Lonza Agreement





[***] Indicates that material has been omitted and confidential treatment
has been requested therefor.  All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.



                CONFIDENTIAL TREATMENT REQUESTED - EDITED COPY





Exhibit 10.2

SUPPLY AGREEMENT

This Supply Agreement (the "Agreement") is
entered into as of December 18, 2000 (the "Effective Date"), between
Lonza AG, having an address at Muenchensteinerstrasse 38, CH-4002, Basel,
Switzerland, and Lonza Inc., having an address at 17-17 Route 208, Fair
Lawn, New Jersey 07410 (Lonza AG and Lonza Inc. are jointly referred to herein
as "LONZA"), and Pharmacyclics, Inc., a Delaware corporation,
having its principal executive offices at 995 E. Arques Avenue, Sunnyvale,
California 94086-4521 ("PCYC").  LONZA and PCYC are sometimes referred
to herein individually as a "Party" and collectively as the
"Parties."

Recitals

Whereas, PCYC is engaged in the development of and owns
or has a license to certain rights relating to its proprietary compounds
motexafin lutetium and motexafin gadolinium, each of which is a human
pharmaceutical agent for the treatment of certain diseases, and wishes to
develop, market and commercially distribute such agents;

Whereas, LONZA has expertise in conducting the cGMP
manufacturing of bulk pharmaceuticals and intermediates therefor;

Whereas, LONZA and PCYC are parties to that certain
Feasibility Evaluation Agreement effective April 15, 1999, as amended March 29,
2000, regarding LONZA's conduct of certain process scale-up and cGMP fine
chemicals manufacturing services for PCYC;

Whereas, PCYC now desires to have LONZA manufacture,
label, package, test and ship bulk forms of its proprietary pharmaceutical
compounds and intermediates therefor, and LONZA desires to undertake such
activities, on the terms hereinafter set forth;

Now, Therefore, in consideration of the foregoing
premises and the mutual promises hereinafter set forth, the Parties hereby agree
as follows:





	



Definitions.

As used herein, the following capitalized terms shall
have the following meanings:



	"Acceptable Product" means a Batch of
Product Manufactured by LONZA and delivered to PCYC hereunder that meets the
Release Criteria for such Product, as determined pursuant to Section
4.2.


	"Affiliate" means, as to a Party hereto,
any person, corporation, company, partnership, joint venture, firm and/or other
entity which controls, is controlled by or is under common control with such
Party.  For these purposes, "control" means direct or indirect
ownership or control of at least fifty percent (50%) of the outstanding voting
securities of a corporation or a comparable equitable interest in any other type
of entity.


	"Batch" means a specific quantity of a
Product that (a) is intended to have uniform character and quality within
specified limits, and (b) is produced according to a single Manufacturing order
during the same cycle of Manufacture.


	"Capacity" means, with respect to each
Product to be Manufactured by LONZA hereunder, LONZA's Manufacturing capacity
for such Product, as set forth in the applicable Product Appendix.


	"Confidential Information" shall have
the meaning ascribed in Section 12.


	"Controlled" means, with respect to any
material, information or intellectual property right, possession of the ability
by a Party to grant access, a license, or a sublicense to such material,
Information or intellectual property right as provided for herein without
violating an agreement with a third party as of the time such Party would be
first required hereunder to grant the other Party such access, license or
sublicense.  


	"Current Good Manufacturing Practices" or
"cGMP" means: (a) the good manufacturing practices required by the
FDA and set forth in the FD&C Act or FDA regulations (including without
limitation 21 CFR 210 and 211), policies, or guidelines, in effect at any time
during the term of this Agreement, for the manufacture and testing of
pharmaceutical materials as applied to bulk pharmaceuticals or their
intermediates, as applicable; and (b) the corresponding requirements of each
applicable Regulatory Authority, in each case as may be further specified in the
applicable Product Appendix.


	"Development Technology" means all IP
and all "Improvements" (as defined in Section 1.4 of the Prior
Agreement).


	"Drug Master File" or "DMF"
means, with respect to each Product Manufactured by LONZA hereunder, a drug
master file covering LONZA's Manufacture of such Product in accordance with 21
CFR 314.420, as may be amended from time to time, and any foreign
equivalents.


	"Drug Product" means a filled and
finished pharmaceutical product for clinical use, or for commercial use and/or
sale, that employs or incorporates one or more Products.


	"Drug Substance" means a bulk form of
the pharmaceutically active compound motexafin lutetium or motexafin gadolinium,
as applicable.  


	"Facility" means LONZA's Manufacturing
facility located in Visp, Switzerland, or such other Manufacturing facility as
may be set forth in the applicable Product Appendix.


	"FDA" means the United States Food and
Drug Administration or any successor entity thereto.


	"FD&C Act" means the United States
Federal Food, Drug and Cosmetic Act, as may be amended from time to
time.


	"Field" means [ *** ]


	"Force Majeure Event" shall have the
meaning ascribed in Article 14.


	"Identification Testing Standards" means
the identification standards for each PCYC Material to be supplied hereunder as
set forth in the applicable Product Appendix. 


	"IND" means an Investigational New Drug
Application filed with the FDA, or a corresponding application filed with any
other Regulatory Authority.


	"Intermediate" means a key intermediate
compound required for the synthesis of a Drug Substance.


	"IP" means any and all inventions,
improvements, information and know-how, including without limitation those
related to processes, compositions of matter and methods of use, made by or on
behalf of either Party individually or jointly, that arise out of the
performance of this Agreement, whether protectable by patent or as a trade
secret, and all intellectual property rights therein and thereto.
"IP" specifically excludes all LONZA Technology.  


	"LONZA Technology" means (a) all
inventions that are necessary or useful for the Manufacture, use or sale of a
Product, and all patents (including without limitation reissues, re-examinations
and inventor's certificates) covering such inventions; and (b) all information,
trade secrets and know-how that are necessary or useful for the Manufacture, use
or sale of a Product, in each case that are Controlled by LONZA during the term
of this Agreement.  


	"Manufacture," "Manufactured" or
"Manufacturing" means the synthesis, processing, preparation,
handling, packaging and labeling of Products and the storage and testing of
Materials and Products.


	"Master Batch Record" means, with
respect to each Product to be Manufactured hereunder, the approved formal set of
instructions for the Manufacture of such Product, as further described in
Section 6.1. 


	"Materials" means, with respect to each
Product to be Manufactured hereunder, the raw material, primary packaging,
secondary packaging and labeling to be used in the Manufacture of such Product
hereunder.


	"Materials Specifications" means, with
respect to each of the Materials for a particular Product, the written
specifications for each of such Materials as set forth in the applicable Product
Appendix.


	"Material Supply Breach"
means:




	LONZA's falling more than [ *** ] behind its
schedule for its Manufacturing campaign with respect to any Purchase Order
submitted by PCYC and accepted by LONZA pursuant to Section 3.4, as such
schedule is provided to PCYC pursuant to Section 3.4.3; or


	LONZA's failure to supply to PCYC at least [ *** ]
of the quantity of Acceptable Product set forth in any Purchase Order
submitted to and accepted by LONZA pursuant to Section 3.4 by the delivery date
set forth in such Purchase Order.

[ *** ]


	"NDA" means a New Drug Application filed
with the FDA or any other regulatory filing necessary to obtain marketing
approval from a Regulatory Authority.


	"Packaging Specifications" means, with
respect to each Product to be Manufactured hereunder, the written
specifications for the packaging of such Product as set forth in the applicable
Product Appendix.


	"PCYC Materials" means, with respect to
each Product to be Manufactured hereunder, those Materials for such Product
that PCYC is obligated to supply as set forth in the applicable Product
Appendix.


	"PCYC Technology" means all patents
(including without limitation, reissues, re-examinations and inventor's
certificates) covering the Manufacture of Products hereunder, and all
information, trade secrets and know-how related thereto, that is Controlled by
PCYC during the term of this Agreement.


	"Prior Agreement" means that certain
Feasibility Evaluation Agreement entered into between the Parties effective
April 15, 1999, as amended March 29, 2000.


	"Product" means a Drug Substance or
Intermediate, as applicable, to be Manufactured by LONZA hereunder.


