all governmental approvals and/or licenses necessary for the satisfactory
performance of such party's obligations hereunder have been duly obtained.
20.2 No United States Government Procurement Regulations shall be
binding on either party unless specifically agreed to in writing prior to
incorporation in this Agreement.
20.3 XOMA acknowledges that the Product may be subject to certain
export controls, laws and regulations of the United States government, and
accordingly XOMA agrees not to export the Product outside the United States
without the prior consent of CRBS.
[Signature page immediately follows.]
-9-
IN WITNESS WHEREOF, XOMA and CRBS have caused this Agreement to be executed by
their duly authorized officers as of the day and year first above written.
CHARLES RIVER BIOTECHNICAL SERVICES, INC.
By: /s/James C. Foster
James C. Foster
President
XOMA CORPORATION
By: /s/Steven C. Mendell
Steven C. Mendell
Chairman and Chief Executive Officer
-10-
Exhibit A
STATEMENT OF WORK TO
CHARLES RIVER BIOTECHNICAL SERVICES, INC. FOR
ASCITES PRODUCTION WITH [*] CELL LINE
1. General
Production procedures are to be performed in compliance with CGMP's.
2. Cell Culture
XOMA will supply a [*] cell line to be used [*] for each lot. The medium
[*] described in the [*] production batch record number [*]. An inoculum of
[*] will be prepared as described in production batch record [*].
[*]
3. Ascites Production
All ascites collection from mice must be carried out in [*].
[*]
[*] Only [*] may be used. [*]
[*] at least [*] prior to being used for production.
[*]
[*]
[*]. Subsequent operations are performed following the procedure outlined
in [*].
[*]
[*]
[*]
4. Testing and Specifications
To be accepted by XOMA, the [*] ascites must meet the specifications
described in the paragraphs below.
[*]
[*]
[*]
1
Exhibit A
Page 2
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
5. Shipment
[*] ascites and samples are to be shipped to XOMA and other destinations
indentified in the production batch record, [*] via overnight carrier.
6. Reporting Requirements
Copies of all batch records and QC data are to be sent to XOMA at the same
time as the ascites.
7. Attachments
1) [*] Assessment Profile
2) Ascites [*] Test Requirements
XOMA CORPORATION
By: /s/Nevada Blair Date: 2/21/89
Nevada Blair
Production Planning, Inventory Control
CHARLES RIVER BIOTECHNICAL SERVICES, INC.
By: /s/ Robert J. Judge Date: 2/22/89
Robert J. Judge
Vice President, Operations
2
Exhibit A
Page 3
Attachment 1
CRBS Statement of Work
[*]
[*] Assessment Profile
Agent Method
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
3
Exhibit A
Page 4
Attachment 2
CRBS Statement of Work
[*]
[*] Test Requirements
Agent Method
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
4
Exhibit A
Page 5
STATEMENT OF WORK TO
CHARLES RIVER BIOTECHNICAL SERVICES, INC. FOR
ASCITES PRODUCTION WITH [*] CELL LINE
1. General
Production procedures are to be performed in compliance with CGMP's.
2. Cell Culture
XOMA will supply a [*] cell line to be used [*] for each lot. The medium
[*] is described in the [*] production batch record number [*]. An inoculum
of [*] cells will be prepared as described in production batch record [*].
[*]
3. Ascites Production
All ascites collection from mice must be carried out [*]
[*] Only
[*] may be used.
[*] at least
[*] prior to being used for production.
[*]
[*] Subsequent operations are performed following the procedure outlined
[*]
4. Testing and Specifications
To be accepted by XOMA, the pooled [*] must meet the specifications
described in the paragraphs below. [*]
Exhibit A
Page 6
[*]
5. Shipment
Bulk ascites and samples are to be shipped to XOMA and other destinations
identified in the production batch reocrd, [*] via overnight carrier.
6. Reporting Requirements
Copies of all batch records and QC data are to be sent to XOMA at the same
time as the ascites.
