<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A-2
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
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 0-15847
LIPOSOME TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 94-3031834
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
960 HAMILTON COURT, MENLO PARK, CA 94025
(Address of principal executive (Zip Code)
offices)
</TABLE>
Registrant's telephone number, including area code: (415) 323-9011
------------------------
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.0001 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities 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 (229.405 of this chapter) 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 or any amendment to this Form 10-K. / /
The aggregate market value of the voting stock held by non-affiliates of the
registrant, based upon the closing price of the Common Stock on the Nasdaq
National Market on March 31, 1995, was $125,165,563. Solely for the purposes of
this calculation, each officer and director of the registrant is deemed to be an
affiliate.
The number of shares of Common Stock outstanding as of March 31, 1995, was
19,146,132.
------------------------
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT FORM 10-K PART
Portions of the Annual Report to Stockholders for the Fiscal Year Ended December
31, 1994 II
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Section (a)3. of Item 14 is hereby amended and restated as follows:
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 3. EXHIBITS:
<TABLE>
<S> <C>
3.1 Restated Certificate of Incorporation (1)
3.2 By-Laws (2)
10.1* 1982 Employee Stock Option Plan (As Amended) (1)
10.1.1* 1987 Employee Stock Option Plan (4)
10.1.2* 1987 Consultant Stock Option Plan (1)
10.1.4* Employee Stock Purchase Plan (4)
10.1.5* 401(k) Plan and Adoption Agreement for 401(k) Plan (1)
10.1.6* LTI Flex Elect Section 125 Cafeteria Plan (1)
10.1.7* 1990 Director Stock Option Plan (4)
10.2 Lease Agreement between Lincoln Property Company N.C. Inc. and the
Company dated August 31, 1993, as amended (3)
10.3.1* Employment Agreement dated as of October 1, 1987, between the Company
and Nicolaos V. Arvanitidis (3)(6)
10.4* Employment Agreement dated as of June 30, 1983, between the Company
and Sally A. Davenport (2)
10.3.2* Memorandum of Agreement between the Company and Nick Arvanitidis dated
April 3, 1995.
10.5 Forms of Confidentiality Agreements entered into by Employees,
Consultants and Advisors of the Company (2)
10.11.1* Stock Option Agreement between the Company and Nicolaos V. Arvanitidis
dated as of December 7, 1989 (4)
10.11.2* (a) and (b) Stock Option Agreements between the Company and Nicolaos
V. Arvanitidis dated as of January 25, 1990 (4)
10.11.3* Stock Option Agreement between the Company and Michael K. Ullman dated
as of December 7, 1989 (4)
10.11.4* Stock Option Agreement between the Company and Michael K. Ullman dated
as of January 25,1990 (4)
10.12 Common Stock and Warrant Purchase agreement between the Company and
David Blech dated as of January 25, 1990 (5)
10.13* Letter Agreement between the Company and Peter V. Leigh dated May 5,
1995 regarding Mr. Leigh's separation from the Company (7)
10.14** Agreement between Zeneca Limited and the Company relating to
"Amphocil" dated August 12, 1993, as amended as of March 1, 1994 and
July 12, 1994
10.15** Manufacturing and Supply Agreement between Ben Venue Laboratories,
Inc. ("Ben Venue") and the Company relating to DOXIL dated January 1,
1993
10.16** Manufacturing and Supply Agreement between Ben Venue and the Company
relating to AMPHOCIL dated January 1, 1993
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
10.17** Supply Agreement between Meiji Seika Pharma International LTD and the
Company relating to Doxorubicin Hydrochloride, USP dated September
27, 1994
10.18** Supply Agreement between A.L. Laboratories and the Company relating to
Amphotericin B, USP dated February 15, 1994
13 1994 Annual Report to Security Holders pursuant to Rule 14a-3(b) -
Reference is made to p. 24 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994
23 Consent of Independent Auditors - Reference is made to p. 23 of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994
24 Power of Attorney - Reference is made to p. 22 of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994
<FN>
- ------------------------
* Management or Compensatory plan or arrangement.
** The Registrant has requested confidential treatment of certain portions of
this agreement.
(1) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1988 and
incorporated herein by reference.
(2) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Registration Statement on Form S-1 (File No. 33-13332) and incorporated
herein by reference.
(3) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K of the fiscal year ended September 30, 1987 and
incorporated herein by reference.
(4) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1989 and
incorporated herein by reference.
(5) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1990 and
incorporated herein by reference.
(6) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K/A-1 for the fiscal year ended December 31, 1994
and incorporated herein by reference.
(7) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1995
and incorporated herein by reference.
</TABLE>
3
<PAGE>
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.
LIPOSOME TECHNOLOGY, INC.
By: ______/s/_SALLY A. DAVENPORT______
Sally A. Davenport,
SECRETARY
Date: May 26, 1995
4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- -------------------------------------------------------------------------------- ---------
<S> <C> <C>
3.1 Restated Certificate of Incorporation (1).............................
3.2 By-Laws (2)...........................................................
10.1* 1982 Employee Stock Option Plan (As Amended) (1)......................
10.1.1* 1987 Employee Stock Option Plan (4)...................................
10.1.2* 1987 Consultant Stock Option Plan (1).................................
10.1.4* Employee Stock Purchase Plan (4)......................................
10.1.5* 401(k) Plan and Adoption Agreement for 401(k) Plan (1)................
10.1.6* LTI Flex Elect Section 125 Cafeteria Plan (1).........................
10.1.7* 1990 Director Stock Option Plan (4)...................................
10.2 Lease Agreement between Lincoln Property Company N.C. Inc. and the
Company dated August 31, 1993, as amended (3)........................
10.3.1* Employment Agreement dated as of October 1, 1987, between the Company
and Nicolaos V. Arvanitidis (3)(6)...................................
10.4* Employment Agreement dated as of June 30, 1983, between the Company
and Sally A. Davenport (2)...........................................
10.3.2* Memorandum of Agreement between the Company and Nick Arvanitidis dated
April 3, 1995........................................................
10.5 Forms of Confidentiality Agreements entered into by Employees,
Consultants and Advisors of the Company (2)..........................
10.11.1* Stock Option Agreement between the Company and Nicolaos V. Arvanitidis
dated as of December 7, 1989 (4).....................................
10.11.2* (a) and (b) Stock Option Agreements between the Company and Nicolaos
V. Arvanitidis dated as of January 25, 1990 (4)......................
10.11.3* Stock Option Agreement between the Company and Michael K. Ullman dated
as of December 7, 1989 (4)...........................................
10.11.4* Stock Option Agreement between the Company and Michael K. Ullman dated
as of January 25,1990 (4)............................................
10.12 Common Stock and Warrant Purchase agreement between the Company and
David Blech dated as of January 25, 1990 (5).........................
10.13* Letter Agreement between the Company and Peter V. Leigh dated May 5,
1995 regarding Mr. Leigh's separation from the Company (7)...........
10.14** Agreement between Zeneca Limited and the Company relating to
"Amphocil" dated August 12, 1993, as amended as of March 1, 1994 and
July 12, 1994........................................................
10.15** Manufacturing and Supply Agreement between Ben Venue Laboratories,
Inc. ("Ben Venue") and the Company relating to DOXIL dated January 1,
1993.................................................................
10.16** Manufacturing and Supply Agreement between Ben Venue and the Company
relating to AMPHOCIL dated January 1, 1993...........................
10.17** Supply Agreement between Meiji Seika Pharma International LTD and the
Company relating to Doxorubicin Hydrochloride, USP dated September
27, 1994.............................................................
10.18** Supply Agreement between A.L. Laboratories and the Company relating to
Amphotericin B, USP dated February 15, 1994..........................
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- -------------------------------------------------------------------------------- ---------
<S> <C> <C>
13 1994 Annual Report to Security Holders pursuant to Rule 14a-3(b) -
Reference is made to p. 24 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.....................
23 Consent of Independent Auditors - Reference is made to p. 23 of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994....................................................
24 Power of Attorney - Reference is made to p. 22 of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994......
<FN>
- ------------------------
* Management or Compensatory plan or arrangement.
** The Registrant has requested confidential treatment of certain portions of
this agreement.
(1) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1988 and
incorporated herein by reference.
(2) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Registration Statement on Form S-1 (File No. 33-13332) and incorporated
herein by reference.
(3) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K of the fiscal year ended September 30, 1987 and
incorporated herein by reference.
(4) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1989 and
incorporated herein by reference.
(5) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1990 and
incorporated herein by reference.
(6) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Annual Report on Form 10-K/A-1 for the fiscal year ended December 31, 1994
and incorporated herein by reference.
(7) Filed as an Exhibit with corresponding Exhibit Number to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1995
and incorporated herein by reference.
</TABLE>
<PAGE>
THE SYMBOL "**" IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT THE PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
ZENECA ZENECA PHARMACEUTICALS
Alderley House
Alderley Park
Macclesfield
Cheshire SKI 0 4TF
England
Lipsome Technology Inc Telephone 0625 582828
1050 Hamilton Court Telex 669095/669388 ZENPHA
Menlo Park Fax - Main 0625
585022/582572
California 94035 Fax - Department 0625
USA
DIRECT FAX: 0625 585618
Your Ref Our Ref Direct Line Tel ext Date
LB/vab/769 0625 514621 4621 12 Jul 1994
Dear Sirs,
RE: AGREEMENT DATED 12TH AUGUST 1993 BETWEEN LIPOSOME TECHNOLOGY INC ("LTI")
AND ZENECA LIMITED ("ZENECA")("THE AGREEMENT")
It is agreed between LTI and ZENECA that with effect from 1st August 1994,
Schedule A to the Agreement shall be amended by the addition of Austria and
Switzerland to the list of territories.
It is further agreed that LTI will **.
With the exception of the above, the terms of the Agreement shall remain as
written.
If these terms are acceptable, would you please sign and date both copies and
return one copy to me.
<PAGE>
Yours faithfully,
For and on behalf of ZENECA Ltd
/s/ L. Biggins
L Biggins
Authorized Signatory
ZENECA Pharmaceuticals
AGREED and ACCEPTED by
for and on behalf of
LIPOSOME TECHNOLOGY INC
\s\ Peter V. Leigh
...................................
Name Vice President Finance
2
<PAGE>
AMENDMENT TO AGREEMENT BETWEEN ZENECA AND LTI
RELATING TO LTI'S COMPLEX OF AMPHOTERICIN B WITH SODIUM CHOLESTERYL
This Amendment to that certain agreement between LIPOSOME TECHNOLOGY, INC.
whose registered office is at 960 Hamilton Court, Menlo Park, California 94025,
USA ("LTI") and ZENECA LIMITED, whose registered office is at 15 Stanhope Gate,
London W1Y 6LN, UK ("ZENECA") effective the 12th day of August, 1993, relating
to LTI's present pharmaceutical product comprising a complex of amphotericin B
with sodium cholesteryl sulphate (hereinafter, the "Agreement") is effective as
of March 1, 1994 ("Effective Date of this Amendment").
For good and valuable consideration, the parties hereby amend the Agreement
as follows:
A-1 DEFINITIONS AND INTERPRETATION
1. "Territory," as defined in Article 1 of the Agreement, shall mean
those countries set out in Schedule A-1 to this Amendment, in addition to those
countries set out in Schedule A to the Agreement.
2. All provisions of the Agreement referring to the "Territory", in
addition to those countries set out in Schedule A to the Agreement, shall refer
to and include the countries set out in Schedule A-1 (the "A-1 Countries"),
except for the following provisions, which are modified as noted:
A-8.1.2 RESPONSIBILITY FOR REGULATORY APPROVALS
1. The parties agree that both ZENECA and LTI will use all reasonable
endeavors to obtain regulatory approvals for the Product in the A-1 Countries,
having regard to the degree of diligence that ZENECA would normally use in
obtaining such regulatory approval for a pharmaceutical product of its own
invention.
A-6.8 ENTITLED MINIMUM PURCHASES
1. For any A-1 Country in which ZENECA has not commenced sales of the
Product within the period of ** from the Effective Date of this Amendment, LTI
shall have the option to serve a notice to Zeneca (the "LTI Notice") stating
that LTI wishes to sell the Product itself or establish alternative arrangements
for sale of the Product in said A-1 Country, including without limitation the
appointment of other distributors or agents for the Product. Upon receipt of an
LTI Notice, ZENECA shall have sixty (60) days within which to notify LTI, in
writing, of **.
2. In the event that **.
3. In the event that **.
<PAGE>
The following new provisions shall apply to sales of the Product in any and
all A-1 Countries:
A-4 PAYMENTS
1. In part consideration of rights granted by LTI to ZENECA pursuant to
this Amendment, ZENECA shall make the following non-offsettable and, except as
specifically set forth below, non-refundable payments to LTI:
1.1. Sums of ** within fifteen (15) working days of the first date for
each of ** on which Registration of the Product (as defined in section 4.1.4 of
the Agreement) has been obtained; provided that the said sums of ** shall only
be payable in respect of the **;
1.2. The sum of ** within fifteen (15) working days of the date on
which Registration of the Product has been obtained in **; and
1.3. The sum of ** within fifteen (15) working days of the date on
which Registration of the Product has been obtained in **.
A-12.1 ADDITIONAL LTI REPRESENTATIONS, WARRANTIES AND INDEMNITIES
1. As of the Effective Date of this Amendment, to LTI's knowledge, there
are not suits, claims or proceedings pending against LTI or any of its
Affiliates in any court or by or before any government body or agency with
respect to the Product, and no such actions, suits or claims have been
threatened against LTI or any of its Affiliates.
2. As of the Effective Date of this Amendment, there are no commitments
or contractual obligations of which LTI is aware that would in any way prohibit
LTI from executing this Amendment to the Agreement.
3. No warranty is given as to patent rights of LTI in any of the A-1
Countries.
4. For the avoidance of doubt, Article 12.3.6 of the Agreement shall
apply to Articles A-12.1.1 and A-12.1.2 above.
A-12.2 ADDITIONAL ZENECA RESPONSIBILITIES AND WARRANTIES
1. As of the Effective Date of this Amendment, there are no commitments
or contractual obligations of which ZENECA is aware that would in any way
prohibit ZENECA from executing this Amendment to the Agreement.
2. No warranty is given by ZENECA with respect to the authorization of
its duly incorporated Affiliates to sell pharmaceutical products in the A-1
Countries.
2
<PAGE>
3. For the avoidance of doubt, Article 12.4.3 of the Agreement shall
apply to Article A-12.2.1 above.
A-22 PRESS/PUBLICITY
Any announcements or similar publicity with respect to this Amendment or the
transactions contemplated herein shall be at such time and in such manner as LTI
and ZENECA shall agree, provided that nothing herein shall prevent either party,
upon notice to the other, from making such public announcements as that party's
legal obligations require.
IN WITNESS WHEREOF the parties hereto have hereunto set their respective hands
the day and year thereafter written.
ZENECA LIMITED LIPOSOME TECHNOLOGY, INC.
By: /s/ C.R.W. Petty By: /s/ Peter V. Leigh
---------------------------- ---------------------------------
Title: Assistant Secretary Title: Vice President, Finance
---------------------------- ---------------------------------
Zeneca Pharmaceuticals
Date: March 18, 1994 Date: March 16, 1994
---------------------------- ---------------------------------
3
<PAGE>
SCHEDULE A-1
ADDITIONAL TERRITORIES
Afghanistan
Angola
Antigua
Argentina
Ascension Island
Australia/New Zealand
Bahamas
Bahrain
Bangladesh
Barbados
Beliza
Bermuda
Bhutan
Bolivia
Botswana
Brazil
Burundi
Cameroon
Chile
China
Columbia
Costa Rica
Crown Agents
Cuba
Curacao
Cyprus
4
<PAGE>
Djibouti
Dominican Republic
Ecuador
Egypt
El Salvador
Ethiopia
Gambia
Ghana
Gibraltar
Grenada
Guatemala
Guyana
Haiti
Honduras Republic
Hong Kong
Iceland
India
Indonesia
Iran
Iraq
Jamaica
Jordan
Kenya
Korea
Kuwait
Lebanon
Leeward Island
Lesotho
5
<PAGE>
Liberia
Libya
Malawi
Malaysia
Malta
Mauritius
Mexico
Mozambique
Nicaragua
Nigeria
Oman
Pakistan
Panama
Peru
Philipines
Qatar
Rwanda
Saudi Arabia
Seychelles
Sierra Leone
Singapore
Somalia
South Africa
Sri Lanka
St. Vincent
St. Lucia
Sudan
Surinam
Swaziland
6
<PAGE>
Syria
Taiwan
Tanzania
Thailand
Trinidad
Turkey
UAE
Uganda
Uruguay
Venezuela
Vietnam
Windward Island
Yemen
Former Yugoslavia: Bosnia
Croatia
Macedonia
Montenegro
Serbia
Slovenia
Zaire
Zamia
Zimbabwe
TERRITORIES ADMINISTERED BY ZENECA FRANCE:
French Guyana
Martinique
Guadaloupe
French Polynesia
New Caledonia
7
<PAGE>
Reunion
Morocco
Tunisia
Algeria
Ivory Coast
Gabon
Congo
Senegal
8
<PAGE>
AGREEMENT
BETWEEN
ZENECA LIMITED
AND
LIPOSOME TECHNOLOGY INC
RELATING TO
`AMPHOCIL'
<PAGE>
INDEX PAGE
----
Article 1 - Definitions and Interpretation 4
Article 2 - Appointment, Territory 8
Article 3 - Duration 10
Article 4 - Payments 10
Article 5 - New Developments, Improvements 12
Article 6 - Product Supply 14
Article 7 - Price/Payment 20
Article 8 - Development and Regulatory 23
Article 9 - Product Know-how, Marketing and Sale 28
Article 10 - Patents, Trademarks, Intellectual Property 31
Article 11 - Confidentiality 35
Article 12 - Representations and Warranties, Indemnities 36
Article 13 - Non-Assignability/Sub-Distributors 44
Article 14 - Termination/Post-Termination Matters 44
Article 15 - Non-Compete 46
Article 16 - Force Majeure 46
Article 17 - Notices 48
Article 18 - Waiver 49
Article 19 - Entire Agreement/Amendments 49
Article 20 - Validity/Severability 49
Article 21 - Nature of Relationship 50
Article 22 - Press/Publicity 50
Article 23 - Dispute Resolution 50
2
<PAGE>
SCHEDULES
PAGE
----
SCHEDULE A - THE TERRITORY 53
SCHEDULE B - PATENTS 54
SCHEDULE C - PART I: SPECIFICATION 55
PART II: TECHNICAL REQUIREMENTS 56
SCHEDULE D - PRICING MECHANISMS 72
3
<PAGE>
THIS AGREEMENT effective as of the twelfth day of August one thousand, nine
hundred and ninety three BETWEEN LIPOSOME TECHNOLOGY INC whose registered office
is at 1050 Hamilton Court Menlo Park, California 94025, USA ("LTI") and ZENECA
LIMITED whose registered office is at 15 Stanhope Gate, London W1Y 6LN
("ZENECA").
WHEREAS
4. LTI manufactures, markets and sells the Product hereinafter defined;
5. ZENECA has expertise in the marketing, distribution and sale of
pharmaceutical products;
6. LTI desires to appoint ZENECA as importer and distributor of the said
Product in certain countries on the terms and conditions set out below,
and ZENECA desires to be so appointed.
NOW IT IS HEREBY AGREED AS FOLLOWS
ARTICLE 1 - DEFINITIONS AND INTERPRETATION
1.1 In this Agreement unless the context requires otherwise:
"Affiliate" of a party to this Agreement shall mean any business entity
which controls, is controlled by or is under common control with such
party. A business entity shall be deemed to "control" another business
entity if it owns, directly or indirectly, fifty per cent (50%) or more of
the outstanding voting securities or capital stock of such other business
entity or has other comparable ownership interest with respect to an
entity other than a corporation, or the power, whether pursuant to
contract the ownership of securities or otherwise, to direct the
management and policies of a business entity and shall remain an Affiliate
under this Agreement only for as long as such control exists;
"Calendar Quarter" shall mean each successive period of three (3) months,
ending on 31 March, 30 June, 30 September and 31 December in any calendar
year;
"Calendar Year" shall mean each successive period of twelve (12) months
commencing on 1 January and ending on 31 December;
"Dollars" shall mean United States Dollars;
"Effective Date" shall mean the 12th day of August 1993;
"Know-how" shall mean information and data, not generally known, which is
necessary and useful for the formulation, manufacture, packing,
registration, use, distribution and sale of the Product.
4
<PAGE>
**
"Patents" shall mean the patents and patent applications of LTI in the
Territory as listed in Schedule B hereto and any other patents in the
Territory owned or controlled by LTI necessary or useful for the
manufacture, use or sale of the Product and patents which are divisions,
reissues, re-examinations, extensions patents of addition and
Supplementary Protection Certificates relating to such patents;
The "Product" shall mean LTI's present pharmaceutical product comprising a
complex of amphotericin B with sodium cholesteryl sulphate;
"Territory" shall mean those countries set out in Schedule A hereto.
The following indicates the location in this Agreement of other terms
defined herein.
PAGE
----
"Arbitrator" Article 23.1 50
"Claim" Article 12.3 26
"Claim Notice" Article 12.5.4 38
"a Competing Product" Article 15.14 2
"Co-ordinating Committee" Article 9.44 5
"Costs" Article 6.10 30
"CPLT" Article 8.4 19
"Development" Article 5.1 12
"External Circumstances" Article 7.3.3 21
**
"Force Majeure" Article 16.1 46
"Improvement" Article 5.1 12
"the Indemnified Party" Article 12.5.1 40
"the Indemnifying Party" Article 12.5.1 40
"JAMS" Article 23.1 50
5
<PAGE>
"MAA" Article 8.1.2 23
"Operating Margin" Article 7.3.3 21
"Plans" Article 9.3 29
"Recall" Article 6. 10 19
"Registration" Article 4.1.4 11
1.2 Any reference in this Agreement to "writing" or cognate expressions
includes reference to telex or facsimile transmission or comparable means
of communication.
