<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
-------------------
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
-----------
Date of Report (Date of Earliest Event Reported): September 19, 1996
U.S. BIOSCIENCE, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
1-10392 23-2460100
- ------------------------------ -------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
One Tower Bridge
100 Front Street
West Conshohocken, Pennsylvania 19428
- ---------------------------------------- ------------------------------
(Address of Principal Executive Offices) (Zip Code)
(610) 832-0570
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
<PAGE>
Item 5. Other Events
------------
Amendment of Distribution and Supply Agreement
-----------------------------------------------
On September 24, 1996, the Company announced an agreement with an
affiliate of Schering-Plough Corporation to amend their 1993 European
distribution agreement (the "Agreement") for Ethyol(R) (amifostine), U.S.
Bioscience's cytoprotective product. The Agreement is filed as Exhibit 10.16 to
the Company's Annual Report on Form 10-K and incorporated herein by reference.
The amendment reported herein (the "Amendment") is attached hereto as Exhibit
10.16.1 and incorporated herein by reference. The following description is
qualified by reference to such exhibits.
Under terms of the amended Agreement, effective January 1, 1996,
Schering-Plough will purchase Ethyol from U.S. Bioscience at a price based on a
percent of net sales and U.S. Bioscience will no longer absorb certain
promotional expenses previously shared by the parties. In addition, Schering-
Plough's exclusive marketing period will be extended by two years, through 2003,
and Schering-Plough will provide U.S. Bioscience with a net incremental payment
of $3.4 million. Following that exclusive period, U.S. Bioscience may elect to
enter into a two-year transition period in which U.S. Bioscience would co-
promote Ethyol in Europe and thereafter all rights to market Ethyol in Europe
will revert to U.S. Bioscience.
2
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- ------- ------------------------------------------------------------------
(c) Exhibits.
*10.16.1 Amendment to Distribution and Supply Agreement, dated as of
August 31, 1996, between the Company and Scherico, Ltd.
-------------
* Confidential Treatment Requested
3
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
U.S. BIOSCIENCE, INC.
By: /s/ Robert I. Kriebel
---------------------------------
Name: Robert I. Kriebel
Title: Senior Vice President
September 24, 1996
4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
*10.16.1 Amendment to Distribution and Supply Agreement,
dated as of August 31, 1996, between the Company and
Scherico, Ltd.
____________
* Confidential Treatment Requested
5
<PAGE>
EXHIBIT 10.16.1*
*The confidential material contained herein has been omitted and has been
filed separately with the Commission.
<PAGE>
AMENDMENT TO DISTRIBUTION AND SUPPLY AGREEMENT
----------------------------------------------
This amendment ("Amendment"), dated as of August 31, 1996, is by and
between U.S. Bioscience, Inc. ("USB"), a corporation organized and existing
under the laws of the state of Delaware and Scherico, Ltd., ("Scherico") a
corporation organized and existing under the laws of Switzerland.
WHEREAS, USB and Scherico entered into a Distribution and Supply Agreement
dated May 10, 1993 (the "Agreement"), relating to the distribution and supply of
Ethyol(R) (amifostine);
WHEREAS, USB and Scherico desire to amend certain provisions of the
Agreement including, inter alia, provisions for determining the price at which
----------
Product is sold to Scherico under the Agreement and extending the Exclusive
Period by two years, as hereinafter provided; and
NOW, THEREFORE, in consideration of the mutual promises contained herein
and intending to be legally bound hereby, the parties hereby agree as follows:
1. Except as otherwise specifically provided herein, all capitalized
terms used herein and not defined herein shall have the meaning assigned to such
terms in the Agreement.
2. Definitions.
-----------
a. Section 1.1 (c) is hereby amended by deleting the first paragraph
of Section 1.1 (c) in its entirety and in its place inserting the
following:
"(c) 'Commencement Date' means January 1, 1997."
-----------------
b. Section 1.1 (d) is hereby amended by deleting Section 1.1 (d) in
its entirety and in its place inserting the following:
"(d) 'Contract Year' means the period beginning January 1, 1997 and
-------------
ending December 31, 1997 and each consecutive twelve-month period
thereafter during the term of this Agreement."
c. Section 1.1(l) is hereby amended by adding, in the first sentence,
the words "or organ" after "hematological"
* Confidential material
omitted and filed
separately with the
Commission.