	"Product Appendix" means, for each
Product to be Manufactured hereunder, the Product Specifications, the
price per kilogram and the validation and Manufacturing activities to be
performed by LONZA for such Product, including without limitation the testing
programs and development schedules, all to be agreed upon by the Parties as
further described in Section 2.1. The documentation comprising the Product
Appendices shall be attached and incorporated herein as Schedule 1.33 hereto,
and may be amended only by the Parties' written agreement.  


	"Product Specifications" means, with
respect to each Product to be Manufactured hereunder, the written specifications
for the testing of such Product, as detailed in the applicable Product
Appendix.


	"Purchase Orders" means written purchase
orders provided by PCYC to LONZA, which shall specify: (a) the quantity of
Product to be Manufactured by LONZA, (b) the Purchase Price of such Product as
set forth in the applicable Product Appendix, (c) the dates on which such
Product shall be shipped, and (d) the shipping address(es) designated by PCYC.



	"Purchase Price" means, with respect to
each Product to be Manufactured hereunder, the price per kilogram of such
Product as set forth in the applicable Product Appendix. 


	"QC Sample" shall have the meaning
ascribed in Section 4.1. 


	"Regulatory Approval" means all
authorizations by the appropriate Regulatory Authority necessary for use,
development, Manufacture, distribution or sale of a Product or Drug Product in a
particular regulatory jurisdiction.


	"Regulatory Authority" means any
national, supranational, regional, cantonal, state or local regulatory agency,
department or other government entity with the authority to approve and regulate
the use, development, Manufacture, distribution or sale of a Product or Drug
Product in a regulatory jurisdiction.  "Regulatory Authority" shall
also include any non-governmental group licensed by an entity described in the
preceding sentence to perform inspections, audits and/or reviews.


	"Release Criteria" shall have the
meaning ascribed in Section 4.2.1.


	"Released Executed Batch Record" means
the completed batch record and associated deviation reports, investigation
reports and certificates of analysis created by LONZA for each Batch
Manufactured hereunder, including written confirmation that such batch record
has been reviewed and approved by LONZA's quality assurance unit.


	"Test Methods" means, with respect to
each Product Manufactured hereunder, the written procedures for
evaluating compliance with the applicable Product Specifications, as set
forth in the applicable Product Appendix.


	



Product Appendices



	Product Appendices.  



	For each Product to be Manufactured by LONZA
hereunder, the Parties shall agree in writing upon a Product Appendix.  For all
Products that PCYC desires LONZA to Manufacture hereunder, PCYC shall prepare
and deliver to LONZA two (2) copies of the corresponding Product Appendix.
LONZA shall either sign such Product Appendix and return one (1) copy to PCYC,
or shall return an amended Product Appendix acceptable to LONZA, in each case
within [ *** ] of receipt of such Product Appendix from PCYC.  If
such amended Product Appendix is not acceptable to PCYC, then PCYC shall so
notify LONZA within [ *** ] of PCYC's receipt of such amended
Product Appendix, and the Parties shall promptly meet in order to resolve in
good faith any outstanding disagreements with respect to such amended Product
Appendix. 


	Notwithstanding any other provision of this Section 2.1,
this Agreement shall not be deemed to be amended or modified in any manner by
any provision of any Product Appendix.  Notwithstanding the foregoing, a
particular Product Appendix may supersede a particular term of this Agreement,
solely with respect to the work that is the subject of such Product Appendix,
only if such Product Appendix specifically and expressly sets forth the intent
that such term shall be so superseded.


	Amendments to Product Appendix. Each Product
Appendix may be amended from time to time, as the Parties' experience with the
development, Manufacture, testing and use of the applicable Product warrants,
upon mutual written agreement of PCYC and LONZA.


	



Manufacturing



	Agreement to Purchase and Supply.  During the term of
this Agreement, PCYC agrees to purchase from LONZA and LONZA agrees to
Manufacture, sell and deliver to PCYC, such quantities of each Product as
may be set forth on Purchase Orders placed by PCYC and accepted by LONZA,
pursuant to the terms and conditions of this Agreement (including without
limitation the applicable Product Appendix).  LONZA may also Manufacture
certain Intermediates to be held in inventory for use in its Manufacture of
other Products, as agreed upon in writing by the Parties.


	Supply of Materials.



	LONZA shall supply, at its expense, all Materials
necessary to Manufacture each Product other than the PCYC Materials.  


	PCYC shall supply, at its expense, all PCYC Materials
necessary to Manufacture each Product hereunder.  PCYC shall deliver or
cause to be delivered a reasonably sufficient amount of each of the applicable
PCYC Materials for each Product to be Manufactured hereunder to the
applicable Facility sufficiently in advance of the time that such PCYC Materials
will be required for use in the Manufacture of such Product under the applicable
Purchase Order.  Such required advance times and amounts shall be set forth in
the applicable Product Appendix, as well as any applicable storage requirements
for such PCYC Materials.  


	Upon receipt of the PCYC Materials as set forth above,
LONZA shall review the accompanying certificate(s) of analysis and test the PCYC
Materials for conformance with the applicable Identification Testing Standards,
in accordance with the analytical test methods set forth in the applicable
Product Appendix.  Both such Identification Testing Standards and related
analytical test methods may be amended from time to time upon mutual written
agreement of PCYC and LONZA.  


	Within [ *** ] of receipt of the PCYC
Materials described in Section 3.2.2, or such other period as may be specified
in the applicable Product Appendix, LONZA shall determine if such PCYC Materials
meet the applicable Identification Testing Standards.  If LONZA determines that
such PCYC Materials meet the Identification Testing Standards, then such PCYC
Materials shall be used by LONZA in performing its Manufacturing obligations
under this Agreement.  If LONZA determines that any such PCYC Materials do not
meet the Identification Testing Standards, then LONZA shall make no use of such
non-conforming PCYC Materials and shall promptly confer with PCYC to determine
how to proceed.  LONZA shall return, rework or destroy any non-conforming PCYC
Materials as directed by PCYC in writing and at PCYC's expense.  


	From the time of delivery of the PCYC Materials to LONZA
until the earlier of (a) delivery by LONZA of Product, or (b) return or
destruction of the PCYC Materials by LONZA that do not meet the Identification
Testing Standards, each in the manner provided in this Agreement, LONZA shall
bear all risk of loss of such PCYC Materials.  LONZA shall comply with all
applicable laws, rules, regulations and guidelines in the use, storage, handling
and transportation of the PCYC Materials.  PCYC shall retain all right, title
and interest in and to all PCYC Materials at all times. 


	If PCYC fails to deliver to LONZA the PCYC Materials
necessary to fulfill a Purchase Order submitted by PCYC and accepted by LONZA in
accordance with Section 3.4.2, in the quantities and time frame described in
Section 3.2.2, or if LONZA determines in accordance with Section 3.2.4 that such
PCYC Materials do not meet the applicable Identification Testing Standards,
then:



	PCYC may, at its election, cancel such Purchase Order,
with the effect set forth in  Section 3.5; or


	PCYC may request that LONZA reschedule the manufacturing
campaign for such Purchase Order, and LONZA shall use reasonable, good faith
efforts to fulfill such request.  



	To the extent that such rescheduling directly results in
the plant capacity reserved for the fulfillment of such Purchase Order being
unutilized, PCYC shall reimburse LONZA for such unutilized capacity in
accordance with Section 3.5.2.  


	If LONZA does not reject, in writing, PCYC's request to
reschedule such manufacturing campaign within [ *** ] following
LONZA's receipt of PCYC's written request, then LONZA shall be deemed to have
accepted such request.  


	If LONZA rejects PCYC's request to reschedule such
manufacturing campaign, then such Purchase Order shall be deemed to have been
cancelled, with the effect set forth in Section 3.5.


	Forecasts.  PCYC shall provide to LONZA [
*** ] a written rolling forecast of the quantities of such Product
it intends in good faith to purchase under this Agreement [ ***
]:  



	[ *** ];


	[ *** ]:  



	[ *** ]


	[ *** ]


	[ *** ]


	Purchase Orders.  



	All purchases of Products shall be made pursuant to
Purchase Orders which shall be delivered to the Facility, or such other location
as agreed to in writing by the Parties, at least [ *** ] in
advance of the date of shipment specified in said Purchase Order, or to such
other location and/or within such other time period as may be specified in the
applicable Product Appendix.  The Parties anticipate that the lead time for a
Purchase Order for a Product shall be decreased if LONZA has sufficient
quantities of the necessary Intermediates to fulfill such Purchase Order in
inventory.


