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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
AMENDMENT NO. 1
TO
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ---- ACT OF 1934
For the FISCAL YEAR ENDED DECEMBER 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---- EXCHANGE ACT OF 1934
For the transition period from __________ to ____________.
COMMISSION FILE NUMBER 0-18549
GENSIA SICOR INC.
(Formerly Gensia, Inc.)
(Exact name of registrant as specified in its charter)
DELAWARE 33-0176647
(State of or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19 Hughes
Irvine, CA 92618
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (714) 455-4700
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.01
Preferred Stock Purchase Rights, Par Value $.01
-----------------------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K is not contained herein, and will not be contained to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. X
---
At March 23, 1998, the aggregate market value of the voting stock held by
nonaffiliates totaled approximately $247.0 million, based on the last sale price
s reported on the Nasdaq National Market.
At March 23, 1998, there were 79,282,513 shares of common stock, $.01 par value,
of the registrant issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
(To the extent indicated herein)
None.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(c) Exhibits
The following documents are exhibits to this Form 10-K:
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------
2.1(17) Stock Exchange Agreement, dated as of November 12, 1996, as
amended on December 16, 1996 between Gensia and Rakepoll Finance
N.V.
3(i)(21) Restated Certificate of Incorporation of the Company, as amended
by Certificate of Designation of Series A Convertible Preferred
Stock.
3(ii)(18) By-Laws of Gensia.
4.1(5) Warrant Agreement dated November 26, 1991 between the Company and
First Interstate Bank, Ltd. (Warrant Agent).
4.2(12) Form of Certificate for Gensia Common Stock with Rights Legend
(4.1)*.
4.3(16) Warrant Agreement dated April 10, 1996 between the Company and
Domain Partners III, L.P. (4.1)*
4.4(16) Warrant Agreement dated July 22, 1996 between the Company and
MMC/GATX Partnership No. 1 (4.2)*
4.5(18) Shareholder's Agreement dated November 12, 1996, as amended on
December 21, 1996 and on February 28, 1997, between Gensia and
Rakepoll Finance N.V.
4.6(21) Amendment No. 3, dated May 19, 1997, to the Shareholder's
Agreement, dated November 12, 1996, as amended on December 21,
1996 and on February 28, 1997, between the Company and Rakepoll
Finance N.V. (4.1)*
4.7(21) Securities Purchase Agreement, dated May 1, 1997, by and between
the Company and HCCP. (4.2)*
4.8(21) Registration Rights Agreement, dated May 19, 1997, by and between
the Company and HCCP. (4.3)*
4.9(21) Form of 2.675% Subordinated Convertible Notes due May 1, 2004,
issued to certain affiliates of HCCP. (4.4)*
4.10(21) Form of Common Stock Purchase Warrant, dated May 19, 1997, issued
to certain affiliates of HCCP. (4.5)*
4.11(22) Form of Unit Purchase Agreement between the Company and certain
accredited investors, dated as of March 27, 1997.(4.2)*
4.12(25) Form of Unit Purchase Agreement between the Company and certain
accredited investors, dated December 1997. (4.6)*
4.13+/**/ Investor's Rights Agreement among the Company, Metabasis
Therapeutics, Inc. and Sankyo Co., Ltd. dated December 18, 1997.
10.1(1)# Form of Indemnification Agreement entered into between Gensia and
its directors. (10.1)*
10.2(9)# Amended and Restated 1990 Stock Plan of Gensia (the "Plan").
10.3(1)# Form of Incentive Stock Option Agreement under the Plan. (10.3)*
10.4(1)# Form of Nonstatutory Stock Option Agreement under the Plan.
(10.4)*
10.5(1)+/**/ Development and Supply Agreement dated January 26, 1990 between
Gensia and Protocol Systems, Inc. (10.46)*
10.6(2)# Form of Indemnification Agreement entered into between Gensia and
its officers and certain key employees. (10.50)*
10.7(3) Partnership Purchase Option Agreement dated June 13, 1991 between
Gensia and each of the limited partners of the Partnership.