-1-
<PAGE>
and by adding the words "or cisplatin" after the word "cyclophosphamide".
d. Section 1.1 (n) is hereby amended by deleting Section 1.1 (n) in
its entirety and in its place inserting the following:
"(n) 'Marketing Summary' has the meaning specified in Section 4.1
-----------------
hereof, as amended."
e. Section 1.1 (t) is hereby amended by deleting Section 1.1 (t) in
its entirety and in its place inserting the following:
"(t) 'Purchase Price Per Vial' has the meaning specified in Sections
-----------------------
6.5 and 6.6, as amended."
f. Section 1.1 (cc) is hereby amended by deleting from Section 1.1
(cc) (ii) the word "seventh" and replacing it with the word "ninth".
g. Section 1.1 is hereby amended by adding a definition of the term
Vial as Section 1.1 (ff) as follows:
"(ff) 'Vial' means a 500 mg vial of amifostine (Ethyol(R))."
----
3. Diligence in Marketing the Product.
----------------------------------
a. Section 3.1 (a) is hereby amended by deleting from that Section
the following:
(1) The introductory phrase as follows:
"Subject to the applicable limitations on Allowable Expenses specified
in Exhibit A," and
(2) The last sentence as follows:
"Notwithstanding the foregoing, however, Scherico shall not be
required to use diligent efforts to launch, market or sell Product or
pursue pricing and reimbursement approvals under this Agreement in any
country within the Territory where USB has obtained a Regulatory
Approval that is less than the Minimum Chemoprotective Labelling for
the Product, until the earlier of an Early Launch Date in such country
(as defined below) or the Commencement Date."
* Confidential material
omitted and filed
separately with the
Commission.
-2-
<PAGE>
b. Section 3.1 (c) of the Agreement is hereby amended by deleting
Section 3.1 (c) in its entirety. The parties expressly acknowledge that USB
shall not be obligated to pay Operating Losses under the Agreement nor
share in Operating Profits under the Agreement.
4. Trademark Registrations, Patents, etc.
-------------------------------------
a. Section 3.4(b) is hereby amended by adding the following as the
last sentence of Section 3.4(b):
"The costs for the prosecution of any such infringement shall be
shared equally be the parties, however, either party, upon thirty (30)
days written notice to the other party may elect to discontinue
sharing in such costs. The parties further agree to divide any award
of damages or settlement payment by the infringer as follows:
1) first, each party shall be reimbursed the documented
reasonable out of pocket costs and expenses it incurred in
prosecuting such infringement;
2) second, the amount of sales (if any) of the Product lost due
to such infringement shall be calculated (as determined during
the course of the litigation) and, to the extent there are
sufficient funds remaining from the damage award or settlement,
such calculated amount of lost sales shall be deemed to be Net
Sales and shall be divided between the parties in accordance with
the other provisions of this Agreement (e.g., Sections 6.5, 6.6
and 9.5), as amended; and
3) third, any funds thereafter remaining from the damage award
or settlement shall be divided between the parties in the same
proportion as the costs of prosecuting the infringement were
shared by the parties."
b. Section 3.4 (d) is hereby amended by deleting Section 3.4 (d) its
entirety and replacing it with the following:
"3.4 (d) Except as otherwise provided in subsection (e) below, during
the Distributorship Period, unless the parties otherwise agree, USB
shall have the sole right, but not the obligation, to defend, at its
* Confidential material
omitted and filed
separately with the
Commission.
-3-
<PAGE>
expense, a Trademark or patent related to the Product in the Territory
against a claim of infringement. If USB does not commence a defense
of any such claim within 60 days after it receives notice thereof,
Scherico shall have the option to take over the defense thereof at its
sole cost and risk, or shall be entitled to terminate this Agreement
with respect to any affected country in the Territory. USB shall be
entitled to control the defense of any such claim or action and shall
have the right to settle or compromise any such claim or action
without the consent of Scherico unless such settlement would impose a
monetary obligation on Scherico. USB shall be entitled to retain any
judgment or settlement amount received in connection with any such
claim or action. If in connection with the defense of a claim or
action pursuant to this subsection (d) USB agrees to or is required to
obtain a license or similar authorization from an unaffiliated third
party, any amounts payable to such third party shall be at the sole
cost and expense of USB."
c. Section 3.4 (e) is hereby amended by deleting Section 3.4 (e) in
its entirety and replacing it with the following:
"3.4 (e) During the Distributorship Period, unless the parties
otherwise agree, the parties shall cooperate in good faith to jointly
defend the litigation captioned: 'U.S. Bioscience,
Inc./IchthyolGesellschaft Cordes'. The parties shall share equally
the jointly approved reasonable out-of-pocket costs and expenses
incurred by each party in connection with such litigation, including,
without limitation, attorneys' fees, surveys and expert fees, and any
judgment or settlement amounts asserted against or received by a party
relating thereto. Provided however, that fees of USB's trademark
counsel Pennie & Edmonds in connection with such proceedings shall be
at the sole cost and expense of USB, unless otherwise agreed by the
parties in writing in advance. If in connection with such litigation
the parties agree to or are required to obtain a license or similar
authorization from an unaffiliated third party, any amounts payable to
such third party shall be shared equally by the parties during the
Distributorship Period and thereafter shall be at the sole cost and
expense of USB."