	LONZA shall ship all Products Manufactured hereunder as
set forth in Sections 3.4.1 and 4.5 by the date and in the quantities specified
in the applicable Purchase Order, unless otherwise specified in the applicable
Product Appendix.  PCYC shall be obligated to buy and LONZA shall be obligated
to Manufacture and sell only the quantities of Product that are subject to a
Purchase Order accepted by LONZA.  Any Purchase Order (or portion thereof) for
which PCYC has not received a written rejection from LONZA within [
*** ] of LONZA's receipt of such Purchase Order shall automatically be
deemed accepted by LONZA.  LONZA shall be obligated to accept any Purchase Order
meeting the requirements of Section 3.3.2, and shall use reasonable efforts to
accept any Purchase Order in excess of such quantities. 


	Within [ *** ] following its acceptance of
a Purchase Order, LONZA shall provide to PCYC a written schedule of its intended
Manufacturing campaign for fulfilling such Purchase Order.


	To the extent that the terms of a Purchase Order are
inconsistent with the terms of this Agreement, this Agreement shall control.



	Amendment or Cancellation of Purchase Order.  PCYC
may amend or cancel any Purchase Order by providing LONZA written notice of such
amendment or cancellation.   If such amendment would result in an increase in
such Purchase Order, LONZA shall not be obligated to accept such increase, but
shall consider such amendment in good faith.  In the event that PCYC decreases
or cancels any Purchase Order, LONZA's sole and exclusive remedy shall be as
follows:   



	PCYC shall reimburse LONZA for any non-cancelable, out-
of-pocket costs for Materials reasonably incurred by LONZA in fulfilling such
amended or canceled Purchase Order up to the time of LONZA's receipt of such
notice of amendment or cancellation.  Such reimbursement shall only be made to
the extent of costs that are not otherwise recoverable by LONZA.  Title in all
Materials for which PCYC so reimburses LONZA shall vest in PCYC.  Such Materials
shall not be used for any purpose other than the Manufacture of Products for
PCYC hereunder, unless otherwise agreed in writing by PCYC.  At PCYC's request,
all Materials paid for by PCYC under this Section 3.5 shall be shipped to PCYC
at PCYC's expense; and


	PCYC shall reimburse LONZA for its fixed costs for unused
plant capacity reserved for the fulfillment of such amended or cancelled
Purchase Order and to the extent that LONZA cannot otherwise utilize such plant
capacity, provided that LONZA has made commercially reasonable, good
faith efforts to otherwise utilize such plant capacity.  A schedule setting
forth the maximum amount payable for such unused plant capacity for each Product
shall be included in the applicable Product Appendix.


	Testing of Batches by LONZA.  LONZA will test each
Batch of Product in accordance with the applicable Test Methods and Product
Specifications, and shall supply PCYC with a certificate of analysis confirming
that such Batch meets the applicable Product Specifications and Packaging
Specifications at the time of batch release if practicable, but in any event no
later than with shipment of the QC Sample.  LONZA shall hold and store samples
from each Batch in accordance with, and for the period required under, Section
6.3.1.  If LONZA notices any testing or material manufacturing discrepancies
during the Manufacturing of a Product, LONZA shall promptly notify PCYC.  PCYC
may retest a Product as more fully set forth in Section 4.2 to confirm that it
meets the applicable Product Specifications and Packaging Specifications.



	LONZA Covenant.  LONZA shall not (a) sell, provide
or transfer any Product to any third party, nor (b) use, allow any third
party to use nor otherwise dispose of any Product, except in each case as
specifically set forth in this Agreement or as expressly authorized by PCYC in
writing.  PCYC shall retain all right, title and interest in and to the Products
Manufactured hereunder at all times, subject to its payment in full for the
Products in accordance with Sections 5.1 and 5.2.  


	Material Supply Breach.  



	If, within [ *** ] following receipt of
written notice from PCYC that a Material Supply Breach has occurred, (a) LONZA
has failed to deliver to PCYC a plan detailing how LONZA will cure such Material
Supply Breach to PCYC's satisfaction, or (b) PCYC has accepted such plan to cure
such Material Supply Breach and LONZA fails to adhere to such plan to PCYC's
reasonable satisfaction, then in addition to any other rights that PCYC may have
at law or equity, [ *** ].  


	If LONZA reasonably anticipates that there is a
substantial likelihood that a Material Supply Breach will occur, then LONZA
shall promptly notify PCYC in writing thereof.  Upon receipt of such notice, the
Parties shall promptly confer to discuss the circumstances and magnitude of such
potential Material Supply Breach, and to determine in good faith whether there
are any reasonable steps that LONZA could take to avoid such Material Supply
Breach.  [ *** ]


	If PCYC cancels any Purchase Orders as described in
this Section 3.8, then upon PCYC's request LONZA shall promptly, but no later
than [ *** ] after receipt of PCYC's request, either (a) ship to
PCYC or its designee, [ *** ], any PCYC Materials delivered to
LONZA under Section 3.2.2 for use in Manufacturing such Product which have not
been consumed in the Manufacture of such Product,  and/or [ ***
]


	Subcontractors.  LONZA may not subcontract its
obligations under this Agreement to any third party or Affiliate without PCYC's
prior written consent or as specifically set forth in the applicable Product
Appendix.  All such subcontractors shall agree in writing to be bound by the
terms of this Agreement prior to conducting any work hereunder.


	LONZA's Facility.  All Manufacture of Product
hereunder shall be conducted at the Facility.  In the event that LONZA sells or
otherwise transfers ownership or control of the Facility to any third party or
Affiliate, such third party or Affiliate shall expressly assume LONZA's
obligations hereunder in writing.  Notwithstanding the foregoing, any such
assumption shall not relieve LONZA of any liability for such third party's or
Affiliate's failure to perform under this Agreement; provided that
[ *** ].  LONZA hereby expressly waives any requirement that PCYC
exhaust any right, power or remedy, or proceed directly against such third party
or Affiliate, for any obligation or performance hereunder prior to proceeding
directly against LONZA.


	[ *** ]


	



Delivery and Acceptance



	Quality Control Sample of Product.  At least [
*** ] prior to the shipment of any Batch of Product, LONZA shall provide
PCYC with (a) a quality control sample of such Batch as specified in the
applicable Product Appendix (the "QC Sample") for the purpose of
confirming that such Batch meets the Product Specifications and Packaging
Specifications, and (b) a certificate of analysis for such Batch, including
written confirmation that the associated Released Executed Batch Record has been
reviewed and approved by LONZA's quality assurance department.  The
corresponding Released Executed Batch Record shall be available for PCYC's
inspection.  Upon PCYC's request, LONZA shall provide PCYC with a copy of such
Released Executed Batch Record.  


	Acceptance and Rejection of Product.  



	PCYC may reject any Batch delivered hereunder that
does not conform with the applicable Master Batch Record, LONZA's standard
operating procedures, certificate of analysis, Product Specifications or
Packaging Specifications, or documentation or process requirements
(collectively, the "Release Criteria") based upon PCYC's testing of
the QC Sample in accordance with the Test Methods and review of the Released
Executed Batch Record.  Any such notice of rejection shall be in writing
and shall indicate the reasons for such rejection.  Such notice is to be
delivered to LONZA within [ *** ] from PCYC's receipt of the QC
Sample and certificate of analysis or such other period as may be specified in
the applicable Product Appendix (the "Testing Period").  If LONZA does
not receive such notice of rejection by the end of the Testing Period, then PCYC
shall be deemed to have accepted such Batch.


	After notice of rejection is given, PCYC shall
cooperate with LONZA in establishing the root cause of the rejection and shall
deliver to LONZA a sample of the allegedly non-conforming QC Sample for LONZA's
evaluation.  LONZA will evaluate process issues and other reasons for such non-
compliance.  LONZA shall notify PCYC as promptly as reasonably possible whether
it disputes PCYC's basis for any rejection, but in any event no later than
[ *** ] after its receipt of PCYC's notice of rejection of such
non-conforming sample or such other period as may be specified in the applicable
Product Appendix (the "Response Period").  If PCYC does not receive
such notice of dispute by the end of the Response Period, then LONZA shall be
deemed to agree with PCYC's rejection of such Batch.  