(10.3)*
10.8(3) Partnership Purchase Agreement dated June 13, 1991 between Gensia
and each of the limited partners of the Partnership. (10.4)*
10.9(4) Form of Limited Partner Warrant. (10.53)*
10.10(4) Form of Investment Executive Warrant. (10.54)*
10.11(4) Form of Warrant issued to MMC/GATX Partnership No. 1. (10.56)*.
10.12(6) Stockholder Rights Plan dated March 9, 1992.
10.13(13) Lease agreement between Gena Property Company and the Company
dated as of December 21, 1993.
10.14(10) Registration Rights Agreement dated October 10, 1994 between
Gensia, Inc. and Corange International Limited (10.3)*.
10.15(14) Severance Agreement dated October 1995 between Gensia, Inc. and
David F. Hale. (10.52)*
10.16(14) Form of Severance Agreement for officers and certain other
employees.
10.17(15)+ Collaborative Research Agreement dated as of May 1, 1996 between
the Company and Pfizer Inc.
10.18(15)+ License and Royalty Agreement dated as of May 1, 1996 between the
Company and Pfizer Inc.
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10.19(15)+ Stock Purchase Agreement dated as of May 1, 1996 between the
Company and Pfizer Inc.
10.20(19) Amendment No. 1 to Stockholder Rights Agreement dated November 12,
1996.
10.21(20) Factoring agreement, dated September 25, 1997, by and between the
Company and Silicon Valley Financial Services (a division of
Silicon Valley Bank). (10.1)*
10.22(22)+ Collaborative Research and Development Agreement between the
Company and Sankyo Co., Ltd., dated as of April 18, 1997. (10.1)*
10.23(22)+ Supply Agreement between and among Sicor S.p.A., Alco Chemicals,
Ltd. and Boehringer Ingelheim International GmbH, dated September
23, 1996. (10.2)*
10.24(22)+ Distribution and Supply Agreement between and among the Sicor
S.p.A. and Alco Chemicals, Ltd. and The Upjohn Company, dated as
of January 1, 1994. (10.3)*
10.25(22) Agency Agreement between Sintesis Lerma S.A. de C.V. and Alco
Chemicals, Ltd., dated September 26, 1996. (10.4)*
10.26(22)+ Agency Agreement between Sicor S.p.A. and Alco Chemicals, Ltd.,
dated January 1, 1994. (10.5)*
10.27(22) Agreement between Sicor S.p.A. and Alco Chemicals, Ltd., dated
September 30, 1996. (10.6)*
10.28(22)+ Agreement between Sicor S.p.A. and Horse Vitality S.A. re:
colostrum, dated September 26, 1996. (10.7)*
10.29(22) Distribution Agreement between Sicor S.p.A. and Alco Chemicals,
Ltd. re: Budesonide, dated January 1, 1995. (10.8)*
10.30(22) Distribution Agreement between Sicor S.p.A. and Alco Chemicals,
Ltd. re: Difluprednate, dated January 1, 1995. (10.9)*
10.31(22) Distribution Agreement between Sicor S.p.A. and Alco Chemicals,
Ltd. re: Etoposide, dated March 1, 1995. (10.10)*
10.32(22)+ License Agreement between Sicor S.p.A. and Alco Chemicals, Ltd.,
dated January 9, 1989, as amended on June 16, 1992 and October 31,
1996. (10.11)*
10.33(22) Manufacturing Agreement between Sicor S.p.A. and Alco Chemicals,
Ltd., dated July 16, 1992. (10.12)*
10.34(22) Service Agreement between Sintesis Lerma and Grupo Fairmex S.A. de
C.V., dated January 2, 1995. (10.13)*
10.35(22) Letter Agreement between the Company and Donald E. Panoz, dated
March 18, 1997. (10.14)*
10.36(23) Gensia Sicor Inc. 1997 Long-Term Incentive Plan.
10.37(24)+ Cyclosporine Amended and Restated Supply and License Agreement,
dated as of March 31, 1997, between and among the Company, Alco
Chemicals, Ltd., Vinchem, Inc. and Sangstat.