* Confidential material
omitted and filed
separately with the
Commission.
-4-
<PAGE>
5. Article 4 - Marketing Activities. Sections 4.1, 4.2 and 4.7 are
--------------------------------
hereby amended by deleting Sections 4.1, 4.2 and 4.7 in their entirety and
replacing them with the following:
"4.1 Scherico Marketing Summary. During the Distributorship
--------------------------
Period, on an annual basis, Scherico shall provide USB with a
projected marketing activity summary for commercializing the Product
in the Territory setting forth: projected Net Sales and projected
number of Vials to be sold (the "Marketing Summary"). Scherico shall
provide USB with the Marketing Summary for each Contract Year by
January 2 of such Contract Year. Within thirty (30) days after
receipt of the Marketing Summary by USB, USB and Scherico shall meet
to review and discuss such Marketing Summary and Scherico shall
present the Marketing Summary. The term 'Marketing Summary' shall be
deemed to replace the term 'Operating Plan' throughout this Agreement,
as amended."
"4.2 Establishment of Transition Committee. Commensurate with
-------------------------------------
USB's written notice to Scherico pursuant to Section 5.1 or 5.2 that
USB elects to begin the Transition Period, the parties shall establish
a transition committee (the "Transition Committee") which shall meet
prior to the initiation of the Transition Period and thereafter at
least twice per Contract Year (once in coordination with the meeting
to be scheduled pursuant to Section 4.1 as amended). The Transition
Committee shall coordinate the activities of the parties related to
the Product within the Territory. Each party shall designate three
members of the Transition Committee. Each party shall be responsible
for all expenses of its representatives in connection with
participation in Transition Committee meetings."
6. Product Labelling. Section 4.3 (c) is hereby amended by deleting the
-----------------
words "(outside the calculation of Operating Profits)" from Section 4.3 (c).
7. Training of USB Sales Force. Section 4.4 is hereby amended as follows:
---------------------------
a. Section 4.4 (a) is hereby amended by deleting the word "fourth" in
the first sentence of Section 4.4 (a) and replacing it with the word
"sixth". Section 4.4(a) is further amended by deleting the phrase "under
Section
* Confidential material
omitted and filed
separately with the
Commission.
-5-
<PAGE>
5.3(b)" in the first sentence of Section 4.4(a) and replacing it with "by
USB."
b. Section 4.4 (b) is hereby amended by deleting the word "fourth" in
the first sentence of Section 4.4 (b) and replacing it with the word
"sixth".
c. Section 4.4 (c) is hereby amended by deleting Section 4.4 (c) in
its entirety and replacing it with
"(c) Scherico shall be responsible for providing the training for the
USB sales personnel in the Territory during the Distributorship Period
as more specifically described in this Section 4.4, as amended and in
Section 5.3, as amended, either by hiring and training new members of
Scherico's own sales force who will become USB employees at the
beginning of the Transition Period, as provided above, or by training
USB employees. In either case, the sales training shall be comparable
to that which Scherico gives its employees in the Territory (including
training related specifically to the Product as well as more general
sales training in the oncology area and other matters, to the extent
customarily provided to Scherico's sales force, but excluding matters
that are related to any specific Scherico products or proprietary
Scherico systems or procedures). Scherico shall be responsible for
[ * ] for members
of its own sales force prior to the time any such Scherico employee
becomes an employee of USB in accordance with Section 4.4(a) above.
Scherico shall be responsible [ *
] with respect to the
training of any USB employee. For purposes of this Agreement,
training costs shall include only the direct costs of conducting such
training and shall not include any employee salaries, benefits or
expenses, including without limitation, travel, meal and housing
expenses associated with such training."
c. Section 4.4 (d) is hereby amended by deleting the word "fourth" in
the first sentence of Section 4.4 (d) and replacing it with the word
"sixth" and by deleting the last sentence of Section 4.4 (d).