1.3 Any reference in this Agreement to any provision of a statute or to any
regulation shall be construed as a reference to that provision or
regulation as re-enacted, amended, replaced or extended at the relevant
time.
1.4 The headings used in this Agreement are for convenience only and shall not
affect its interpretation.
1.5 Words importing the singular number include the plural and vice versa;
words importing gender shall include all other genders and words importing
corporations shall include persons and vice versa.
1.6 Any reference in this Agreement to an "Article" or "Schedule" is to an
Article or Schedule of this Agreement.
ARTICLE 2 - APPOINTMENT, TERRITORY
2.1 EXCLUSIVE DISTRIBUTORSHIP
LTI hereby appoints ZENECA to be the exclusive distributor of the Product
in the Territory during the term of this Agreement and ZENECA agrees to
act in that capacity, all subject to the terms and conditions of this
Agreement. Except as specifically provided hereinafter, LTI shall not
during the term of this Agreement itself distribute or sell the Product in
the Territory and shall not license or otherwise appoint any third party
so to do.
2.2 LTI CO-MARKETING RIGHTS AFTER ** YEARS
Notwithstanding Article 2.1, LTI may itself or through Affiliates of LTI
sell the Product to normal trade outlets (including without limitation
wholesalers, pharmacies and physicians but excluding contractually
appointed distributors or licensees) in any country of the Territory after
a period of ** years has elapsed from the earlier of (i) launch of the
Product or (ii) a date 3 months following Registration (as defined in
Article 4.1.4) of the Product in such country provided that in the event
that LTI
6
<PAGE>
within such ** years becomes an Affiliate of or merged with a third party
that could reasonably be expected to have the resources to be a
significant competitor in the sale of the Product in the Territory, the
period of ** years first referred to above in Article 2.2 shall be
replaced by a period of ** years. LTI shall give to ZENECA at least
twelve (12) months notice of its intention to make sales under this
Article 2.2. The following provisions of this Agreement shall cease to
have effect in respect of such country from the date on which LTI or its
Affiliate first sells the Product in such country: Articles 6.8, 9.3.2,
9.5 and 2.3.
2.3 TERRITORIAL RESTRICTION
ZENECA shall not seek customers for the Product outside the Territory and
shall not establish a branch or a distribution depot outside the Territory
for the purpose of marketing or distributing the Product outside the
Territory. ZENECA may however establish a branch or distributor depot
outside the Territory for the purpose of selling within the Territory.
ARTICLE 3 - DURATION
Subject to prior termination of this Agreement under any of the provisions
hereof, this Agreement shall commence on the Effective Date and shall remain in
force until 28 February 2008. ZENECA may terminate this Agreement by giving LTI
not less than twelve (12) months prior written notice, such notice not to be
given by ZENECA so as to cause termination of this Agreement prior to **.
Following such notice, LTI may by not less than thirty (30) days prior notice to
ZENECA, itself sell or establish alternative arrangements for the sale of the
Product in any country in the Territory and ZENECA shall in that event
co-operate with LTI in the orderly transfer of the sales responsibility for the
Product in such country to LTI or its nominee, in which event this Agreement
shall terminate with respect to such country upon completion of such transfer.
Any reasonably incurred out of pocket costs incurred by ZENECA or its Affiliates
in co-operating as aforesaid shall be promptly reimbursed by LTI.
ARTICLE 4 - PAYMENTS
4.1 In part consideration for the rights granted by LTI to ZENECA hereunder
ZENECA shall make the following non-offsettable and, except as
specifically set forth below, non-refundable payments to LTI:
4.1.1 The sum of ** within fifteen (15) working days of the Effective Date
(which sum shall be returned to ZENECA forthwith if all
Registrations of the Product necessary to enable the Product to be
sold in the ** have not been obtained by **; and
7
<PAGE>
4.1.2 The sum of ** within fifteen (15) working days of the date on which
all Registrations of the Product necessary and reasonably acceptable
to enable the Product to be sold in the ** have been obtained; and
4.1.3 The sum of ** within fifteen (15) working days of the first date for
each of ** on which Registration of the Product has been obtained;
Provided that the said sums of ** shall be payable only in respect
of the first three of these countries in which such Registration is
obtained; and
4.1.4 Milestone payments shall be made within sixty (60) days after the
end of the Calendar Quarter in which ZENECA and its Affiliates
achieve cumulative ** of the Product as follows:
** MILESTONE PAYMENT
**
For the purposes of this Agreement the term "Registration" shall include any and
all pricing and reimbursement approvals required of authorities and accepted
(such acceptance not to be unreasonably withheld or delayed) by ZENECA or its
Affiliates to enable the general sale of the Product in a given country.
ARTICLE 5 - NEW DEVELOPMENTS, IMPROVEMENTS
5.1 DEFINITIONS: INCLUSION OF IMPROVEMENTS AND DEVELOPMENTS
The Product shall initially be in the form of 100 mg and 50 mg vials and
any Improvements thereto shall be automatically incorporated. LTI
undertakes to negotiate in good faith with ZENECA with a view to reaching
agreement for ZENECA to market Developments as provided in Article 5.2.
For the purpose of this Article "Improvements" shall mean any new or
amended injectable indications, new or amended injectable formulation(s),
and new or amended injectable presentations of the Product which would not
be recognized generally in the pharmaceutical industry as a new product
and any change to the Product which is not an Improvement shall be deemed
to be a "Development." By way of example only, a new indication for the
Product itself would be an Improvement whereas any new or amended
formulation requiring clinical development and regulatory approvals (or
equivalent) would be a Development.
5.2 RIGHT OF FIRST NEGOTIATION FOR DEVELOPMENTS
LTI undertakes to offer to negotiate with ZENECA expeditiously and in good
faith for a period of not less than sixty (60) days with a view to ZENECA
being appointed as the exclusive distributor in the Territory for
Developments completed by LTI during the term of this Agreement. Where
practicable, the parties shall conduct such
8
<PAGE>
negotiations based on the framework presented in this Agreement. Neither
party shall be under any obligation to enter into such a distribution
arrangement and provided that LTI has performed its duties under Article
5.2, LTI shall be free to market and sell such Development directly in the
Territory or to offer such Development for marketing and sale in the
Territory to any other person, firm or Organization; provided, however,
that LTI shall not conclude such an agreement with a third party
comparable in scope to that offered to ZENECA during such negotiations on
terms more favorable (taken as a whole) to such third party than those
offered to ZENECA without first offering the terms offered to such third
party to ZENECA for its acceptance or for refusal within ten (10) days of
such offer to ZENECA.
ARTICLE 6 -PRODUCT SUPPLY
6.1 PURCHASE OF PRODUCT SOLELY FROM LTI
ZENECA shall purchase its requirements for the Product during the term of
this Agreement solely from LTI at prices calculated in accordance with
Article 7.
6.2 INITIAL PURCHASES AND FORECASTS
As soon as practicable after the Effective Date, ZENECA shall provide LTI
with a forecast. ZENECA shall provide LTI with a forecast by Calendar
Quarter of its requirements for the Product for the twelve (12) months
commencing 1 January 1994. The first three (3) months of such forecast,
that is the forecast for the months of January, February and March 1994,
shall represent a binding commitment of ZENECA to purchase and LTI to
supply such forecasted amount. On or before 15 December 1993 and on or
about the fifteenth (15th) day of the final month of each subsequent
Calendar Quarter ZENECA shall provide to LTI an updated forecast of its
quarterly requirements for the Product for the twelve (12) months
commencing one Calendar Quarter after the due date for such forecast. The
first three (3) months of each forecast so provided shall likewise
represent a binding commitment of ZENECA to buy and of LTI to supply such
forecasted quantity of Product in a timely manner. ZENECA shall order and
maintain all reasonable inventories of the Product. having regard to
current and forecasted sales volumes.
6.3 FIRM ORDERS
ZENECA shall place firm orders from time to time for the purchase of the
Product at least three (3) months in advance of required delivery and LTI
shall use all reasonable endeavors to deliver such orders on or before the
required delivery dates, provided that such orders are within ** percent
** of the forecasts supplied hereunder; and shall use all reasonable
efforts to fill orders in excess of that level.
9
<PAGE>
6.4 IMPORTATION REQUIREMENTS
LTI shall obtain any necessary import licenses, certificates of origin or
other relevant documents reasonably required by ZENECA**. ZENECA shall
obtain any necessary import licenses, certificates of origin or other
requisite documents and shall pay all applicable customs duties and taxes
in respect of the re-export of the Product into countries in the Territory
other than the country to which LTI first delivered the Product.
6.5 INCOTERMS
Purchase of the Products shall be DDP Manchester Airport (Incoterms 1990).
6.6 LABELLING AND SHELF LIFE
LTI shall supply the Product to ZENECA in the form of bulk 100mg and 50mg
vials and, having regard to production batch size and to ZENECA's sales
forecast provided under Article 6.2, with at least ** unexpired approved
shelf life as at the date of shipment in the case of an approved shelf
life of **; or ** unexpired shelf life as at the date of delivery in the
case of an approved shelf life of **. In the event that LTI cannot supply
Product with the minimum unexpired approved shelf life specified above,
LTI shall so inform ZENECA of the expiry dates of available Product and,
for so long as ZENECA's quarterly requirements are less than LTI's current
batch size **, ZENECA will make a good faith effort to accept shipment of
Product which has an unexpired shelf-life below the relevant applicable
shelf-life. LTI shall comply with all legal and other regulatory
requirements relating to the manufacture and supply of the Product to
ZENECA hereunder and ZENECA shall comply with all legal and other
regulatory requirements relating to the importation and sale of the
Product in each country in the Territory. ZENECA shall be responsible for
labelling the Product and repackaging the Product in such form as is
suitable and in compliance with all applicable laws for resale in each
country of the Territory. To the extent permitted by law, the Product
shall be represented in all labelling and other documentation as developed
by LTI, and all product packaging shall (inter alia) make reference to LTI
in a reasonably prominent manner using the following language: "Developed
by Liposome Technology Inc." and shall bear the company trade marks of
both LTI and ZENECA with equal prominence.
6.7 SHORTAGE OF SUPPLY
In the event that LTI is unable to execute any orders placed by ZENECA in
accordance with Article 6.3, then LTI shall immediately so inform ZENECA,
ZENECA shall have the opportunity to make reasonable adjustments to the
relevant purchase and sales forecasts; and without prejudice to any other
remedy available to ZENECA:
10
<PAGE>
6.7.1 Temporary Right to Manufacture
In the event that LTI is unable to supply ZENECA's forecasted
requirements of the Product for **, at ZENECA's request, LTI will
grant to ZENECA, solely for such time as LTI cannot supply ZENECA's
forecasted requirements, a temporary non-exclusive license of the
Patents and LTI Know-how as ZENECA shall reasonably require to
enable ZENECA to manufacture the Product either itself or by means
of a third party manufacturer. In such circumstances LTI shall
disclose to ZENECA details of the formulae and all manufacturing and
processing know-how in its possession-or under its control required
to accomplish said manufacture and shall assist ZENECA to the
fullest extent in that regard.
6.7.2 ALLOCATION OF SUPPLY
LTI shall allocate available quantities of the Product to ZENECA on
the basis of the respective sales volumes of the Product by LTI to
(i) ZENECA and its Affiliates and to (ii) all other third parties in
the previous two Calendar Quarters preceding such inability. LTI
and ZENECA shall immediately exchange information comprising such
sales in the event of such inability.
6.8 MINIMUM PURCHASES
ZENECA shall at least 30 days prior to the commencement of each Calendar
Year supply to LTI its internal forecasts, in vials, used for budgeting
purposes of its sales of the Product in each country of the Territory for
the following Calendar Year. In the event that for ** ZENECA or its
Affiliates achieve less than ** of such forecasts in any country then LTI
shall be entitled by not less than ** notice to ZENECA given before 31
March in the succeeding Calendar Year to terminate this Agreement in
respect of the country concerned. ZENECA's appointment hereunder shall be
rendered non-exclusive from the date of such notice with respect to such
country and the following provisions of this Agreement shall solely with
respect to such country cease to have effect from the date of such notice:
Article 6.8; Article 9.3.2, Article 9.5 and Article 2.3; provided,
however, that in the event that ZENECA's appointment shall be rendered
non-exclusive pursuant to this Article 6.8 with respect to **, LTI shall
have the right to terminate this Agreement. ZENECA agrees that it will
prepare reasonable forecasts in good faith and where any forecast is less
than the preceding year's actual sales, ZENECA shall demonstrate to LTI
that the relevant forecast is reasonable.
6.9 SPECIFICATIONS
All quantities of the Product to be supplied hereunder shall comply with
the specifications set out in Part I of Schedule C. The provisions of Part
II of Schedule C (Technical Requirements) shall apply as set out therein.
11
<PAGE>
6.10 PRODUCT RECALL
In the event that a recall of Product is necessary as a result of actions
of ZENECA (other than actions taken by ZENECA in accordance with LTI's
recommendations), ** shall be responsible for all costs relating thereto,
including any costs reasonably incurred by LTI. In the event that a
recall is necessary for reasons in addition to such actions of **, then
ZENECA and LTI shall each be responsible for an equitable proportion of
such costs, to be agreed between ZENECA and LTI. Subject to the above **
shall bear the costs of any recall in all other circumstances and shall
reimburse to ** any costs incurred by ** in complying with any recall in
all other circumstances. For the purposes of this provision, "costs"
shall mean solely reasonable out of pocket costs, and "recall" shall mean
a withdrawal from commerce of the Product resulting from a formal request
or order of a Government Health Authority or from other circumstances
justifying such withdrawal.
ARTICLE 7 - PRICE / PAYMENT
7.1 PERCENTAGE OF **
The price at which LTI shall sell and ZENECA shall purchase quantities of
the Product shall be determined by reference to **, as follows:
**
7.2 CALCULATING **
The mechanisms set out in Schedule D hereto shall apply to effectuate
Article 7.1.
7.3 NEGOTIATIONS CONCERNING CHANGES TO ** PRICES
7.3.1 AT THE REQUEST OF ZENECA
In the event that the application of the ** purchase price of ** as
set out in Article 7.1 would result in prices of **, then ZENECA and
LTI shall, if ZENECA so requests, enter into negotiations in good
faith to **.
7.3.2 AT THE-REQUEST OF LTI
ZENECA and LTI shall if LTI so requests enter into negotiations in
good faith to **.
7.3.3 DEFINITIONS RESPECTING **
For the purposes of this Article 7:
12
<PAGE>
**
7.3.4 AGREEMENT TO CHANGE **
In the event that the parties are able as a result of the
negotiations described in Articles 7.3.1 to 7.3.2 inclusive to agree
changes to ** then such changed ** shall apply until such time as
any further changes are agreed pursuant to further negotiations
pursuant to Articles 7.3.1 to 7.3.2 inclusive.
7.3.5 **
7.4 DATE OF PAYMENT
ZENECA shall pay for supplies of the Product within ** days of the dates
of the invoices from LTI in respect thereof Any late payment by either
party, including late payments for supplies of the Product and late
payments pursuant to Schedule D, shall bear interest at the lower of the
prime rate published by Wells Fargo Bank N.A. plus **, and the maximum
rate legally allowable.
7.5 METHOD OF PAYMENT
All payments to be made by either party under this Agreement shall be made
by transfer to such bank account as the other party shall reasonably
request, by wire transfer of immediately available funds.
7.6 AUDIT
LTI's independent professional representatives shall have the right at
reasonable times and on reasonable notice to inspect and audit the books
and records of ZENECA and its Affiliates for the sole purpose of assessing
compliance with the terms of this Agreement relating to financial matters.
For this purpose ZENECA shall maintain such records for not less than **
years after the relevant dates and LTI shall be entitled at its cost to
take copies of relevant extracts.
ARTICLE 8 - DEVELOPMENT AND REGULATORY
8.1 RESPONSIBILITY FOR REGULATORY APPROVALS
8.1.1 ZENECA and LTI shall jointly prepare a regulatory plan within **
months of the Effective Date. In the event that any further
clinical studies are required to obtain regulatory approvals of the
Product in the Territory, then ZENECA may with the prior written
consent of LTI, to be given or withheld in LTI's discretion, carry
out the same at its own cost and in that event LTI shall supply all
necessary quantities of the Product to ZENECA free of charge for
such purposes.
13
<PAGE>
8.1.2 ZENECA and LTI shall have joint responsibility for obtaining as
promptly as reasonably possible and maintaining regulatory approvals
for the Product as required by Government Health Authorities in the
Territory based on available data.
ZENECA's responsibilities shall include:
- preparing in connection with the ** in the Territory;
- attending **;
- ** prepared ** marketing authorization application described below
("MAA") as required by local Government Health Authorities;
- producing **;
- obtaining regulatory **;
- advising **; and
- responding to enquiries made to ZENECA by Government Health
Authorities in the Territory concerning the Product or the sale or
distribution thereof.
LTI's responsibilities shall include:
- preparing **;
- submitting appropriate **;
- signing regulatory approval for the Product applications as holder
of the licenses in all countries in the Territory excluding those
that require the license holder to have a local address; and
- responding to enquiries made to LTI by Government Health
Authorities.
Each party shall have the right at reasonable times and on reasonable
notice to inspect and audit the records of the other party for the purpose
of assessing compliance with appropriate regulatory standards.
8.2 REGULATORY SUBMISSION AND MAINTENANCE FEES
All out of pocket fees for regulatory submissions and maintenance of
regulatory approvals incurred under this Article 8 shall be borne by ** or
its Affiliates.
14
<PAGE>
8.3 ADVERSE EVENT REPORTS AND CUSTOMER COMPLAINTS
ZENECA shall as soon as reasonably practicable and in any event within **
notify LTI of all adverse event reports. LTI will supply details to
ZENECA of all adverse events fulfilling CIOMS reporting requirements
communicated to LTI as soon as reasonably practicable and in any event
within ** of receipt by LTI. ZENECA shall be responsible for the
notification of individual adverse event reports to the appropriate
regulatory authorities within the Territory as soon as reasonably
practicable and in any event within ** following notification by LTI.
LTI shall be responsible for the maintenance of the ** LTI from time to
time. LTI shall provide quarterly updates to ZENECA with respect to
safety matters relating to the Product and shall, if ZENECA so requests,
promptly give to ZENECA details of all adverse events or other safety
information relating to the Product on a worldwide basis held by LTI.
ZENECA shall promptly notify LTI of reportable customer complaints
communicated to ZENECA with respect to the Product.
8.4 CPLT
The parties shall as soon as practicable after the Effective Date jointly
establish Core Prescribing and Label Texts ("CPLT") for the Product. The
CPLT shall be the basis on which regulatory approvals shall be sought and
maintained in the Territory. LTI shall promptly in advance communicate to
ZENECA by means of the Co-ordinator referred to in Article 9.3 the basis
for any proposed changes to the CPLT or local prescribing information in
the Territory and ZENECA shall have the right to comment on the same.
ZENECA shall furthermore have the right itself to propose changes to the
CPLT. In the event that the parties cannot **.
8.5 ZENECA CLINICAL OR TECHNICAL ACTIVITY RESPECTING THE PRODUCT
It is agreed that LTI has an interest in maintaining the technical and
scientific integrity of the Product. Accordingly, ZENECA shall from time
to time notify LTI of any clinical trial or other technical activity which
it intends to undertake with respect to the Product; and LTI shall
communicate any technical or scientific concerns in relation thereto
within ** of notification in which event the parties shall promptly
discuss the same. In the event that LTI has any such technical or
scientific concerns which cannot be satisfied, then LTI may notify ZENECA
to that effect and ZENECA shall not undertake the clinical trial or other
technical activity concerned, provided that no such determination shall be
made unreasonably by LTI.
8.6 PRESCRIBERS' ENQUIRIES, CUSTOMER SUPPORT
ZENECA shall be responsible for answering routine prescribers' questions
and queries and undertaking routine customer support activities on the use
of the Product
15
<PAGE>
in the Territory and ZENECA and LTI shall jointly compile and maintain a
complete set of publications for such purposes.
8.7 ** PLAN
ZENECA shall within ninety (90) days of the Effective Date draw up a plan
for the **.
ARTICLE 9 - PRODUCT KNOW-HOW, MARKETING AND SALE
9.1 PRICING AND REIMBURSEMENT AUTHORISATIONS
ZENECA will use its reasonable endeavors to obtain all necessary pricing
and reimbursement approvals for the Product in the Territory.
9.2 MARKETING RESPONSIBILITY, REASONABLE ENDEAVORS
9.2.1 ZENECA shall be responsible for the marketing of the Product in the
Territory and for the preparation of all training and promotional
materials and training of sales representatives as well as all
related marketing matters. ZENECA shall ensure that all such
materials as referred to above comply with applicable laws and shall
provide LTI with a copy of such materials not less than seven (7)
calendar days prior to its publication of the same.
9.2.2 ZENECA shall use all reasonable endeavors to promote sales of the
Product in the Territory, exercising such diligence as ZENECA would
use in promoting and marketing a newly approved pharmaceutical
product of its own invention including, but not limited to, the use
of its trained and qualified sales force where such exists (and a
comparably trained and qualified sales force where such does not
exist) in each country in the Territory to make calls on physicians,
pharmacists and other persons licensed to dispense, administer and
prescribe products similar to the Product.
9.3 COMMUNICATING KNOW-HOW AND MARKETING PLANS
9.3.1 KNOW-HOW
LTI and ZENECA shall from time to time promptly communicate to each
other any new Know-how including the results of any clinical or
other technical activity carried out with respect to the Product and
shall for this purpose each appoint a suitably experienced and
senior Co-ordinator through whom the same shall be channelled.
16
<PAGE>
9.3.2 MARKETING
ZENECA shall by means of the said Coordinator communicate to LTI its
headquarters marketing plans for the Product including without
limitation marketing positioning, promotion plans, country launch
plans and sales budgets, publication strategy, clinical/development
strategy and regulatory strategy (together, "Plans") on a country by
country basis. LTI shall have the right to comment on the Plans and
to propose changes and any serious disagreements may be referred by
the parties to senior management for resolution **. ZENECA shall
also supply to LTI for information copies of ZENECA's detail aids
and country marketing plans.