10.38(21) Agreement, dated as of April 15, 1997, by and between Sicor de
Mexico S.A. de C.V. and Alco Chemicals, Ltd. (10.2)*
10.39(21)+ Agreement, dated as of April 15, 1997, by and between Genchem
Pharma, Ltd. and Alco Chemicals, Ltd. (10.3)*
10.40(21) Agreement, dated as of January 1, 1997, by and between Sicor and
Alco Chemicals, Ltd. (10.4)*
10.41+ Amendment No. One to Cyclosporine Amended and Restated Supply and
License Agreement dated as of December 22, 1997 between the
Company and Sangstat Medical Corporation (the Transplant Company).
10.42/**/ Amendment to Severance Agreement, dated December 16, 1997, between
the Company and David F. Hale.
10.43/**/ Amendment dated as of December 23, 1997 to Development and Supply
Agreement, dated as of January 26, 1990, by and between the
Company and Protocol Systems, Inc.
10.44/**/ Asset and Liability Transfer Agreements by and among Gensia
Automedics, Inc., the Company and Gensia Sicor Pharmaceuticals,
Inc. dated December 23, 1997.
21.1/**/ Subsidiaries of Gensia Sicor.
23.1/**/ Consent of Ernst & Young LLP, Independent Auditors.
24.1/**/ Powers of attorney (see page 64).
27.1/**/ Financial Data Schedule.
_____________________
(1) Incorporated by reference to Gensia's Registration Statement on Form S-1
(No. 33-34565).
(2) Incorporated by reference to Gensia's Registration Statement on Form S-1
(No. 33-38877).
(3) Incorporated by reference to Gensia's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1991 (No. 0-18549).
(4) Incorporated by reference to Gensia's Registration Statement on Form S-1
(No. 33-43221).
(5) Incorporated by reference to Gensia's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991 (No. 0-18549).
(6) Incorporated by reference to Gensia's Current Report on Form 8-K dated
March 16, 1992. (No. 0-18549).
(7) Incorporated by reference to Gensia's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 (No. 0-18549).
(8) Incorporated by reference to Gensia's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1992 (No. 0-18549).
(9) Incorporated by reference to Gensia's Registration Statement on Form S-8.
(No. 33-95152).
(10)Incorporated by reference to Gensia's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994 (No. 0-18549).
(11)Incorporated by reference to Gensia's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993 (No. 0-18549).
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(12) Incorporated by reference to Gensia's Registration Statement on Form S-4
(No. 33-94778).
(13) Incorporated by reference to Gensia's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 (0-18549).
(14) Incorporated by reference to Gensia's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 (0-18549).
(15) Incorporated by reference to Gensia's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996 (0-18549).
(16) Incorporated by reference to Gensia's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 (0-18549).
(17) Incorporated by reference to Annex A to Gensia's Proxy Statement dated
January 15, 1997 (0-18549).
(18) Incorporated by reference to Gensia Sicor's Report on Form 8-K dated
February 28, 1997 (0-18549).
(19) Incorporated by reference to Gensia Sicor's Annual Report of Form 10-K for
the fiscal year ended December 31, 1996 (0-18549).
(20) Incorporated by reference to Gensia Sicor's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997 (0-18549).
(21) Incorporated by reference to Gensia Sicor's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997 (0-18549).
(22) Incorporated by reference to Gensia Sicor's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997 (0-18549).
(23) Incorporated by reference to Annex D of the Company's Definitive Proxy
Statement dated January 15, 1997 (0-18549).
(24) Incorporated by reference to Exhibit 10.24 of SangStat Medical
Corporation's (the Transplant Company) Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997 (File No. 000-22890).
(25) Incorporated by reference to the Company's Registration Statement on Form
S-3 (No. 332-44563).
* Parenthetical references relate to the exhibit number under which such
exhibit was initially filed.
** Previously filed.
# Indicates management contract or compensatory plan or arrangement.
+ Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
GENSIA SICOR INC.
Date: May 6, 1998 By: /s/ John W. Sayward
----------------------------------------------
Vice President, Finance, Chief Financial
Officer and Treasurer
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EXHIBIT INDEX
Exhibit
Number Description of Document
- ------ --------------------------------------
4.13+/**/ Investor's Rights Agreement among the Company, Metabasis
Therapeutics, Inc. and Sankyo Co., Ltd. dated December 18, 1997 (with
certain confidential information deleted).
