EXHIBIT 10.35
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
LICENSE AND DISTRIBUTION AGREEMENT
BETWEEN:
CYTOGEN CORPORATION
AND
DRAXIMAGE INC.
DATED
DECEMBER 5, 2000
CONTENTS
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ARTICLE 1 - DEFINITIONS
ARTICLE 2 - EXCLUSIVE LICENSE (WITH RIGHT TO SUBLICENSE)
ARTICLE 3 - MILESTONES AND ROYALTIES
ARTICLE 4 - PROMOTIONAL ACTIVITIES; MINIMUM SALES AND NON-EXCLUSIVITY
ARTICLE 5 - OWNERSHIP AND JOINT DEVELOPMENTS
ARTICLE 6 - CONFIDENTIALITY
ARTICLE 7 - LIAISON COMMITTEE
ARTICLE 8 - SUPPLY
ARTICLE 9 - NON-COMPETITION AND NON-SOLICITATION
ARTICLE 10 - REPRESENTATIONS AND WARRANTIES
ARTICLE 11 - LIABILITY AND INSURANCE
ARTICLE 12 - LIMITATION OF LIABILITY
ARTICLE 13 - INTELLECTUAL PROPERTY AND REGULATORY APPROVALS
ARTICLE 14 - FORCE MAJEURE
ARTICLE 15 - TERM AND TERMINATION
ARTICLE 16 - DISPUTE RESOLUTION
ARTICLE 17 - INDEPENDENT CONTRACTOR
ARTICLE 18 - ASSIGNMENT AND SUBLICENSING
ARTICLE 19 - MISCELLANEOUS
LICENSE AND DISTRIBUTION AGREEMENT
----------------------------------
THIS LICENSE AND DISTRIBUTION AGREEMENT is made as of the 5th day of December,
2000 (the "Effective Date"), by and between DRAXIMAGE Inc., a corporation
incorporated pursuant to the laws of Canada ("DRAXIMAGE") and Cytogen
Corporation, a corporation incorporated pursuant to the laws of Delaware
("Cytogen").
RECITALS
--------
1. DRAXIMAGE owns the rights to the Products in the Territory and desires to
enter into an exclusive agreement with Cytogen for the commercialization of
those Products in the Territory on the terms and conditions contained in this
Agreement.
2. Concurrent with the execution of this Agreement, the Parties shall also enter
into a supply agreement wherein DRAXIMAGE will supply to Cytogen its
requirements of Products for distribution and sale within the Territory in
accordance with the terms therein ("Supply Agreement").
AGREEMENT
---------
NOW, THEREFORE, IT IS AGREED between the Parties as follows:
ARTICLE 1 - DEFINITIONS
- ------------------------
1.1 "Affiliate(s)" as applied to DRAXIMAGE or Cytogen shall mean any legal
entity other than DRAXIMAGE or Cytogen, as the case may be, in whatever
country organized, controlled by or under common control with DRAXIMAGE
or Cytogen. "Affiliate" shall also mean any company which owns or
controls at least fifty percent (50%) of the voting stock of Cytogen or
DRAXIMAGE, or any other company at least fifty percent (50%) of whose
voting stock is owned by or controlled by such company. The term
"control" means possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such entity,
whether pursuant to the ownership of voting securities, by contract or
otherwise.
1.2 "Bad Debts" shall mean any payments owing to Cytogen from its customers
related to the Products which remain uncollected after three hundred
and sixty (360) days from invoicing and only to the extent they remain
uncollected. For greater certainty and clarification if, and to the
extent, such debts are eventually collected by Cytogen (by direct or
indirect means), such amounts shall not be deemed bad debts for the
purposes of Article 1.14 hereof and accordingly shall be subject to
royalty entitlements pursuant to Article 3.2 hereof.