9.4 REGULAR MEETINGS
The parties shall for the purposes of reviewing progress and issues
relating to this Agreement meet as a "Co-ordinating Committee" twice per
annum or less or more frequently as they may agree. In particular, the
parties shall in the Coordinating Committee review, discuss and agree on
actions in relation to the Product regarding manufacture and supply;
development and regulatory approval; clinical trials and publications;
progress regarding commercialization; prescribing information and safety.
The parties may agree to establish subcommittees reporting to the
Co-ordinating Committee to review particular areas.
9.5 ZENECA SALES REPORT
ZENECA shall within fifteen (15) working days after the end of each month
send to LTI a report showing for such month the ** and number of vials of
the Product sold by ZENECA and its Affiliates in each country of the
Territory. Within thirty (30) calendar days following the end of each
Calendar Quarter ZENECA shall provide to LTI a country by country sales
report for such Calendar Quarter and for the Calendar Year to date.
ARTICLE 10 - PATENTS, TRADEMARKS, INTELLECTUAL PROPERTY
10.1 PATENT APPLICATIONS
LTI shall keep ZENECA advised on a regular basis to be agreed of all steps
taken or to be taken in the prosecution of all applications for Patents
and in the maintenance or extension of the Patents and shall, on request,
furnish ZENECA with a copy of any Patent application, Patent or other
document pertinent to the prosecution, maintenance, and extension of such
applications and Patents. LTI shall **.
17
<PAGE>
10.2 INFRINGEMENT OF PATENTS
LTI and ZENECA shall promptly notify each other of any infringement of the
Patents in the Territory which may come to their attention. LTI shall
promptly undertake reasonable efforts to obtain a discontinuance of the
aforesaid infringement or unauthorized use. If within three (3) months
after any such infringement or unauthorized use has come to LTI's
attention, LTI has failed to obtain a discontinuance of said infringement
then LTI shall give notice in writing to ZENECA of the full circumstances
of such infringement including such evidence of infringement as LTI may
possess and the numbers of any patents and patent applications so
infringed. The parties shall then consider what steps, if any, are
appropriate to obtain a discontinuance of such infringement. Any suit to
obtain such discontinuance shall be either in the name of LTI or in the
name of ZENECA, or jointly by LTI and ZENECA, as may be required by law of
the forum. For this purpose, each party shall execute such legal papers
necessary for the prosecution of such suit as may be reasonably requested
by the other. The external costs of any such suit shall be borne **. It
is agreed that any sums received or recovered by judgement, settlement or
otherwise as a result of such suit shall be **.
10.3 TRADEMARKS
The Product shall be sold by ZENECA under trademarks specified by LTI and
made available to ZENECA on an exclusive basis in each country of the
Territory in which ZENECA has the right to sell the Product pursuant to
this Agreement; provided that ZENECA shall be entitled to decline to sell
the Product in any country under a trademark specified by LTI if in
ZENECA's reasonable opinion such trademark is inappropriate for the
Product or is likely to infringe the rights of third parties; in which
event the parties shall identify an alternative trademark to be owned by
LTI which is useable for the sale of the Product in such country. LTI
shall keep ZENECA fully informed as to its progress in registering
trademarks for the sale of the Product in the Territory.
10.4 USE OF TRADEMARKS BY ZENECA
LTI and ZENECA will take any necessary action to authorise the use of
trademarks for the sale of the Product by ZENECA, including if necessary
by LTI licensing ZENECA or its Affiliates to use the trademarks during the
term of this Agreement. Where requested by LTI, ZENECA shall enter into
licensing agreements in respect of the use of LTI's trademarks in a form
reasonably specified by LTI.
10.5 INFRINGING OR UNUSABLE LTI TRADEMARKS
In the event that any trademark owned by LTI and used by ZENECA for the
sale of the Product hereunder infringes the rights of any third party or
is otherwise unusable then (notwithstanding the proviso contained in
Article 10.3 and in addition to Article 12.3):
18
<PAGE>
10.5.1 The parties shall promptly consult and establish what steps
should be taken (which may include LTI arranging for a change
of name with regulatory authorities);
10.5.2 ** in changing such trademark as a result thereof to a
registerable or registered non-infringing and useable
trademark, including without limitation costs incurred in any
recall of Product; altering packages; printing;
re-distributing; purchase of replacement materials;
destruction of obsolete materials; and advertising.
10.6 ZENECA TECHNICAL DATA AND INTELLECTUAL PROPERTY
With respect to any technical data or any intellectual property developed
by or on behalf of ZENECA and arising from ZENECA's activities with
respect to the Product hereunder ZENECA shall own such data and
intellectual property and ZENECA shall to the extent that ZENECA is
reasonably able to do so grant to LTI a perpetual worldwide non-exclusive
royalty-free license to use the same for the manufacture use and sale of
the Product. With respect to any technical data or intellectual property
owned jointly by ZENECA and LTI, the parties shall be free to use and
license the same as they see fit for the Product or otherwise."
10.7 NO IMPLIED LICENSES
Except as specifically provided herein, nothing in this Agreement shall
confer upon either party the right to use or exploit any trademarks,
patents, know-how or other intellectual property rights of the other
party.
ARTICLE 11 - CONFIDENTIALITY
11.1 Each of the parties hereto shall take all steps and do all things
necessary to ensure that all information provided by the other party for
the purposes of this Agreement shall not be disclosed or made use of
outside the business of the receiving party or Affiliates ** for any
purpose other than in connection with applications for regulatory
approval, processing, repackaging and sale of the Product or other
activities pursuant to this Agreement.
11.2 The provisions of Clause 11.1 of this Article shall not apply to
information as aforesaid:
11.2.1 which either party can show was known to it prior to
disclosure by the other party and which was not subject to
obligations of confidentiality to the other party or a third
party; or
11.2.2 which is or becomes public knowledge through no fault of the
receiving party; or
19
<PAGE>
11.2.3 which is disclosed to either party to this Agreement by a
third party with good legal title thereto, but without
restrictions on disclosure or use; or
11.2.4 which is disclosed in accordance with the requirements of
applicable law or the rules of any applicable regulatory body
or the rules of any applicable recognized stock exchange.
11.3 SURVIVAL OF CONFIDENTIALITY PROVISIONS
This Article 11 shall survive termination of this Agreement.
ARTICLE 12 - REPRESENTATIONS AND WARRANTIES, INDEMNITIES
12.1 LTI REPRESENTATIONS AND WARRANTIES
LTI hereby represents and warrants that:
12.1.1 As at the Effective Date LTI is the sole owner of (or has the
right to license) such right, title and interest in and to the
Patents as is necessary for the purposes of this Agreement.
12.1.2 As of the Effective Date, to LTI's knowledge, there are no
suits, claims or proceedings pending against LTI or any of its
Affiliates in any court or by or before any governmental body
or agency with respect to the Product and no such actions,
suits or claims have been threatened against LTI or any of its
Affiliates.
12.1.3 With the exception of regulatory approvals, as set forth in
Article 8, as of the Effective Date LTI has established what
LTI reasonably believes to be all arrangements necessary to
manufacture the Product in quantities and to standards
sufficient for ZENECA to distribute the Product under the
terms of this Agreement and has for that purpose obtained and
shall maintain necessary manufacturing, export and other
licenses.
12.1.4 As of the Effective Date, there are no commitments or
contractual obligations of which LTI is aware which would in
any way prohibit LTI from entering into this Agreement.
12.2 ZENECA RESPONSIBILITIES AND WARRANTIES
ZENECA hereby represents and warrants the following:
20
<PAGE>
12.2.1 As of the Effective Date there are no commitments or
contractual obligations of which ZENECA is aware which would
in any way prohibit ZENECA from entering into this Agreement.
12.2.2 As of the Effective Date ** ZENECA or its duly incorporated
Affiliates are authorised to sell pharmaceutical products in
all countries in the Territory.
12.3 LTI'S INDEMNIFICATION OF ZENECA
LTI shall defend, indemnify and hold harmless ZENECA and its Affiliates,
their directors, employees, representatives and agents from and against
all suits, claims, liabilities, damages, demands and costs (including but
not limited to reasonable legal expenses) ("Claims") incurred by:
12.3.1 LTI's breach of the terms of this Agreement;
12.3.2 **;
12.3.3 **;
12.3.4 **;
12.3.5 the negligence, recklessness or wilful misconduct on the part
of LTI, its Affiliates, their directors, employees,
representatives or agents with respect to the Product or in
the performance of this Agreement; and
12.3.6 any falsity of the representations and warranties given by LTI
under Article 12.1;
provided that LTI shall not be required so to defend and indemnify in
respect of any Claim to the extent caused by the negligence or wilful
misconduct of ZENECA, its Affiliates, their directors, employees,
representatives or agents in the performance of their obligations
hereunder or in respect of any breach by ZENECA of this Agreement.
12.4 ZENECA INDEMNIFICATION OF LTI
ZENECA shall defend, indemnify and hold harmless LTI and its Affiliates,
their directors, employees, representatives and agents from and against
all Claims incurred by:
12.4.1 ZENECA's breach of the terms of this Agreement;
12.4.2 the negligence, recklessness or wilful misconduct on the part
of ZENECA, its Affiliates, their directors, employees,
representatives or
21
<PAGE>
agents with respect to the Product or in the performance of
this Agreement; and
12.4.3 any falsity of the representations and warranties given by
ZENECA under Article 12.2;
provided that ZENECA shall not be required so to defend and indemnify in
respect of any Claim to the extent caused by the negligence or wilful
misconduct of LTI, its Affiliates, their Directors, employees,
representatives or agents in the performance of their obligations
hereunder or in respect of any breach by LTI of this Agreement.
12.5 INDEMNIFICATION PROCEEDINGS
12.5.1 NOTICE OF CLAIMS: ASSUMPTION OF DEFENCE
The party to be indemnified ("the Indemnified Party") shall give
prompt notice to the other party ("the Indemnifying Party") of the
assertion of any Claim in respect of which indemnity may be sought
hereunder. It is understood, however, that the Indemnified Party
shall be authorised and expected to take any such prompt action as
may be reasonably necessary in the circumstances of any proceedings
seeking an injunction or similar equitable relief against it. The
Indemnifying Party may, at its own expense, (i) participate in the
defence of any Claim for which it is obligated to indemnify the
Indemnified Party hereunder and (ii) upon notice to the Indemnified
Party at any time during the course of any such Claim, assume the
defence thereof; provided however that (i)the Indemnifying Party's
counsel is reasonably satisfactory to the Indemnified Party and (ii)
the Indemnifying Party shall, upon reasonable request, thereafter
consult with the Indemnified Party from time to time with respect to
such Claim. If the Indemnifying Party assumes such defence, the
Indemnified Party shall have the right (but not the duty) to
participate in the defence thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Indemnifying
Party. Whether or not the Indemnifying Party chooses to defend or
prosecute any such Claim, both parties hereto shall cooperate in the
defence or prosecution thereof.
12.5.1 SETTLEMENT OR COMPROMISE
Any settlement or compromise made or caused to be made by the
Indemnified Party or the Indemnifying Party (as the case may be) of
any Claim shall be binding upon the Indemnifying Party or the
Indemnified Party (as the case may be) in the same manner as if a
final judgment or decree has been entered by a court of competent
jurisdiction in the amount of such settlement or compromise;
provided however, that no obligation, restriction or loss shall be
imposed on an Indemnified Party as a result of such settlement
without its prior written consent which consent shall not
unreasonably be withheld, and such settlement shall include an
unconditional release of the Indemnified Party;
22
<PAGE>
and provided further, that the Indemnified Party shall not make or
cause to be made any such settlement or compromise without the prior
written consent of the Indemnifying Party, which consent shall not
unreasonably be withheld. The Indemnified Party will give the
Indemnifying Party at least thirty (30) days' prior notice of any
proposed settlement or compromise of any Claim it itself is
defending, during which time the Indemnifying Party may assume the
defence of, and responsibility for, such Claim and, if it does so,
the proposed settlement or compromise may not be made.
12.5.2 FAILURE OF INDEMNIFYING PARTY TO ACT
In the event that the Indemnifying Party does not elect to assume
the defence of any Claim or to cause the same to be done, then any
failure of the Indemnified Party to defend or participate in the
defence of any such Claim or to cause the same to be done, shall not
relieve the Indemnifying Party of its obligations hereunder;
provided however, that the Indemnified Party shall have given the
Indemnifying Party at least thirty (30) days' notice of its proposed
failure to defend or participate and afford the Indemnifying Party
the opportunity to assume defence thereof prior to the end of such
period.
12.5.3 PROCEDURE FOR INDEMNIFICATION
Upon becoming aware of any claim for indemnification, the
Indemnified Party shall promptly give notice of such claim (a "Claim
Notice") to the Indemnifying Party and will provide, to the extent
possible and without prejudice to the rights of the Indemnified
Party hereunder, a good faith estimate of the amount the Indemnified
Party reasonably anticipates that it will be entitled to on account
of indemnification by the Indemnifying Party. If the Indemnifying
Party does not object to such indemnification claim within
forty-five (45) days of receiving notice thereof, the Indemnified
Party shall be entitled to recover promptly the amount of such claim
(but such recovery shall not limit the amount of any additional
indemnification or other rights to which the Indemnified Party may
be entitled pursuant to this Article 12). If, however, the
Indemnifying Party advises the Indemnified Party that it disagrees
with the Indemnified Party's claim, the parties shall, for a period
of forty five (45) days after the Indemnifying Party advises the
Indemnified Party of such disagreement, attempt to resolve the
difference. If the parties are unable to reach agreement within
such forty five (45) days, the disagreement shall be resolved
pursuant to Article 23.
ARTICLE 13 - NON-ASSIGNABILITY / SUB-DISTRIBUTORS
13.1 Neither ZENECA nor LTI shall at any time without the previously obtained
written consent of the other party assign, transfer, license, charge or in
any manner make over the benefit or obligations of this Agreement to any
person, firm or company whatsoever. For the avoidance of doubt it is
hereby expressly agreed that with the
23
<PAGE>
previously obtained written consent of LTI (such consent not to be
unreasonably withheld or delayed), ZENECA shall be entitled to appoint
Affiliates and sub-distributors in any part of the Territory for the sale
of the Product. Such Affiliates or sub-distributors shall comply with the
terms of this Agreement and ZENECA shall be responsible for the acts of
such Affiliates and sub-distributors insofar as they relate to the
performance of ZENECA's obligations under this Agreement.
ARTICLE 14 - TERMINATION / POST-TERMINATION MATTERS
14.1 RIGHT TO TERMINATE
If either party following receipt of notice from the other party withholds
from the other for a period of ** days any monies due to the other unless
the same are the subject of a legitimate dispute; or commits or permits
any substantial breach of any of the terms of this Agreement and fails to
remedy that breach within ** days of receiving written notice thereof from
the other party; or has a receiver or administrator appointed in respect
of the whole or any part of its assets; or enters into any arrangement or
composition with its creditors; or goes into liquidation whether
voluntarily or compulsorily (except for the purpose of reconstruction or
amalgamation); or anything analogous to any of the foregoing under the law
of any jurisdiction occurs in relation to either party, then other party
shall be at liberty at any time by notice in writing to terminate this
Agreement forthwith, but such determination shall be without prejudice to
the rights of either party against the other then accruing or accrued in
respect of the event giving rise to such termination or otherwise under
this Agreement.
14.2 **
ARTICLE 15 - NON-COMPETE
15.1 **
15.2 **
ARTICLE 16 - FORCE MAJEURE
16.1 DEFINITION OF FORCE MAJEURE
If either party to this Agreement is prevented or delayed in the
performance of any of its obligations by force majeure and if such party
gives written notice thereof to the other party within twenty (20) days of
the first day of such event (or within twenty (20) days of the first day
on which it is possible to give such notice) specifying the matters
constituting force majeure, together with such evidence as it reasonably
can give, then the party so prevented or delayed will be excused from
performance, or punctual performance, as the case may be, as from the date
of such event for so long as such cause of prevention or delay continues.
For the purposes of this Agreement
24
<PAGE>
the term "force majeure" will be deemed to include acts of God, war,
hostilities, riot, fire, explosion, accident, flood, sabotage, strike,
lock-out or injunction, compliance with governmental laws, regulations or
orders, or any other cause whether or not of the class or kind enumerated
above which affects the performance of this Agreement arising from or
attributable to acts, events, non-happenings, omissions or accidents
beyond the reasonable control of the party affected.
16.2 ALTERNATIVE ARRANGEMENTS ON TERMINATION AFTER 12 MONTHS
If any force majeure prevails for a continuous period in excess of twelve
(12) months, the parties shall (i) enter into bona fide discussions with a
view to alleviating its effects or (ii) at the request of the party having
received written notice of any event constituting an event of force
majeure terminate this Agreement forthwith.
16.3 ALLOCATION OF SUPPLY BY LTI DURING FORCE MAJEURE
In the event that LTI's supply of the Product is impaired at any time
during this Agreement for reasons of force majeure then LTI shall allocate
the supply of Product available in the manner set out in Article 6.7.2.
ARTICLE 17 - NOTICES
All communications, notices, orders, telexes and facsimile transmissions
required or permitted to be sent pursuant to this Agreement shall be addressed
to:
ZENECA: The Secretary
ZENECA Pharmaceuticals
Alderley House
Alderley Park
MACCLESFIELD
Cheshire
SK10 4TF
UNITED KINGDOM
Facsimile : O11 44 625 585618
LTI: The General Counsel Liposome Technology, Inc.
1050 Hamilton Court
Menlo Park
California 94025
USA.
Facsimile : 0101 415 323 9016
shall be deemed properly given to the party at the above address on the seventh
day r the envelope containing the same was posted to that address or on the date
of submission by
25
<PAGE>
telex or facsimile, as the case may be, provided in the case of the latter that
a confirming copy is sent by post to that address within twenty four (24) hours
after transmission.
ARTICLE 18 - WAIVER
The failure of either party to exercise any right hereunder shall not be deemed
to be a waiver of such right. Any waiver made in writing in respect of any
breach of a provision hereof shall be valid but shall not be construed to be a
waiver of any succeeding breach of such a provision or waiver of the provision
itself.
ARTICLE 19 - ENTIRE AGREEMENT / AMENDMENTS
This Agreement and its Schedules set forth the entire agreement and
understanding between the parties regarding the subject matter hereof and
supersede all prior discussions and agreements written or oral, and each of the
parties acknowledges that it has not been induced to enter into this Agreement
by reason of any representation made or by or on behalf of the other party that
is not in this Agreement. No amendment shall be effective unless unless made in
writing by an authorised signatory of each party. This Agreement may be
executed in counterparts, each of which shall be deemed to be a duplicate
original and to comprise one and the same instrument.
ARTICLE 20 - VALIDITY / SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision which shall remain
in full force and effect. The parties shall use their best efforts to achieve
the purpose of the invalid provision by a new, legally valid stipulation.
ARTICLE 21 - NATURE OF RELATIONSHIP
The relationship of the parties to this Agreement is that of independent
contractors. Neither party shall be deemed to be the agent of the other nor is
any joint venture or partnership relationship hereby created and neither party
is authorised to take any action binding upon the other. Neither party shall be
deemed to be the Licensee of the other except as specifically provided herein.
ARTICLE 22 - PRESS / PUBLICITY
Any announcements or similar publicity with respect to this Agreement or the
transactions contemplated herein shall be at such time and in such manner as LTI
and ZENECA shall agree, provided that nothing herein shall prevent either party,
upon notice to the other, from making such public announcements as that party's
legal obligations require.
26
<PAGE>
ARTICLE 23 - DISPUTE RESOLUTION
23.1 CHOICE OF LAW; ARBITRATION
The internal laws of the State of Delaware, United States of America,
applicable to contracts entered into and wholly to be performed in
Delaware by Delaware residents, without reference to any principles
concerning conflicts of law, shall govern the validity of this Agreement,
the construction of its terms and the interpretation of the rights and
duties of the parties hereunder; provided, however, that to the extent
legally permissible, this Article 23.1 and the parties' rights under this
Article 23.1 shall be governed by and construed in accordance with the
Federal Arbitration Act, 9 U.S.C. section 1 et.seq. Any controversy or
claim arising out of or relating to this Agreement or the breach thereof
shall be settled by the following procedures: Either party may send the
other written notice identifying the matter in dispute and invoking the
procedures of this Article 23. Within fourteen (14) days after such
written notice is given, one or more officers of each party shall meet at
a mutually agreeable location in Chicago, Illinois for the purpose of
determining whether they can resolve the dispute themselves by written
agreement, and, if no whether they can agree upon a third party impartial
arbitrator (the "Arbitrator") to whom to submit the matter in dispute for
final and binding arbitration. If the parties fail to resolve the
dispute by written agreement or to agree on the Arbitrator within such
twenty one (21) day period either party may make written application to
the Judicial Arbitration and Mediation Services ("JAMS") or agreed upon
Chicago equivalent for the appointment of a single Arbitrator to resolve
the dispute by arbitration and at the request of JAMS, the parties shall
meet with JAMS at its offices or confer with JAMS by telephone within ten
(10) calendar days of such request to discuss the dispute and the
qualifications and experience which each party respectively believes the
Arbitrator should have; provided, however, that the selection of the
Arbitrator shall be the exclusive decision of JAMS and shall be made
within thirty (30) days of the written application to JAMS. Within thirty
30 days of the selection of the Arbitrator, the parties shall meet in
Chicago, Illinois with such Arbitrator at a place and time designated by
the Arbitrator after consultation with the parties and present their
respective positions on the dispute. Each party shall have no longer than
one (1) day to present its position, the entire proceedings before the
Arbitrator shall be on no more than three consecutive days, and the award
shall be made in writing no more than ten (10) days following the end of
the proceeding. Such award shall be a final and binding determination of
the dispute and shall be fully enforceable as an arbitration award in any
court having jurisdiction and venue over the parties. The prevailing
party (as determined by the Arbitrator) shall in addition be awarded by
the Arbitrator such party's own attorneys' fees and expenses in connection
with such proceeding. The non-prevailing party (as determined by the
Arbitrator) shall pay the Arbitrator's fees and expenses.