	If LONZA disagrees with PCYC's determination that a QC
Sample does not meet the Release Criteria, then such QC Sample shall be
submitted to a mutually acceptable, independent third party laboratory to
determine whether such QC Sample conforms to the Release Criteria.  The Parties
agree that such third party laboratory's determination shall be final and
binding.  



	If the third party laboratory determines that such QC
Sample meets the Release Criteria, then PCYC shall be deemed to have accepted
such Batch, and shall pay for such Batch as set forth in Section 5.2.  


	If the third party laboratory determines that such
Product does not meet the Release Criteria, then such Batch shall be deemed
rightfully rejected, and PCYC shall have no further obligation under this
Agreement with respect to such Batch.  


	The Party against whom such independent third party
laboratory rules shall bear the expenses of such laboratory with respect to such
testing of such Batch. 


	[ *** ]


	Any Batch accepted by PCYC under this Agreement shall
remain  subject to LONZA' warranties in Sections 8.2 and 8.3.  


	Replacement Batches.  Whether or not LONZA accepts
PCYC's basis for rejection of a Batch under Section 4.2, promptly following
receipt of a notice such rejection and receipt of the applicable PCYC Materials
from PCYC, LONZA shall use its best efforts at PCYC's written request to replace
such rejected Batch.  PCYC shall purchase such replacement Batch at the
applicable Purchase Price, subject to its acceptance of such Batch pursuant to
Section 4.2.  


	Destruction of Product.  Neither Party may destroy
any Product rejected by PCYC under Section 4.2.1 until the independent third
party laboratory determines whether such Product meets such Release Criteria and
provides written notification to the Parties with respect to such determination,
unless LONZA accepts PCYC's basis for such rejection.  Thereafter, LONZA shall
have the obligation to destroy, or have destroyed, at its cost, all such
rejected Product.  Upon LONZA's written request and at LONZA's cost, PCYC shall
return to LONZA any rejected Product. The Parties agree that in the event of
destruction of Product, the method of such destruction shall be in compliance
with all national, cantonal, federal, state and local laws, rules and
regulations.


	Delivery of Product.  All deliveries of Product
and QC Samples shall be shipped FCA (INCOTERMS 2000) the Facility to a location
designated by PCYC, using a carrier acceptable to PCYC.  All Batches shall be so
shipped within [ *** ] following acceptance of each Batch pursuant
to Section 4.2 unless otherwise agreed in writing by the Parties.  At PCYC's
request, LONZA shall hold the Product at the Facility for shipment to locations
other than the United States or, in the case of an Intermediate, in inventory
for later use.  PCYC shall be responsible for all freight and delivery charges,
including without limitation insurance charges, and shall assume all risk of
loss of the Product and QC Samples after transfer of possession to the
designated carrier.  All Product and QC Samples shall be delivered to PCYC free
and clear of all liens, claims and encumbrances.  


	



Purchase Price and Payment.



	Purchase Price.  Subject to the terms of this Section
5.1, PCYC shall pay LONZA the applicable Purchase Price for each shipment of
Product delivered by LONZA and accepted by PCYC pursuant to Section 4.2. The
Purchase Price shall be deemed to be full compensation for all work performed by
LONZA relating to the Manufacture and supply of such Product hereunder,
including without limitation all LONZA Materials used in such Manufacture, all
overhead, all quality inspection and testing activities performed by LONZA and
delivery of such Product as set forth in Section 4.5, unless expressly provided
otherwise herein or in the applicable Product Appendix.  


	Payment.  Each Product Manufactured and supplied
hereunder shall be invoiced at the applicable Purchase Price following PCYC's
acceptance thereof pursuant to Section 4.2.  Payments by PCYC shall be made in
U.S. dollars by check mailed to LONZA by regular first class mail within
[ *** ] from the date of shipment of the applicable Batch, or
within such other time period and/or manner as set forth in the applicable
Product Appendix.  


	Records.  LONZA shall keep accurate records in
sufficient detail to permit the determination of all invoices and fees payable,
credits due and quantities of Product Manufactured hereunder.  Within [
*** ] following a request by PCYC, LONZA shall permit PCYC or its
designee to examine such records during ordinary business hours for the purpose
of verifying the correctness of any such invoices, fees, credits and quantities.
LONZA shall retain such records for at least [ *** ] from the date
of each invoice to which such records pertain or for such longer period as may
be required by any Regulatory Authority.  


	



Quality Assurance; Regulatory.



	Master Batch Record. Each Master Batch Record for
each Product shall be prepared and maintained in LONZA's standard format by
LONZA.  Each Master Batch Record must be approved by Pharmacyclics' Chemical
Operations and Quality Assurance groups.  Master Batch Records will be written
in German but LONZA will provide a certified English translation.


	Audits.  



	PCYC shall have the right to conduct a general audit
of the Facility and of the equipment, system, processes and related
documentation used in the Manufacture of Products to evaluate compliance with
cGMP [ *** ], or more frequently for cause (including without
limitation in the case of an emergency as described in Section 6.7) or at PCYC's
request, such request not to be unreasonably denied by LONZA.  Such audits shall
be conducted during normal business hours, unless otherwise agreed by the
Parties in writing.  PCYC may make recommendations to LONZA based on such audit,
and LONZA agrees to give such recommendations good faith consideration. LONZA
shall be responsible for compliance with cGMP and shall promptly take such
action, at its expense, as may be necessary to bring said equipment, system,
processes, documentation and Facility into conformance therewith.


	In the event that PCYC notifies LONZA following an audit
under this Section 6.2.1 that LONZA is not in compliance with cGMP, and LONZA
disagrees with such finding, then the Parties shall promptly meet to resolve in
good faith the issues relating to such alleged non-compliance.


	Reasonable notice will be provided by PCYC to LONZA to
schedule the date of such audit.  If LONZA needs to cancel such audit due to
events outside of LONZA's reasonable control (e.g., FDA inspection unrelated to
the Product, act of God, etc.), LONZA will immediately contact PCYC to re-
schedule the audit. 


	PCYC's failure to exercise its right to audit the
Facility will not represent a waiver of any future exercise of this right or of
any other rights under this Agreement, nor does it represent acceptance of any
conditions past or present that might exist or result from such conditions at
the Facility.


	Regulatory Matters; Records.  



	LONZA shall keep documentation and records in
accordance with the requirements of cGMP.  LONZA shall provide fully-executed
copies of all documents approved by PCYC promptly following signature of such
documents by each Party's authorized representative.  Copies of all
documentation and information relating to the Manufacture, processing, packaging
and shipping of Product and/or required to support PCYC's NDAs (or INDs, if
appropriate) or other regulatory submissions, including but not limited to
information relating to Batch records, specifications, methods, method
validations, equipment and the Facility, will be provided by LONZA to PCYC for
review and inclusion as necessary in PCYC's regulatory submissions.  LONZA shall
maintain all records and documentation under this Section 6.3 and any inspection
samples and data for at least [ *** ] past the expiration dates of
each Batch or for such longer period as may be required by cGMP or other
regulations promulgated by the Regulatory Authorities applicable to the relevant
Product.  


	Prior to LONZA's destruction of any of the records or
documentation described in Section 6.3.1, LONZA shall notify PCYC in writing
specifically identifying the records or documentation that it wishes to destroy.
PCYC shall have [ *** ] from its receipt of such notice to notify
LONZA that it desires to receive such records or documentation.  In such event,
such records or documentation shall be delivered to PCYC or its designee at
PCYC's expense.  If PCYC does not notify LONZA that it desires to receive such
records or documentation within such thirty-day period, then LONZA shall be free
to destroy such records or documentation.  


	LONZA shall be solely responsible, at its expense, for
obtaining and maintaining all Regulatory Approvals required for it to carry out
its development, regulatory and Manufacturing obligations hereunder.  LONZA
agrees to cooperate fully with PCYC in PCYC's efforts to obtain and maintain any
Regulatory Approval which may be required for the use of the Products, or the
Manufacture and/or marketing of Drug Products, in any country.  Such efforts
shall include, without limitation, (a) providing information in LONZA's
possession that is useful or required by PCYC to submit regulatory filings or
obtain or maintain Regulatory Approvals with respect to Products and/or Drug
Products, including all information necessary for PCYC to complete the CMC
portions of its regulatory filings; (b) allowing the use of LONZA's name in any
such filings; and (c) taking any and all other actions reasonably required to
assist PCYC and/or its designee in obtaining Regulatory Approval of Drug
Products.    


