EXHIBIT 10.19

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

 

Amendment No. 2

To the Manufacturing and Supply Agreement

By and Between

Allergan Sales, Inc.

And

Carl Zeiss Ophthalmic Systems, Inc.

 

This second AMENDMENT, EFFECTIVE AS OF May 31, 2002 is to the Manufacturing and
Supply Agreement executed on May 28, 1999 (hereafter “Agreement”), as amended
between Allergan Sales, Inc., a California Corporation, on behalf of itself and
its affiliates (“Allergan”), having principal offices at 2525 Dupont Drive,
Irvine, California 92612 and Carl Zeiss Ophthalmic Systems, Inc., A New York
Corporation, on behalf of itself and its affiliates (“CZOS”), having principal
offices at 5160 Hacienda Dr., Dublin, California 94568.

 

RECITALS

 

CZOS and Allergan each desire to amend the Manufacturing and Supply Agreement as
set forth herein below.

 

NOW THEREFORE, CZOS and Allergan hereby agree as follows:

 

Section 1. Definitions

 

Section 1.14 is amended in its entirety to read as follows:

“Humphrey” here after shall mean Carl Zeiss Ophthalmic Systems, (CZOS).

 

Section 1.20 is added as follows:

“End of Life (EOL)” shall mean any component used to manufacture the Product(s)
that the component supplier has or will be discontinuing supply of, and Allergan
and CZOS have agreed to purchase a fixed quantity of these components.

 

Section 2. Terms and Termination

 

The term of this Agreement shall be extended for an additional two (2) years.
The term of the extension will be from May 28, 2003 through May 31, 2005.

 

Section 2.3.4 is amended in its entirety to read as follows:

Upon expiration of this Agreement, Allergan will purchase at the prevailing
standard cost, the raw materials, work in process (WIP) materials and finished
goods held at CZOS. The raw and WIP materials repurchased would be in the
quantity mutually agreed upon, (or the most current

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***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

forecast as stated in Section 6.2), to support the required delivery times and
manufacturing lead-times.

 

Section 3. Pricing and Payment

 

Section 3.1 Determination of Price is amended in its entirety to read as
follows:

The pricing for the Products are in the table set forth below and shall be
supported by a “costed” bill-of –material. The costs reflected in the “costed”
bill-of-materials are based on the following categories: (i) ***** (ii) *****
(iii) *****.

 

Product

 

2002

 

2003

 

2004

 

2005

SOV. Foot Pedal

 

*****

           

SOV. Remote

 

*****

           

SOV. Cart/IV Pole

 

*****

           

SOV. Console

 

*****

           

Diplomax System

 

*****

 

*****

 

*****

 

*****

Diplomax Foot Pedal

 

*****

 

*****

 

*****

 

*****

Diplomax IV Pole

 

*****

 

*****

 

*****

 

*****

Diplomax Remote

 

*****

 

*****

 

*****

 

*****

Prestige System

 

*****

 

*****

 

*****

 

*****

Prestige Foot Pedal

 

*****

 

*****

 

*****

 

*****

Prestige Foot Pedal II

 

*****

 

*****

 

*****

 

*****

Prestige IV Pole

 

*****

 

*****

 

*****

 

*****

Prestige Remote

 

*****

 

*****

 

*****

 

*****

Prestige Dust Cover

               

Prestige Power Cord

 

*****

 

*****

 

*****

 

*****

Prestige Power Cord

 

*****

 

*****

 

*****

 

*****

 

Pricing is based on the following order quantities of materials required to
manufacture the Product(s).

 

  1.   Sovereign Console – minimum ***** units.

  2.   Other Sovereign System Components – minimum ***** units.

  3.   Diplomax – is determined by minimum quantities remaining to build,
(approx. ***** units)

  4.   Prestige – is determined by consumption of excess materials. (Approx.
***** units)

 

Section 3.6 ECR Pricing Adjustments is amended in its entirety to read as
follows:

 

Page 2

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***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

If Allergan increases the cost of the Product as the result of an ECR the cost
of the Product will increase immediately. CZOS will invoice Allergan for all
costs associated with the implementation and/or validation of any requested ECR
for said Products. This would include but is not limited to materials that may
become scrapped and/or excess based upon the ECR. CZOS will notify Allergan’s
Logistics Director in writing of these costs prior to the ECR being implemented
and CZOS and Allergan will mutually approve these costs in writing as stated in
Section 4.2.

 

Section 5. Place of Manufacture; Right of Inspection

 

Section 5.2 Allergan Inspection is amended by deleting the phrase “twenty-four
(24) hours advance notice” in the first sentence and inserting “forty-eight (48)
hours advance notice” in its place.