8. Product Sampling. Section 4.5 is hereby amended by deleting from the
----------------
last sentence of that Section the following:
* Confidential material
omitted and filed
separately with the
Commission.
-6-
<PAGE>
"USB's Cost of Goods and shall be included in the calculation of Operating
Profits." and in its place inserting the following: "[ * ]
per Vial; provided however, if USB's Cost of Goods materially increases or
decreases after the date hereof, the parties shall negotiate in good faith an
increased or decreased price for Product for sampling purposes which shall be
USB's Cost of Goods plus the amount of the SRI Royalty actually paid by USB to
the Southern Research Institute for such Product."
9. Commencement of the Transition Period. Section 5.1 is hereby amended
-------------------------------------
by deleting the word "fifth" in the first sentence of that Section and replacing
it with the word "seventh".
10. Acceleration of Transition Period. Section 5.2 is hereby amended by
---------------------------------
deleting the word "third" in the first sentence of that section and replacing it
with the word "fifth" and by deleting the phrase "Operating Plan" in the first
sentence of that section and replacing it with the phrase "most recent Marketing
Summary".
11. Activities During the Transition Period.
---------------------------------------
a. Section 5.3 (b) is hereby amended by deleting Section 5.3 (b) in
its entirety and in its place inserting the following:
"(b) Throughout the Transition Period, Scherico shall be responsible
for providing USB's sales representatives, at Scherico's expense, with
all Product promotional and training materials as may be reasonably
required by USB to promote the Product in the Territory. Scherico
shall provide such materials in comparative quantity (on a per sales
representative basis) as such materials are furnished to Scherico's
sales force."
b. Section 5.3 (c) is hereby amended by deleting Section 5.3 (c) in
its entirety and in its place inserting the following:
"(c) USB and Scherico shall submit to each other a report, not later
than forty-five (45) days after the end of each calendar quarter of
the Transition Period, setting forth in reasonable detail and on a
country by
* Confidential material
omitted and filed
separately with the
Commission.
-7-
<PAGE>
country basis the efforts made by the reporting party in copromoting
the Product."
c. Section 5.3 (d) is hereby amended by
(i) deleting the second and third sentences of Section 5.3 (d) in
their entirety and replacing them with the following: "USB shall be
responsible for recruiting and hiring any additional sales personnel
it needs in the Territory.", and
(ii) deleting from the last sentence of Section 5.3 (d) the following:
"treated as an Allowable Expense and included in the calculation of
Operating Profits."
12. Regulatory Approval Payments. Milestone Payments. The parties
-------------------------------------------------
expressly acknowledge that the Regulatory Approval Payments under Section 6.2
and the Milestone Payments under Section 6.4 remain in place under the
Agreement. Scherico has received a copy of the August 27, 1996 letter from USB
regarding the positive resolution for the Ethyol Type II Variation Application
for an additional indication, i.e., "to protect patients with advanced solid
tumors of non-germ cell origin from cumulative nephrotoxicity of cisplatin and
cisplatin containing regimens, where unit doses of cisplatin range from 60 to
120 mg/m/2/, in conjunction with adequate hydration measures." Scherico
acknowledges that the positive resolution with respect to such additional
indication fulfills the achievement of the Minimum Chemoprotective Labelling
requirements, as amended hereby, for the purpose of making the Regulatory
Approval Payments as provided in Section 6.2 of the Agreement. The parties
hereby agree that the Regulatory Approval Payments shall be due in accordance
with the time frame set forth in Section 6.2(c) provided that any such payments
becoming due and payable prior to thirty (30) days after both parties have
signed this Amendment shall hereby be due and payable within thirty (30) days
after both parties have signed this Amendment.
13. Pricing Approval Payments. Section 6.3 is hereby amended to delete
-------------------------
Section 6.3 in its entirety with the effect of eliminating the Pricing Approval
Payments under the Agreement.
14. Compensation to USB During Exclusive Period. Section 6.5 is hereby
-------------------------------------------
amended by deleting Section 6.5 in its entirety and replacing it with the
following:
"6.5 (a) During the Distributorship Period the purchase price to
Scherico per Vial for Product (the "Purchase
* Confidential material
omitted and filed
separately with the
Commission.