27
<PAGE>
IN WITNESS WHEREOF the parties hereto have hereunto set their respective hands
day and year hereafter written.
/s/ C. R. W. Petty /s/ Peter V. Leigh
................................... ...................................
ZENECA Pharmaceuticals Liposome Technology, Inc.
by C. R. W. Petty by Peter V. Leigh
Manager, Legal Affairs Vice President and Chief Financial
and Assistant Secretary Officer
Date: 11th August 1994 Date: October 20, 1994
28
<PAGE>
SCHEDULE A
UK*
FRANCE
GERMANY
ITALY
SPAIN
BELGIUM
HOLLAND
DENMARK
NORWAY
SWEDEN
FINLAND
LUXEMBOURG
PORTUGAL
POLAND
CZECH AND SLOVAK REPUBLICS
HUNGARY
GREECE
RUSSIA + former USSR territories
ROMANIA
BULGARIA
* In the case of Northern Ireland, the rights of ZENECA to distribute the
Product shall commence on the date seven (7) months following the Effective
Date.
29
<PAGE>
SCHEDULE B
THE PATENTS
EPD Patent No. 0303683
European Patent Application 88902717.3
European Patent Applications corresponding to US Patent No. 5077057
European Patent Application 130577 and 158441
30
<PAGE>
SCHEDULE C
PART I: THE SPECIFICATION
**
31
<PAGE>
**
PART II: TECHNICAL REQUIREMENTS
**
32
<PAGE>
SCHEDULE D
PRICING MECHANISMS
**
33
<PAGE>
THE SYMBOL "**" IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT THE PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
MANUFACTURING AND SUPPLY CONTRACT
THIS AGREEMENT is made as of this 1st day of January 1993 (the
"Effective Date"), by and between Liposome Technology, Inc. a corporation
organized and existing under the laws of Delaware, with its principal office at
1050 Hamilton Court, Menlo Park CA 94025, (hereinafter "LTI"), and BEN VENUE
LABORATORIES, INC., a corporation organized and existing under the laws of
Pennsylvania, with principal manufacturing facilities at 300 Northfield Road,
Bedford, Ohio 44146 (hereinafter "BVL").
WITNESSETH
WHEREAS, LTI is active in the pharmaceutical business and is the owner
of all rights to certain proprietary technical information, patents and patent
applications relating to the product defined in Schedule A, which is attached
hereto (hereinafter "Product"); and WHEREAS, LTI desires to contract with BVL
for the manufacture and supply of finished parenteral dosage forms of the
Product; and
WHEREAS, BVL possesses the requisite expertise, personnel and
facilities for the manufacture and supply of finished parenteral dosage forms of
the Product and is willing to manufacture and supply such Product to LTI;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and conditions herein contained, LTI and BVL agree as follows:
ARTICLE 1 - DESCRIPTION OF WORK
1.1 LTI shall from time to time at LTI's expense supply BVL with
sufficient bulk quantities of active drug substance (hereinafter ADS) and other
materials specified in Schedule 1.1 for the Product as needed in order to meet
LTI's requirements for research and later for commercial quantities (following
approval of the product by Regulatory Authorities) of Product in finished dosage
form. During the pre-approval process, LTI will diligently proceed toward
securing US Food and Drug Administation and other similar foreign Regulatory
Authorities' (hereinafter individually or collectively "RA") approval, **.
1.2 Pursuant to subsequent provisions of this Agreement, BVL shall
supply all, or a principal portion of, LTI requirements for research and
commercial quantities of Product in finished dosage form. As used herein, the
terms "Supply" or "Supplied" shall mean processing, formulating, packaging,
compounding, freeze drying or lyophilizing (if applicable), bottling, labeling,
testing, handling, procuring of components for or storage of the Product. Such
Product shall meet Specifications as set forth in Schedule 1.2. (hereinafter
<PAGE>
"Specifications"). Subject to BVL's prior written consent, such consent not to
be unreasonably withheld, LTI may, from time to time, change Specifications.
1.3 LTI shall provide BVL with the manufacturing process for Product,
and shall provide assistance to BVL for transfer of manufacturing process
technology to BVL. BVL agrees to provide for selected LTI employees and agents
to participate in research or manufacturing operations at BVL facilities as may
be required to transfer technology or assist in the manufacture of certain lots
of Product. BVL will provide training or other information to LTI employees as
required to qualify them for such operations. BVL shall make known and make
available, upon request, its policies, regulations and rules for employees and
visitors to its facilities and LTI employees and agents will comply with all
such BVL policies and procedures.
1.4 Product labels may indicate that the Product has been
manufactured for LTI by BVL. Except as required by law or federal regulation or
to obtain RA, approval, LTI shall make no other use of BVL's name without BVL's
prior written permission.
ARTICLE 2 - MANUFACTURING FACILITIES
2.1 BVL represents that it has obtained all approvals required by RA
for its manufacturing facilities and that its manufacturing facilities conform,
and will in the future conform to, current Good Manufacturing Practices and all
other applicable laws, regulations and guidelines as established by the RA from
time to time. No material change in BVL's manufacturing or testing procedures
shall be made without prior notice to LTI, except to the extent that such
procedures are specific to the Product, in which instance no change shall be
made without the prior written consent of LTI.
2.2 BVL shall not make any changes or modifications to the
manufacturing process for Product without the prior written agreement of LTI.
BVL shall notify LTI of any deviations from BVL's standard operating procedures
for the manufacturing process for Product during the manufacture of any lot of
Product, such notification to be provided to LTI within ** of said deviation.
BVL shall provide a written report, describing the nature of the deviation and
of corrective actions planned to prevent reoccurrence, such report to be
provided to LTI within ** of said deviation.
2.3 Where such audits, reports and documentation actually or
potentially affect Product; BVL shall, within ** after their occurrence and/or
receipt by BVL, notify LTI of any RA and/or any other governmental or regulatory
inspection or meetings, and shall provide to LTI a copy of any written Form 483
or any other similar governmental or regulatory citation or any RA and/or any
other governmental or regulatory warning letter, pertaining to BVL facilities,
or procedures. LTI reserves the right to review BVL's response to citations
regarding Product or its manufacture prior to BVL's submission of any response
to RA and/or any other governmental or regulatory authority. BVL shall provide
LTI copies of any and all written
2
<PAGE>
responses to such Form 483's, or warnings, or other reports of meetings or
audits, as well as follow up plans and actions within ** after their transmittal
or issuance. Except as required by law, LTI will hold such notifications,
citations, audits, and responses in confidence.
2.4 BVL agrees to permit LTI to cite BVL's Drug Master File and
provide LTI with copies of, or access to, such documents and reports regarding
BVL's manufacturing facility as LTI may be required to include in submissions to
RA to obtain approvals for Product.
ARTICLE 3 - SECOND SOURCE
3.1 LTI may qualify a second source of supply other than BVL and **.
3.2 BVL will not produce any liposome- or lipid-based products which
compete with Product ("Competing Product") without LTI's prior written approval.
**.
ARTICLE 4 - VOLUMES
4.1 LTI's estimates of its requirements for the period following RA
approval of the Product are set forth in Schedule 4.l. It is expressly
understood that the quantities shown in Schedule 4. 1. are estimates only and
are in no way binding on LTI.
4.2 On the Effective Date, or as soon as practicable thereafter, LTI
shall provide BVL with a firm purchase order for the quantity of product
required for delivery prior to **. On or before **, LTI shall provide BVL with
a forecast by ** of its requirements for the Product for the **. The first **
of such forecast, that is the forecast **, shall represent a binding commitment
of LTI to purchase and BVL to supply such forecasted amount. On or before **
and thereafter on or before the last day of each **, LTI shall provide BVL with
an updated forecast of its ** requirements for Product for the ** commencing **
after the due date for such forecast. The first ** of each forecast so provided
shall likewise represent a binding commitment on LTI to buy and BVL to supply
such forecasted quantity of Product in a timely manner.
4.3 LTI will submit purchase orders in writing. Purchase orders may
be on LTI's purchase order form, provided that any provision of any such
purchase order form which is in addition to or inconsistent with any provision
of this Agreement shall be ineffective and not binding on either party unless
specifically agreed to in writing by an authorized representative of each party.
4.4 In any one ** (as defined above), BVL agrees to supply Product
for all purchase orders placed by LTI hereunder that are between ** of the
applicable binding forecast for such ** submitted by LTI. BVL shall use
reasonable efforts to supply Product ordered in excess or ** of such binding
forecast.
3
<PAGE>
4.5 **
ARTICLE 5 - PRICE - PAYMENT
5.1 The prices to be paid by LTI for quantities of Product purchased
pursuant to Article 4 is specified in Schedule 5.1. subject to adjustment on **
basis by BVL for the next succeeding year. BVL shall notify LTI of price
adjustments at least ** in advance of each anniversary of the Effective Date of
this Agreement.
5.2 In the event any of the prices for Product specified by BVL in a
notice to LTI pursuant to Section 5.1 represents an increase of more than the
percent change in **, over the price of the Product charged during the
immediately preceding ** period, then, **.
5.3 All prices of Product shall be on the basis of F.O.B. shipping
dock at BVL's plant in Bedford, Ohio.
5.4 The purchase price for Product shall be paid to BVL no later than
** after the date of BVL's invoice to LTI. BVL will issue an invoice at such
time as the ** to LTI, such documents to be shipped by BVL no later than ** from
date of manufacture (defined as sealing date). In the event of nonpayment of
balances within **, BVL shall be entitled to assess a late payment charge equal
to ** per month of the unpaid balance.
5.5 LTI will not be required to pay BVL for any Product which does
not conform to Specifications except that any production and testing procedure
which has not been fully developed and validated may not be cited by LTI as a
basis for nonconformance.
ARTICLE 6 - QUALITY
6.1 LTI shall have the right, but not the obligation, to inspect
BVL's quality control procedures and records and to obtain specimens of Product
from BVL's production for analysis to confirm quality. LTI employees may
perform inspections of BVL's manufacturing facilities. LTI employees who
inspect BVL's facilities shall comply with BVL regulations and rules and LTI
assumes all risk of loss and shall indemnify, defend and hold BVL harmless from
all liability resulting from the presence of LTI employees at BVL facilities
except when due to negligence or willful misconduct on the part of BVL and its
employees.
6.2 LTI or its vendor shall supply BVL with a copy of its protocol of
analysis for the active drug substance (hereinafter "ADS") of the Product no
later than the date of delivery of the ADS to BVL. LTI and BVL agree to supply
the materials with specifications as designated in Schedule 1.1.
4
<PAGE>
6.3 The ADS may be delivered directly from LTI's vendor to BVL at **.
With each shipment LTI shall provide or require the vendor to supply BVL with a
completed copy of the vendor's protocol of analysis for ADS containing test
results. BVL shall undertake testing of each shipment for compliance with the
Specifications. If the ADS does not meet Specifications, BVL will immediately
inform LTI, and BVL shall be excused from its obligation to supply Product to
LTI until ADS meeting approved Specifications is delivered to BVL. Upon such
delivery, BVL shall have a reasonable time in which to supply Product to LTI.
To the extent BVL has existing stock of ADS which conforms to the approved
Specifications, nothing in the foregoing shall relieve BVL of its obligation to
Supply to LTI Product deriving from such conforming ADS.
6.4 For each batch of Product produced by BVL, BVL shall undertake
testing for compliance with the Specifications. Upon completion of testing, BVL
shall submit to LTI a protocol of analysis listing testing results and all
agreed upon records (including, but not limited to, the records identified on
Schedule 6.2. attached hereto) for each lot of Product produced. Subject to
BVL's prior consent, such consent not to be unreasonably withheld, LTI may, from
time to time, change the records to be provided to LTI by BVL for each lot of
Product produced.
6.5 LTI Shall have ** upon receipt of shipment to inspect the Product
to determine whether or not it conforms to the Specifications. LTI shall
promptly give BVL written notice of any aspect in which Product fails to conform
to Specifications. If LTI fails to notify BVL of any nonconformity within such
** period, LTI shall be deemed to have accepted the Product as shipped and,
subject to BVL at all times storing such Product in conformance with
specifications, all Product of the same batch remaining at BVL. If LTI notifies
BVL of any non-conformity, payment of the invoice for the non conforming batch
shall be held in abeyance until the dispute is resolved, unless the reason for
the non-conformance is due to problems encountered by BVL through use of non-
validated Production or Testing Procedures.
6.6 BVL shall replace Product which fails to meet applicable
specifications within **. In the event that BVL has insufficient inventory of
ADS to manufacture all or part of the replacement Product required, to such **
period shall be added such number of days as LTI and/or its vendor shall require
to deliver the quantity of ADS that BVL shall reasonably require to manufacture
such replacement Product.
6.7 Pursuant to paragraph 6.5 herein, if LTI shall claim that any
lot(s) of Product fail(s) to meet the Specifications because of BVL's failure to
carry out any of its obligations under this Agreement, LTI and BVL will
cooperate to investigate the source of the discrepancy. Additional testing
required will be carried out by BVL and LTI. Results of such testing will be
evaluated jointly and further action shall be negotiated. **. If LTI cannot
justify any decision regarding such a batch BVL may seek to resolve such
controversy by arbitration as specified in Section 18. In the event that **.
BVL agrees to be responsible for any loss of raw materials supplied by LTI up to
** that fails. In addition, BVL will be responsible for all manufacturing costs
incurred.
5
<PAGE>
6.8 LTI shall supply BVL with a Material Safety Data Sheet for the
ADS and other materials supplied by LTI. BVL and LTI shall mutually develop
safety procedures for the handling and manufacture of the Product and treatment
or disposal of wastes relating thereto that comply with all federal and state
environmental and occupational safety and health requirements, and such
procedures shall be included in a separate document and shall be followed by BVL
in performing services under this Agreement. BVL shall, in accordance with
LTI's instructions, ship rejected ADS and/or rejected Product to such
destination as LTI shall designate in writing. BVL shall not dispose of rejects
or waste without prior consent from LTI. **.
6.9 In the event of the rejection of a batch of Product, BVL will
cease further production of Product until such time as the results of the
investigation has been communicated in writing to LTI, and LTI has confirmed the
corrective action. **.
ARTICLE 7 - INDEMNIFICATION
7.1 LTI hereby holds harmless and indemnifies BVL against any and all
claims, losses, liabilities, lawsuits, proceedings, costs and expenses,
including, without limitation, reasonable attorneys' fees, and the cost of
recalls, (hereinafter collectively referred to as "Claim" or "Claims") resulting
from, arising out of or in connection with injuries and/or death to humans
resulting from, arising out of or in connection with the injection or other use
of the Product, including, without limitation, Claims based on negligence,
warranty, strict liability or any other theory of product liability or violation
of any applicable laws or regulations except to the extent that such injuries or
violations were the result of BVL's action, inaction or negligence in the Supply
of Product. If any Claim shall be made against BVL as to which this
indemnification applies, BVL shall, as soon as reasonably practicable, inform
LTI of such Claim and BVL shall not take any step nor conduct any legal
proceeding before consulting and obtaining LTI's written consent thereto. At
BVL's request, LTI and/or its insurers shall assume direction and control of the
defense against such claim, including, without limitation, the settlement
thereof at the sole option of LTI or its insurer. BVL may, at its option and
expense, have its own counsel participate in any proceeding which is under the
direction and control of LTI. BVL shall cooperate with LTI and its insurer in
the disposition of any such matters. In addition, BVL may at any time relieve
LTI of its responsibilities under this paragraph as to any other Claim.
7.2 BVL hereby holds harmless and indemnifies LTI against any and all
Claims (as defined in Section 7.1 above) resulting from, arising out of or in
connection with the action, inaction or negligence of BVL in the Supply of
Product. If any Claims shall be made against LTI as to which this
indemnification applies, LTI shall, as soon as reasonably practicable, inform
BVL thereof. At LTI's request, BVL and/or its insurers shall assume direction
and control of the defense against such Claim, including, without limitation,
the settlement thereof at the sole option of BVL or its insurer. LTI may, at
its option and expense, have its own counsel participate in any proceeding which
is under the direction and control of BVL. LTI shall cooperate with BVL and its
insurer in the disposition of any such matters. In
6
<PAGE>
addition, LTI may at any time relieve BVL of its responsibilities under this
paragraph 7.2 as to any other Claim.
ARTICLE 8 - SECRECY
8.1 The confidentiality agreement signed by LTI and BVL, dated
February 4, 1991, and attached hereto as Exhibit 8.l. shall apply to this
agreement and shall form an integral part of it.
8.2 Except as hereinafter provided, information provided by one party
to the other party shall be treated as confidential (hereinafter "Confidential
Information") by the other party. Confidential Information shall not include:
(a) information which was known to the receiving party, prior to
receipt from the delivering party;
(b) information which was in the public domain or generally
known to the trade at the time of receipt from the
delivering party;
(c) information which, other than by breach of this Agreement,
enters the public domain or becomes generally known to the
trade;
(d) information which is disclosed to the receiving party by a
third party who is free to make such disclosure;
(e) information which is independently developed by the
receiving party without use of the delivering party's
Confidential Information; or
8.3 Except as may be required by law, regulatory, administrative or
judicial order, each party's Confidential Information shall be kept confidential
by the other party and shall not be disclosed by such other party other than to
its officers, employees and agents who are engaged in its operations relating to
the Product, who have the need to know such Confidential Information. LTI may
use BVL's Confidential Information only for the purpose of obtaining and
maintaining regulatory approvals and no disclosure may be made outside of LTI's
organization even for this purpose without the prior knowledge and consent of
BVL.
8.4 New techniques, inventions, processes and know-how (hereinafter
"New Development") which are useful in the making, using or selling of the
Product may be developed by BVL during the performance of this Agreement. To
the extent LTI's Confidential Information is the principal basis for any such
New Development, then LTI shall have ownership of such New Development and BVL
**, BVL shall not use such New Development or LTI's Confidential Information to
compete, or assist third parties to compete, directly or indirectly,
7
<PAGE>
with the sale of Product or any other product of LTI. BVL agrees to cooperate
in the filing and prosecution of patent applications for any New Development
owned by LTI, but LTI shall bear all associated expenses. As to any New
Development which may be developed by BVL during the performance of this
Agreement which relates to the manufacture of pharmaceutical products, and does
not involve LTI's Confidential Information. BVL grants LTI a non-transferable,
royalty-free, irrevocable, worldwide, non-exclusive license to make, have made,
use or sell the New Development in connection with Product.
8.5 The provisions of this Article 8 shall survive termination of
this Agreement for any reason.
ARTICLE 9 - TERM
9.1 This Agreement shall become effective on the date first stated
above and, except as otherwise provided herein, shall be in effect for an
initial term of **. So long as this Agreement is in force, it shall be
automatically renewed for additional terms of ** each, unless one party shall
elect to terminate this Agreement by notice thereof to the other party in
writing at least ** prior to expiration of the then existing term.
9.2 Either party may terminate this Agreement for a material breach
by the other party by giving the breaching party written notice, specifying the
breach relied on, and giving the breaching party ** to cure such breach. If the
default has not been cured at the end of the ** period, then, upon notice
thereof to the breaching party by the other, this Agreement shall terminate.
Termination for breach will have no effect on performance obligations or amounts
to be paid which have accrued up to the effective date of such termination.
9.3 In the event of any proceedings, voluntary or involuntary, in
bankruptcy or insolvency, by or against LTI or BVL, or the appointment with or
without the parties' consent of a receiver for either party, the other party
shall be entitled to terminate this Agreement without any liability whatsoever.
Such termination shall not affect any claim for damages available to the
terminating party.
9.4 In the event that, upon termination of this Agreement pursuant to
Sections 9.2 and 9.3 above, or upon a change of circumstances which renders BVL
unable or unwilling to continue its obligations under this Agreement, BVL agrees
to use its best efforts to transfer to LTI or to LTI's agent such technology and
technological know-how as LTI shall reasonably require to ensure that LTI can
continue to produce and /or obtain Product. In the event that LTI terminates
this Agreement, pursuant to Sections 9.2 and 9.3 above, transition will be
conducted in such a manner as to minimize inconvenience to either party.
9.5 **.
8
<PAGE>
ARTICLE 10 - NOTICES
Any and all notices or other communications required or permitted
under this Agreement must be in written form and be deemed to have given upon
receipt of telefax to the notified party (followed by hard copy of documents)
addressed to the party to be notified as listed in the beginning of this
Agreement or to such other address as either party shall have theretofore
specified in a notice to other in the manner herein provided.
Contact Addresses:
Ben Venue Laboratories, Inc. Liposome Technology Inc.
300 Northfield Road 1050 Hamilton Court
Bedford, Ohio 44146 Menlo Park, CA 94025
Attn: Vice President - Marketing Attn: Corporate Secretary
Telefax: (216) 232-2772 (415) 323-9106
ARTICLE 11 - WAIVER
The waiver by either party hereto of any breach or any provision
hereof shall not be deemed to be waiver of any prior or subsequent breach of the
same or other provision of this Agreement or waiver of the provision itself.
ARTICLE 12 - ASSIGNMENT OF AGREEMENT
Except as provided herein, neither this Agreement nor any rights or
obligations hereunder may be assigned by either party hereto without the prior
written consent of the other party, which shall not be unreasonably withheld.
LTI may assign this Agreement to any purchaser or transferee of all, or
substantially all, of LTI's business relating to Product without BVL's prior
written consent, but such assignment shall be subject to BVL's subsequent
written consent, such consent not to be unreasonably withheld. Any subsequent
assignee, purchaser, or transferee shall be bound by the terms of this
Agreement.
ARTICLE 13 - GOVERNING LAW
This Agreement shall be construed, interpreted and applied in
accordance with the laws of the State of Ohio.
ARTICLE 14 - FORCE MAJEURE
9
<PAGE>
BVL shall not be liable for any failure or delay in manufacturing or
delivering Product and LTI shall not be liable for any failure to request
manufacturing or delivery of ADS, when any such failure or delay shall be caused
(directly or indirectly) by fires, flood, earthquakes, accidents, explosions,
sabotage, strikes, or other labor disturbances (regardless of the reasonableness
of the demands of labor) civil commotions, riots, invasions, wars, acts,
restraints, requisitions, regulations, or directions of governmental
authorities, shortages of labor, fuel, power, or raw material, inability to
obtain equipment or supplies, inability to obtain or delays in transportation,
acts of God, or any cause (whether similar or dissimilar to the foregoing)
beyond the reasonable control of LTI or BVL, as the case may be.
