Tenofovir Disoproxil Fumarate Manufacturing Supply Agreement

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


Exhibit 10.62

GILEAD SCIENCES LIMITED.-AMPAC FINE CHEMICALS LLC

TENOFOVIR DISOPROXIL FUMARATE MANUFACTURING SUPPLY AGREEMENT

THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THE FOLLOWING:

THIS SUPPLY AGREEMENT (" Agreement" ) is entered into as of March 6, 2008 (" Effective Date" ), by and between Ampac Fine Chemicals LLC, a California limited liability company (" AFC" ) having its principal place of business at Highway 50 & Hazel Avenue, Rancho Cordova, CA 95670, and a mailing address of P.O. Box 1718, Rancho Cordova, CA 95741, and Gilead Sciences Limited, an Irish limited company (" GSL" ), having its principal place of business at Unit 13, Stillorgan Industrial Park, Blackrock, Co. Dublin, Ireland. AFC and GSL may be referred to individually as a " Party" and collectively as the " Parties" in this Agreement.

WHEREAS, AFC is a known manufacturer of active pharmaceutical ingredients with expertise in cGMP manufacturing, and GSL and its designees manufacture and market pharmaceutical products for human use. WHEREAS, AFC and GSL desire to establish mutually agreeable terms for the commercial supply of bulk tenofovir disoproxil fumarate (" Product" ) as an active pharmaceutical ingredient by AFC to GSL.

NOW, THEREFORE, in consideration of (i) AFC' s agreement to manufacture and supply Product to GSL for the monetary amounts set forth in this Agreement; (ii) the promises, covenants, agreements and other valuable consideration hereinafter set forth, and intending to be legally bound, the Parties hereby:

1. AGREEMENT ACCEPTANCE: AFC has read and understands these terms and conditions set forth in this Agreement (these " terms" ) and understands that AFC' s written acceptance or delivery of any Product under these terms shall constitute AFC' s acceptance of these terms. All terms and conditions proposed by AFC which are different from or in addition to these terms and are not agreed to in writing by GSL are expressly rejected by GSL, and shall not become a part of these terms. GSL has read and understands these terms and shall purchase the Product manufactured by AFC and pay for the supply of the Product in accordance with the terms and provisions of these terms. Any modifications to these terms shall, prior to their implementation, be mutually agreed upon by the Parties hereto and shall be made in accordance with Section 28.

Neither the General Sales Conditions of AFC nor the General Purchase Conditions of GSL shall apply to the supply of the Product by AFC to GSL pursuant to these terms.

2. TERM: The term of this Agreement shall begin as of the Effective Date, and shall remain in effect until December 31, 2010 (the " Initial Term" ) unless earlier terminated according to Section 13 " Termination" of this Agreement.


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CD-08-0029

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


3. SUPPLY: During the term of this Agreement, AFC will manufacture Product for GSL for use in manufacture of Finished Product (as defined in Section 4 below). During the term of this Agreement, AFC is obligated to manufacture Product at the location and in the quantities set forth herein. AFC will not manufacture or supply Product to any person or entity other than GSL without GSL' s prior written consent.

a) Facility: AFC will manufacture the Product for GSL only at its facility located at Rancho Cordova, CA, or such other facilities as the Parties agree to in writing (collectively, the " Facility" ). GSL has inspected the Facility and has acknowledged, based upon information in its possession as of the Effective Date, that the Facility appears to be appropriate for the purposes of manufacturing the Products.

b) Minimum Quantities: During the Initial Term and any renewal term GSL will purchase and AFC will deliver at least the quantities of Product set forth in Exhibit A. Failure in any year by GSL to purchase the required quantities will result in [ * ] an amount equal to the [ * ] , the invoice for which will be [ * ] , and such invoice shall be [ * ] . For clarity, Regulatory Terminations (as defined in Section 13(c) below) shall not be deemed to be breaches of GSL' s obligations under this Section 3(b).

c) Forecasting: Prior to [ * ] of [ * ] , GSL shall provide to AFC a [ * ] for the [ * ] . Such Purchase Order shall detail the [ * ] , and shall be [ * ] .

d) Acceptance: AFC will respond in writing to each purchase order received from GSL (" GSL Purchase Order" ) within [ * ] calendar days of receipt. The response shall include AFC' s inability to comply with, or confirmation of the delivery dates and quantities set forth in the GSL Purchase Order.

