Exhibit 10.11.2
SECOND AMENDMENT TO MANUFACTURING AGREEMENT
This second amendment, dated May ____, 1996, is by and between U.S.
Bioscience, Inc. ("USB"), a corporation organized and existing under the laws of
the State of Delaware, having a place of business at One Tower Bridge, 100 Front
Street, West Conshohocken, Pennsylvania 19428 and Applied Analytical Industries,
Inc. ("AAI"), a corporation organized and existing under the laws of the State
of Delaware, having a place of business at 1206 North 23rd Street, Wilmington,
North Carolina 28405.
WHEREAS, USB and AAI entered into a Manufacturing Agreement dated
January 1, 1995 (the "Agreement"), relating to the manufacture of Hexalen(R)
(Altretamine);
WHEREAS, USB and AAI amended the Agreement by an Amendment to
Manufacturing Agreement dated April 12, 1995; and
WHEREAS, USB and AAI desire to further amend the Agreement to extend
the term of the Agreement for five (5) years and as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and intending to be legally bound hereby, the parties hereby agree as
follows:
1. Definitions: 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. Current Good Manufacturing Practice. Section 1.2 of the Agreement
shall be amended by deleting Section 1.2 in its entirety and in its place
inserting the following Section 1.2:
"1.2 CURRENT GOOD MANUFACTURING PRACTICE" or "cGMP" shall mean
those current Good Manufacturing Practice regulations required by the
FDA in the production of pharmaceutical products as published in Title
XXI Code of Federal Regulations and, for PRODUCTS to be manufactured
for distribution in the European Economic Community, those current Good
Manufacturing Practice regulations required by the European Economic
Community as referred to in Article 16 of Directive 75/319/EEC and
Article 24 Directive 81/85/EEC as modified."
3. PRODUCT. Section 1.10 of the Agreement shall be amended by adding
the following immediately after the word "bulk" in the third line of that
section:
"Prepared for bottled presentation."
Section 1.10 shall be further amended by adding the following as the last
sentence of that Section:
"PRODUCT shall not include Hexalen for presentations other
than bottled presentations, including without limitation Hexalen in
capsules for blister packaging."
4. Services Performed by Third Parties. A new Section 3.11 shall be
added to the Agreement as follows:
"3.11 Services Performed by Third parties. AAI shall be
prohibited from subcontracting out any of the services to be provided
by AAI hereunder; provided, however, that AAI may subcontract out such
services to third parties upon receipt of USB's prior written consent
and that the results of such services are available for inspection by
USB."
5. Warranties. Section 8.1 of the Agreement shall be amended by
deleting Section 8.1 in its entirety and in its place inserting the following
Section 8.1:
"8.1 WARRANTIES. AAI warrants that it will PREPARE the PRODUCT
in accordance with cGMPs and the requirements established for PRODUCT
in the SPECIFICATIONS and that it will not manufacture any PRODUCT for
distribution in the United Kingdom until such time as it has received
manufacturing details and specifications set forth in the applicable
product license."
6. Term. Section 11.1 of the Agreement shall be amended by deleting the
word "two (2)" in the first sentence and in its place inserting the word "seven
(7)".
7. Manufacturing Schedule. Section 2.1A of the Agreement shall be
amended by inserting in the first sentence immediately following "AAI and USB
shall mutually agree upon the annual price," the following:
"which shall be no higher than the price in effect under this Agreement
on the date of this Amendment; provided however, that AAI shall be
entitled to an increase in its annual price for PRODUCT hereunder
beginning in calendar year 1997, which increase shall be limited to the
percentage increase in the Producer Price Index for Pharmaceuticals
prepared by the Labor Department's Bureau of Labor Statistics for the
calendar year immediately preceding the calendar year for which the
price increase applies."
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Section 2.1A of the Agreement shall be further amended by adding the following
sentence:
"AAI agrees that from time to time under this Agreement in the event
USB materially reduces its market price of Hexalen to meet competitive
market conditions, USB and AAI shall negotiate in good faith a price
for PRODUCT hereunder which is mutually acceptable to both parties. In
the event the parties are unable to negotiate a price acceptable to
both parties, USB shall have the right, without penalty, to terminate
this Agreement upon 60 days prior written notice to AAI."
8. Primary Supplier. A new section 2.4 shall be added to the Agreement
as follows:
"2.4 During the term of this Agreement USB agrees to use AAI
as its primary supplier of PRODUCT for the United States commercial
market. For purposes of this Agreement, primary supplier shall mean AAI
will, as primary supplier for the United States commercial market for
PRODUCT, PREPARE all but such quantities as shall be reasonably
required to qualify and maintain a secondary supplier of PRODUCT for
the United States commercial market. Provided however, that USB shall
no longer be required to use AAI as its primary supplier for PRODUCT
for the United States commercial market if AAI at any time under this
Agreement is unable to supply PRODUCT to USB in compliance with USB
orders for PRODUCT. USB shall have the right unrestricted by this
Agreement to have others manufacture Hexalen for presentations other
than bottled presentations, including without limitation, Hexalen in
capsules for blister packaging, for commercial sale in the United
States. USB reserves the right at any time to discontinue commercial
sale of PRODUCT in the United States and to sell in its place Hexalen
in any other form or presentation."
9. Non-Compete. A new section 12.10 shall be added to the Agreement as
follows:
"12.10 Non-Compete. Except for the manufacture of Hexalen
(altretamine) for USB pursuant to the terms of this Agreement, AAI
agrees that during the term of this Agreement and for a period of five
(5) years thereafter AAI will not make, develop, use, promote, market,
distribute or sell (or otherwise commercialize) directly or indirectly
(including but not limited to activities conducted through an
AFFILIATE) any product containing altretamine as an active ingredient.
This obligation shall survive the termination or expiration of this
AGREEMENT."
10. Construction. A new section 12.11 shall be added to the Agreement
as follows:
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"12.11 Construction. If any provision or clause of this
Agreement, or portion thereof, shall be held by any court or other
tribunal of competent jurisdiction to be illegal, void, or
unenforceable, the remainder of the Agreement shall not be affected and
shall be given full force and effect. It is the intention of the
parties that, if any court or other tribunal construes any provision or
clause of this Agreement, or any portion thereof, to be illegal, void,
or unenforceable because of the duration of such provision or the area
or matter covered thereby, such court shall reduce the duration, area
or matter of such provision and enforce such provision in its reduced
form."
11. 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 understanding and agreements whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute this Amendment.
APPLIED ANALYTICAL INDUSTRIES, INC.
By:_____________________________________________
Anthony F. Arato
Vice President, Manufacturing and Engineering
U.S. BIOSCIENCE, INC.
By:_____________________________________________
Donald O. Brown
Senior Vice President, Pharmaceutical Operations
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