10.41+ Amendment No. One to Cyclosporine Amended and Restated Supply and
License Agreement dated as of December 22, 1997 between the Company
and Sangstat Medical Corporation (the Transplant Company).
10.42/**/ Amendment to Severance Agreement dated, December 16, 1997, between
the Company and David F. Hale.
10.43/**/ Amendment dated as of December 23, 1997 to Development and Supply
Agreement, dated as of January 26, 1990, by and between the Company
and Protocol Systems, Inc.
10.44/**/ Asset and Liability Transfer Agreements by and among Gensia
Automedics, Inc., the Company and Gensia Sicor Pharmaceuticals, Inc.
dated December 23, 1997.
21.1/**/ Subsidiaries of Gensia Sicor.
23.1/**/ Consent of Ernst & Young LLP, Independent Auditors.
24.1/**/ Power of Attorney (see page 64).
27.1/**/ Financial Data Schedule.
+ Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment.
** Previously filed.
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EXHIBIT 10.41
--------------
[CONFIDENTIAL TREATMENT REQUESTED CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN
MARKED CONFIDENTIAL AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.]
AMENDMENT NO. ONE TO
CYCLOSPORINE
AMENDED AND RESTATED
SUPPLY AND LICENSE AGREEMENT
The Amended and Restated Supply and License Agreement (the "Restated
Agreement") entered into as of March 31, 1997, among GENSIA SICOR INC., a
Delaware corporation ("GENSIA SICOR"), VINCHEM, INC., a New York corporation
("VINCHEM"), SICOR S.p.A., an Italian corporation ("SICOR"), and SANGSTAT
MEDICAL CORPORATION, a Delaware corporation (the "PURCHASER"), is hereby amended
as follows. The Restated Agreement, as amended by this Amendment No. One, shall
hereinafter constitute and be referred to as the Agreement.
1. The definition of Affiliate in Section 1.1 is amended by deleting the
words "thirty percent (30%)" and inserting the words "fifty percent (50%)."
2. The first sentence of the definition of Net Sales in Section 1.13 is
amended in full to read as follows: "Net Sales shall mean the amount actually
received by PURCHASER and its Affiliates (excluding sales to Affiliates) on
sales of Cyclosporine Formulations including the Product to third parties
including its distributors, less deductions for (i) ***, (ii) ***; (iii) ***,
and (iv) *** such costs are separately indicated on the customer invoice, ***.
3. The first paragraph of Section 2.1.1 is amended to read in full as
follows: "Subject to the terms of the Agreement, GENSIA SICOR (for itself and
through SICOR) hereby grants to PURCHASER (i) a nonexclusive, royalty-free right
and license under the Proprietary Rights and to the Technical Information to use
and obtain the Product but only to directly and indirectly formulate, develop,
use, register, market, distribute and sell Cyclosporine Formulations in the
Nonexclusive Territory; and (ii) an exclusive, royalty-free right and license
under the Proprietary Rights and to the Technical Information to use and obtain
with the Product but only to directly and indirectly formulate, develop, use,
register, market, distribute and sell Cyclosporine Formulations in the Exclusive
Territory; provided, however, that the exclusive licenses granted pursuant to
-------- -------
clause (ii) herein shall be co-exclusive in each jurisdiction in which GENSIA
SICOR (or, GENCHEM PHARMA or SICOR, as the case may be) has binding written
agreements, or binding written commitments that will lead to binding written
agreements, to sell Product on the Restatement Date (which is limited to only
those three European companies and the U.S. company with whom GENSIA SICOR has
commitments that are in existence on the
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Restatement Date), but only with respect to such third parties and only until
the earlier of expiration or termination of such agreements."
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4. Section 2.1.5 is deleted.
5. Section 2.2 is amended to read in full as follows: "Each of PURCHASER
and GENSIA SICOR agrees (and GENSIA SICOR shall cause SICOR to do the same) to
advise and keep the other party informed (and GENSIA SICOR shall cause SICOR to
do the same) of any adverse events of which it is aware associated with the
Cyclosporine Formulations."