 

Section 6. Terms of Supply

 

Section 6.2 Forecast and Supply Amounts is amended in its entirety to read as
follows:

Allergan shall, on a monthly basis, provide CZOS with a twelve (12) month,
non-binding forecast of estimated Products needed by the tenth (10th) working
day of each month. CZOS shall use Allergan’s forecast to plan and build products
to support the forecast. Lead-time for Product(s) shall be no more than *****
(*****) calendar days form receipt of Allergan’s purchase order to shipment of
product. However, it is understood that, in the case where the requested
shipping date is sooner than such period, CZOS shall make all reasonable efforts
to comply with Allergan’s requested shipping dates. Should Allergan’s purchase
orders exceed the appropriate forecast, CZOS shall make its best efforts to
produce at least the incremental increases as follows: (i) one hundred percent
(100%) for more than 90 work days of lead time; (ii) twenty percent (20%) for
lead times between 60 and 90 work days; (iii) ten percent (10%) for lead times
between 30 and 60 work days; and (iv) zero percent (0%) for lead times less than
30 work days. There shall be no minimum annual order quantities for the finished
goods Product(s). Allergan and CZOS shall continually seek ways to reduce
manufacturing lead times. All materials that have been purchased on the behalf
of Allergan that are considered End of Life (EOL) of obsolete will be fully
covered by Allergan with a purchase order at the materials cost if not consumed
by the end of the agreement. Obsolete inventory should be identified at the time
an ECR is created and approved.

 

Section 6.3 Purchase of Inventory is amended by adding the following after its
last sentence:

It shall be the responsibility of Allergan to purchase or buy in advance or at
termination of the Agreement, any materials associated with End of Life (EOL),
Excess and Obsolete related to sustaining the current Product, or contributed to
ECR and/or cost saving proposals so long as these materials were purchased or
manufactured by CZOS in the mutually agreed quantities or to support the most
current forecast as stated in Section 6.2. (See the items below.)

 

Page 3

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***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

EOL Items known to date by both Allergan and CZOS are as follows:

  1.   LCD/Monitors – Approximately ***** units with forecast, as of March 2002.
These materials will be consumed by March 2003 depending on actual orders.

  2.   ZiaTech PCBA – Approximately ***** units, the forecast as of March 2002.
These materials will be consumed by April 2003 depending on actual orders.

  3.   Planned cost savings. ***** (*****) have already been determined to be
going obsolete. Allergan is requesting CZOS to purchase as a replacement to the
current LCD monitors.

 

Section 9. Depot Repairs

 

Section 9.4 Spare Parts is amended by deleting the phrase “*****” in the second
sentence and inserting “*****” in its place.

 

The following table will be incorporated into the contract as Exhibit A-1:

 

Exhibit A-1 Products to be Manufactured under Contract:

 

Products

 

Humphrey P/N

 

Description

 

Humphrey

Product

 

Allergan P/N

Sovereign

 

SOV680700

 

Foot Pedal

 

SOV-FP

 

SOV680700

   

SOV680701

 

Foot Pedal

 

SOV-FP

 

SOV680701

   

SOV680135

 

Remote

 

SOV-Remote

 

SOV680135

   

SOV680002

 

Cart/IV Pole

 

SOV-IV

 

SOV680002

   

SOV680300

 

Console

 

SOV.CONSOLE-

Console

 

SOV680300

Diplomax

 

OM410101X

 

System

 

08000-X1

 

OM410101X

   

OM4130011

 

Foot Pedal

 

DIP-FP

 

OM4130011

   

OM7701010PX

 

IV Pole

 

DIP-IV

 

OM7701010PX

   

OM418501

 

Remote

 

OM418501

 

OM418501

Prestige

 

22-11X10-01

 

System

 

7000-X06-0001

 

40070XX

   

32370

 

Foot Pedal

 

ACC32370

 

4000470

   

32913

 

Foot Pedal II

 

ACC32913

 

4000475

   

21744

 

IV Pole

 

ACC21744

 

4000852

   

32730-1

 

IV Pole

 

ACC32730-1

 

4000830

   

43441-1

 

Remote

 

ACC32441-1

 

4000575

   

32771

 

Dust Cover

 

ACC32771

       

30275

 

Power Cord

 

ACC30275

 

4000802

   

30276

 

Power Cord

 

ACC30276

 

4000801

   

Where X is shown = Voltage option

   

 

Page 4

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In all other respects, the terms and conditions of this AGREEMENT executed May
28, 1999, as amended, remains in full force and effect.

 

ALLERGAN SALES, INC.

     

CARL ZEISS OPHTHALMIC SYSTEMS, INC.

By:

 

/s/    JACQUELINE SCHIAVO

--------------------------------------------------------------------------------

     

By:

 

/s/    JAMES TAYLOR

--------------------------------------------------------------------------------

Name:

 

Jacqueline Schiavo

     

Name:

 

James Taylor

Title:

 

Corporate Vice President of Worldwide Operations

     

Title:

 

President