7. Attachments
1) [*] Assessment Profile
2) Ascites [*] Test Requirements
XOMA CORPORATION
By: /s/ Nevada Blair Date: 2-21-89
Nevada Blair
Production Planning, Inventory Control
CHARLES RIVER BIOTECHNICAL SERVICES, INC.
By: /s/ Robert J. Judge Date: 2-21-89
Robert J. Judge
Vice President, Operations
2
Exhibit A
Page 7
Attachment 1
CRBS Statement of Work
[*]
[*] Assessment Profile
Agent Method
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [* ]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
3
Exhibit A
Page 8
Attachment 2
CRBS Statement of Work
[*]
[*] Test Requirements
Agent Method
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
4
Exhibit B
PURCHASE ORDER
Bill to: XOMA Corporation NO. 12/13/88
2910 Seventh Street DATE Shipping Point
Berkeley, CA. 94710 FOB Overnight
Attn: Accts. Payable VIA Net 30
TERMS
TO: Charles River Biotechnical SHIP TO:XOMA Corporation
251 Ballardvale Street 890 Heinz Street
Wilmington, MA 01887 Berkeley, Ca. 97410
Attn: Jack Wheeler Attn: Receiving
PLEASE SHIP THE FOLLOWING: DATE REQUIRED:
ORDERED REC'D DESCRIPTION PRICE AMOUNT
[*] [*] Cell line [*] ascites [*] ea. [*]
[*] [*] Cell line [*] ascites [*] ea. [*]
Subtotal: [*]
Est Frt: [*]
[*]
The above volumes refer to delivered ascites of which Xoma will
guarantee to take [*]. Xoma and Charles River Biotechnical will at
this time refer to the terms and conditions discussed on [*] at the
Chicago Airport Hilton. This purchase order is for one year from the
first shipment by Charles River Biotechnical. Delivery dates will be
established by Nevada Blair at a future date and work will be
performed according to previously received Statements of Work. Any
increase or decrease in the above volumes must be prefaced by [*] days
notice. Any total volume increase greater than [*] mice are subject to
negotiation.
E.D.A. As scheduled
Note: Any additions or deletions to this purchase order are invalid
without the approval of B. Kirby @ Xoma.
DATE RECEIVED AND DISPOSITION
ORDERED BY /s/ Bruce E. Kirby
Bruce E. Kirby
Exhibit B
Page 2
XOMA CORPORATION
Estimated Delivery Schedule
March 1, 1989
PRODUCT: [*] PRODUCT: [*]
Shipment Shipment
Volume (liters) To XOMA Volume (liters) To XOMA
[*] [*]
[*] [*] [*] [*]
[*] [*] [*] [*]
[*] [*] [*] [*]
[*] [*] [*] [*]
[*] [*] [*] [*]
[*] [*] [*] [*]
[*]liters [*]liters
Exhibit C
PRICING SCHEDULE
CELL LINE [*]
Assumes yield of [*] post filtration
[*] Liters Price/Liter
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
CELL LINE [*]
Assumes yield of [*] post filtration
[*] Liters Price/Liter
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*]
EXHIBIT C-1
XOMA
CORPORATION
2910 SEVENTH STREET
BERKELEY, CA 94710
415/644-1170
TELEX: 856-697
March 6, 1989
Mr. John H. Wheeler
Vice President, Sales and Marketing
Charles River Biotechnical Services, Inc.
251 Ballardvale Street
Wilmington, MA 01887
Dear Jack:
After Charles River Biotechnical Services, Raleigh, North Carolina does [*] lots
of cell line [*], we will agree upon the yield per mouse and utilize the
attached page for the appropriate pricing level.
Sincerely,
Clarence L. Dellio
Vice President
Operations
Signed: /s/ John H. Wheeler Date: 3-7-89
John H. Wheeler
Vice President
Marketing & Sales
Signed: /s/ Clarence L. Dellio Date: 3-7-89
Clarence L. Dellio
Vice President
Operations
CELL LINE DESIGNATION
[*]
Assumes the following yields per mouse post filtration
[*] [*] [*]
[*] Liters Price Liters Price
[*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*]
[*] Liters Price Liters Price
[*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]