-8-
<PAGE>
Price Per Vial") supplied to Scherico hereunder for commercial sale in
the Territory during any month shall be calculated as follows:
Period Purchase Price Per Vial
------ -----------------------
(US $) for Product in
---------------------
each Month
----------
Jan 1, 1996 - Dec 31, 1996 [ * ] of Average Per
Vial Net Sales Price of Product in the
Major Markets for the month
First Contract Year [ * ] of
(Jan 1, 1997 - Dec 31, 1997) Average Per Vial Net Sales Price of
Product in the Major Markets for the
month
Second Contract Year through [ * ]
end of the Distributorship of Average Per Vial
Period Net Sales Price of Product in the
Major Markets for the month
(b) Within thirty (30) business days after the end of each month
during the Distributorship Period, Scherico shall pay to USB the
Purchase Price Per Vial for all Vials sold by Scherico in the
Territory in such month and together with such payment shall supply
USB with a report (the "Net Sales Report"), in the form attached
hereto as Appendix I, setting forth for each country in the Territory
for such month: (i) Net Sales in local currency; (ii) US $ exchange
rate for conversion of Net Sales; (iii) Net Sales in US $; (iv) net
Vials sold; (v) Average Purchase Price Per Vial (calculated in
accordance with the formula set forth below); (vi) applicable
percentage; and (vii) gross purchase price due USB. The Average Per
Vial Net Sales Price of Product in the Major Markets shall be
calculated in accordance with the following formula:
Net Sales in the month (US $) in the Major Markets divided by the
corresponding number of Vials sold in the Major Markets, net of
returns, in the month = Average Per Vial Net Sales Price of Product
* Confidential material
omitted and filed
separately with the
Commission.
-9-
<PAGE>
(c) Commensurate with the signing of this Amendment, Scherico shall
provide USB with a Net Sales Report for the 1996 months ending January
31, February 29, March 31, April 30, May 31, June 30, July 31, 1996
and August 31, 1996 and pay to USB the Purchase Price Per Vial for all
Vials sold by Scherico in the Territory during such months. For all
Product purchased prior to the date of this Amendment, Scherico shall
be entitled to a credit against the Purchase Price Per Vial of any
amounts previously paid to USB in respect of such Vials.
(d) For all Product purchased by Scherico after August 31, 1996, USB
shall bill Scherico at the time of shipment [ * ]
per Vial (the "Deposit Payment"), which amount includes all freight,
insurance and customs duties for shipment of Product. Scherico shall
pay the amounts of the invoices within thirty (30) business days. For
Product sold by Scherico in the Territory after August 31, 1996,
Scherico shall be entitled to a credit against the Purchase Price per
Vial equal to [ * ]. In the event Product
remains unsold by Scherico at its expiration date, Scherico's Deposit
Payment with respect to such Product shall be considered payment for
such Product and no additional amounts shall be due from Scherico with
respect to such Product. Product sold to Scherico under this
Agreement is nonreturnable, except as specifically provided in Section
8.5 of this Agreement.
(e) Scherico agrees that it shall not encourage, through commercial
incentives or otherwise, stock-in of inventory by Scherico's customers
above normal ordering patterns for the purpose of purchasing Product
from USB at a lower price level in effect prior to a Product price
increase in accordance with paragraph (a) of this Section.
(f) USB shall provide Scherico with clinical supplies of Product to
Scherico for use in the Clinical Research Program as described in
Section 7.1 (c) of the Agreement at a price of [ * ]
per Vial, which amount includes all freight, insurance, and customs
duties charges for shipment of Product, but only for studies where
Product will be provided free of charge to investigators; provided
however, if USB's Cost of Goods materially increases or decreases
after the date hereof, the parties shall negotiate in good faith an
increased or decreased price for Product for
* Confidential material
omitted and filed
separately with the
Commission.
-10-
<PAGE>
clinical study purposes which shall be USB's Cost of Goods plus the
amount of the SRI Royalty actually paid by USB to the Southern
Research Institute for such Product.
(g) Notwithstanding any other provision of the Agreement or this
Amendment, the Purchase Price Per Vial for Product sold to Scherico
hereunder shall not be less than USB's Cost of Goods plus the amount
of the SRI Royalty actually paid by USB to the Southern Research
Institute for such Product."
15. Compensation to USB During Transition Period. Section 6.6 is hereby
--------------------------------------------
amended by deleting Section 6.6 in its entirety and replacing it with the
following:
"6.6 (a) For any country where USB has elected to begin the Transition
Period, Scherico shall pay to USB, in addition to the compensation
specified in paragraph 6.5(a) of this Agreement, as amended, an amount
equivalent to [ * ] of the [ *
] achieved in such country during each Contract Year of the
Transition Period, provided that, in such country, USB has used
diligent efforts to promote and sell the Product in such country
during such Contract Year. For purposes of this Agreement the
[ * ] for each Contract Year of the
Transition Period shall be calculated, on a country-by-country basis,
as follows:
[ *
]
* Confidential material
omitted and filed
separately with the
Commission.