	Upon the request of any Regulatory Authority, such entity
shall have access to observe and inspect the Facility and LONZA's quality and
manufacturing documents and procedures used for the Manufacture of any Product,
including process development and Manufacturing operations, and to audit such
Facility, documents and procedures for compliance with cGMP and/or other
applicable regulatory standards.  LONZA shall give PCYC immediate notice of any
upcoming inspections or audits by a Regulatory Authority of the Facility,
documents and/or procedures relating to any Product Manufactured hereunder, and
shall provide PCYC the opportunity to conduct a pre-inspection of the Facility
and such documents and procedures, and to observe and participate in such
inspection or audit. 


	LONZA also agrees to notify PCYC within [ *** ]
of any written or oral inquiries, notifications, or inspection activity by
any Regulatory Authority in connection with any Product.  LONZA shall provide a
reasonable written description to PCYC of any such inquiries, notifications or
inspections promptly (but in no event later than [ *** ]) after
such visit or inquiry.  LONZA shall furnish to PCYC (a) within [ ***
]after receipt, any report or correspondence issued by the Regulatory
Authority in connection with such visit or inquiry, including but not limited to
any FDA Form 483 (List of Inspectional Observations) or warning letter, and (b)
not later than [ *** ] prior to the time it provides to a
Regulatory Authority, copies of any and all proposed written responses or
explanations relating to items set forth above (each, a "Proposed
Response"), in each case purged only of trade secrets or other confidential
or proprietary information of LONZA that are unrelated to the obligations under
this Agreement or are unrelated to Products.  LONZA shall discuss with PCYC any
comments provided by PCYC on the Proposed Response and the Parties shall
mutually agree on the final written response or explanation to be provided to
the Regulatory Authority but only to the extent that such reply is specific to a
Product.  After the filing of a response with the appropriate Regulatory
Authority, LONZA will notify PCYC of any further contacts with a Regulatory
Authority relating to LONZA's Manufacture of Products.


	LONZA shall promptly notify PCYC of any other production
issues or other information of which LONZA becomes aware that may affect the
regulatory status of a Product or the ability of LONZA to supply a Product in
accordance with PCYC's forecasted requirements.


	LONZA agrees to promptly rectify or resolve any
deficiencies noted by a Regulatory Authority in a report or correspondence
issued to LONZA, and that are based on LONZA's performance under this Agreement,
at LONZA's expense.


	Each Party shall promptly notify the other of new
regulatory requirements of which it becomes aware which are relevant to the
Manufacture of a Product under this Agreement and which are required by the FDA,
other applicable Regulatory Authority or other applicable laws or governmental
regulations, and shall confer with each other with respect to the best means to
comply with such requirements.


	Drug Master File.  LONZA shall file and maintain
the appropriate DMF for its Manufacture of each Product hereunder, at LONZA's
expense except as otherwise agreed by the Parties in writing.  LONZA shall
provide PCYC and/or its designee with letters of authorization to reference such
DMF in its filings with the FDA and other Regulatory Authorities


	Stability Testing.  LONZA shall be responsible for
performing stability testing of each commercial Product, in accordance with the
requirements of all applicable Regulatory Authorities.


	Changes in Manufacture.  



	LONZA shall not alter any processing steps with respect
to the Manufacture of each Product, as such steps are set forth in the NDA, DMF
(or IND, if appropriate), applicable Manufacturing protocols, Master Batch
Records or any other document governing such steps.  LONZA may, from time to
time, suggest to PCYC changes LONZA may wish to make in the Manufacture of a
Product, the location of Manufacture within the Facility, the equipment used to
Manufacture such Intermediate or Product or the process used to Manufacture such
Intermediate or Product.  LONZA shall notify PCYC of any such suggested changes
via LONZA's change notice procedure, but shall not implement any such changes
until signature approval has been received from PCYC's authorized Quality
Assurance and Chemical Operations representatives designated in the applicable
Product Appendix.  PCYC shall have no obligation to accept any such suggestions.
Any such changes shall be made in accordance with both LONZA's and PCYC's change
control policies and procedures.


	In the event that [ *** ], unless otherwise
agreed by the Parties in writing:  



	[ *** ]


	[ *** ]

For clarity, neither [ *** ]


	[ *** ].   


	Emergency Access.  In case of an emergency with
the potential to affect the quality of any Product, a PCYC representative shall
have [ *** ] access to LONZA's project manager(s) for the
applicable Product(s), who shall [ *** ] access to the Facility
and all applicable personnel, records and documents for the purpose of dealing
with such emergency.  


	Compliance with Laws.  In its performance under
this Agreement, LONZA shall comply with all applicable present and future
orders, regulations, requirements and laws of the United States and Swiss
national, state and local authorities and agencies, and all other Regulatory
Authorities (including without limitation any cantonal Regulatory Authorities),
including without limitation all laws and regulations applicable to the
transportation, storage, use, handling and disposal of hazardous materials.
LONZA represents and warrants to PCYC that it has and will maintain during the
term of this Agreement all Regulatory Approvals, including without limitation
health, safety and environmental permits, necessary for the conduct of the
actions and procedures that it undertakes pursuant to this Agreement.



	



Complaints; Recalls.



	Complaints and Adverse Reactions.  



	LONZA shall advise PCYC of any complaints, adverse
reaction reports, safety issues or toxicity issues relating to any Product of
which it becomes aware, regardless of the origin of such information, within the
time frame required by cGMP and 21 CFR 312 and 314, and the corresponding
regulations of the applicable Regulatory Authorities (collectively, the
"Regulations"), but in no event later than [ *** ] from
the initial complaint or report, except where such complaint or report would not
be required to be reported to the applicable Regulatory Authority, in which case
LONZA shall inform PCYC of such complaint or report as soon as reasonably
possible.  


	PCYC's shall notify LONZA promptly of those complaints
and adverse reactions that are relevant to the Manufacturing activities
conducted by LONZA hereunder, but shall not be obligated to notify LONZA of
complaints or adverse reactions due to inherent Product characteristics or
arising from the activities of third parties unrelated to LONZA.  


	PCYC shall retain and manage complaints in accordance
with the Regulations.  The Parties hereby agree to cooperate with one another
and with any Regulatory Authority in the evaluation and investigation of any
complaint, claim or adverse reaction report related to the Manufacture of a
Product with the intention of promptly complying with the Regulations.



	If any such event occurs, LONZA shall retain any unused
supplies of such Product and its associated Materials (including without
limitation PCYC Materials), and all associated Batch and other production
records in such manner as PCYC may reasonably direct.  Such retention shall be
at PCYC's expense, except to the extent that such event is caused by LONZA's
wrongful act or omission.  LONZA agrees to respond to PCYC in respect to such
complaint investigations involving LONZA's Manufacturing of a Product or
services rendered hereunder as soon as reasonably possible but in any case
within [ *** ] from receipt by LONZA of the report of such
complaint and sample (if available), or in the case of a serious adverse event,
within [ *** ] from receipt of the report of such complaint and
sample (if available).  PCYC and/or its designee shall serve as the sole point
of contact with the FDA or other applicable governmental entity concerning any
complaints, adverse reaction reports, safety issues or toxicity issues with
respect to the Product.  LONZA shall have the opportunity to comment upon PCYC's
proposed written responses to the FDA or other applicable governmental entity
solely to the extent that such response relates specifically to LONZA's
Manufacturing activities hereunder; provided that PCYC must receive LONZA's
comments within [ *** ] of LONZA's receipt of such proposed
response.


	Product Defects.  If either Party becomes aware at
any time of any defect or the possibility of any defect associated with any
Product Manufactured by LONZA hereunder, such Party will notify the other Party
immediately and confirm the notification as soon as possible in writing.



	Recalls. 



	PCYC shall notify LONZA promptly if any Drug Product
employing or incorporating a Product Manufactured by LONZA hereunder is the
subject of a recall, market withdrawal or correction, and PCYC and/or its
designee shall have the sole responsibility for the handling and disposition of
such recall, market withdrawal or correction.  