6. Clause 2.3(iii) is hereby amended to read in full as follows: "It will
use commercially reasonable efforts to improve the Product strain and Product
manufacturing process." Clause (iv) is hereby amended to read in full as
follows: "To the best of its knowledge, and except as set forth herein, no
other licenses or permissions are required to supply the Product to PURCHASER
under the terms of this Agreement."
7. The first two sentences of Section 3.1 are amended to read as follows:
"In accordance with the terms of the Agreement, GENSIA SICOR (through SICOR)
shall supply PURCHASER's ordered requirements for Product in bulk form for use
by PURCHASER in the Territories. The right and license of PURCHASER to purchase
Product from GENSIA SICOR and obtain, use and distribute Cyclosporine
Formulations containing the Product (including the right to make or have made
Cyclosporine Formulations containing the Product to the extent provided in
Article 14 of the Agreement) from GENSIA SICOR and SICOR shall be (i)
nonexclusive in the Nonexclusive Territory, and (ii) exclusive in the Exclusive
Territory; provided, however, that the rights and licenses set forth in clause
-------- -------
(ii) above shall be co-exclusive in each jurisdiction in which GENSIA SICOR (or
GENCHEM PHARMA or SICOR, as the case may be) has binding written agreements, or
binding written commitments that will lead to binding written agreements, to
sell Product on the Restatement Date (which is limited to only those three
European companies and the U.S. company with whom GENSIA SICOR has commitments
that are in existence on the Restatement Date), but only with respect to such
third parties and only until the earlier of expiration or termination of such
agreements."
8. Clause (iii) of Section 3.1 is amended to insert the words "use
reasonable commercial efforts to" after the word "shall" and before the word
"maintain."
9. The first sentence of Section 3.3 is hereby amended to read as follows:
"In accordance with the terms of the Agreement, GENSIA SICOR (through SICOR)
shall supply PURCHASER's ordered requirements for Product."
10. Section 5.1 is deleted in full.
11. The first two sentences of Section 5.2 are amended to read in full as
follows: "PURCHASER shall use commercially reasonable efforts to obtain
approval to market its Cyclosporine Formulations in ***. In addition, PURCHASER
agrees that if it has not commenced marketing of its Cyclosporine Formulation
*** and in *** within *** after obtaining such approval in each such
jurisdiction, and provided that GENSIA SICOR has provided quantities of Product
in accordance with its obligations hereunder, then the exclusive license and
supply rights granted pursuant to Article 2 and Article 3 shall become
nonexclusive, but only with respect to the jurisdiction in which PURCHASER has
failed to meet its obligations under this Section 5.2."
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12. Section 6.3(a) is hereby amended to read in full as follows: "GENSIA
SICOR shall use reasonable commercial efforts to commence the expansion
(promptly following receipt of necessary governmental expansion permits and
approvals and to pursue and complete such expansion and obtain such approvals in
accordance with Schedule I hereto), file with the Regulatory Authorities in ***
and the *** for approval to produce commercial quantities of Product, and
produce validated Product from the facility currently owned by GENSIA SICOR (or
its Affiliates) in Santhia, Italy (the "Santhia Facility") that adds
manufacturing capacity to produce at such facility initially *** of Product (on
an annual basis) and, possibly, *** of Product (on an annual basis). The
capacity at the Santhia Facility shall not include the production of Product at
other facilities including, without limitation, the current capacity of GENSIA
SICOR to produce *** of Product from its Rho facility. This Santhia capacity is
hereinafter referred to as the "Santhia #1 Capacity Expansion" and includes the
building and all equipment necessary to fully purify (as required by Regulatory
Authorities) *** per year of Product, and approvals relating to the foregoing,
from *** and *** Regulatory Authorities that authorize the manufacture,
marketing and sale in the *** and *** of Product from the Santhia Facility.