-11-
<PAGE>
[ *
]
* Confidential material
omitted and filed
separately with the
Commission.
-12-
<PAGE>
[ *
]
* Confidential material
omitted and filed
separately with the
Commission.
-13-
<PAGE>
[ *
]
Within sixty (60) days after the end of each Contract Year of the
Transition Period, Scherico shall pay USB the amount due in accordance
with this Section 6.6(a), as amended. Notwithstanding the foregoing,
if USB has elected to accelerate the Transition Period in accordance
with Section 5.2 of this Agreement, as amended, the compensation
formula for the Exclusive Period specified in Section 6.5(a) of this
Agreement, as amended, shall continue in effect and the additional
payments provided for in this paragraph 6.6(a) shall not accrue or
become due or payable until after the end of the seventh Contract
Year. The method for computing the compensation due to USB as set
forth above in this Section 6.6 (a) shall not be applicable if a new
therapeutic indication is approved for the Product in the Territory
during the Transition Period. In such event, the parties shall meet
to negotiate in good faith a compensation formula that takes into
account the marketing efforts put forth by USB and Scherico and the
increase in sales that is attributable to the approval of the new
therapeutic indication for the Product."
16. Withholding Taxes, etc. Section 6.7 is hereby amended by deleting the
-----------------------
phrase "and shall not be included in the
* Confidential material
omitted and filed
separately with the
Commission.
-14-
<PAGE>
calculation of Operating Profits" from the third sentence of Section 6.7 and by
deleting the phrase ", which shall not be included in the calculation of
Operating Profits" from the fourth sentence of Section 6.7.
17. Clinical Trials, etc.
--------------------
a. Section 7.1 (a) is hereby amended by deleting the last sentence of
Section 7.1 (a) in its entirety.
b. Section 7.1 (b) is hereby amended by deleting the last sentence of
Section 7.1 (b) in its entirety.
c. Section 7.1 (c) is hereby amended by deleting from the last sentence of
Section 7.1 (c) the following: "included as an Allowable Expense to the
extent provided in Exhibit A hereto and included in the calculation of
Operating Profits" and replacing it with the following: "at the sole cost
and expense of Scherico."
18. Product Registrations. Section 7.2 (b) is hereby amended by deleting
---------------------
Section 7.2 (b) in its entirety and replacing Section 7.2 (b) with the
following:
"7.2 (b) Scherico shall reimburse USB for [ * ] of the
filing fees previously paid by USB for Regulatory Approvals in the
Territory. Such reimbursement shall be in the amount of [
* ] and
shall be payable within ten (10) business days after the date of
execution of the Amendment to this Agreement. USB and Scherico shall
share equally all filing fees paid for Regulatory Approvals in the
Territory from and after the date of the Amendment to this Agreement
through the end of the Distributorship Period. Scherico shall pay
such fees within thirty (30) days of invoice by USB."
19. Pricing and Reimbursement Approvals. Section 7.3 (b) is hereby
-----------------------------------
amended by deleting from the second sentence of Section 7.3 (b) the following:
"outside the calculation of Operating Profits".
20. Recalls and Market Withdrawals. Section 7.7 (b) is hereby amended by
------------------------------
deleting from the first sentence of Section 7.7
* Confidential material
omitted and filed
separately with the
Commission.
-15-
<PAGE>
(b) the following: "outside the calculation of Operating Profits,".
21. New Formulation. Section 7.8 is hereby amended by deleting the sixth
---------------
sentence of Section 7.8 in its entirety, which sentence states "The sharing of
costs and expenses under this Section 7.8 is separate and outside the
calculation of Operating Profits."
22. Purchase and Tender of Product.
------------------------------
a. Section 8.2 (b) is hereby amended by deleting the last sentence of
Section 8.2 (b) and replacing it with the following: "USB shall provide
Scherico with unlabelled Product which Scherico shall label in compliance
with the law and all regulatory requirements for Labelling of such stock.
All such Labelling shall be at the sole cost and expense of Scherico."
b. Section 8.2 (c) is hereby amended by deleting from the first
sentence of Section 8.2 (c) the following: "in the calculation of
Operating Profits".
c. Section 8.2 (d) is hereby amended by deleting Section 8.2 (d) in
its entirety and replacing it with the following:
"8.2 (d) Unless otherwise agreed by the parties, USB shall be
responsible for shipping the Product to Scherico's distribution
facility in Heist-Op-Den-Berg, Belgium within the Territory with
insurance, freight and customs duties prepaid by USB."