	If a recall is required as a result of LONZA's breach of
any of its warranties set forth in Section 8.2 hereof, then LONZA shall
reimburse PCYC for the Purchase Price of such Product and all other reasonable
costs and expenses associated with such Drug Product recall, market withdrawal
or correction, but only to the extent that the foregoing costs and expenses are
attributable to LONZA's breach of its warranties hereunder. [ *** ]
In all other events of a recall, market withdrawal or correction, all costs
and expenses incurred in connection with such Drug Product recall, market
withdrawal or correction shall be borne by PCYC.  


	PCYC and/or its designee shall serve as the sole point of
contact with the FDA or other applicable Regulatory Authority concerning any
recall, market withdrawal or correction with respect to such Drug Product.



	



Representations and Warranties.



	Mutual Representations and Warranties.  Each Party
hereby represents and warrants to the other Party that:  (a) the person
executing this Agreement is authorized to execute this Agreement; (b) this
Agreement is legal and valid and the obligations binding upon such Party are
enforceable by their terms; and (c) the execution, delivery and performance of
this Agreement does not conflict with any agreement, instrument or
understanding, oral or written, to which such Party may be bound, nor violate
any law or regulation of any court, governmental body or administrative or other
agency having jurisdiction over it.


	LONZA Product Warranties.  LONZA warrants that all
Products Manufactured by LONZA hereunder shall, at the time of delivery to
PCYC's designated carrier:  (a) conform to the applicable Product Specifications
and Packaging Specifications; (b) have been Manufactured, handled, stored,
labeled, packaged and transported in accordance with the Master Batch Records,
and with cGMP and all other applicable laws, regulations and other requirements
of all applicable Regulatory Authorities; and (c) not be (i) adulterated or
misbranded by LONZA within the meaning of the FD&C Act, or (ii) an article
that may not be introduced into interstate commerce under the provisions of
Sections 404 or 505 of the FD&C Act.  


	No Debarment or Convictions.  LONZA represents and
warrants that: (a) it has not and will not use in any capacity the services of
any persons debarred under 21 U.S.C. Section 335a(a) or 335a(b) in connection
with its Manufacture of any Product hereunder; (b) neither LONZA nor any LONZA
official or employee has been convicted of a felony under Federal law for
conduct relating to the development or approval, including the process for
development or approval, of any drug, product, NDA, abbreviated NDA or IND; and
(c) no LONZA official or employee has been convicted of a felony under United
States law for conduct otherwise relating to the regulation of any drug
substance or drug product under the FD&C Act.


	Intellectual Property.  LONZA represents and
warrants that: (a) PCYC's practice of the Development Technology and/or the
LONZA Technology as contemplated herein will not infringe upon the intellectual
property rights of any third party; and (b) none of the Development Technology
or the LONZA Technology has been misappropriated from any third party nor is the
result of any misuse of any third party's intellectual property; and (c) there
is no action, suit or proceeding pending or that has been threatened, orally or
in writing, against LONZA, with respect to the infringement or misappropriation
of any third party's intellectual property rights through the use of the
Development Technology or the LONZA Technology.


	



Indemnification.



	Indemnification by LONZA.  



	Subject to PCYC's compliance with Section 9.3, LONZA
shall indemnify, defend and hold harmless PCYC and its directors, officers,
employees and agents from all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including without
limitation reasonable attorneys' fees) or disbursements of any kind and nature
whatsoever arising out of property damage or personal injury (including without
limitation death) of third parties (collectively, "Claims"), to the
extent that such Claims arise from any: (a) breach by LONZA of any of its
obligations under this Agreement including without limitation any of its
warranties and representations hereunder (except to the extent caused by
inherent characteristics of a Product or by LONZA's adherence to PCYC's written
instructions), (b) gross negligence, recklessness or willful misconduct of LONZA
or its employees or agents, and/or (c) infringement of any third party patents
or other proprietary rights by LONZA's manufacturing processes.


	[ *** ]


	Indemnification by PCYC.  Subject to LONZA's
compliance with Section 9.3, PCYC shall indemnify, defend and hold harmless
LONZA and its directors, officers, employees and agents from all Claims to the
extent that such Claims arise from any: (a) breach by PCYC of any of its
obligations under this Agreement including without limitation any of its
warranties and representations hereunder, (b) gross negligence, recklessness or
willful misconduct of PCYC or its employees or agents, (c) personal injury
caused by adverse reaction to the formula of a Product Manufactured by LONZA
hereunder, and/or (d) the promotion, labeling, marketing, distribution, use or
sale of any Product Manufactured by LONZA hereunder, but in each case only to
the extent that such liability is not covered by LONZA's indemnification
obligations under Section 9.1.


	Indemnification Procedures.  A Party (the
"Indemnitee") which intends to claim indemnification under this
Article 9 shall promptly notify the other Party (the "Indemnitor") in
writing of any action, claim or other matter in respect of which the Indemnitee
or any of its Affiliates, or any of their respective directors, officers,
employees or agents, intend to claim such indemnification; provided,
however, the failure to provide such notice within a reasonable period of
time shall not relieve the Indemnitor of any of its obligations hereunder except
to the extent the Indemnitor is prejudiced by such failure.  The Indemnitee
shall permit, and shall cause its directors, officers, employees and agents to
permit, the Indemnitor at its discretion to settle any such action, claim or
other matter, and the Indemnitee agrees to the complete control of such defense
or settlement by the Indemnitor.  Notwithstanding the foregoing, the Indemnitor
shall not enter into any settlement that would adversely affect the Indemnitee's
rights hereunder, or impose any obligations on the Indemnitee in addition to
those set forth herein in order for it to exercise such rights, without
Indemnitee's prior written consent, which shall not be unreasonably withheld or
delayed.  No such action, claim or other matter shall be settled without the
prior written consent of the Indemnitor, which shall not be unreasonably
withheld or delayed. The Indemnitor shall not be responsible for any attorneys'
fees or other costs incurred other than as provided herein.  The Indemnitee and
its directors, officers, employees and agents shall cooperate fully with the
Indemnitor and its legal representatives in the investigation and defense of any
action, claim or other matter covered by the indemnification obligations of this
Article 9.  The Indemnitee shall have the right, but not the obligation, to
be represented in such defense by counsel of its own selection and at its own
expense.


	



Insurance.

LONZA shall at all times maintain general liability
(including product liability) insurance coverage at its own expense in full
force and effect.  LONZA shall maintain insurance coverage [ *** ]
with a responsible insurance carrier.  Such insurance shall not be
terminated or reduced without providing PCYC with at least [ *** ]
advance written notice.  PCYC may request reasonable proof of the existence
and maintenance of this insurance coverage at any time.


	



Intellectual Property; License Grants.



	License Grant by PCYC. During the term of this
Agreement, and subject to the terms and conditions of this Agreement, PCYC
hereby grants to LONZA a nonexclusive, royalty-free license, without the right
to sublicense, under the PCYC Technology, solely to Manufacture Products for
PCYC as provided herein. 


	[ *** ]



	[ *** ] with respect to each Product only
if:



	[ *** ]; or 


	LONZA has committed a Material Supply Breach with respect
to such Product.  


	If, during the term of this Agreement, [ *** ]
shall give [ *** ] written notice thereof.  Upon [
*** ] receipt of such notice, the Parties shall [ *** ]  If
the Parties [ *** ]  receipt of such notice, then [ ***
] shall have no further obligations to [ *** ] under this
Section 11.2.2.


	Ownership of Inventions and Improvements.




	All IP shall be owned solely by PCYC.  LONZA shall
promptly provide PCYC with a copy of any formal invention disclosure document
that relates to IP.  IP shall be deemed to be the Confidential Information of
PCYC.  


	LONZA shall take all necessary actions to perfect PCYC's
title to the IP, including without limitation executing all necessary
instruments of assignment. LONZA will cooperate with PCYC in the filing and
prosecution of patent applications covering the IP.  Such cooperation will
include, but not be limited to, furnishing supporting data and affidavits for
the prosecution of patent applications and completing and signing forms needed
for the prosecution, assignment and maintenance of patent
applications.