-1-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
1.3 "Commercially Reasonable Efforts" shall mean reasonable efforts and
resources at least equal to those normally used by a reputable
pharmaceutical or biotechnology company, under similar circumstances as
the Parties to this Agreement, for a compound, formulation or product
owned by it or to which it has rights, which has a similar market
potential to the Products at a similar stage in its product life,
taking into account the formulation of the Products, the
competitiveness of the Products' marketplace, the proprietary position
of the Products, the applicable regulatory structure and requirements
for the Products, the clinical and pre-clinical study results
pertaining to the Products, time and cost of completion of development
of the Products, the profitability of the Products, the size and
location of the subject market of the Products within the Territory,
and any other relevant factors.
1.4 "Effective Date" shall mean the date stated in the first paragraph
above.
1.5 "First Sale" shall mean the first commercial sale of a Product in the
Territory.
1.6 "First Shipment" shall mean the first shipment for commercial sale of
the applicable Product, F.O.B. DRAXIMAGE's facility.
1.7 "Force Majeure Event" shall have the meaning ascribed thereto in
Article 14.1 hereof.
1.8 "Free Goods" shall mean the shipments of the Product supplied to
twenty-five (25) patients for I125 Product during its initial launch
in the Territory.
1.9 "Improvements" shall mean any enhancement in the formulation,
ingredients, preparation, presentation, means of delivery, dosage or
packaging for the Products or to the Intellectual Property Rights or
Know-How.
1.10 "Initial Marketing Plan" is attached hereto as Schedule "A" and
incorporated by reference.
1.11 "Intellectual Property Rights" means the patents and patent
applications (until such time as such applications are denied,
abandoned or issued into patents) and Product-related trademarks and
tradenames such as BrachySeed(TM), which are specified in Schedule "B",
attached hereto and incorporated by reference, and any future
Product-related trademarks and tradenames, patents and patent
applications, continuations, divisionals and reissues as part of
patents and patent applications in the Territory regarding the Products
and any Improvements thereto, which DRAXIMAGE owns or under which
DRAXIMAGE is licensed with the right to sublicense in the Territory.
1.12 "Know-How" shall mean any of DRAXIMAGE's information and materials
anywhere in the Territory relating to the Regulatory Approvals,
marketing, use or sale of the Products including any existing dosimetry
and marketing outcome studies necessary for Cytogen to exploit its
rights under Article 2.1 hereof.
1.13 "Liaison Committee" shall have the meaning ascribed thereto in Article
7.1 hereof.
1.14 "Minimum Sales Targets" shall mean an amount equal to [**] percent
([**]%) of the Net Sales volumes referenced in the Initial Marketing
Plan and in subsequent marketing plans as set forth therein, subject to
the provisions of Article 4.1 herein.
-2-
1.15 "Negotiators" shall have the meaning ascribed thereto in Article 7.3
hereof.
1.16 "Net Sales" shall mean the gross invoiced sales for Products sold or
commercially disposed of for value to a third party by Cytogen or by
its Affiliates, after deduction of the following amounts:
(i) credits or allowances given or made for rejection or recall
of previously sold Products actually taken or allowed,
and/or allowances for Bad Debts related to the Products;
(ii) any tax or government charge (including any tax such as a
value added or similar tax or government charge other than
an income tax) levied on the sale, transportation or
delivery of a Product and borne by the seller thereof;
(iii)freight, insurance and duties on shipments of Products;
(iv) Free Goods; and
(v) chargeback payments and rebates related to the Products
granted to managed health care organizations or to federal,
state and local governments, their agencies, and other
purchasers and reimbursers or to trade customers, including
but not limited to, wholesalers and chain and pharmacy
buying groups.
1.17 "Party" means either Cytogen or DRAXIMAGE, individually; "Parties"
means Cytogen and DRAXIMAGE collectively
1.18 "Product" or "Products" means, singularly or collectively, DRAXIMAGE's
titanium-encapsulated brachytherapy seeds ("BrachySeed(TM)") which
incorporate the Intellectual Property Rights and are based on the
radioisotope Iodine-125 ("I125 Product") or Palladium-103 ("Pd103
Product") for the indication of cancer of the prostate.