e) Failure to Supply: If AFC is unable to supply sufficient quantities of the Product to meet its minimum obligations under Section 3(b), or should either Party perceive that a shortfall in delivery of Product by AFC is likely to occur for any reason, the Parties will [ * ] GSL will have the right [ * ] or [ * ] . Any quantities [ * ] to meet such a shortfall shall be [ * ] . If GSL must [ * ] AFC shall be liable for [ * ] . Repeated shortfalls may be considered a material breach of this Agreement, as described in Section 13 of this Agreement. f) Delay: If release and/or shipment of any quantity is delayed after AFC has accepted an order, through the fault of AFC, by more than [ * ] days [ * ] [ * ] the quantity shall be considered a shortfall, and treated as above in Section 3(e). If such delay is caused by the fault of GSL, GSL will make [ * ] to remediate the fault [ * ] however, after [ * ] days from the date of expected release and/or shipment, AFC shall be entitled to issue the relevant invoice(s) in any case.

4. GOOD MANUFACTURING PRACTICES: AFC expressly warrants that all Product covered by these terms have been manufactured in accordance with current good manufacturing practices (" cGMP" ) as established by the United States Food and Drug Administration (the " FDA" ) for the manufacture of pharmaceutical materials, as well as other applicable rules and regulations of the FDA and other governmental or regulatory agencies of United States or other countries where finished products of GSL incorporating the Product (collectively, the " Finished Products" ) are marketed with jurisdiction over the manufacture, use, or sale of Product, as then in effect. Each party shall promptly notify the other of any new


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CD-08-0029

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


instructions or specifications required by the FDA, the Federal Food, Drug and Cosmetic Act, the Federal Public Health Service Act or other applicable regulations of the United States and/or other countries where the Finished Products are marketed, and shall confer with each other with respect to the best means to comply with such requirements and shall allocate any costs of implementing such changes on an equitable basis. Upon written request of GSL, AFC will permit representatives of GSL to observe such manufacture, or any government inspection of AFC' s manufacturing process for the Products covered by these terms, at mutually agreeable times and AFC shall permit GSL to inspect copies of AFC' s manufacturing records, including its batch records, for the purposes of assuring product quality and compliance with agreed-upon manufacturing procedures. 5. MANUFACTURING PROCESS: GSL shall make available to AFC, [ * ] all such know-how, information, and technical assistance if needed by AFC so as to allow AFC to manufacture Product with utmost efficiency and to the standard of GSL as will be more precisely described by GSL in writing to AFC before the start of manufacturing of the Product. AFC shall manufacture the Product in conformance with the relevant specifications, as then in effect (the " Specifications" ) and according to the manufacturing process description as set forth in the Gilead Sciences Tenofovir DF Contract Manufacturing Manual dated June 6, 2000, and as thereafter amended (the " Contract Manufacturing Manual" ).

6. RAW MATERIALS: Raw materials used in the manufacture of Product will conform to the specifications set forth in the Contract Manufacturing Manual (the " Raw Material Specifications" ) and such conformance will be verified in accordance with the testing standards and procedures specified therein. AFC agrees that it will facilitate changes to the Raw Material Specifications that are necessary or appropriate in light of FDA or other regulatory requirements. AFC shall not be liable hereunder if the raw materials meet the Raw Material Specifications and the Product fails to meet the Specifications because the Raw Material Specifications are inadequate.

7. CHANGE IN MANUFACTURING PROCESS: AFC shall obtain GSL' s prior written approval, per the Notification Policy (October 5, 2001), before implementing any planned change in the materials, equipment, process, or procedures used to manufacture the Product that would constitute a major change under cGMP, or that would constitute noncompliance with the manufacturing process set forth in the Contract Manufacturing Manual. AFC shall disclose all proposed changes in such manufacturing materials, equipment, process, or procedure to GSL at a level sufficient to allow GSL to practice such changed manufacturing process. GSL shall notify AFC of any change in the materials, equipment, process, analytical methods, specifications, or procedures to be used in the manufacture of the Product in writing, by means of timely updates to the Contract Manufacturing Manual, identical copies of which reside at AFC and GSL. AFC shall provide GSL with an authentic copy of the current master batch record for the preparation of the Product. The cost of implementing any amendment or change of whatever nature to the procedures described in the Contract Manufacturing Manual, as well as any extra costs resulting from the implementation of such change, shall be borne by [ * ] . However, the Parties recognize the pricing agreed in Exhibit A reflect implementation of the process developed by AFC and GSL during 2007-2008, which, at the time of this agreement, is not represented in the Contract Manufacturing Manual.