23. Calculation of Operating Profits; Purchase Price. Section 8.3 is
------------------------------------------------
hereby amended by deleting Section 8.3 in its entirety and by replacing it with
the following:
"8.3 Purchase Price. With respect to the Exclusive Period, the
--------------
Purchase Price Per Vial for Product shall be as set forth in Section
6.5 of the Agreement, as amended. With respect to the Transition
Period, the Purchase Price Per Vial for Product shall be as set forth
in Sections 6.5 and 6.6 of the Agreement, as amended."
* Confidential material
omitted and filed
separately with the
Commission.
-16-
<PAGE>
24. Rejection of Product. Section 8.5 (b) is hereby amended by deleting
--------------------
from Section 8.5 (b) the term "Purchase Price" from the eighth line of Section
8.5 (b) and replacing it with the following: "actual purchase price paid to USB
by Scherico for such Vials".
25. Alternate Supply of the Product.
-------------------------------
a. Section 8.6 (a) is hereby amended by deleting from Section 8.6 (a)
the second sentence as follows: "If Scherico's Cost of Goods for such
period exceeds [ * ] of Net Sales, the parties shall equally share the
applicable excess amount of Cost of Goods, outside the calculation of
Operating Profits." Section 8.6(a) is hereby further amended by adding to
Section 8.6(a) as its last sentence the following: "In the event that
Scherico is manufacturing finished Product (itself or at a third party
facility) pursuant to this Section 8.6, as amended, Scherico shall pay USB
in respect of such Product the amounts set forth in Sections 6.5(a) and
Section 6.6, as amended, less the greater of [ * ] per
vial or the Cost of Goods that would have otherwise been attributed to the
manufacture of such finished Product if USB were to manufacture such
finished Product."
b. Section 8.6 (c) is hereby amended by deleting Section 8.6 (c) in
its entirety.
26. Transfer of Inventory. Section 9.2 is hereby amended by deleting
---------------------
beginning on the ninth line of Section 9.2 the following: "the most recent
Purchase Price for the Product calculated pursuant to Section 8.3 hereof" and
replacing it with the following "the actual purchase price paid to USB by
Scherico for such Vials".
27. Transfer of Registrations. Section 9.4 is hereby amended by deleting
-------------------------
from the last sentence of Section 9.4, the following: ", outside the
calculation of Operating Profits".
28. Compensation to Scherico. Section 9.5 (a) is hereby amended by
------------------------
deleting from Section 9.5 (a) the following: "[ * ] of Operating Profits during
the eighth Contract Year, [ * ] of Operating Profits during the ninth Contract
Year, and [ * ] of Operating Profits during the tenth Contract Year" and
replacing it with the following: "[ * ] of Net Sales
* Confidential material
omitted and filed
separately with the
Commission.
-17-
<PAGE>
during the tenth Contract Year, [ * ] of Net Sales during the
eleventh Contract Year, and [ * ] of Net Sales during the twelfth
Contract Year;" and further amended by deleting the last sentence of Section 9.5
(a) and replacing it with the following: "All such payments shall be made
within thirty (30) business days after the end of each month in the Final
Period, in accordance with the terms of Article 10 hereof and shall be
accompanied by the report described in Section 9.7 (c)."
29. Certain Obligations of USB During Final Period.
----------------------------------------------
a. Section 9.7(b) is hereby amended by deleting from the second
sentence of Section 9.7(b) the following: "Cost of Goods and Operating
Profits, by quarter."
b. Section 9.7 (c) is hereby amended by deleting from the first line
of Section 9.7 (c) the following: ", upon request,".
c. Section 9.7 (d) is hereby amended by deleting Section 9.7 (d) in
its entirety.
30. Advance to USB. Section 10.4 is hereby amended by deleting Section
--------------
10.4 in its entirety.
31. Records. Section 10.5 is hereby amended by deleting from the first
-------
sentence of Section 10.5 the words "Allowable Expenses" and "Operating Profits".
32. Term of Agreement. Section 14.1 is hereby amended by deleting from
-----------------
Section 14.1 from the second line, the term "tenth" and replacing it with the
term "twelfth".
33. Termination by Scherico. Section 14.4 is hereby amended by deleting
-----------------------
the last sentence of Section 14.4 in its entirety and replacing it with the
following: "Scherico shall not be obligated to make any payment that becomes
due in accordance with the terms of Sections 6.2 or 6.4 after the termination
date."