	[ *** ].  Upon the [ *** ]
automatically shall be deemed to have granted to [ *** ]  this
Agreement is [ *** ], or [ *** ] pursuant to Section
[ *** ]  in all other cases of [ *** ] the Parties
shall [ *** ]  as follows:  For [ *** ] the Parties
shall [ *** ] as to the [ *** ]  If the Parties
[ *** ] shall have no further obligations to [ *** ]
under this Section 11.4.


	[ *** ]  



	If, during the term of this Agreement, [
*** ] shall give [ *** ] written notice thereof.  Upon
[ *** ]  receipt of such notice, the Parties shall [ ***
] including without limitation a [ *** ].  If the Parties
[ *** ] receipt of such notice, then [ *** ] shall
have no further obligations to [ *** ] under this Section
11.5.


	If, during the term of this Agreement, [ *** ]
shall first notify [ *** ] in writing.  If, within [
*** ] receipt of [ *** ] notice, [ *** ]
receives written notice from [ *** ] that [ *** ]
then the Parties shall proceed under Section [ *** ] does not
receive such written notice from [ *** ] shall have no further
obligations to [ *** ] under this Section 11.5.


	



Confidentiality.



	Confidentiality and Exceptions.  Except as otherwise
provided in this Agreement, all information disclosed by one Party (the
"Disclosing Party") to the other Party (the "Receiving
Party") pursuant to this Agreement shall be deemed to be the Disclosing
Party's "Confidential Information."  Confidential Information shall
include, but not be limited to, information relating to the structure of a
Product or PCYC Materials, any know-how relating to the Manufacture of any
Product or Drug Product, the Manufacturing records and documentation and the
Manufacturing costs, purchase prices and other financial arrangements made
pursuant to this Agreement.  Each Party agrees that it will take the same steps
to protect the confidentiality of the other Party's Confidential Information as
it takes to protect its own proprietary and confidential information, which
shall in no event be less than reasonable steps.  Each Party, and its employees
and agents, shall protect and keep confidential and shall not use, publish or
otherwise disclose to any third party, except as permitted by this Agreement, or
with the other Party's written consent, the other Party's Confidential
Information.  For the purposes of this Agreement, Confidential Information shall
not include such information that:



	was already known to the Receiving Party at the time of
disclosure by the other Disclosing Party, other than under an obligation of
confidentiality; or


	was generally available to the public or was otherwise
part of the public domain at the time of disclosure or became generally
available to the  public or otherwise part of the public domain after disclosure
other than through any act or omission of the Receiving Party in breach of this
Agreement; or


	was lawfully disclosed to the Receiving Party, other than
under an obligation of confidentiality, by a third party who had no obligation
not to disclose such information to others; or


	was independently developed by or for the Receiving Party
without the aid, application or use of the other Party's Confidential
Information by persons who did not have access to such Confidential
Information.


	Authorized Disclosure.  



	Each Party may disclose Confidential Information
hereunder to the extent such disclosure is reasonably necessary for prosecuting
or defending litigation, filing for Regulatory Approvals, complying with
applicable government regulations or conducting preclinical or clinical trials;
provided that if a Party is required by law or regulation to make any
such disclosure of the other Party's Confidential Information it will, except
where impracticable for necessary disclosures (for example in the event of
medical emergency), give reasonable advance notice to the other Party of such
disclosure requirement and will use its best efforts to assist such other Party
to secure a protective order or confidential treatment of such Confidential
Information required to be disclosed. 


	Neither Party shall disclose Confidential Information of
the other Party in any patent filings without the prior written consent of the
disclosing Party.


	Confidentiality and Publicity.  The Parties agree
that, except as may otherwise be required by applicable laws, regulations,
rules, or orders, including without limitation the rules and regulations
promulgated by the United States Securities and Exchange Commission, and except
as may be authorized in Section 12.2, no information concerning this Agreement
and the transactions contemplated herein shall be made public by either Party
without the prior written consent of the other.  The Parties agree that the
public announcement of the execution of this Agreement shall be by one or more
press releases mutually agreed to by the Parties.  A failure of a Party to
return a draft of a press release with its proposed amendments or modifications
to such press release to the other Party within [ *** ] of such
Party's receipt of such press release shall be deemed as such Party's approval
of such press release as received by such Party.  Each Party agrees that it
shall cooperate fully and in a timely manner with the other with respect to all
disclosures to the Securities and Exchange Commission and any other governmental
and regulatory agencies, including requests for confidential treatment of
Confidential Information of either Party included in any such
disclosure.


	Survival of Confidentiality.  All
obligations of confidentiality and non-use imposed upon the Parties under this
Agreement shall continue for [ *** ] following the date of expiration or
termination of the Agreement.


	



Term and Termination of Agreement.



	Term.  



	This Agreement shall commence upon the Effective Date
and, unless terminated sooner in accordance with the terms and conditions
provided for herein, shall remain in full force and effect with respect to each
Product to be Manufactured hereunder until the date which is five (5) years from
the date of Regulatory Approval of such Product by the FDA, or, where such
Product is an Intermediate, then five (5) years from the date of Regulatory
Approval by the FDA of both of the Drug Substances motexafin gadolinium and
motexafin lutetium.  Thereafter, this Agreement will automatically renew with
respect to such Product for successive two (2) year terms, subject to Section
13.2 and Article 14, unless either Party provides one (1) year written notice to
the other Party prior to the expiration of the then-current term that the
Agreement shall not be renewed with respect to such Product. 


	Termination for Breach.  



	Either Party may terminate this Agreement upon thirty
(30) days prior written notice in the event of a material breach of this
Agreement by the other Party which is not cured by the breaching Party within
such thirty (30) day period.  At the option of the non-breaching Party, such
termination may be with respect to the entire Agreement, or only with respect to
the Product which is the subject of such material breach.  


	A Material Supply Breach shall be deemed to be a material
breach of this Agreement.  PCYC shall have the right to terminate this Agreement
for an uncured Material Supply Breach as described in Section 13.2.1, provided
that PCYC first follows the procedures set forth in Section 3.8.1. 


	In the event that a Party materially breaches this
Agreement [ *** ], the other Party shall have the right to
terminate this Agreement pursuant to this Section 13.2 either with respect to
the Product(s) that is the subject of such material breach or in its entirety,
effective upon giving the breaching Party written notice thereof, and without
being required to provide the breaching Party the cure period described in the
first sentence of this Section 13.2.


	Consequences of Termination or Expiration.




	Upon any termination or expiration of this Agreement:




	All licenses granted pursuant to Sections 11.1
and 11.2 shall terminate;


	LONZA shall return to PCYC all PCYC Materials and
Products currently in inventory that are not being used as set forth in Section
13.3.2.  PCYC shall pay the shipping costs associated therewith, provided that
if PCYC terminates this Agreement for LONZA's material breach, then LONZA shall
pay such shipping costs.


	Each Party shall, within sixty (60) days of such
termination, return all tangible forms of Confidential Information provided by
other Party in its possession; provided, however, that each Party may
return an archival copy of such Confidential Information solely for determining
the scope of its confidentiality obligations hereunder.  


	 Upon termination of this Agreement under
Section 13.2, except for termination for LONZA's material breach:




	PCYC agrees to purchase, and LONZA agrees to sell, any
quantity of Products Manufactured by LONZA and held by LONZA against the
requirements of a Purchase Order on the effective date of termination at the
applicable Purchase Price, and subject to PCYC's acceptance of such Product
pursuant to Section 4.2.  


	At the request of PCYC, LONZA shall fulfill any
outstanding Purchase Orders for Product using, at LONZA's option, Materials on
hand or on order by LONZA for such Purchase Order, in accordance with the terms
of this Agreement.  In such event, such Product shall be purchased by PCYC at
the applicable Purchase Price, subject to PCYC's acceptance of such Product
pursuant to Section 4.2.  Alternatively, PCYC agrees to purchase any Materials
which have been ordered by LONZA pursuant to a non-cancelable order and
unutilized for such Purchase Order, at cost, which Materials shall be delivered
free and clear of all liens, claims and encumbrances. 


	If this Agreement is terminated only with respect to one
or more Product(s) and not in its entirety, then this Section 13.3 shall apply
only with respect to such Product(s).  Termination of this Agreement with
respect to a Product shall also include termination of the applicable Product
Appendix.