ARTICLE 15 - TITLE OF GOODS
Title to and risk of loss of the bulk active drug substance and waste,
in process and in finished Product, shall **.
ARTICLE 16 - REPRESENTATION
BVL shall not make any representation or give any warranty in respect
of LTI other than those authorized in writing by LTI from time to time and LTI
shall not be liable for any unauthorized warranty or representation that may
have been made by BVL and BVL shall incur no liability on behalf of LTI.
ARTICLE 17 - ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between the
parties and is intended as a final expression of their agreement and as a
complete statement of terms and conditions thereof, and shall not be amended
except in writing signed by an authorized representative of each party and
specifically referring to this Agreement. If there is any inconsistency between
this document and any other writings which are referred to or are incorporated
herein, the terms and conditions of this document shall take precedence. This
Agreement supersedes any previous agreements or arrangements between the parties
and any customary practice of the parties at variance with the terms hereof.
ARTICLE 18 - INDEPENDENT CONTRACTOR
Neither party shall have the right to control the activities of the
other in performance of this Agreement and each shall perform as an independent
contractor and nothing herein shall be construed to be inconsistent with that
relationship or status. Under no circumstances shall the employees or agents of
one party be considered employees or agents of
10
<PAGE>
the other. This Agreement shall not constitute, create, or in any way be
interpreted as a joint venture, partnership, or formal business organization of
any kind.
ARTICLE 19 - ARBITRATION
Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by the following procedures: Either
party may send the other written notice identifying the matter in dispute and
involving the procedures of this Article 19. Within fourteen (14) days after
such written notice is given, one or more principals of each party shall meet at
a mutually agreeable location in San Francisco, California, for the purpose of
determining whether they can resolve the dispute themselves by written
agreement, and, if not, whether they can agree upon a third-party impartial
arbitrator (the "Arbitrator") to whom to submit the matter in dispute for final
and binding arbitration. If the parties fail to resolve the dispute by written
agreement or agree on the Arbitrator within such twenty- one (21) day period,
either party may make written application to the Judicial Arbitration and
Mediation Services ("JAMS"), 111 Pine Street, San Francisco, California for the
appointment of a single Arbitrator to resolve the dispute by arbitration and at
the request of JAMS, the parties shall meet with JAMS at its offices or confer
with JAMS by telephone within ten (10) calendar days of such request to discuss
the dispute and the qualifications and experience which each party respectively
believes the Arbitrator should have; provided, however, the selection of the
Arbitrator shall be the exclusive decision of JAMS and shall be made within
thirty (30) days of the written application to JAMS. Within thirty (30) days of
the selection of the Arbitrator, the parties shall meet in San Francisco,
California with such Arbitrator at a place and time designated by the Arbitrator
after consultation with the parties and present their respective positions on
the dispute. Each party shall have no longer than one day to present its
position, the entire proceedings before the Arbitrator shall be on no more than
three consecutive days, and the award shall be made in writing no more than
30 days following the end of the proceeding. Such award shall be a final and
binding determination of the dispute and shall be fully enforceable as an
arbitration award in any court having jurisdiction and venue over the parties.
The prevailing party (as determined by the Arbitrator) shall in addition be
awarded by the Arbitrator such party's own attorneys' fees and expenses in
connection with such proceeding. The nonprevailing party (as determined by the
Arbitrator,) shall pay the Arbitrator's fees and expenses.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives.
LIPOSOME TECHNOLOGY, INC. BEN VENUE LABORATORIES, INC.
By:/s/ Peter V. Leigh By:/s/ Duncan McVean
------------------------------- -------------------------------------
Title:VP Finance Title:Vice President, Contract Marketing
---------------------------- ----------------------------------
11
<PAGE>
Date:June 30, 1993 Date:July 29, 1993
----------------------------- -----------------------------
12
<PAGE>
SCHEDULE A.
PRODUCT DESCRIPTION
Doxil-Registered Trademark-, Stealth-Registered Trademark- liposomal doxorubicin
HCI injection, is a sterile, non pyrogenic, parenteral product for intravenous
infusion. The following table describes the composition of Doxil.
<PAGE>
**
<PAGE>
SCHEDULE 1.1
ADS SPECIFICATIONS
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIPOSOME TECHNOLOGY, INC. DATE EFFECTIVE: SEP 30 1992 CONTROLLED DOCUMENT NO.: 13-407-05
RAW MATERIAL ANALYSIS REPORT -----------------------------------------------------------------------------------
SUPERSEDES: 13-407-04 FORM # LF - 108-05
----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RAW MATERIAL/COMPONENT MATERIAL CODE NO.: LTI CONTROL NO.:
Doxorubicin Hydrochloride, USP D-0052
- ----------------------------------------------------------------------------------------------------------------------------------
MANUFACTURER/SUPPLIER MFG. LOT NO.: EXPIRATION/RE-EVALUATION DATE
- ----------------------------------------------------------------------------------------------------------------------------------
WRITTEN BY DATE APPROVED BY DATE REFERENCE
/s/ Gary Gonsales USP XXII Supplement 1 and
9/28/92 /s/ Les Thomas 9-29-92 21 CFR 450.24
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
ASSAY - TEST METHOD SPECIFICATION ASSAY RESULT DATE ANALYST REFERENCE
- ----------------------------------------------------------------------------------------------------------------------------------
1. Appearance Visual Red-orange powder
2. Identity USP XXII Exhibits peak at same retention
time as, and the chromatogram
compares quantatatively to,
that of the standard prepartion
of USP Doxorubicin
Hydrochloride RS.
3. Crystallinity USP XII [695] Passes Test
4. Depressor USP XXII [101] Pass, at does of 1.0 mL/kg and
Substances a concentration of 1.5 mg/mL.
- ----------------------------------------------------------------------------------------------------------------------------------
PO#: APPROVED MANUFACTURERS OR SUPPLIERS DATA REVIEWED AND VERIFIED
RETEST INTERVAL: Accept mfg. exp. date (1) Meiji Seika (3)
CERT OF Kaisha, LTD. BY:
ANALYTICAL: ___ YES ___ NO Must receive (2) (4) -----------------------
prior to
release
- -----------------------------------------------------------------------------------------------------
DATE:
STORAGE CONDITIONS - SPECIAL REMARKS: ---------------------
Preserve in tight containers. Great care should be taken to prevent SAMPLE QUANTITY: 3.0g
inhaling Doxorubicin Hydrochloride particles and exposing the skin
to it.
USP Doxorubicin Hydrochloride reference standard. Do not dry before RETEST: N/A
using.
</TABLE>
Page 1 of 2
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
ASSAY - TEST METHOD SPECIFICATION ASSAY RESULT DATE ANALYST REFERENCE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5. pH USP XXII [791] Between 4.0 and 5.5, in a
6. Water USP XXII [921] NMT 4.0%
Method 1
7. Chromatographic USP XXII Total impurities NMT 3.0%
Purity Supplement I (peak area normalization)
8. Solvent Residue USP XXII Total acetone and alcohol
NMT 2.5%
9. Assay USP XXII NLT 97.0% and NMT 102.0% of
Supplement I C27H29NO11.HCL, calculated on the
anhydrous, solvent-free basis.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2 of 2
<PAGE>
**
Page 2 of 2
<PAGE>
SCHEDULE 1.2
PRODUCT SPECIFICATIONS
<PAGE>
SCHEDULE 4.1
ESTIMATED REQUIREMENTS
**
Up to end of **
<PAGE>
SCHEDULE 5.1.
PRICE SCHEDULE
**
<PAGE>
SCHEDULE 5.4.
Documents to be Provided with Product
<PAGE>
LTI DOCUMENTATION REQUIREMENTS FOR CONTRACT
MANUFACTURING OF STERILE PRODUCTS
BATCH RECORD INFORMATION --- REQUIRED FOR EVERY LOT
1. Certificate of Compliance ensuring that the product was manufactured per
GMPs
2. Master batch record reviewed and approved by LTI Manufacturing and Quality
Assurance personnel prior to manufacturing of product
3. Completed manufacturing batch record to include the following:
a. Formulation / manufacturing instructions
b. Manufacturing area and equipment clearance / cleaning verification
c. Records for equipment and component preparation (including all
applicable records and charts)
d. Filter / filtration information (pre-, and post-use integrity test
results)
e. Lyophilization record charts, if applicable. Include sterilization
and leak test records.
f. All in-process inspections, sampling and test results
g. Equipment and component sterilization records
h. Visual inspection records and test results
i. Inspection of packaging and labeling area before and after use
j. Yield calculations, and reconciliation data for bulk and finished
product
k. Investigation of yield discrepancies and test failures
l. Records of finished product labeling, and specimen label(s)
m. Completed deviation reports
n. Inspection of finished products for correct labeling
4. Certificates of Analysis (including tests, specifications and results) for
any raw materials or components supplied by the contract manufacturer
<PAGE>
5. Certificate of Analysis for finished product testing performed by the
contract manufacturer or by a contract laboratory for the contract
manufacturer
6. Statement of equivalent lot numbers for raw materials if LTI control
numbers are not directly referenced
7. Environmental monitoring results, or Certificate of Compliance signed by
contractor QA department
8. LTI product lot number to be referenced in the batch record as well as on
all shipping containers, along with quantity per container
SUPPORTING DOCUMENTATION -- AVAILABLE UPON REQUEST / AUDIT
1. Validation data for analytical methods not supplied by LTI
2. Validation data for equipment cleaning or certification that equipment is
dedicated
3. Validation data for major equipment / processes used in manufacturing
4. Procedures for sampling and testing water, steam compressed gases
5. Environmental monitoring procedures and data
6. Standard Operating procedures for manufacturing and testing processes
7. Calibration records for instrumentation used for LTI processes
8. Training records for employees involved with manufacturing, inspection, or
testing of LTI products
9. Other pertinent information related to the manufacture of LTI products
(e.g., aseptic media fill data)
<PAGE>
ATTACHMENT 8.1.
<PAGE>
MUTUAL CONFIDENTIALITY AGREEMENT
This Mutual Confidentiality Agreement (the "Agreement") is entered
into as of January 29, 1991 and is by and between Liposome Technology, Inc.,
1050 Hamilton Court, Menlo Park, California 94025 ("LTI") and Ben Venue Labs,
Inc., 270 Northfield Road, Bedford, Ohio 44146 ("BEN VENUE"). The parties to
this Agreement wish to discuss sterile filtration and lyophilization of Stealth
Doxorubicin ("S-DOX") and Amphotericin B Colloidal Dispersion ("ABCD"), and in
this connection each party may disclose technical data and business information
that are proprietary ("Confidential Information"). Each party is willing to
disclose Confidential Information under the following terms.
1. All disclosures of Confidential Information will be identified in
writing as falling within the terms of this Agreement.
2. Each party agrees to hold in confidence all Confidential
Information disclosed by the other party and limit disclosure within the party
to those individuals with a need-to-know for a period of five (5) years from the
date of disclosure, with the exception of Confidential Information which:
(a) at the time of disclosure is public knowledge or, after
disclosure, becomes public knowledge other than through acts or
omissions of the receiving party; or
(b) is known to the receiving party at the time of disclosure
and was not acquired, directly or indirectly from the disclosing
party; or
(c) was independently developed, as evidenced by written
records, by the receiving party; or
(d) is disclosed at any time to the receiving party from a third
party having the legal right to disclose it.
3. In the event that Confidential Information is or becomes the
subject of a patent application, patent, or copyright under the laws of the
United States or any other country, the receiving party agrees that the
disclosing party will have all the rights and remedies available to it as a
result of said patent applications, patents or copyrights.
4. Each party may disclose Confidential Information to the extent
disclosure is reasonably required in complying with applicable laws or
regulations.
5. Neither party shall use any Confidential Information of the other
party for any purpose other than that contemplated hereunder. This Agreement
does not constitute a license, grant or any other right to use Confidential
Information of the other party other than as specified herein.
<PAGE>
6. Each party agrees to return the other party's written
Confidential Information in the event that the parties decide to terminate the
activities contemplated hereunder.
7. This Agreement shall be construed in accordance with the laws of
the State of California.
IN WITNESS THEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
LIPOSOME TECHNOLOGY, INC. BEN VENUE LABORATORIES, INC.
By:/s/ Carl F. Grove By:/s/ Duncan E. McVean
------------------------------- -------------------------------------
Title: VP R&D PLANNING/ADMIN Title:VICE PRESIDENT
---------------------------- ----------------------------------
Date:January 29, 1991 Date:February 4, 1991
----------------------------- -----------------------------------
<PAGE>
THE SYMBOL "**" IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT THE PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
MANUFACTURING AND SUPPLY CONTRACT
THIS AGREEMENT is made as of this 1st day of January 1993 (the "Effective
Date"), by and between Liposome Technology, Inc. a corporation organized and
existing under the laws of Delaware, with its principal office at 1050 Hamilton
Court, Menlo Park CA 94025, (hereinafter "LTI"), and BEN VENUE LABORATORIES,
INC., a corporation organized and existing under the laws of Pennsylvania, with
principal manufacturing facilities at 300 Northfield Road, Bedford, Ohio 44146
(hereinafter "BVL").
WITNESSETH
WHEREAS, LTI is active in the pharmaceutical business and is the owner of
all rights to certain proprietary technical information, patents and patent
applications relating to the product defined in Schedule A, which is attached
hereto (hereinafter "Product"); and WHEREAS, LTI desires to contract with BVL
for the manufacture and supply of finished parenteral dosage forms of the
Product; and
WHEREAS, BVL possesses the requisite expertise, personnel and facilities
for the manufacture and supply of finished parenteral dosage forms of the
Product and is willing to manufacture and supply such Product to LTI;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and conditions herein contained, LTI and BVL agree as follows:
ARTICLE 1 - DESCRIPTION OF WORK
1.1. LTI shall from time to time at LTI's expense supply BVL with
sufficient bulk quantities of active drug substance (hereinafter ADS) and other
materials specified in Schedule 1.1 for the Product as needed in order to meet
LTI's requirements for research and later for commercial quantities (following
approval of the product by Regulatory Authorities) of Product in finished dosage
form. During the pre-approval process, LTI will diligently proceed toward
securing US Food and Drug Administration and other similar foreign Regulatory
Authorities' (hereinafter individually or collectively "RA") approval, **
1.2. Pursuant to subsequent provisions of this Agreement, BVL shall supply
all, or a principal portion of, LTI requirements for research and commercial
quantities of Product in finished dosage form. As used herein, the terms
"Supply" or "Supplied" shall mean processing, formulating, packaging,
compounding, freeze drying or lyophilizing (if applicable), bottling,
<PAGE>
labeling, testing, handling, procuring of components for or storage of the
Product. Such Product shall meet Specifications as set forth in Schedule 1.2.
(hereinafter "Specifications"). Subject to BVL's prior written consent, such
consent not to be unreasonably withheld, LTI may, from time to time, change
Specifications.
1.3. LTI shall provide BVL with the manufacturing process for Product, and
shall provide assistance to BVL for transfer of manufacturing process technology
to BVL. BVL agrees to provide for selected LTI employees and agents to
participate in research or manufacturing operations at BVL facilities as may be
required to transfer technology or assist in the manufacture of certain lots of
Product. BVL will provide training or other information to LTI employees as
required to qualify them for such operations. BVL shall make known and make
available, upon request, its policies, regulations and rules for employees and
visitors to its facilities and LTI employees and agents will comply with all
such BVL policies and procedures.
1.4. Product labels may indicate that the Product has been manufactured
for LTI by BVL. Except as required by law or federal regulation or to obtain RA,
approval, LTI shall make no other use of BVL's name without BVL's prior written
permission.
ARTICLE 2 - MANUFACTURING FACILITIES
2.1. BVL represents that it has obtained all approvals required by RA for
its manufacturing facilities and that its manufacturing facilities conform, and
will in the future conform to, current Good Manufacturing Practices and all
other applicable laws, regulations and guidelines as established by the RA from
time to time. No material change in BVL's manufacturing or testing procedures
shall be made without prior notice to LTI, except to the extent that such
procedures are specific to the Product, in which instance no change shall be
made without the prior written consent of LTI.
2.2. BVL shall not make any changes or modifications to the manufacturing
process for Product without the prior written agreement of LTI. BVL shall notify
LTI of any deviations from BVL's standard operating procedures for the
manufacturing process for Product during the manufacture of any lot of Product,
such notification to be provided to LTI within ** of said deviation. BVL shall
provide a written report, describing the nature of the deviation and of
corrective actions planned to prevent reoccurrence, such report to be provided
to LTI within ** of said deviation.
2.3. Where such audits, reports and documentation actually or potentially
affect Product; BVL shall, within ** after their occurrence and/or receipt by
BVL, notify LTI of any RA and/or any other governmental or regulatory inspection
or meetings, and shall provide to LTI a copy of any written Form 483 or any
other similar governmental or regulatory citation or any RA and/or any other
governmental or regulatory warning letter, pertaining to BVL facilities, or
procedures. LTI reserves the right to review BVL's response to citations
regarding Product or its manufacture prior to BVL's submission of any response
to RA and/or any other governmental or regulatory authority. BVL shall provide
LTI copies of any and all written
2
<PAGE>
responses to such Form 483's, or warnings, or other reports of meetings or
audits, as well as follow up plans and actions within ** after their transmittal
or issuance. Except as required by law, LTI will hold such notifications,
citations, audits, and responses in confidence.
2.4. BVL agrees to permit LTI to cite BVL's Drug Master File and provide
LTI with copies of, or access to, such documents and reports regarding BVL's
manufacturing facility as LTI may be required to include in submissions to RA to
obtain approvals for Product.
ARTICLE 3 - SECOND SOURCE
3.1. LTI may qualify a second source of supply other than BVL and **
3.2. BVL will not produce any liposome- or lipid-based products which
compete with Product ("Competing Product") without LTI's prior written approval.
**
ARTICLE 4 - VOLUMES
4.1. LTI's estimates of its requirements for the period following RA
approval of the Product are set forth in Schedule 4.1. It is expressly
understood that the quantities shown in Schedule 4.1. are estimates only and are
in no way binding on LTI.
4.2. On the Effective Date, or as soon as practicable thereafter, LTI
shall provide BVL with a firm purchase order for the quantity of product
required for delivery prior to ** On or before ** LTI shall provide BVL with a
forecast by ** of its requirements for the Product for the ** The first ** of
such forecast, ** shall represent a binding commitment of LTI to purchase and
BVL to supply such forecasted amount. On or before ** and thereafter on or
before the last day of each ** LTI shall provide BVL with an updated forecast of
its ** requirements for Product for the ** commencing ** after the due date for
such forecast. The first ** of each forecast so provided shall likewise
represent a binding commitment on LTI to buy and BVL to supply such forecasted
quantity of Product in a timely manner.
4.3. LTI will submit purchase orders in writing. Purchase orders may be on
LTI's purchase order form, provided that any provision of any such purchase
order form which is in addition to or inconsistent with any provision of this
Agreement shall be ineffective and not binding on either party unless
specifically agreed to in writing by an authorized representative of each party.
4.4. In any one ** (as defined above), BVL agrees to supply Product for
all purchase orders placed by LTI hereunder that are between ** of the
applicable binding forecast for such ** submitted by LTI. BVL shall use
reasonable efforts to supply Product ordered in excess or two hundred percent
(200%) of such binding forecast.
4.5. **
3
<PAGE>
ARTICLE 5 - PRICE-PAYMENT
5.1. The prices to be paid by LTI for quantities of Product purchased
pursuant to Article 4 is specified in Schedule 5.1. subject to adjustment on **
by BVL for the next succeeding year. BVL shall notify LTI of price adjustments
at least ** in advance of each anniversary of the Effective Date of this
Agreement.
5.2. In the event any of the prices for Product specified by BVL in a
notice to LTI pursuant to Section 5.1 represents an increase of more than the
percent change in ** over the price of the Product charged during the
immediately preceding ** period, then, **
5.3. All prices of Product shall be on the basis of F.O.B. shipping dock
at BVL's plant in Bedford, Ohio.
5.4. The purchase price for Product shall be paid to BVL no later than **
after the date of BVL's invoice to LTI. BVL will issue an invoice at such time
as the ** such documents to be shipped by BVL no later than ** from date of
manufacture (defined as sealing date). In the event of nonpayment of balances
within ** BVL shall be entitled to assess a late payment charge equal to ** per
month of the unpaid balance.
5.5. LTI will not be required to pay BVL for any Product which does not
conform to Specifications except that any production and testing procedure which
has not been fully developed and validated may not be cited by LTI as a basis
for nonconformance.
ARTICLE 6 - QUALITY
6.1. LTI shall have the right, but not the obligation, to inspect BVL's
quality control procedures and records and to obtain specimens of Product from
BVL's production for analysis to confirm quality. LTI employees may perform
inspections of BVL's manufacturing facilities. LTI employees who inspect BVL's
facilities shall comply with BVL regulations and rules and LTI assumes all risk
of loss and shall indemnify, defend and hold BVL harmless from all liability
resulting from the presence of LTI employees at BVL facilities except when due
to negligence or willful misconduct on the part of BVL and its employees.
6.2. LTI or its vendor shall supply BVL with a copy of its protocol of
analysis for the active drug substance (hereinafter "ADS") of the Product no
later than the date of delivery of the ADS to BVL. LTI and BVL agree to supply
the materials with specifications as designated in Schedule 1.1.
6.3. The ADS may be delivered directly from LTI's vendor to BVL at ** With
each shipment LTI shall provide or require the vendor to supply BVL with a
completed copy of the vendor's protocol of analysis for ADS containing test
results. BVL shall undertake testing of each shipment for compliance with the
Specifications. If the ADS does not meet Specifications, BVL will immediately
inform LTI, and BVL shall be excused from its obligation to supply Product to
LTI until ADS meeting approved Specifications is delivered to BVL. Upon such
4
<PAGE>
delivery, BVL shall have a reasonable time in which to supply Product to LTI. To
the extent BVL has existing stock of ADS which conforms to the approved
Specifications, nothing in the foregoing shall relieve BVL of its obligation to
Supply to LTI Product deriving from such conforming ADS.