Certain additional Santhia Capacity Expansion (the "Santhia #2 Capacity
Expansion") is described in Section 6.3(c) below. If such capacity is added, the
"Santhia #2 Capacity Expansion" shall include the building and all equipment
necessary to fully purify (as required by Regulatory Authorities) an additional
*** per year of Product at the Santhia Facility, and approvals relating to the
foregoing, from *** and *** Regulatory Authorities to authorize the manufacture,
marketing and sale in *** and *** from such facility. GENSIA SICOR shall use
commercially reasonable efforts to maintain the Santhia Facility (including
Santhia #1 Capacity Expansion and, if built, Santhia #2 Capacity Expansion) at
the production levels (i.e. for ***, and an additional *** of Product annually,
respectively) for which AADA approval is obtained."
13. Section 6.3(b) is hereby amended to read in full as follows:
"PURCHASER shall promptly provide (and no later than December 29, 1997) GENSIA
SICOR U.S. $2,500,000 in equity funding through the direct purchase from GENSIA
SICOR of its Common Stock (price based on a 20 prior day trading average), which
shall be used solely for the purpose of completing the Santhia #1 Capacity
Expansion. In addition, PURCHASER shall promptly (and no later than December
29, 1997) prepurchase from SICOR *** of Product against future purchase orders
deliverable from GENSIA SICOR. Amounts provided as an advance against purchase
orders shall be applied against any Product orders following approval from the
FDA of the AADA supplement for PURCHASER'S Cyclosporine Formulation that
contains Product manufactured at the Santhia #1 Capacity Expansion, provided
that no more than *** of such amount may be applied against any purchase order.
PURCHASER may accelerate recovery of the advance against Firm Orders if the
Santhia #1 Capacity Expansion is not completed and operating according to the
timetable described in Section 6.3(a)."
14. Section 6.3(c) is hereby amended in full as follows: "At the
reasonable request of PURCHASER within one (1) year after approval by the FDA of
the AADA filed by SICOR
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to market and sell Product in *** from the Santhia #1 Capacity Expansion, and
provided that the parties have agreed to extend the commitments set forth in
clauses A and B of Exhibit 10 until December 31, 2005 (without affecting the
other rights and obligations of the parties under the Agreement), the parties
shall negotiate in good faith with respect to the form of financing through
which PURCHASER shall provide to GENSIA SICOR up to $2,000,000, to build and
complete the Santhia #2 Capacity Expansion. The parties agree that PURCHASER's
obligation to provide financing shall not exceed the same proportional financial
commitment as its contribution to the cost of the Santhia #1 Capacity Expansion
bears to the total cost of such expansion, and GENSIA SICOR shall be under no
obligation to accept such financing."
15. Section 6.3(d) is hereby amended to read in full as follows: "So long
as PURCHASER purchases *** of its requirements of bulk Cyclosporine (which,
commencing on the one year anniversary after the date of approval by the FDA of
AADA supplement for PURCHASER's Cyclosporine Formulation that contains Product
manufactured at the Santhia #1 Capacity Expansion and ending on the second
anniversary of such date, and then in each year thereafter, is at least *** per
year of Product), SICOR shall use the Santhia #1 Capacity Expansion for (and
only for) the production and refinement of Product originating from SICOR,
Diaspa or third party facilities that are reasonably acceptable to PURCHASER,
but in each instance for sale of Product to PURCHASER for production of
PURCHASER's Cyclosporine Formulations. Provided that PURCHASER has agreed to
provide $2,000,000 of funding towards building the Santhia #2 Capacity
Expansion, such facility shall be dedicated to PURCHASER's potential Product
requirements, provided, however, that any unused capacity in the Santhia #2
-----------------
Capacity Expansion may be used by GENSIA SICOR to manufacture non-
immunosuppressant cyclosporine (as described in Paragraph 21 below) on behalf of
third parties, as long as such manufacturing does not affect the ability of
GENSIA SICOR to manufacture Product to meet PURCHASER's Firm Orders."
16. Section 6.3(e) is hereby amended to read in full as follows: "Except
for the funds described in subsection (b) above, GENSIA SICOR shall be solely
responsible for funding required to complete and fully validate the Santhia #1
Capacity Expansion and the Santhia #2 Capacity Expansion."