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CD-08-0029

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


8. PROCESS IMPROVEMENTS:

a) [ * ] agrees to communicate to [ * ] any idea and substantial improvement made by [ * ] arising from [ * ] under the following conditions: (i) all rights and title to improvements (patented or unpatentable) which are related to the [ * ] shall be assigned to [ * ] which shall have only the right to utilize such improvements in the manufacture of the Product; (ii) all rights and title to improvements (patented or unpatentable) which apply to the [ * ] and provided that [ * ] is not contained in said improvements, shall be assigned to [ * ] which shall have only the right to utilize such improvements in the process of the Product; (iii) a royalty-free worldwide exclusive license [ * ] shall be granted by [ * ] to [ * ] for improvements (patented or unpatentable) related to said processing [ * ] (iv) in the event that [ * ] contracts out the manufacture of the Product to any third party, any improvement made by [ * ] hereunder may be disclosed to such contract manufacturer but rights to use the same shall be restricted to the manufacture of the Product and the Parties hereto will [ * ] .

b) The Parties recognize the process changes under development by AFC and GSL for piloting and validation in 2008. All rights to said improvement shall be passed to [ * ] in accordance with the provisions of Section 8(a), (i) through (iii), above. The Parties confirm no further remuneration shall be sought by [ * ] under Section 8(a)(iv) above. AFC will produce a development report describing such revised process to be provided to GSL prior to commercial scale validation of such process. Further, AFC shall provide to GSL necessary assistance in support of technology transfer to one Gilead Sciences, Inc.-owned facility, which may include teleconferences, meetings, and chemistry support during the initial commercial campaign.

9. QUALITY CONTROL SAMPLE AND DOCUMENTATION: Manufacture of the Product shall at all times be in strict conformance with the Specifications and such conformance will be verified in accordance with the testing procedures, specified herein. Prior to the delivery of any batch of Product, AFC shall provide GSL with (i) a quality control sample of such batch to be held by GSL for analytical reference, (ii) written confirmation that the batch records for such batch have been reviewed and approved by AFC' s quality assurance unit (Certificate of Compliance), and (iii) a Certificate of Analysis confirming that such batch meets Specifications. No delivery of the Product shall be made until GSL accepts the material in accordance with the provisions of Paragraph 10.

10. BATCH ACCEPTANCE AND REJECTION: GSL shall have the right without penalty to cancel delivery of an entire batch of Product at any time within [ * ] days after receipt of the applicable Certificate of Compliance and Certificate of Analysis (the " Acceptance Period" ). Title and risk of loss for each batch of Product shall pass to GSL upon [ * ] . If no such notice of rejection is received, GSL shall be deemed to have accepted the batch of Product upon the expiration of Acceptance Period. Either GSL' s written acceptance of the batch or expiration of the Acceptance Period shall result in GSL assuming title and risk of loss for related batch. AFC shall be authorized to make delivery of the full batch upon GSL' s acceptance of the batch, pending receipt of specific delivery instructions from GSL. AFC represents and warrants that the Product delivered to the destination specified by GSL shall comply with the Specifications for


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CD-08-0029

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


the Product. Any contestation of the quantity of Product delivered to the destination specified by GSL or the related documentation must be made in writing to AFC within [ * ] days from receipt thereof by GSL or an agent of GSL. GSL and AFC shall [ * ] or [ * ] as appropriate. After notice of rejection is given, GSL shall cooperate with AFC in determining whether rejection is necessary or justified. AFC will evaluate process issues and other reasons for such non-compliance. AFC shall notify GSL as promptly as reasonably possible whether it accepts GSL' s basis for any rejection. In the event that such contestation of quality by GSL is not accepted by AFC, a sample of the contested batch sealed by AFC in compliance with applicable regulations shall be submitted by AFC to an independent laboratory, acceptable to GSL, and the check assay of said laboratory shall be accepted by the two Parties as final and binding. The cost of said analysis made by the laboratory shall be borne by the failing party. Whether or not AFC accepts GSL' s basis for rejection, AFC shall use reasonable efforts at GSL' s request to replace such rejected Product. If the third party laboratory determines that the batch meets the Specifications, GSL gua ...