6.4. For each batch of Product produced by BVL, BVL shall undertake testing
for compliance with the Specifications. Upon completion of testing, BVL shall
submit to LTI a protocol of analysis listing testing results and all agreed upon
records (including, but not limited to, the records identified on Schedule 6.2.
attached hereto) for each lot of Product produced. Subject to BVL's prior
consent, such consent not to be unreasonably withheld, LTI may, from time to
time, change the records to be provided to LTI by BVL for each lot of Product
produced.
6.5. LTI Shall have ** upon receipt of shipment to inspect the Product to
determine whether or not it conforms to the Specifications. LTI shall promptly
give BVL written notice of any aspect in which Product fails to conform to
Specifications. If LTI fails to notify BVL of any nonconformity within such **
period, LTI shall be deemed to have accepted the Product as shipped and, subject
to BVL at all times storing such Product in conformance with specifications, all
Product of the same batch remaining at BVL. If LTI notifies BVL of any
non-conformity, payment of the invoice for the non conforming batch shall be
held in abeyance until the dispute is resolved, unless the reason for the
non-conformance is due to problems encountered by BVL through use of
non-validated Production or Testing Procedures.
6.6. BVL shall replace Product which fails to meet applicable
specifications within ** In the event that BVL has insufficient inventory of ADS
to manufacture all or part of the replacement Product required, to such ** day
period shall be added such number of days as LTI and/or its vendor shall require
to deliver the quantity of ADS that BVL shall reasonably require to manufacture
such replacement Product.
6.7. Pursuant to paragraph 6.5 herein, if LTI shall claim that any lot(s)
of Product fail(s) to meet the Specifications because of BVL's failure to carry
out any of its obligations under this Agreement, LTI and BVL will cooperate to
investigate the source of the discrepancy. Additional testing required will be
carried out by BVL and LTI. Results of such testing will be evaluated jointly
and further action shall be negotiated. ** If LTI cannot justify any decision
regarding such a batch BVL may seek to resolve such controversy by arbitration
as specified in Section 18. In the event that ** BVL agrees to be responsible
for any loss of raw materials supplied by LTI up to ** that fails. In addition,
BVL will be responsible for all manufacturing costs incurred.
6.8. LTI shall supply BVL with a Material Safety Data Sheet for the ADS
and other materials supplied by LTI. BVL and LTI shall mutually develop safety
procedures for the handling and manufacture of the Product and treatment or
disposal of wastes relating thereto that comply with all federal and state
environmental and occupational safety and health requirements, and such
procedures shall be included in a separate document and shall be followed by BVL
in performing services under this Agreement. BVL shall, in accordance with LTI's
instructions,
5
<PAGE>
ship rejected ADS and/or rejected Product to such destination as LTI shall
designate in writing. BVL shall not dispose of rejects or waste without prior
consent from LTI. **
6.9. In the event of the rejection of a batch of Product, BVL will cease
further production of Product until such time as the results of the
investigation has been communicated in writing to LTI, and LTI has confirmed the
corrective action. **
ARTICLE 7 - INDEMNIFICATION
7.1. LTI hereby holds harmless and indemnifies BVL against any and all
claims, losses, liabilities, lawsuits, proceedings, costs and expenses,
including, without limitation, reasonable attorneys' fees, and the cost of
recalls, (hereinafter collectively referred to as "Claim" or "Claims") resulting
from, arising out of or in connection with injuries and/or death to humans
resulting from, arising out of or in connection with the injection or other use
of the Product, including, without limitation, Claims based on negligence,
warranty, strict liability or any other theory of product liability or violation
of any applicable laws or regulations except to the extent that such injuries or
violations were the result of BVL's action, inaction or negligence in the Supply
of Product. If any Claim shall be made against BVL as to which this
indemnification applies, BVL shall, as soon as reasonably practicable, inform
LTI of such Claim and BVL shall not take any step nor conduct any legal
proceeding before consulting and obtaining LTI's written consent thereto. At
BVL's request, LTI and/or its insurers shall assume direction and control of the
defense against such claim, including, without limitation, the settlement
thereof at the sole option of LTI or its insurer. BVL may, at its option and
expense, have its own counsel participate in any proceeding which is under the
direction and control of LTI. BVL shall cooperate with LTI and its insurer in
the disposition of any such matters. In addition, BVL may at any time relieve
LTI of its responsibilities under this paragraph as to any other Claim.
7.2. BVL hereby holds harmless and indemnifies LTI against any and all
Claims (as defined in Section 7.1 above) resulting from, arising out of or in
connection with the action, inaction or negligence of BVL in the Supply of
Product. If any Claims shall be made against LTI as to which this
indemnification applies, LTI shall, as soon as reasonably practicable, inform
BVL thereof. At LTI's request, BVL and/or its insurers shall assume direction
and control of the defense against such Claim, including, without limitation,
the settlement thereof at the sole option of BVL or its insurer. LTI may, at its
option and expense, have its own counsel participate in any proceeding which is
under the direction and control of BVL. LTI shall cooperate with BVL and its
insurer in the disposition of any such matters. In addition, LTI may at any time
relieve BVL of its responsibilities under this paragraph 7.2 as to any other
Claim.
ARTICLE 8 - SECRECY
8.1. The confidentiality agreement signed by LTI and BVL, dated February
4, 1991, and attached hereto as Exhibit 8.1. shall apply to this agreement and
shall form an integral part of it.
6
<PAGE>
8.2. Except as hereinafter provided, information provided by one party to
the other party shall be treated as confidential (hereinafter "Confidential
Information") by the other party. Confidential Information shall not include:
(a) information which was known to the receiving party, prior to
receipt from the delivering party;
(b) information which was in the public domain or generally known to
the trade at the time of receipt from the delivering party;
(c) information which, other than by breach of this Agreement, enters
the public domain or becomes generally known to the trade;
(d) information which is disclosed to the receiving party by a third
party who is free to make such disclosure;
(e) information which is independently developed by the receiving
party without use of the delivering party's Confidential
Information; or
8.3. Except as may be required by law, regulatory, administrative or
judicial order, each party's Confidential Information shall be kept confidential
by the other party and shall not be disclosed by such other party other than to
its officers, employees and agents who are engaged in its operations relating to
the Product, who have the need to know such Confidential Information. LTI may
use BVL's Confidential Information only for the purpose of obtaining and
maintaining regulatory approvals and no disclosure may be made outside of LTI's
organization even for this purpose without the prior knowledge and consent of
BVL.
8.4. New techniques, inventions, processes and know-how (hereinafter "New
Development") which are useful in the making, using or selling of the Product
may be developed by BVL during the performance of this Agreement. To the extent
LTI's Confidential Information is the principal basis for any such New
Development, then LTI shall have ownership of such New Development and BVL **
BVL shall not use such New Development or LTI's Confidential Information to
compete, or assist third parties to compete, directly or indirectly, with the
sale of Product or any other product of LTI. BVL agrees to cooperate in the
filing and prosecution of patent applications for any New Development owned by
LTI, but LTI shall bear all associated expenses. As to any New Development which
may be developed by BVL during the performance of this Agreement which relates
to the manufacture of pharmaceutical products, and does not involve LTI's
Confidential Information. BVL grants LTI a non-transferable, royalty-free,
irrevocable, worldwide, non-exclusive license to make, have made, use or sell
the New Development in connection with Product.
8.5. The provisions of this Article 8 shall survive termination of this
Agreement for any reason.
7
<PAGE>
ARTICLE 9 - TERM
9.1. This Agreement shall become effective on the date first stated above
and, except as otherwise provided herein, shall be in effect for an initial term
of ** So long as this Agreement is in force, it shall be automatically renewed
for additional terms of ** each, unless one party shall elect to terminate this
Agreement by notice thereof to the other party in writing at least ** prior to
expiration of the then existing term.
9.2. Either party may terminate this Agreement for a material breach by
the other party by giving the breaching party written notice, specifying the
breach relied on, and giving the breaching party ** to cure such breach. If the
default has not been cured at the end of the ** period, then, upon notice
thereof to the breaching party by the other, this Agreement shall terminate.
Termination for breach will have no effect on performance obligations or amounts
to be paid which have accrued up to the effective date of such termination.
9.3. In the event of any proceedings, voluntary or involuntary, in
bankruptcy or insolvency, by or against LTI or BVL, or the appointment with or
without the parties' consent of a receiver for either party, the other party
shall be entitled to terminate this Agreement without any liability whatsoever.
Such termination shall not affect any claim for damages available to the
terminating party.
9.4. In the event that, upon termination of this Agreement pursuant to
Sections 9.2 and 9.3 above, or upon a change of circumstances which renders BVL
unable or unwilling to continue its obligations under this Agreement, BVL agrees
to use its best efforts to transfer to LTI or to LTI's agent such technology and
technological know-how as LTI shall reasonably require to ensure that LTI can
continue to produce and/or obtain Product. In the event that LTI terminates this
Agreement, pursuant to Sections 9.2 and 9.3 above, transition will be conducted
in such a manner as to minimize inconvenience to either party.
9.5. **
ARTICLE 10 - NOTICES
Any and all notices or other communications required or permitted under
this Agreement must be in written form and be deemed to have given upon receipt
of telefax to the notified party (followed by hard copy of documents) addressed
to the party to be notified as listed in the beginning of this Agreement or to
such other address as either party shall have theretofore specified in a notice
to other in the manner herein provided.
Contact Addresses:
Ben Venue Laboratories, Inc. Liposome Technology Inc.
300 Northfield Road 1050 Hamilton Court
Bedford, Ohio 44146 Menlo Park, CA 94025
8
<PAGE>
Attn: Vice President - Marketing Attn: Corporate Secretary
Telefax: (216) 232-2772 (415) 323-9106
ARTICLE 11 - WAIVER
The waiver by either party hereto of any breach or any provision hereof
shall not be deemed to be waiver of any prior or subsequent breach of the same
or other provision of this Agreement or waiver of the provision itself.
ARTICLE 12 - ASSIGNMENT OF AGREEMENT
Except as provided herein, neither this Agreement nor any rights or
obligations hereunder may be assigned by either party hereto without the prior
written consent of the other party, which shall not be unreasonably withheld.
LTI may assign this Agreement to any purchaser or transferee of all, or
substantially all, of LTI's business relating to Product without BVL's prior
written consent, but such assignment shall be subject to BVL's subsequent
written consent, such consent not to be unreasonably withheld. Any subsequent
assignee, purchaser, or transferee shall be bound by the terms of this
Agreement.
ARTICLE 13 - GOVERNING LAW
This Agreement shall be construed, interpreted and applied in accordance
with the laws of the State of Ohio.
ARTICLE 14 - FORCE MAJEURE
BVL shall not be liable for any failure or delay in manufacturing or
delivering Product and LTI shall not be liable for any failure to request
manufacturing or delivery of ADS, when any such failure or delay shall be caused
(directly or indirectly) by fires, flood, earthquakes, accidents, explosions,
sabotage, strikes, or other labor disturbances (regardless of the reasonableness
of the demands of labor) civil commotions, riots, invasions, wars, acts,
restraints, requisitions, regulations, or directions of governmental
authorities, shortages of labor, fuel, power, or raw material, inability to
obtain equipment or supplies, inability to obtain or delays in transportation,
acts of God, or any cause (whether similar or dissimilar to the foregoing)
beyond the reasonable control of LTI or BVL, as the case may be.
ARTICLE 15 - TITLE OF GOODS
Title to and risk of loss of the bulk active drug substance and waste, in
process and in finished Product, shall **
9
<PAGE>
ARTICLE 16 - REPRESENTATION
BVL shall not make any representation or give any warranty in respect of
LTI other than those authorized in writing by LTI from time to time and LTI
shall not be liable for any unauthorized warranty or representation that may
have been made by BVL and BVL shall incur no liability on behalf of LTI.
ARTICLE 17 - ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between the parties
and is intended as a final expression of their agreement and as a complete
statement of terms and conditions thereof, and shall not be amended except in
writing signed by an authorized representative of each party and specifically
referring to this Agreement. If there is any inconsistency between this document
and any other writings which are referred to or are incorporated herein, the
terms and conditions of this document shall take precedence. This Agreement
supersedes any previous agreements or arrangements between the parties and any
customary practice of the parties at variance with the terms hereof.
ARTICLE 18 - INDEPENDENT CONTRACTOR
Neither party shall have the right to control the activities of the other
in performance of this Agreement and each shall perform as an independent
contractor and nothing herein shall be construed to be inconsistent with that
relationship or status. Under no circumstances shall the employees or agents of
one party be considered employees or agents of the other. This Agreement shall
not constitute, create, or in any way be interpreted as a joint venture,
partnership, or formal business organization of any kind.
ARTICLE 19 - ARBITRATION
Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by the following procedures: Either party
may send the other written notice identifying the matter in dispute and
involving the procedures of this Article 19. Within fourteen (14) days after
such written notice is given, one or more principals of each party shall meet at
a mutually agreeable location in San Francisco, California, for the purpose of
determining whether they can resolve the dispute themselves by written
agreement, and, if not, whether they can agree upon a third-party impartial
arbitrator (the "Arbitrator") to whom to submit the matter in dispute for final
and binding arbitration. If the parties fail to resolve the dispute by written
agreement or agree on the Arbitrator within such twenty-one (21) day period,
either party may make written application to the Judicial Arbitration and
Mediation Services ("JAMS"), 111 Pine Street, San Francisco, California for the
appointment of a single Arbitrator to resolve the dispute by arbitration and at
the request of JAMS, the parties shall meet with JAMS at its offices or confer
with JAMS by telephone within ten (10) calendar days of such request to discuss
the dispute and the qualifications and experience which each party respectively
10
<PAGE>
believes the Arbitrator should have; provided, however, the selection of the
Arbitrator shall be the exclusive decision of JAMS and shall be made within
thirty (30) days of the written application to JAMS. Within thirty (30) days of
the selection of the Arbitrator, the parties shall meet in San Francisco,
California with such Arbitrator at a place and time designated by the Arbitrator
after consultation with the parties and present their respective positions on
the dispute. Each party shall have no longer than one day to present its
position, the entire proceedings before the Arbitrator shall be on no more than
three consecutive days, and the award shall be made in writing no more than 30
days following the end of the proceeding. Such award shall be a final and
binding determination of the dispute and shall be fully enforceable as an
arbitration award in any court having jurisdiction and venue over the parties.
The prevailing party (as determined by the Arbitrator) shall in addition be
awarded by the Arbitrator such party's own attorneys' fees and expenses in
connection with such proceeding. The nonprevailing party (as determined by the
Arbitrator,) shall pay the Arbitrator's fees and expenses.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives.
LIPOSOME TECHNOLOGY, INC. BEN VENUE LABORATORIES, INC.
By: \s\ Peter V. Leigh By: /s/ Duncan E. McVean
------------------------------- ---------------------------
Title: VP Finance Title: Vice-President
----------------------------- ------------------------
Date: June 30, 1993 Date: July 29, 1993
----------------------------- ------------------------
11
<PAGE>
SCHEDULE A.
PRODUCT DESCRIPTION
Amphocil-TM-, also known as Amphotericin B Colloidal Dispersion or ABCD, is a
sterile, nonpyrogenic, lyophilized parenteral product for intravenous infusion.
It is supplied as either 50 mg or 100 mg of amphotericin BP per vial. It is
readily reconstituted with Water for Injection to an amphotericin concentration
of 5 mg/mL. Amphocil is further diluted with 5% Dextrose for Injection prior to
infusion. Amphocil is a near 1:1 molar complex of amphotericin BP and sodium
cholesteryl sulphate. **
<PAGE>
**
<PAGE>
SCHEDULE 1.1.
ADS SPECIFICATIONS
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
LIPOSOME TECHNOLOGY, INC. DATE EFFECTIVE: DEC 03 1992 CONTROLLED DOCUMENT NO.: 13-404-09
------------------------------------- --------------------------------------------
RAW MATERIAL ANALYSIS REPORT
SUPERSEDES: 13-404-08 FORM # LF - 108-07
--------------------------------------- ------------------------------------- --------------------------------------------
RAW MATERIAL/COMPONENT MATERIAL CODE NO.: LTI CONTROL NO.:
Amphotericin B, USP A-0030
--------------------------------------- ------------------------------------- --------------------------------------------
MANUFACTURER/SUPPLIER MFG. LOT NO: EXPIRATION/RE-EVALUATION DATE
--------------------------------------- ------------------------------------- --------------------------------------------
WRITTEN BY DATE APPROVED BY DATE REFERENCE
/s/ Gary Gonsales 12/1/92 Andrew Campbell 12-03-92 USP XXII
21 CFR 449, 4a
--------------------------------------- ------------------------------------------------- -------------------------------
ASSAY - TEST METHOD SPECIFICATION ASSAY RESULT DATE ANALYST REFERENCE
------- ------------------- ----------- ------------------------------ ------------------ -------- -------- -------------
1.* Appearance Visual Bright Yellow Powder
2. Identity USP XXII A. Ultraviolet absorption
spectrum exhibits ma
maxima in the rage of 240
nm to 320 nm at the same
wavelengths as that of
the Amphotericin B
standard preparation,
except that an extra peak
may occur at about 304 nm.
B. Ultraviolet and visible
absorption spectrum
exhibits maxima in the
range of 320 nm to 400 nm
at the same wavelengths
as that of a similar
preparation of the
Amphoericin B standard
preparation.
------- ------------------- ----------- ------------------------------------------------- -------- -------- -------------
PO#: MANUFACTURERS OR SUPPLIERS REVIEWED AND VERIFIED
RETEST INTERVAL: 1 year (1) A/S Dumex (3)
CERT OF BY: --------------------
ANALYTICAL: ___ YES ___ NO (2) (4)
-------------------------------------- -----------------------------------------------------
DATE:-------------------
STORAGE CONDITIONS - SPECIAL REMARKS: SAMPLE QUANTITY: 10
Preserve in well-sealed, light-resistant containers at 2-8DEG.C Chemical 10g Pyrogen
(for Parenteral Use) 10g Microbial Burden
Ref. Std. USP Amphotericin B and USP Nystatin RETEST: 5g Chemical
*RETEST 10g Microbial
--------------------------------------------------------------------- ----------------------
Page 1 of 2
<PAGE>
ASSAY - TEST METHOD SPECIFICATION ASSAY RESULT DATE ANALYST REFERENCE
------- ------------------- ----------- ------------------------------ ------------------ -------- -------- -------------
3. Loss on Drying USP XXII [731] NMT 5.0% (3 hrs. @ 60DEG.C)
4. Residue on USP XXII NMT 0.5%
Ignition [281]
5.* Amphotericin A USP XXII NMT 5% calculated on the
dried basis
6.* Assay USP XXII NLT 750 ug of C47h73NO per
mg, calculated on the dry
(Antibiotic basis
Microbial
Assays
[81])
7. Rabbit Pyrogen USP XXII Passes test, the test dose
[151] being 1.0 mL/kg of a 10
mg/mL solution
------- ------------------- ----------- ------------------------------ ------------------ -------- -------- -------------
</TABLE>
Page 2 of 2
<PAGE>
SCHEDULE 1.2
PRODUCT SPECIFICATIONS
<PAGE>
SCHEDULE 4.1
ESTIMATED REQUIREMENTS
**
<PAGE>
SCHEDULE 5.1.
PRICE SCHEDULE
**
<PAGE>
SCHEDULE 5.4.
Documents to be Provided with Product
<PAGE>
LTI DOCUMENTATION REQUIREMENTS FOR CONTRACT
MANUFACTURING OF STERILE PRODUCTS
BATCH RECORD INFORMATION --- REQUIRED FOR EVERY LOT
1. Certificate of Compliance ensuring that the product was manufactured per
GMPs
2. Master batch record reviewed and approved by LTI Manufacturing and Quality
Assurance personnel prior to manufacturing of product
3. Completed manufacturing batch record to include the following:
a. Formulation / manufacturing instructions
b. Manufacturing area and equipment clearance / cleaning verification
c. Records for equipment and component preparation (including all
applicable records and charts)
d. Filter / filtration information (pre-, and post-use integrity test
results)
e. Lyophilization record charts, if applicable. Include sterilization and
leak test records.
f. All in-process inspections, sampling and test results
g. Equipment and component sterilization records
h. Visual inspection records and test results
i. Inspection of packaging and labeling area before and after use
j. Yield calculations, and reconciliation data for bulk and finished
product
k. Investigation of yield discrepancies and test failures
l. Records of finished product labeling, and specimen label(s)
m. Completed deviation reports
n. Inspection of finished products for correct labeling
4. Certificates of Analysis (including tests, specifications and results) for
any raw materials or components supplied by the contract manufacturer
<PAGE>
5. Certificate of Analysis for finished product testing performed by the
contract manufacturer or by a contract laboratory for the contract
manufacturer
6. Statement of equivalent lot numbers for raw materials if LTI control
numbers are not directly referenced
7. Environmental monitoring results, or Certificate of Compliance signed by
contractor QA department
8. LTI product lot number to be referenced in the batch record as well as on
all shipping containers, along with quantity per container
SUPPORTING DOCUMENTATION -- AVAILABLE UPON REQUEST / AUDIT
1. Validation data for analytical methods not supplied by LTI
2. Validation data for equipment cleaning or certification that equipment is
dedicated
3. Validation data for major equipment / processes used in manufacturing
4. Procedures for sampling and testing water, steam compressed gases
5. Environmental monitoring procedures and data
6. Standard Operating procedures for manufacturing and testing processes
7. Calibration records for instrumentation used for LTI processes
8. Training records for employees involved with manufacturing, inspection, or
testing of LTI products
9. Other pertinent information related to the manufacture of LTI products
(e.g., aseptic media fill data)
<PAGE>
ATTACHMENT 8.1.