	Bankruptcy Rights.  In the event that this
Agreement is terminated or rejected by a Party or its receiver or trustee under
applicable bankruptcy laws due to such Party's bankruptcy, then all rights and
licenses granted under or pursuant to this Agreement by such Party to the other
Party are, and shall otherwise be deemed to be, for purposes of Section 365(n)
of the United States Bankruptcy Code (the "Bankruptcy Code") and any
similar law or regulation in any other country, licenses of rights to
"intellectual property" as defined under Section 101(35A) of the
Bankruptcy Code.  The Parties agree that all intellectual property rights
licensed hereunder, including without limitation any trade secrets, patents or
patent applications of a Party in any country covered by the license grants
under this Agreement, are part of the "intellectual property" as
defined under Section 101(35A) of the Bankruptcy Code subject to the protections
afforded the non-terminating Party under Section 365(n) of the Bankruptcy Code,
and any similar law or regulation in any other country.  


	Survival.  The following provisions shall survive
termination of this Agreement:  Sections 3.2.5, 3.7, 4.4, 5.3, 6.3.1, 6.3.2,
11.3, 11.4, 13.3, 13.4 and 13.5, and Articles 7, 9, 12 and 15.  Termination of
this Agreement shall not relieve either Party of any liability or obligation
which accrued hereunder prior to the effective date of such termination, nor
preclude either Party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this Agreement,
nor prejudice either Party's right to obtain performance of any obligation.



	



Force Majeure Events.

If, by any reason of impediment such as Acts of God, war,
rebellion, tumult, riot, civil commotion, insurrection, political disturbance,
strike, lock-out, fire, flood, interruption of transportation, embargo,
shortages of raw materials, or any other cause or event of a similar nature
affecting either Party over which such Party has had no control (a "Force
Majeure Event"), such Party cannot perform its obligations hereunder, it
shall have the right to postpone the performance of such obligation for the
duration of such Force Majeure Event. The Parties shall use all reasonable
efforts to avoid or overcome the causes affecting performance, and the Party
whose performance is affected by such Force Majeure Event shall fulfill all
outstanding obligations as soon as possible.  The affected Party shall give
facsimile notice to the other Party of the occurrence of such impediment and its
anticipated duration and shall subsequently notify the other Party as quickly as
possible of the cessation of said cause or event. [ *** ]

 


	



Miscellaneous.



	Notices.  All notices, requests and other
communications provided for herein shall be given or made in writing and shall
be deemed to have been duly given if (a) delivered by hand, (b) mailed by
certified mail, return receipt requested, or (c) delivered by a recognized
courier service, or (d) transmitted by facsimile and confirmed by overnight
delivery of a hard copy, with appropriate documentation of delivery, to the
intended recipient and, in the case of mail or courier service, at the following
address:

PCYC:

Pharmacyclics, Inc.

                       995 E. Arques Avenue

                   Sunnyvale, California 94086-4521

                   Fax:  (408) 774-0340

                   Attention:  President

                   With copies to:  General Counsel and
                               Vice President, Chemical Operations






LONZA:

LONZA LTD.

                   Münchensteinerstrasse 38

                   CH-4002  Basel

                   Fax: +41 61 316 83 01

                   Attention: Assistant Vice President, Head of Fine Chemicals Pharma






or, as to any Party, at such other address as shall be
designated by such Party in a written notice to the other Party.  All such
communications shall be deemed to have been duly given when hand delivered, or
mailed, in each case given or addressed as aforesaid.


	Independent Contractor.  Nothing herein shall
create any association, partnership, joint venture or the relation of principal
and agent between the Parties hereto, it being understood that LONZA is
Manufacturing Products as an independent Contractor, and neither Party shall
have the authority to bind the other or the others' representatives in any way.
Nothing in this Agreement shall constitute LONZA as an employee, agent, or
general representative of PCYC.


	Amendments.  No provision of this Agreement or of
the Product Appendices attached hereto may be modified or supplemented except by
an instrument in writing signed by a duly authorized of officer of each Party.



	Waiver.  No failure on the part of either Party to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.


	Headings.  The article and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this
Agreement.


	Assignment.  Neither Party may assign or transfer
this Agreement or any rights or obligations hereunder without the prior written
consent of the other, except that a Party may make such an assignment without
the other Party's consent to a successor-in-interest to substantially all of the
business assets of such Party to which this Agreement relates, whether in a
merger, sale of stock, sale of assets or other transaction.  Any permitted
successor or assignee of rights and/or obligations hereunder shall, in a writing
to the other Party, expressly assume performance of such rights and/or
obligations.  Any permitted assignment shall be binding on the successors of the
assigning Party.  Any assignment or attempted assignment by either Party in
violation of the terms of this Section 15.6 shall be null and void and of no
legal effect.  This Agreement shall be binding upon and shall inure to the
benefit of each Party's successors-in-interest and permitted assigns.


	Complete Agreement.  This Agreement, together with
the Product Appendices hereto, which are hereby incorporated into and shall form
part of this Agreement, represents the complete Agreement between the Parties
hereto as to all matters covered hereby or thereby, and supersedes any prior
agreements or understanding (oral or written) between the Parties regarding the
subject matter hereof.  Notwithstanding the foregoing, this Agreement is not
intended to supersede or replace the Prior Agreement.


	Severability.  If, for any reason, any provision
of this Agreement shall be deemed by a court of competent jurisdiction to be
illegal, invalid or unenforceable, the validity, legality or enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired, and such provision shall be modified to the minimum extent necessary
to make such provision consistent with applicable law, and in its modified form
such provision shall be enforceable and enforced.


	Governing Law and Language.  This Agreement shall
be governed exclusively by laws of the State of [ *** ], U.S.A.,
as such laws apply to contracts made between, and performed entirely in that
State, by [ *** ] residents, and LONZA hereby consents to the
jurisdiction of the courts of the United States and of the State of [
*** ].  The official text of this Agreement and any appendices, exhibits
and schedules hereto, or any notice given or accounts, reports or statements
required by this Agreement shall be in English.  In the event of any dispute
concerning the construction or meaning of this Agreement, reference shall be
made only to this Agreement as written in English and not to any other
translation into any other language.  


	Dispute Resolution. In the event of any
controversy or claim arising out of, relating to or in connection with any
provision of this Agreement, or the rights or obligations of the Parties
hereunder, the Parties shall try to settle their differences amicably between
themselves by referring the disputed matter to the President of PCYC and the
President of LONZA or their designates for discussion and resolution.  Either
Party may initiate such informal dispute resolution by sending written notice of
the dispute to the other Party, and within [ *** ] of such notice
the President of PCYC and the President of LONZA or their designates shall meet
for attempted resolution by good faith negotiations.  If such personnel are
unable to resolve such dispute within [ *** ] of initiating such
negotiations, each Party may thereafter pursue any and all rights and remedies
it may have at law or equity.  If mutually agreeable, the Parties may explore
alternative forms of dispute resolution, such as mediation and/or arbitration.
Notwithstanding any other provision of this Section 15.10, either Party may seek
a temporary restraining order or injunction against the other Party in the event
of a breach of any confidentiality obligation hereunder, or to prevent a Party's
wrongful use of any intellectual property hereunder.


	Remedies.  Except as otherwise specifically
provided in this Agreement, the remedies provided under this Agreement are
cumulative, and are not exclusive of other remedies available to a Party in law
or equity.


	Days.  "Days" in this Agreement means
calendar days unless expressly stated otherwise.


	United States Dollars.  References in this
Agreement to "Dollars" or "$" shall mean the legal tender of
the United States of America.  


	Counterparts.  This Agreement may be executed in
counterparts with the same force and effect as if each of the signatories had
executed the same instrument.


	Ambiguities.  Ambiguities, if any, in this
Agreement shall not be construed against either Party, regardless of which Party
is deemed to have drafted the provision at issue.



In Witness Whereof, the Parties hereto have caused
this Agreement to be duly executed and delivered as of the Effective Date.


 
	

LONZA AG

	

PHARMACYCLICS, INC.


	

By:  /s/ Marc New

	

By: /s/ Richard Miller


	

Name: Marc New

	

Richard A. Miller, M.D.


	

Title:  Assistant VP Fine Chemicals Ph.

	

President and Chief Executive Officer






LONZA INC.



By:  /s/  M. Gemmend



Name:  M. Gemmend



Title:  VP Exclusive Synthesis



















 

Schedule 1.33



Product Appendices