Exclusive Distribution Agreement

EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------


THIS AGREEMENT is made the 18th day of October 1994 - --------------


BETWEEN - -------


1. CHARTEX INTERNATIONAL PLC, Company No. 243 9625 whose principal place of
business is at 1 Sovereign Park, Coronation Road, London NW10 7QP
("Chartex"); and


2. TAIHO PHARMACEUTICAL CO., LTD., whose registered office is at 1-27,
Kandanishiki-cho, Chiyoda-ku, Tokyo 101, Japan ("Taiho").


IT IS HEREBY AGREED - -------------------


1. Appointment
-----------


1.01 Chartex hereby appoints Taiho as its exclusive distributor in Japan
(the "Territory") for the products listed in Appendix I to this
Agreement as may be amended by written agreement between Chartex and
Taiho from time to time (the "Products").


2. Exclusivity
-----------


2.01 Chartex shall not supply the Products in the Territory to any person
other than Taiho during the term of this Agreement, except that
Chartex may sell Products to international non-profit organizations,
such as UN, WHO, IPPF or the like.


2.02 Taiho shall purchase all its requirements for the Products from
Chartex.


2.03 Subject to Clause 9 hereof, Chartex shall timely supply to Taiho all
of its requirements for the Products.


2.04 Taiho shall commence actual distribution of the Products within six
(6) months of the date of acquisition of the relevant permission or
licence required to import and market the Products in the Territory
from the Ministry of Health and Welfare of the Japanese Government


(the "Ministry"). The first day of such actual distribution is
hereinafter referred to as the "Distribution Date" and the date of
the approval contained in the Koseisho Certificate (the
"Certificate") is hereinafter referred to as the "Approval Date." In
connection with the application process for the Certificate, Taiho
will keep Chartex reasonably informed of the steps being taken
towards receipt of the Certificate and the progress being made in
respect thereof.


3. Term
----


3.01 This Agreement shall be for an initial period commencing on the date
of execution by both parties of this Agreement and ending on the
fifth anniversary of the Approval Date, and shall continue
thereafter for additional periods of two (2) years each unless and
until terminated as provided in this Agreement.


3.02 Either party may terminate this Agreement as of such fifth
anniversary or at the end of any such 2-year renewal period by
giving to the other party not less than six (6) months' prior
written notice.


4. Marketing and Support
---------------------


4.01 Taiho shall at its own expense and at all times during the term of
this Agreement actively promote and endeavour to increase sales of
the Products throughout the Territory to all the sectors potentially
relevant to the Products. Taiho agrees, given its exclusivity within
the Territory, to use reasonable efforts to sell 3.5 million and 5.0
million Products in the first and second twelve-month periods,
respectively, following the Distribution Date. In attempting to
attain such sales figures, Taiho may include samples purchased at
full price hereunder.


4.02 Taiho shall submit to Chartex a marketing plan, on or prior to May
15 of each year, concerning its activities for the twelve (12)
months starting the immediately following July 1. Each marketing
plan shall include a forecast of both Taiho's sales and purchases of
the Products in the period in question, and a general


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description of Taiho's proposed marketing expenditures for the same
period.


4.03 Chartex shall give to Taiho all technical and sales assistance
reasonably necessary in connection with the sales of the Products in
the Territory.


5. Advertising and Promotion
-------------------------


5.01 Without affecting Taiho's freedom to select the prices at which and
other terms on which the Products are resold, Taiho shall keep
Chartex reasonably informed with respect to Taiho's advertising or
promotional materials relating to the Products, and shall, at
Chartex's reasonable request, provide Chartex with copies of such
materials (translated if necessary).


5.02 In the event that any person or entity alleges that there exist
inappropriate, unlawful or unsubstantiated statements in any text
prepared or suggested by Chartex or Taiho in relation to the
Products, either in leaflets, sales manuals, promotional or
packaging material or the like, Taiho shall refrain from entering
into any correspondence, defence, polemics, discussion or admission,
except for acknowledging receipt and reporting to Chartex
immediately for negotiation, unless in the reasonable opinion of
Taiho it is necessary for it to take immediate action in order to
prevent damage being done to the reputation of the Products in the
Territory and in such circumstances Chartex shall be immediately
informed of the allegations raised and the manner in which they have
been dealt with by Taiho.


6. Minimum Purchases
-----------------


During the first two twelve-month periods immediately following the
Distribution Date Taiho shall purchase at least 1.8 million and 2.0 million
Products, respectively; provided, however, that the parties hereto
acknowledge that these amounts represent minimum acceptable amounts within
the Territory. Products purchased at normal prices hereunder and used as
samples shall count towards Taiho's obligations under this Clause 6.


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7. Competing Products
------------------


During the term of this Agreement Taiho shall not (and shall procure that
none of its associated companies shall) market in the Territory any tubular
prophylactic plastic barrier device used by women or men for protection
against the transfer of infectious matter and against pregnancy during
sexual intercourse.


8. Activities Outside the Territory
--------------------------------


Taiho shall not sell Products to any customers, or establish any branches,
sales offices or distribution depots for the Products, outside the
Territory; provided, however, that should Taiho receive a purchase inquiry
or order from an international non-profit organization UN, WHO, IPPF or the
like outside the Territory Chartex shall, absent any conflicting
contractual obligations on its part, discuss in good faith with Taiho the
waiver by Chartex of the prohibition contained in the first clause of this
sentence.