<PAGE>
MUTUAL CONFIDENTIALITY AGREEMENT
This Mutual Confidentiality Agreement (the "Agreement") is entered
into as of January 29, 1991 and is by and between Liposome Technology, Inc.,
1050 Hamilton Court, Menlo Park, California 94025 ("LTI") and Ben Venue Labs,
Inc., 270 Northfield Road, Bedford, Ohio 44146 ("BEN VENUE"). The parties to
this Agreement wish to discuss sterile filtration and lyophilization of Stealth
Doxorubicin ("S-DOX") and Amphotericin B Colloidal Dispersion ("ABCD"), and in
this connection each party may disclose technical data and business information
that are proprietary ("Confidential Information"). Each party is willing to
disclose Confidential Information under the following terms.
1. All disclosures of Confidential Information will be identified in
writing as falling within the terms of this Agreement.
2. Each party agrees to hold in confidence all Confidential
Information disclosed by the other party and limit disclosure within the party
to those individuals with a need-to-know for a period of five (5) years from the
date of disclosure, with the exception of Confidential Information which:
(a) at the time of disclosure is public knowledge or, after
disclosure, becomes public knowledge other than through acts or
omissions of the receiving party; or
(b) is known to the receiving party at the time of disclosure and
was not acquired, directly or indirectly from the disclosing party; or
(c) was independently developed, as evidenced by written records,
by the receiving party; or
(d) is disclosed at any time to the receiving party from a third
party having the legal right to disclose it.
3. In the event that Confidential Information is or becomes the
subject of a patent application, patent, or copyright under the laws of the
United States or any other country, the receiving party agrees that the
disclosing party will have all the rights and remedies available to it as a
result of said patent applications, patents or copyrights.
4. Each party may disclose Confidential Information to the extent
disclosure is reasonably required in complying with applicable laws or
regulations.
5. Neither party shall use any Confidential Information of the other
party for any purpose other than that contemplated hereunder. This Agreement
does not constitute a license, grant or any other right to use Confidential
Information of the other party other than as specified herein.
<PAGE>
6. Each party agrees to return the other party's written
Confidential Information in the event that the parties decide to terminate the
activities contemplated hereunder.
7. This Agreement shall be construed in accordance with the laws of
the State of California.
IN WITNESS THEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
LIPOSOME TECHNOLOGY, INC. BEN VENUE LABORATORIES, INC.
By:\s\ Carl F. Grove By:\s\ Duncan E. McVean
-------------------------------- ------------------------------
Title:VP R&D Planning/Admin Title:Vice President
---------------------------- ----------------------------
Date:January 29, 1991 Date:February 4, 1991
----------------------------- ----------------------------
<PAGE>
THE SYMBOL "**" IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT THE PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
SUPPLY AGREEMENT
This SUPPLY AGREEMENT ("Agreement") is made and entered into this
twenty-seventh day of September 1994 ("Effective Date"), by and among LIPOSOME
TECHNOLOGY, INC., a Delaware corporation with offices at 960 Hamilton Court,
Menlo Park, California 94025 USA ("LTI"), and MEIJI SEIKA PHARMA INTERNATIONAL
LTD., a Japanese corporation with an office at 4-16 Kybashi 2-chome, Chuo-ku,
Tokyo 104 Japan, hereinafter referred to as ("SUPPLIER").
WHEREAS, LTI wishes to purchase from SUPPLIER the compound identified
in Schedule A (the "Product"); and
WHEREAS, Product has been developed and is being manufactured by MEIJI
SEIKA KAISHA, LTD. ("MEIJI SEIKA"), a parent company of SUPPLIER, and SUPPLIER
has obtained from MEIJI SEIKA the right to sell Product in countries outside
Japan: and
WHEREAS, SUPPLIER is willing to sell Product to LTI under the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1 - PURCHASE AND SALE
1.1 PURCHASE: During the term of this Agreement, LTI agrees to purchase such
quantities of Product as LTI shall order from SUPPLIER and SUPPLIER shall
sell such quantities to LTI, in accordance with the terms of this
Agreement.
1.2 PRICE: SUPPLIER shall sell product to LTI in accordance with the prices
listed in Schedule B. Either party may request a renegotiation of the
prices then applied, if economic conditions including but not limited to
fluctuations of currency rates, cost of manufacture and competition in the
market as being valid reasons for requesting such renegotiation, will
change significantly during the term of this Agreement. It is further
understood that the parties will use their best efforts in finding a
reasonable price structure.
1.3 ORDERS AND FORECASTS: On the Effective Date, or in any event no later than
the last day of the current calendar month. LTI shall provide SUPPLIER
with a forecast of its
<PAGE>
requirements for Product for the twelve (12) months commencing on October
1, 1994. The first three (3) months of such forecast shall reflect LTI's
then existing and outstanding purchase orders for Product, which together
with the fourth month of such forecast shall represent a binding commitment
of LTI to buy and SUPPLIER to sell such forecasted amount. On or before
the last day of each subsequent calendar month, LTI shall provide a 12
month forecast by month of its requirements for Product. The first three
(3) months of such forecast shall reflect LTI's then existing and
outstanding orders for Product, which together with fourth month of such
new 12 month forecast shall represent a binding commitment of LTI to buy
and SUPPLIER to sell such forecasted quantity of Product.
By way of example only, if the Effective Date is September 27, 1994, then
on or before September 30, 1994, LTI will provide a forecast for the twelve
months beginning October 1, 1994, and ending September 30, 1995. The
forecast for the period beginning October 1, 1994, and ending on January
31, 1995, shall represent a binding commitment. On or before October 31,
1994, LTI will provide a new 12 month forecast, for the period beginning
November 1, 1994, and ending on October 31, 1995. The first three months
of the new forecast, that is for the months of November, December and
January, will be identical to the second, third and fourth months of the
prior forecast. The fourth month, February, will represent a new binding
commitment. Similarly, the fourth month of each subsequent monthly
forecast will represent a new binding commitment.
1.4 SUPPLY AND PURCHASE ORDERS: LTI will submit purchase orders to SUPPLIER in
writing. Purchase orders may be on LTI's purchase order form, provided
that any provision of any such purchase order form that is inconsistent
with any provision of this Agreement shall be ineffective and not binding
on either party unless specifically agreed to in writing by an authorized
representative of each party. SUPPLIER agrees to supply Product for all
purchase orders placed by LTI hereunder that are between one hundred
percent (100%) and one hundred and twenty percent (120%) of the applicable
forecast submitted by LTI. SUPPLIER shall use reasonable efforts to supply
Product ordered in excess of one hundred and twenty percent (120%) of such
binding forecast. All purchase orders shall be submitted to SUPPLIER not
less than (60) days before shipment date of Product.
1.5 DELIVERY: SUPPLIER shall deliver Product by air freight to LTI, DDU (1990)
Incoterms, San Francisco or European Airport to be designated by LTI.
Title to product shall pass to LTI at San Francisco Airport or at such
European Airport.
During the initial launch period, covering the first twelve (12) months
after market introduction, SUPPLIER shall use its best efforts to ship
Product with 15 months unexpired approved shelf life as of the date of
shipment. At all times Product delivered shall have at least ten (10)
months unexpired shelf life as of the date of shipment.
1.6 PAYMENT: Payment terms for all shipments shall be within sixty (60) days
from the date of airway bill of shipment. Payment shall be made by
telegraphic transfer to the account
2
<PAGE>
of SUPPLIER by LTI in Japanese Yen. In the event that, with respect to any
invoice, LTI is in default of the payment terms set forth above, interest
shall accrue on the past due amount owed to SUPPLIER at the prime rate as
quoted by Bank of Tokyo, on the day the payment is overdue, plus two
percent (2%) per annum from the due date, until paid.
1.7 SECOND SOURCE: LTI may qualify a second source of Product (the "Second
Source") and secure Product from that Second Source for amounts in excess
of the volumes specified in Section 1.4. Unless SUPPLIER cannot meet LTI's
orders for two (2) consecutive quarters, LTI shall not make the Second
Source its principal supplier of Product. To enable SUPPLIER to monitor
this Provision LTI shall submit, for each calendar quarter, a quarterly
report to SUPPLIER showing the volume, but not the price, of the orders
placed by LTI to such Second Source.
1.8 USE OF PRODUCT: Product supplied by SUPPLIER to LTI shall only be used by
LTI or LTI's agents for the purpose of developing, manufacturing, testing,
registering and selling liposome and lipid-based formulations and shall not
be used for non-liposome or non-lipid based formulations. LTI shall not
resell nor supply Product to any third party without written consent of
SUPPLIER.
ARTICLE 2 - PRODUCT SPECIFICATIONS AND ACCEPTANCE OF PRODUCT
2.1 QUALITY OF PRODUCT STANDARDS: Product shall meet all the specifications set
forth in Schedule C ("Specifications"). The Specifications may be revised
from time to time if required by any authorized regulatory agency or as
otherwise agreed upon in writing by the parties, such agreement not to be
unreasonably withheld.
2.2 ACCEPTANCE OF LOT: Within sixty (60) days from the date of the airway bill,
LTI shall inspect and assay Product and report to SUPPLIER in writing any
nonconformance of such Product to the Specifications. If LTI does not make
to SUPPLIER such written report on any nonconformance of Product to the
Specification within the said sixty (60) day period, Product shall be
deemed to conform to the Specification and to have been accepted by LTI.
In the event that LTI makes such written report and reasonably believes
there is any discrepancy between the characteristics of the particular
shipment and the Specifications, LTI and SUPPLIER will in good faith try to
resolve the discrepancy. In the event that LTI and SUPPLIER are unable to
agree within not more than forty-five (45) days following the date of
initiation of good faith discussions, such discrepancy shall be resolved by
an independent testing laboratory to be mutually agreed upon by the
parties. The decision of the testing laboratory on whether or not Product
conforms to the Specifications shall be final and binding on the parties
and the expenses of such testing laboratory shall be borne by the party in
error. Should a lot or batch of Product fail to meet the Specifications,
LTI shall dispose of such nonconforming product in LTI's inventory at
Supplier's cost and in accordance with instructions given by
3
<PAGE>
SUPPLIER, and SUPPLIER agrees to replace, at no cost to LTI, any such
nonconforming Product as soon as possible but not to exceed thirty (30)
days after final disposition was reached.
2.3 MANUFACTURING METHODS: SUPPLIER shall keep LTI fully informed of any
material changes or modifications made to the manufacturing process, and
all deviations from FDA established manufacturing processes and procedures
for the Product, to enable LTI to determine impact on product and
regulatory requirements. Such notification shall be delivered to LTI in
writing, prior to delivery of Product.
ARTICLE 3 - WARRANTIES AND INDEMNITIES
3.1 WARRANTIES: SUPPLIER warrants that Product to be sold hereunder: (a) will
conform to the Specifications, (b) will be manufactured in accordance and
in compliance with current good manufacturing practices and regulations
("cGMP"), (c) will be manufactured in accordance with the Drug Master File/
AADF submitted pursuant to Section 6.4 of this Agreement, which will be
maintained by SUPPLIER. On prior written approval of SUPPLIER in each
case, which approval shall not be unreasonably withheld, LTI shall have the
right to visit MEIJI SEIKA'S manufacturing facilities to conduct cGMP
audits of the manufacturing records procedures, equipment and facilities to
verify that Product is being produced in accordance with cGMP. It is
specifically agreed in this connection that all information acquired by LTI
from such cGMP audits shall be subject to the non-disclosure and non-use
restrictions set forth in Section 5.1. In addition, LTI's personnel
visiting MEIJI SEIKA's manufacturing facilities to conduct such cGMP audits
shall execute an appropriate secrecy agreement acceptable to SUPPLIER.
SUPPLIER shall cause MEIJI SEIKA to cooperate with LTI in such cGMP audits
and to provide to LTI such documentation and access to MEIJI SEIKA's
manufacturing facilities as may be reasonable required by LTI for such cGMP
audits, provided, however, that SUPPLIER may prevent LTI from having access
to MEIJI SEIKA's know-how and proprietary technical information which,
Meiji Seika reasonably believes, is not required for such cGMP audits
purpose.
3.2 DISCLAIMER: Except for the warranties contained in Section 3.1, SUPPLIER
expressly disclaims all warranties of merchantability or fitness for a
particular purpose and all other warranties, express or implied.
3.3 LTI'S OBLIGATIONS: LTI agrees that in using the Product for the purpose set
forth in Section 1.8, LTI (a) shall comply with all applicable requirements
and regulations of the FDA or any other applicable governmental or
administrative agency; and (b) shall insure that any resulting product is
manufactured in accordance and in compliance with cGMP as published by FDA.
LTI also agrees to comply with any written instructions agreed upon by LTI
and SUPPLIER regarding storage, handling or shelf life of Product.
4
<PAGE>
3.4 SUPPLIER'S INDEMNITY: SUPPLIER agrees to indemnify and hold harmless LTI
from and against any and all loss, damage, liability, cost or expense
arising out of any claim in connection with SUPPLIER's breach of Section
3.1 of this Agreement, or arising out of SUPPLIER's negligence or willful
misconduct.
3.5 LTI'S INDEMNITY: LTI agrees to indemnify and hold harmless SUPPLIER and
Meiji Seika from and against any and all loss, damage, liability, cost or
expense arising out of (i) any materials, information, directions or
instructions given by LTI to SUPPLIER; (ii) improper storage, handling or
the misuse of Product by LTI or its representative; (iii) the alteration,
reformulation or compounding of Product by LTI after acceptance of Product
by LTI or its representative; and (iv) manufacture, use, and/or sale by LTI
of any product containing Product.
3.6 INDEMNIFICATION PROCEDURES: Any party seeking indemnification (the
"Indemnified Party") against a claim by a third party shall give prompt
written notice to the other party (the "Indemnifying Party") of any claim
or action arising out of the obligations hereunder or the alleged breach by
the Indemnifying party of this Agreement. In any claim or action covered
by the foregoing indemnities and brought against the Indemnified Party, the
Indemnifying Party, at its sole option, may elect to assume the defense
thereof with counsel reasonably satisfactory to the Indemnified Party. If
the Indemnifying Party so assumes the defense, the Indemnified Party shall
cooperate fully with the Indemnifying Party in defense of such claim or
action. In the event that the Indemnifying Party so assumes the defense,
the Indemnifying Party shall not be liable to the Indemnified Party
hereunder for any attorney or investigatory fees, costs or expenses
subsequently incurred by the Indemnified Party in the defense thereof;
provided, however, that the Indemnified Party shall have the right at its
own expense to employ separate counsel acceptable to the Indemnifying Party
and to participate in the defense of any such claim or action. In the
event that the Indemnifying Party fails to assume the defense of such claim
or action within fourteen (14) days after receipt of notice from the
Indemnified Party, the Indemnifying Party shall reimburse the Indemnified
Party on a monthly basis for any legal or other similar expenses reasonably
incurred by the Indemnified Party in connection with investigating and
defending against such claim or action (including the reasonable fees,
costs and expenses of counsel retained by the Indemnified Party). The
Indemnifying Party shall not be liable to indemnify the Indemnified Party
for any payment or settlement of any claim or action effected without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. In the event the Indemnifying Party
desires to settle any claim or action, the Indemnifying Party may do so in
its reasonable discretion.
3.7 The indemnification obligations set forth in ARTICLE 3 shall survive
termination of this Agreement.
5
<PAGE>
ARTICLE 4 - TERM AND TERMINATION
4.1 TERM: The term of this Agreement shall commence on the Effective Date and
shall continue for an initial period of five (5) years from such date.
Thereafter, this Agreement shall be automatically renewed on the same terms
and conditions for successive one (1) year periods, unless terminated by
either party by written notice to the other party, such notice to be given
not less than one (1) year before the expiration of the initial term or any
one year extension thereof.
4.2 TERMINATION FOR MATERIAL BREACH: Either party may terminate this Agreement
for a material breach by the other party by giving the breaching party
written notice specifying the breach relied on, and giving the breaching
party sixty (60) days to cure such breach. If the default has not been
cured by the end of the sixty (60) day period, then, upon notice thereof to
the breaching party by the other party, this Agreement shall terminate.
Termination for breach shall have no effect on performance obligations or
amounts to be paid that have accrued up to the effective date of such
termination.
4.3 TERMINATION UPON INSOLVENCY OR BANKRUPTCY: Either party may, immediately
upon giving notice to the other party, terminate this Agreement in the
event that the other party (a) shall be or become insolvent, (b) shall be
the subject of any reorganization, winding up, dissolution, bankruptcy or
liquidation proceedings, any assignment for the benefit of creditors or any
proceedings analogous to one or more of the above, or (c) shall terminate
its business in whole or in substantial part.
ARTICLE 5 - CONFIDENTIALITY
5.1 CONFIDENTIALITY: LTI and SUPPLIER acknowledge and agree that each of them
shall take all reasonable steps to keep confidential, and shall not
disclose to, publish or use for the benefit of any third parties or for
itself (except in carrying out duties in connection with this Agreement)
any information acquired from the other party prior to or during the term
of this Agreement, or in the course of performing this Agreement, without
first having obtained the written consent of the other party to such
disclosure or use unless the same is:
(a) in the public domain (provided that information in the public domain
has not or does not enter the public domain as the result of
disclosure by the receiving party); or
(b) known to the receiving party prior to the disclosure by the other
party; or
(c) available to a party on a non-confidential basis from a source other
than the disclosing party, which source was under no obligation of
confidentiality; or
6
<PAGE>
(d) information which was independently developed, as evidenced by written
records, by the receiving party; or
(e) information expressly Identified in writing by LTI or SUPPLIER as not
being confidential.
The obligations of confidentiality hereunder shall survive any expiration
or termination of this Agreement and shall continue for a period of five
years from the date of disclosure.
ARTICLE 6 - MISCELLANEOUS PROVISIONS
6.1 FORCE MAJEURE: A party shall not be liable for non-performance or delay in
performance caused by any event reasonably beyond the control of such
party, including but not limited to war, hostilities, revolution, riot,
civil commotion, national emergency, epidemic, fire, flood, earthquake,
force of nature, explosion, embargo, or any other Act of God.
6.2 ARBITRATION AND GOVERNING LAW: Any disputes or controversy arising from or
in connection with this Agreement which can not be settled amicably by the
parties hereto shall be finally settled by arbitration. If the arbitration
is initiated by SUPPLIER, the arbitration shall be held in San Francisco,
California, U.S.A. and conducted by the American Arbitration Association in
accordance with its arbitration rules and California Law. If the
arbitration is initiated by LTI, the arbitration shall be held in Tokyo,
Japan and conducted by the Japan Commercial Arbitration Association in
accordance with its arbitration rules and Japanese Law. The above language
specifying governing law is not intended to apply in situations where the
action by SUPPLIER or LTI is initiated as a result of, or in response to, a
third party action brought against SUPPLIER or LTI.
6.3 ASSIGNMENT: This Agreement may not be assigned by either party without the
prior written consent of the other party , which consent shall not be
unreasonably withheld. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
parties.
6.4 DRUG MASTER FILE: SUPPLIER shall be responsible for preparing, submitting
and maintaining a Drug Master File for Product meeting the Specifications.
Such Drug Master File shall be filed with FDA. In addition, SUPPLIER shall
make reasonable efforts to file the Drug Master file with such other
regulatory agencies as LTI shall from time to time direct. The Drug Master
File shall always remain the property of SUPPLIER, and LTI shall not be
allowed to have access to the Drug Master File unless otherwise agreed by
SUPPLIER in writing.
7
<PAGE>
6.5 ENTIRE AGREEMENT: This Agreement is intended by the parties to be the final
expression of their agreement as to the subject matter herein and
constitutes the entire understanding among them with respect thereto. It
is a complete and exclusive statement of the terms and conditions of such
understanding and shall supersede any and all prior correspondence,
conversations, negotiations, understandings or agreements relating to the
same subject matter.
6.6 INTERPRETATION: The headings used at the beginnings of the Sections and
certain subsections of this Agreement are for convenience and shall not by
themselves determine the interpretation of this Agreement. Reference in
this Agreement to the plural shall where the context so admits include the
singular, and vice versa.
6.7 NO STRICT CONSTRUCTION: The language used in the Agreement shall be deemed
to be the language chosen by both parties hereto to express their mutual
intent and no rule of strict construction against either party shall apply
to any term or condition of this Agreement.
6.8 SEVERABILITY: If any provision of this Agreement is held to be illegal or
unenforceable, that provision shall be limited or eliminated to the minimum
extent necessary so that this Agreement shall otherwise remain enforceable
and in full force and effect.
6.9 NO WAIVER: No waiver of any term or condition of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such term or
condition, or as a waiver of any other term or condition of this Agreement.
6.10 NOTICES: Any notice to be served in connection with this Agreement shall be
in writing and may be delivered by personal service or sent by registered
or certified air mail, return receipt requested, with postage fully
prepaid, provided that a copy of any such notice sent by mail is
simultaneously transmitted by telefacsimile. Such notices shall be
addressed as follows:
If to LTI:
Corporate Secretary
Liposome Technology, Inc.
960 Hamilton Court
Menlo Park, CA 94025
U.S.A.
Telephone No.: (415) 323-9011; Telefax No.: (415) 323-9106
If to SUPPLIER:
MEIJI SEIKA PHARMA International, LTD.
4-16, Kyobashi 2-chome, Chuo-ku
Tokyo, 104 Japan
Telephone No.: 03-3273-3483; Telefax No.: 03-3281-4058
8
<PAGE>
Either party may from time to time, by notice in writing served upon the
other as provided above, designate a change of address for the service of
notices.
6.11 RELATIONSHIP OF PARTIES: The parties hereto are independent contractors.
Neither party shall act or represent or hold itself out as having authority
to act as an agent or partner of the other party, or in any way bind or
commit the other party to any obligations (other than those set forth
herein. Nothing contained in this Agreement shall be construed as creating
a partnership, joint venture, agency or and association of any kind.
6.12 COUNTERPARTS: This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the Effective Date.
LIPOSOME TECHNOLOGY, INC. MEIJI SEIKA PHARMA INTERNATIONAL, LTD.