17. Section 9.4 is hereby amended to read in full as follows: "The
parties acknowledge and agree that all information, technology, materials, know-
how, regulatory filings and permissions (except where prohibited by law or
regulation) developed or prepared by or on behalf of PURCHASER, GENSIA SICOR and
SICOR, respectively, in connection with the Agreement shall be and remain the
confidential and proprietary information of PURCHASER, GENSIA SICOR and SICOR,
respectively."
18. Section 14.1 is hereby amended by adding the following words prior to
the first sentence: "For so long as PURCHASER purchases at least *** of its
requirements of bulk Cyclosporine product for its Cyclosporine Formulations from
GENSIA SICOR, ..." Section 14.1 is hereby amended by adding the following new
paragraph following the first paragraph: "Notwithstanding the above, with
respect to clauses 14.1(i) and (ii), SICOR shall have six months to cure the
events mentioned therein before they will be deemed a Transfer Event, so long as
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during such six month period, SICOR is exercising reasonable commercial efforts
to cure such events."
19. Section 15.10 is hereby amended to read in full as follows: "Each of
GENSIA SICOR and PURCHASER shall maintain a comprehensive general liability
insurance policy providing sufficient extensive coverage for personal injury,
bodily injury, property damages, or such coverage as is usual and customary in
the pharmaceutical industry. Each of GENSIA SICOR and PURCHASER shall also
provide commercially reasonable coverage for product liability insurance for a
minimum of $3 million (U.S.), and that said policies include, in the case of
GENSIA SICOR, human in vivo use of the Product (if such coverage is feasible)
and, in the case of PURCHASER, PURCHASER's Cyclosporine Formulations. A
certificate of said product liability insurance policies shall be promptly
delivered to each other by GENSIA SICOR and PURCHASER, respectively."
20. Exhibits 4, 6 and 10 are amended in full as set forth in the Exhibits
hereto.
21. Other:
(a) The parties agree that SICOR retains all rights to the Product as
it relates to an intermediate and/or raw material regarding chemical derivatives
of Cyclosporine which are not (i) immuno-suppressants, (ii) to be used in
transplantation, or (iii) to be used in auto-immune diseases.
(b) GENSIA SICOR represents and warrants that it has entered into a
binding written supply agreement with Diaspa to assist with SICOR's supply of
Product to PURCHASER.
(c) Should SICOR eliminate one or more of the *** companies referred
to in Sections 2.1.1 and 3.1 hereof, SICOR and PURCHASER will discuss whether or
not to increase the basic purchases provided in the Agreement from *** to ***.
(d) The parties agree that SICOR shall be deleted as a signatory to
this Agreement provided that SICOR remains a wholly-owned subsidiary of GENSIA
SICOR and GENSIA SICOR is responsible for ensuring that SICOR and GENSIA SICOR's
other Affiliates (to the extent that the obligations of GENSIA SICOR are
delegated to other Affiliates as permitted hereunder) fulfill the obligations
set forth in the Agreement.
22. Except as set forth herein, the Restated Agreement shall remain in
full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be
signed by their respective corporate officers, duly authorized as of the day and
year first above written.
SANGSTAT MEDICAL CORPORATION GENSIA SICOR INC.
By: /s/ Philippe Pouletty, M.D. By: /s/ Michael D. Cannon
--------------------------- ------------------------
Name: Philippe Pouletty, M.D. Name:
Title: Chairman and Chief
------------------------
Executive Officer Title: Executive Vice President
------------------------
Date: December 22, 1997 Date: December 22, 1997
VINCHEM, INC.
By: /s/ Vinent Ursino
---------------------------
Name: Vincent Ursino
Title: President
Date: December 22, 1997
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EXHIBIT 4
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For the period beginning *** and ending *** (the "***"), the following
additional terms and conditions shall apply to the obligations of the parties
with respect to the supply and purchase of Product.