9. Forecasts and Orders
--------------------


9.01 Prior to Taiho's first submission to the Ministry of documents
relating to the Products, the parties hereto shall meet to discuss
and agree, in good faith, a system for ordering Products and
forecasting such orders, taking into consideration all relevant
factors including, but not limited to, the fact that (i) during the
initial marketing and sales periods, Taiho will not be able to
forecast accurately either demand or sales, and (ii) accurate and
frequent forecasts in advance of shipping dates are required by
Chartex in order to efficiently plan and conduct production,
particularly as regards raw material suppliers, capital acquisitions
and workforce constraints; provided, however, that in no event shall
Chartex be required to supply in any given month during the term of
this Agreement a Product quantity in excess of 25.0% of its monthly
Product production capacity unless agreed by Chartex in writing.


9.02 Nothing in Clause 9.0l shall be deemed to relieve Taiho of its
obligations under Clause 6.


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9.03 A11 contracts for the sale of the Products by Chartex to Taiho shall
be subject to the terms of this Agreement. In the case of any
inconsistency between any individual sale and purchase contract and
this Agreement, the terms of this Agreement shall prevail.


10. Prices
------


10.01 During the first two (2) years immediately following the date of
this Agreement, Chartex shall sell and Taiho shall purchase the
Products at a CIF (Kobe or Osaka) price based on the FOB price of
(Pounds)0.35 per Product. This price is based on Chartex's supplying
Products in its standard packaging, it being understood by the
parties hereto that Taiho shall bear all costs associated with
requested deviations from this standard packaging.


10.02 No later than three months prior to the second anniversary of the
date of this Agreement, Chartex and Taiho shall begin to negotiate
in good faith the price at which Products may be sold and purchased
hereunder subsequent to such second anniversary. Without limiting
the generality of the foregoing good-faith obligation, neither party
shall make demands which are unreasonable considering the relative
facts and circumstances surrounding such negotiations. If agreeable
to both parties, the price set for the first 2-year period under
Clause 10.01 may continue in force and effect after such period.


10.03 Chartex reserves the right to charge any additional costs incurred
by Chartex in repackaging and/or storing Products ordered by Taiho.


10.04 Payment shall be made by Taiho, on the date of despatch of Products,
in Pounds Sterling in London by way of a confirmed, irrevocable
letter of credit, which letter of credit shall be in all material
respects in the form set out in Appendix II.


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11. Delivery
--------


11.01 Unless otherwise agreed specifically in writing, and subject to
Clause 10.01, delivery shall be effected CIF (Osaka or Kobe).


11.02 Taiho must notify Chartex within sixty (60) days of the date of
delivery of any short delivery or any other apparent loss or damage
to the Products. In the absence of such notice, the Products shall
be conclusively deemed to have been delivered.


12. Storage and Out of Condition Products
-------------------------------------


12.01 Taiho shall store and transport the Products in conditions which
will preserve the Products in good condition.


12.02 Taiho shall not sell any of the Products which have become out of
condition for any reason. For the purpose of this Clause, "out of
condition" means Products (including packaging) which:


(a) Chartex has informed Taiho it would not regard as being
saleable; or


(b) have been damaged or have deteriorated.


12.03 If Products in the possession of, under the control of or sold by
Taiho are or become out of condition, Taiho shall, if requested by
Chartex, give all reasonable assistance to Chartex in locating and
recovering the out of condition Products and preventing their sale
to third parties. Taiho shall comply with any Product hold or
Product recall requirements practiced by Chartex.


12.04 All actions by Taiho pursuant to Clauses 12.02 and 12.03 shall be
taken at the expense of the party who is liable or responsible for
the cause of such action.


12.05 Chartex shall at its own expense replace any Products that on
delivery to Taiho are not in a saleable condition or are out of
condition.


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13. Compliance with Local Laws
--------------------------


Chartex and Taiho shall comply with (and Taiho shall keep Chartex
fully and as timely as possible informed of) all applicable laws,
regulations, industry standards, Codes of Practice, and other
voluntary controls concerning the Products in the Territory and
any changes therein.


14. Import Permission
-----------------


14.01 Without affecting the general nature of Clause 13, Taiho shall, at
its own expense, do all things (including conducting clinical
trials) reasonably necessary to obtain any approval, licence,
permission or registration of whatever nature necessary for the
importation, marketing, sale and use, under the Trade Mark or the
Chartex Mark (as hereinafter defined), of the Products in the
Territory as contemplated by this Agreement.


14.02 Chartex shall supply to Taiho free of charge any and all data and
samples of the Products reasonably necessary for obtaining approval,
permission or licence described in the preceding paragraph;
provided, however, that in no event shall Chartex be required under
this Clause 14.02 to supply more than 10,000 Products free of
charge.


14.03 All reports and data resulting from the trials conducted by Taiho in
connection with Taiho's application for approval, permission or
licence to import and market the Products in the Territory, shall,
subject to Clause 22, belong to and become the property of Taiho.
However, Taiho shall timely disclose to Chartex free of charge such
reports and data, and all other information, documents and data
generated in connection with such application, under the
confidentiality of Clause 17 of this Agreement, if requested by
Chartex. The foregoing shall be provided in English translation
wherever reasonably possible.


15. Indemnification
---------------


15.01 Each party hereto agrees to indemnify and hold harmless the other,
its associated companies and its and their respective directors,
officers and


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employees against any and all claims, demands, proceedings, losses,
costs and expenses which may be brought against, suffered or
incurred by it or them in consequence of any negligent act or
omission or wilful default or fraud by the party against whom
indemnification is sought hereunder in connection with any act,
service, obligation or transaction contemplated by this Agreemen ...