By: /S/ PETER V. LEIGH By: /s/ Masabumi Sato
-------------------------- -----------------------------
Printed Name: Peter V. Leigh Printed Name: Masabum Sato
---------------- -------------------
Title: Vice President Title: President & CEO
--------------------- ------------------------
Date of Execution: 9/27/94 Date of Execution: Oct 14, 1994
----------- --------------
WITNESS
MEIJI SEIKA KAISHA, LTD.
By: /s/ Akinobu Otsubo
Printed Name: Akinobu Otsuno
Title: Director
Date of Execution: Oct 14, 1994
9
<PAGE>
SCHEDULE A
Product
Product Name at LTI: Doxorubicin Hydrochloride, USP
Product Name at SUPPLIER: Doxorubicin Hydrochloride, USP
<PAGE>
SCHEDULE B
Prices DDU, San Francisco (1990) INCOTERMS.
**
<PAGE>
SCHEDULE C
PRODUCT SPECIFICATIONS
LTI Specification Summary for Doxorubicin Hydrochloride, USP
(per LTI Specification No. 26-407, Effective 06/21/94)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Assay/Test Specification
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Appearance Red-orange powder
- ----------------------------------------------------------------------------------------------------------------------------------
Identification A: HPLC Exhibit peak at same retention time as, and the chromatogram compares qualitatively
to, that of the standard preparation of USP Doxorubicin Hydrochloride RS.
- ----------------------------------------------------------------------------------------------------------------------------------
Crystallinity Passes test
- ----------------------------------------------------------------------------------------------------------------------------------
Depressor Substances: Dose 1.0 mL/kg at
1.5 mg/mL Concentration Passes test
- ----------------------------------------------------------------------------------------------------------------------------------
pH 4.0-5.5 in a solution containing 5 mg/mL
- ----------------------------------------------------------------------------------------------------------------------------------
Water NMT 4.0%
- ----------------------------------------------------------------------------------------------------------------------------------
Chromatographic Purity Total impurities NMT 2.0% (Peak area normalization)
- ----------------------------------------------------------------------------------------------------------------------------------
Solvent Residue Total acetone and alcohol NMT 2.5%
- ----------------------------------------------------------------------------------------------------------------------------------
Assay NLT 98.0% and NMT 102.0% of doxorubicin hydrochloride, calculated on the anhydrous,
solvent-free basis.
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
THE SYMBOL "**" IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT THE PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
EXECUTION COPY
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (the "Agreement") is made and entered into as of
this 15th day of February, 1994 ("Effective Date"), by and between A.L.
LABORATORIES,INC., a Delaware corporation with an office at One Executive Drive,
Fort Lee, New Jersey 07024 ("Seller"), and LIPOSOME TECHNOLOGY,INC., a Delaware
corporation with an office at 1050 Hamilton Court, Menlo Park, California 94025
("Buyer").
WHEREAS, Seller and its affiliates are engaged in the manufacture and
sale of pharmaceutical products;
WHEREAS, Buyer wishes to purchase Amphotericin B (the "Product") from
Seller; and
WHEREAS, Seller is willing to sell Product to Buyer under the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1--DEFINITIONS
1.1 DEFINITIONS. In this Agreement, the following terms shall have
the following meanings:
(a) "CGMEP" shall have the meaning specified in Section 3.1.
(b) "DAMAGES" shall have the meaning specified in Section 9.4.
(c) "FDA" shall mean the United States Food and Drug
Administration or any successor governmental agency or
department having similar purpose or powers.
(d) "F.O.B." shall mean "free on board" as that term is defined
in Section 2319 of the New Jersey Commercial Code.
<PAGE>
(e) "PRODUCT" shall have the meaning specified in the preamble
of this Agreement.
(f) "SPECIFICATIONS" shall have the meaning specified in Section
2.10.
ARTICLE 2--PURCHASE AND SALE
2.1 PURCHASE. During the term of this Agreement, Buyer shall
purchase such quantities of Product as Buyer shall order from Seller in
accordance with the terms of this Agreement.
2.2 PRICE. Seller shall sell the Product to Buyer at the initial
price set forth in SCHEDULE A for a period of one (1) year following the
Effective Date. Thereafter, Seller shall have the right to vary such price at
any time on sixty (60) days written notice to Buyer, and the price applicable to
an order shall be that in effect at the time of acceptance of such order. At
Buyer's request, Seller shall provide Buyer with evidence (reasonable to Seller)
detailing the basis of any price increase which is greater than ten percent
(10%) from the last price in effect for the Product.
2.3 FORECASTS. On or before the Effective Date, Buyer shall provide
Seller with a forecast of its requirements for the Product for the twelve (12)
months commencing April 1, 1994. The first three (3) months of such forecast
shall represent a binding commitment of Buyer to purchase and Seller to sell
(subject to Section 2.9) such forecasted amount. Thereafter, Buyer shall
provide Seller with updated twelve (12) month forecasts by June 30, September
30, December 31 and March 31 of each year of this Agreement for its requirements
of Products commencing one quarter after the due date for such forecast. The
first three (3) months of each forecast so provided shall represent a binding
commitment of Buyer to purchase and Seller to sell (subject to Section 2.9) such
forecasted amount.
2.4 PURCHASE ORDERS. Buyer will submit purchase orders to Seller in
writing. All purchase orders shall include (a) the quantity of Product to be
purchased; (b) the requested delivery date(s); and (c) any other information
dictated by the circumstances of the order. Purchase orders may be on Buyer's
purchase order form, provided that any provision of any such purchase order form
which is in addition to or inconsistent with any provision of this Agreement
shall be ineffective and not binding on either party. All purchase orders shall
be received by Seller not less than sixty (60) days before shipment of Product
is required.
2.5 ACCEPTANCE OF ORDERS. No purchase order shall be binding on
Seller until accepted in writing by a duly authorized employee of Seller. In
any one calendar quarter, Seller agrees to supply product for all purchase
orders placed by Buyer hereunder that are between one hundred percent (100 %)
and one hundred fifty percent (150 %) of the applicable binding forecast for
such quarter submitted by Buyer. Seller shall use all reasonable efforts to
supply the Product ordered in excess of one hundred fifty percent (150%) of such
binding forecast.
2
<PAGE>
2.6 DELIVERY. Seller shall deliver the Products F.O.B. Menlo Park,
California. The costs of such shipment shall be home by Seller, provided that
if Buyer requests Seller to deliver Products to a different F.O.B. point, Buyer
shall bear any additional delivery costs above the cost Seller would have paid
had the shipment gone to Menlo Park, California.
2.7 INSPECTION. Within twenty (20) days of receipt of a shipment of
Product, Buyer shall inspect the Products and report to Seller any obvious
nonconformance of such Products. In the event that at a later date Buyer
reasonably believes there is a discrepancy in connection with the quality of a
Product, Buyer and Seller will in good faith try to resolve such dispute. In
the event Buyer and Seller are unable to agree within forty-five (45) days
following the date of initiation of good faith discussions, such dispute shall
be resolved by an independent testing laboratory to be mutually agreeable to the
parties. The decision of the testing laboratory with respect to quality matters
shall be final and binding on the parties and the expenses of such testing
laboratory shall be home by the party in error. Should a Product fail to meet
testing standards for quality, Seller agrees to replace within thirty (30) days
in Buyer's inventory any such defective Product with a Product which meets the
appropriate standards, and such replacement shall be Buyer's exclusive remedy
for such failure.
2.8 PAYMENT. Payment for all orders made by Buyer shall be net
thirty (30) days from the date of invoice. Invoices shall be dated no earlier
than the date of shipment. All late payments made by the Buyer under this
Agreement (excluding amounts which have been disputed in writing by Buyer in
good faith by reason of a bona fide dispute) shall bear interest at the prime
rate as quoted by Citibank N.A., New York, New York on the day the payment is
overdue plus two percent (2%) per annum from the date on which due until paid.
2.9 SHORTAGES. In the event of any shortage of the Product, Seller
reserves the right to allocate available supplies among its customers on any
basis Seller considers reasonable.
2.10 SPECIFICATIONS. Seller agrees that Product shall meet the
specifications set forth in Schedule B (the "Specifications"). The
Specifications may be revised by Seller as required by the FDA (with prompt
written notice to Buyer) or as mutually agreed upon in writing by the parties.
ARTICLE 3--WARRANTIES
3.1 SELLER'S WARRANTIES. Seller warrants that the Product sold
hereunder shall (a) conform to the Specifications, and (b) be manufactured in
accordance and in compliance with the then current good manufacturing practices
("CGMP") as published by the FDA. Seller shall replace any Products which prove
to be defective in workmanship or material. EXCEPT FOR THE WARRANTIES CONTAINED
IN THIS SECTION 3. 1, SELLER EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED. SUBJECT TO SECTION 3.3 (a), BUYER ACKNOWLEDGES AND AGREES
THAT THE
3
<PAGE>
REMEDIES SET FORTH IN THIS SECTION AND SECTION 2.7 HEREIN SHALL BE BUYER'S
EXCLUSIVE REMEDIES UNDER THIS AGREEMENT AND SELLER'S OBLIGATIONS AND LIABILITY
FOR ANY WARRANTY CLAIM OR FOR ANY DEFECTIVE PRODUCT SHALL BE LIMITED AS PROVIDED
ABOVE. SELLER SHALL NOT BE LIABLE TO BUYER FOR ANY SPECIAL, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OTHER THAN PERSONAL INJURY CLAIMS ARISING
OUT OF DEFECTIVE PRODUCT SUPPLIED BY SELLER WHETHER BASED UPON LOST GOODWILL,
LOST RESALE PROFITS, WORK-STOPPAGE, IMPAIRMENT OF OTHER GOODS, BREACH OF
CONTRACT, NEGLIGENCE OR OTHERWISE.
3.2 BUYER'S COVENANTS. Buyer agrees that if it uses Product as a
constituent part of another product or if it alters, reformulates or compounds
Product in any way, Buyer shall (a) comply with all applicable requirements and
regulations of the FDA or any other applicable governmental or administrative
agency; and (b) insure that any resulting product is manufactured in accordance
with CGMP. Buyer also agrees to comply with all laws, orders or regulations
applicable to the purchase, handling, use, storage, disposal and sale of the
Product and it will comply with all written instructions of Seller applicable to
the storage, handling and/or use of the Product.
3.3 INDEMNITIES.
(a) SELLER'S INDEMNITY. Seller agrees to defend, indemnify and
hold Buyer harmless from and against any and all damages, claims,
liabilities or expenses, including reasonable attorney's fees
(collectively "Damages"), arising out of any injury to or death
of any person occurring from Seller's breach of Section 3.1 of
this Agreement. Notwithstanding anything to the contrary set
forth in this Section 3.3(a), Seller shall have no responsibility
to defend, indemnify or hold Buyer harmless when Damages arise
from or relate to (i) Buyer's breach of Section 3.2 herein; (ii)
materials or information provided by Buyer or Buyer's
representative; or (iii) improper storage or handling or the
misuse of Product by Buyer or any third party after delivery of
the Product to Buyer.
(b) BUYER'S INDEMNITY. Buyer agrees to defend, indemnify and
hold Seller harmless from any and all Damages arising out of (i)
its breach of Section 3.2 herein and; (ii) any materials,
information, directions or instructions given to Seller by Buyer.
(c) INDEMNIFICATION PROCEDURES. Upon the assertion of any claim
against a party hereto that may give rise to a right of
indemnification under this Agreement, the indemnified party shall
give prompt notice to the indemnifying party of the existence of
such claim and shall give the indemnifying party reasonable
opportunity to control, defend and/or settle such claim at its
own expense and with counsel of its own selection;
4
<PAGE>
PROVIDED HOWEVER, that the indemnified party shall at all times
have the right fully to participate in such defense at its own
expense with separate counsel. If the indemnifying party shall,
within a reasonable time after such notice has been given, fail
to defend, compromise or settle such claim, then the indemnified
party shall have the right to defend, compromise or settle such
claim on behalf, for the account of and at the cost and risk of,
the indemnifying party. In all cases, each of the parties hereto
shall give the other such assistance as may be reasonably be
requested by the other in order to undertake the defense of any
claim.
ARTICLE 4--TERM & TERMINATION
4.1 TERM. The term of this Agreement shall commence upon the
Effective Date and shall continue for an initial period of five (5) years.
Thereafter, this Agreement shall be automatically renewed on the same terms and
conditions for successive one (1) year periods, unless terminated by one party
by written notice to the other party, such notice to be given not less than six
(6) months before the expiration of the initial term or any one year extension
thereof.
4.2 TERMINATION FOR MATERIAL BREACH. Either party may, upon sixty
(60) days written notice to the other party, terminate this Agreement in the
event of a material breach of this Agreement by the other party; PROVIDED
HOWEVER, if such breach is corrected within such sixty (60) day period, this
Agreement shall not be terminated.
4.3 INSOLVENCY OR BANKRUPTCY. At least thirty (30) days prior to the
filing of a petition or other proceeding, voluntary or involuntary, in
bankruptcy or insolvency, by or against either party, or the appointment with or
without a party's consent of an assignee for the benefit of creditors or of a
receiver for either party, or going into liquidation voluntarily or otherwise
for the making of a composition with creditors, each party must notify in
writing the other of the instance and pendency of such action or proceeding.
Further, failure to inform to this requirement shall be deemed a material, pre-
petition, incurable breach of this Agreement. The party receiving such notice
may, within fifteen (15) business days of receipt, notify in writing the sending
party of its decision to terminate this Agreement. Such termination shall take
effect upon receipt of the notice.
4.4 EFFECTS OF TERMINATION. Termination of this Agreement shall not
affect either party's rights or remedies with respect to all years prior to
termination, including Buyer's obligations to pay for Products ordered prior to
termination. Section 5.2 shall survive expiration or termination of this
Agreement.
5
<PAGE>
ARTICLE 5--OTHER AGREEMENTS
5.1 FORCE MAJEURE. If either Buyer or Seller is unable, using all
commercially reasonable efforts, to comply with its obligations under this
Agreement due to events beyond its reasonable control, then such non-compliance
shall not constitute a breach of this Agreement. Seller shall give Buyer prompt
notice of any force majeure event and its best estimate of the likely duration
of such event. Without limiting the generality of the foregoing, events beyond
the reasonable control of the parties shall include acts of God, acts of
government, order of any court of competent jurisdiction, war, third party
shipping delays, epidemics, fires, strikes and other labor disturbances,
shortages of raw materials and supplies, floods or storms, which make it
impossible or commercially impracticable to perform under this Agreement.
5.2 CONFIDENTIALITY. Each of Buyer and Seller acknowledge and agree
that each of them shall take all reasonable steps to keep confidential, and
shall not, disclose to, publish or use for the benefit of any third parties or
for itself (except in carrying out duties in connection with this Agreement) any
information acquired from the other party prior to or during the term of this
Agreement, or in the course of performing this Agreement, without first having
obtained the written consent of the other party to such disclosure or use unless
the same (a) is in the public domain (provided that information in the public
domain has not or does not come into the public domain as the result of
disclosure by a receiving party); (b) is known to the receiving party prior to
disclosure by the other party; (c) becomes available to a party on a non-
confidential basis from a source other than the disclosing party, which source
was under no obligation of confidentiality; (d) is independently developed by
such party; or (e) is information expressly identified in writing by a party as
not being confidential. The parties hereby acknowledge and agree that Seller's
prices of Products to Buyer hereunder and any information relating to any
regulatory approval for a Product shall be considered confidential information
for purposes of this Section 5.2 without any further identification by Seller
that such information is confidential. The obligations of confidentiality
hereunder shall survive any expiration or termination of this Agreement for a
period of five (5) years from the effective date of such expiration or
termination.
5.3 COMMUNICATIONS. Seller shall promptly notify Buyer of any
significant communications received from the FDA which actually or may
potentially have a material effect on Product.
5.4 DRUG MASTER FILE. Seller shall be responsible for maintaining
its Drug Master File for the Product.
ARTICLE 6--MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement and all disputes arising hereunder
shall be governed by and interpreted in accordance with the laws of the State of
New Jersey as they apply to contracts executed and performed entirely within
that State.
6
<PAGE>
6.2 DISPUTE RESOLUTION. All disputes arising out of, or in relation
to, this Agreement (except for disputes arising under Section 2.7 which shall be
resolved as set forth therein), shall be referred for decision forthwith to a
senior executive of each party. If no agreement can be reached through this
process within thirty (30) days of request by one party to the other to nominate
a senior executive for dispute resolution, then either party hereto shall be
entitled to refer such dispute to three arbitrators for arbitration under New
Jersey law, such arbitration to be held in New York, New York, on an expedited
basis in accordance with the rules and regulations of the American Arbitration
Association ("AAA"). One arbitrator shall be appointed by each party within
(30) days of a request for arbitration or receipt of notice thereof, with such
arbitrators to appoint the third arbitrator within thirty (30) days of the
appointment of the latter of the party arbitrators. If one of the parties fails
to appoint an arbitrator or if the arbitrators chosen by the parties cannot
agree on a third arbitrator, then such arbitrator shall be selected by the AAA.
Judgement upon any award rendered by the arbitrators may be entered in any court
having jurisdiction thereof and shall be final and binding.
6.3 ASSIGNMENT. This Agreement and the rights of the parties
hereunder shall not be transferrable in whole or in part without mutual
approval, except that:
(a) Seller may transfer this Agreement in whole or in part to an
Affiliate for purposes of implementation of this Agreement with
written notice to Buyer, provided that Seller shall remain liable
for performance by such Affiliate; and
(b) Seller may transfer this Agreement in whole or in part to a
successor corporation to Seller with written notice to Buyer.
6.4 INTERPRETATION. The section headings contained in this Agreement
are inserted for convenience only and shall not affect the interpretation of
this Agreement. The word "including" shall not be taken to limit a more general
preceding term or phrase. Words importing the singular shall include the plural
and vice versa.
6.5 NO STRICT CONSTRUCTION. The language used in this Agreement
shall be deemed to be the language chosen by both parties hereto to express
their mutual intent and no rule of strict construction against either party
shall apply to any term or condition of this Agreement.
6.6 SEVERABILITY. Should any provision of this Agreement be held to
be illegal, invalid or unenforceable, by any court of competent jurisdiction,
such provision will be ineffective only to the extent of such invalidity,
without invalidating the remainder of this Agreement. Notwithstanding the
foregoing, if any provision is so invalidated, the parties hereto shall, to the
extent lawful and practicable, use their best reasonable efforts to enter into
arrangements to reinstate the intended benefits, net of the intended burdens, of
such provision.
7
<PAGE>
6.7 NO WAIVER. The failure of one party hereto to enforce at any
time any of the provisions of this Agreement, or any rights in respect thereto,
or to exercise any election herein provided, shall in no way be considered to be
a waiver of such provision, rights or elections, or in any way to affect the
validity of this Agreement. Any waiver must be in writing.
6.8 NOTICES. All notices required or permitted to be given under
this Agreement shall be in writing and shall be personally delivered, sent by
telecopy (with receipt confirmed), sent by Federal Express or other recognized
courier requiring signature on receipt, or sent by certified mail, return
receipt requested, to the parties at the following addresses (or at such other
address as a party may specify by notice to the other):
For Seller: A.L. Laboratories, Inc.
One Executive Drive
Fort Lee, New Jersey 07024
TELEPHONE: (201) 947-7774
TELECOPY: (201) 947-4879
ATTENTION: Corporate Counsel
For Buyer: Liposome Technology, Inc.
1050 Hamilton Court
Menlo Park, California 94025
TELEPHONE: (415) 323-9011
TELECOPY: (415) 323-9106
ATTENTION: Corporate Secretary
6.9 RELATIONSHIP OF PARTIES. Neither of the parties shall act or
represent or hold itself out as having authority to act as an agent or a partner
of the other party, or in any way bind or commit the other party to any
obligations. Nothing contained in this Agreement shall be construed as creating
a partnership, joint venture, agency or an association of any kind.
6.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
8
<PAGE>
IN WITNESS WHEREOF, the parties have caused their duly authorized
representative to execute this Agreement as of the date first above written.
A.L. LABORATORIES, INC. LIPOSOME TECHNOLOGY, INC.
By:/s/ Daniel E. Cohen By:/s/ Joseph Vallner
-------------------------------- --------------------------------
Name: Name: Joseph Vallner
------------------------------ -----------------------------
Title:President Animal Health Title: V.P. R&D
----------------------------- -----------------------------
9
<PAGE>
SCHEDULE A
PRICE
**
<PAGE>
SCHEDULE B
PRODUCT SPECIFICATIONS
LTI Specification Summary for Amphotericin B, USP
(Issue Date: 02/27/94)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Assay/Test Specification
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Appearance Bright yellow powder
- ----------------------------------------------------------------------------------------------------------------------------------
Identity Test A Ultraviolet absorption spectrum exhibits maxmima in the range of 240 nm to 320 nm at the
same wavelengths as that of the Amphotericin B standard preparation, except that an extra
peak may occur at about 340 nm.
- ----------------------------------------------------------------------------------------------------------------------------------
Identity Test B Ultraviolet and visible absorption spectrum exhibits maxima in the range of 320 nm to
400 nm at the same wavelength as that of a similar preparation of the Amphotericin B
standard preparation.
- ----------------------------------------------------------------------------------------------------------------------------------
Loss on Drying NMT 5%, by weight
- ----------------------------------------------------------------------------------------------------------------------------------
Residue on Ignition (Sulfated ash) NMT 0.5%
- ----------------------------------------------------------------------------------------------------------------------------------
Amphotericin A NMT 5%, calculated on the dried basis
- ----------------------------------------------------------------------------------------------------------------------------------
Assay NLT 900 micrograms of C47H73NO per mg, calculated on the dried basis
- ----------------------------------------------------------------------------------------------------------------------------------
Total Aerobic NMT 100 CFU/g
Microbial Count
- ----------------------------------------------------------------------------------------------------------------------------------
Assay (HPLC) Record result
- ----------------------------------------------------------------------------------------------------------------------------------
Water Content Record result
- ----------------------------------------------------------------------------------------------------------------------------------
Bacterial Endotoxins by LAL Maximum 1.O EU/mg
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