PRICE PER KILOGRAM OF PRODUCT
***
The parties will negotiate in good faith to review the *** purchase
commitment and exclusivity provisions of the Agreement not less than nine (9)
months prior to the end of the ***. Should the parties fail to reach an
agreement, then any additional purchases of Product by PURCHASER after the ***
shall be at prices established for year ***, adjusted from the last day of the
*** for (i) inflation at a standard governmental index for Milan, Italy, and
(ii) foreign exchange variances between the U.S. dollar and the Italian Lira (or
it equivalent in Euro currency) from those in effect on the date hereof.
The parties agree that in the event that PURCHASER deems it necessary
(whether by *** or otherwise) to establish (or thereafter reduce) the *** of a
*** in a *** for a *** to a price that is at least *** in *** calendar quarter
of ***, the parties shall in good faith negotiate the prices for the Product
sold to PURCHASER to take into account such changing market conditions, and in
any event GENSIA SICOR agrees to sell Product to PURCHASER at ***.
For the purposes of this Exhibit 4, "ASP" shall mean ***.
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EXHIBIT 6
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EXCLUSIVE TERRITORY
***
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EXHIBIT 10
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A. Subject to Paragraphs B and C below, during the ***, Period, PURCHASER
agrees to purchase at least *** of its worldwide requirements for Cyclosporine
bulk product from SICOR.
B. If in a calendar year during the ***, *** or more of the aggregate net
kilogram quantity of Product sold by SICOR and its Affiliates are to the *** and
*** company described in Section 3.1 of the Agreement then, subject to SICOR's
ability to supply PURCHASER in accordance with its firm orders PURCHASER shall
be required to purchase no more than *** of its worldwide requirements for
Cyclosporine bulk product from SICOR during the immediate succeeding calendar
year, and *** of its worldwide requirements for Cyclosporine bulk product during
the next succeeding calendar year. The obligations of the parties under this
Paragraphs B. shall apply only if, after the one year anniversary of the date of
approval by the FDA of the AADA supplement for PURCHASER'S Cyclosporine
Formulation that contains Product manufactured at the Santhia #1 Capacity
Expansion (which is measured commencing on the one year anniversary after such
date and ending on the second anniversary of such date, and then in each year
thereafter), PURCHASER is purchasing a minimum of *** per year of Product from
SICOR; in the event that PURCHASER fails to purchase a minimum of *** in any
such year, then the obligations of the parties under this Paragraph B shall not
apply in the succeeding year. However, if in such succeeding year, PURCHASER
purchases *** of Product, then the obligations of the parties shall apply in the
next succeeding year (provided, that such year is within the *** and any
extensions of the commitments made with respect thereto).
C. During the ***, PURCHASER may purchase from third parties the greater
of either (a) *** of its worldwide requirements for Cyclosporine bulk product,
or (b) *** Kg in ***, *** Kg in ***, and *** in *** and each of the ***, of
Cyclosporine bulk product.
D. For the avoidance of doubt, after the ***, unless the obligations set
forth in Paragraphs A. and B of this Exhibit 10 have been extended pursuant to
Section 6.3(c) or otherwise, (i) PURCHASER shall have no obligation to purchase
quantities of Cyclosporine bulk product from SICOR and (ii) SICOR's obligation
to supply Product to PURCHASER shall become nonexclusive, the license grant in
Section 2.1.1 shall become nonexclusive license, and Section 2.3(iii) and
Section 2.3(v) of Article 2, Article 5, Section 6.3 of Article 6, the final
sentence of Section 13.1 of Article 13 and Article 14 shall terminate.
E. Audit Rights. Each party agrees to keep complete and accurate records
------------
so that the other party may confirm compliance with the provisions of this
Amendment. Upon fifteen (15) days prior written notice, each party shall have
the right to have a Big Six (or one of their successors in interest) Deloitte &
Touche accounting firm review the books and records of the other party to
confirm compliance with the provisions of this Amendment, provided that such
accounting firm (i) shall execute and deliver the standard confidentiality
agreement of the party that will be subject of the audit, and (ii) shall only
disclose to the party requesting the audit, the extent (and no other substantive
matters) of any discrepancy between the books and records and the obligations
hereunder.
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SCHEDULE I
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MANUFACTURING (INCLUDING PURIFICATION) SCALE-UP TIMETABLE
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***
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***
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