34. Exhibit A. Exhibit A is hereby amended by deleting from Exhibit A,
---------
Section IV., Allowable Expenses during Exclusivity
* Confidential material
omitted and filed
separately with the
Commission.
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<PAGE>
Period; A. Scherico's Allowable Expenses, the provisions setting a limit on
Scherico's Allowable Expenses during the Exclusive Period. Scherico shall have
no limit on its Allowable Expenses under the Agreement, as amended. Exhibit A
is further amended by deleting Section VI.B. in its entirety. Exhibit A is
further amended by deleting from Section VII the first three sentences.
35. Payments to USB. Within ten (10) business days after execution of
---------------
this Amendment Scherico shall pay to USB four million one hundred forty thousand
five hundred twelve dollars ($4,140,512.00).
36. Effect of Amendment. Other than the specific amendment set forth
-------------------
above, all other terms and conditions of the Agreement shall remain in full
force and effect. This Amendment embodies the full and complete understanding
of the parties hereto with respect to the matters addressed herein and
supersedes all prior understandings and agreements whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute this Amendment to the Agreement.
U.S. BIOSCIENCE, INC. SCHERICO, LTD.
By: /s/ Philip S. Schein By: /s/ ppa Eric Dicker
------------------------- -------------------------
Name: Philip S. Schein Name: Eric Dicker
----------------------- -----------------------
Title: Chairman and CEO Title: Prokurist
---------------------- ----------------------
Date: September 19, 1996 Date: September 18, 1996
----------------------- -----------------------
/95284-8/
* Confidential material
omitted and filed
separately with the
Commission.
-19-
<PAGE>
GUARANTY
IN CONSIDERATION OF U.S. BIOSCIENCE, INC., ("USB") entering into an
amendment on the date hereof to the May 10, 1993 Distribution and Supply
Agreement with Scherico, Ltd. (the "Affiliate"), a wholly-owned subsidiary of
SCHERING-PLOUGH CORPORATION (the "Guarantor"), (such Agreement as amended
hereinafter referred to as the "Amended Agreement"), Guarantor hereby
guarantees, and will cause to occur (whether through the Affiliate, Guarantor or
otherwise) the prompt and complete performance of all the applicable terms and
conditions of said Amended Agreement to be performed by the Affiliate,
including, but not limited to prompt payment of all sums payable thereunder, and
the undersigned further agrees to indemnify and hold USB, its successors and
assigns, harmless from and against any and all liability, loss, damage or
expense, including reasonable attorneys' fees which USB may incur or sustain by
reason of the failure of said Affiliate to fully perform and comply with such
terms and conditions of said Amended Agreement.
This is a continuing, absolute, irrevocable and unconditional guaranty and
shall continue until all obligations under the Amended Agreement have been
satisfactorily performed or otherwise discharged by the Affiliate. The
liability of the undersigned shall not be affected or decreased by any
amendment, termination (to the extent obligations survive such termination),
extension, renewal, waiver or modification of said Amended Agreement; provided,
however, that in no event shall the liability of the Guarantor ever be greater
than or in excess of the liability or obligations of the Affiliate, as
established by the terms of the Amended Agreement; and provided also, that any
alteration, or modification or amendment of the Amended Agreement entered into
by USB and the Affiliate that would in any way increase the extent of
Guarantor's obligations hereunder, or make performance by the Affiliate more
difficult shall not be binding on the Guarantor unless the written consent of
Guarantor to the change has been obtained in advance. The Guarantor shall also
have the benefit of any modification of the Amended Agreement and shall have the
benefit of any settlement, compromise or adjustment of any claims of the
Affiliate arising out of the Amended Agreement.
Any failure by USB to proceed under this Guaranty in any particular
circumstance shall not operate as a waiver of any further right to proceed under
this Guaranty as to such circumstance or in any other circumstance. This
Guaranty shall be binding upon the successors and assigns of Guarantor and shall
inure to the benefit of USB's permitted successors and assigns under the Amended
Agreement. The rights of USB under this Guaranty are in addition to and
independent of any other rights USB may have under the Amended Agreement.
Guarantor waives any right to require USB to proceed against Affiliate or to
exhaust any collateral or to pursue any other remedy USB may have at law or in
equity.
SCHERING-PLOUGH CORPORATION
By: /s/ Raul Cesan
-------------------------------
Title: Executive Vice President
----------------------------
Date: September 18, 1996
-----------------------------
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