1.19 "Proprietary Information" includes, without limitation, compilations,
formulae, processes, plans, blueprints, formulations, technical
information, new product information, methods of product delivery, test
procedures, Know-How, software, customer lists, market plans or
strategies, sales information, specifications, scientific, clinical,
commercial and any other information or data considered confidential in
nature, whether communicated in writing or orally, which are of
competitive advantage to either Party in the conduct of its business.
1.20 "Regulatory Approvals" shall mean a 510-K clearance, premarket approval
("PMA"), and/or any similar or successor approval issued from time to
time by the United States Food and Drug Administration ("FDA"), or any
successor agency, and any required approvals from the United States
Nuclear Regulatory Commission ("NRC"), the Canadian Nuclear Safety
Commission ("NSC") or its predecessor the Canadian Atomic Energy
Control Board ("AECB"), or any successor agency, which is required for
the manufacturing, supply, transportation, marketing and sale (with the
exception of Cytogen's promotional material and other similar
documentation) of the Products in the Territory.
1.21 "Settlement Date" shall have the meaning ascribed thereto in Article
7.3 hereof.
1.22 "Supply Agreement" shall have the meaning ascribed thereto in the
recitals to this Agreement, which are incorporated by reference.
-3-
1.23 "Term" shall have the meaning ascribed thereto in Article 15.1 hereof.
1.24 "Territory" means the United States and its territories.
1.25 "Trademarks" shall mean the registered trademarks or trademark
applications for the Products in the Territory listed in Schedule "B"
and incorporated by reference.
ARTICLE 2 - EXCLUSIVE LICENSE (WITH RIGHT TO SUBLICENSE)
- --------------------------------------------------------
2.1 Subject to the other provisions of this Agreement, DRAXIMAGE hereby
grants to Cytogen and Cytogen hereby accepts an exclusive license
(exclusive even as to DRAXIMAGE except as expressly provided otherwise
herein) under the Intellectual Property Rights, Know-How and the
Regulatory Approvals now or hereafter owned or controlled by DRAXIMAGE
for the sole and exclusive purpose of importing, using, distributing,
offering for sale, marketing, promoting and selling (but not
manufacturing) the Products in the Territory, for the indication of
cancer of the prostate.
2.2 Subject to the other provisions of this Agreement, DRAXIMAGE hereby
grants to Cytogen an exclusive license (exclusive even as to DRAXIMAGE
except as expressly provided otherwise herein) to use the Intellectual
Property Rights, Know-How and Regulatory Approvals on packaging,
labeling and other materials used in connection with commercialization
of Products in the Territory for so long as this Agreement remains in
effect. Cytogen agrees that it will use the Intellectual Property
Rights, Know-How and Regulatory Approvals only in promotion of the
Products, and in accordance with standard industry practices.
2.3 Upon execution of this Agreement, DRAXIMAGE shall disclose to Cytogen,
in writing, or via electronic media acceptable to Cytogen, all
Know-How. In addition, during the Term of this Agreement, DRAXIMAGE
shall as soon as practicable disclose to Cytogen, in writing, or via
electronic media acceptable to Cytogen, on an ongoing basis all new
Know-How. Such Know-How shall be automatically deemed to be within the
scope of the license grant herein without payment of any additional
compensation.
2.4 The license granted under this Article 2 confers on Cytogen the right,
at Cytogen's sole discretion, to appoint an independent third party
distribution sales force for the Territory; provided that such
independent third party distributors shall be subject to the same
obligations as Cytogen pursuant to this Agreement.
ARTICLE 3 - MILESTONES AND ROYALTIES
- ------------------------------------
3.1 In consideration of granting the rights described in Article 2, and
subject to the provisions of Articles 3 and 4.1, Cytogen shall pay to
DRAXIMAGE milestones aggregating Two Million Dollars ($2,000,000) to
be paid by Cytogen in cash as follows:
(a) $500,000 upon execution of this Agreement and the Supply
Agreement (upon delivery of such executed agreements, to
Cytogen's solicitors for release of such funds held in escrow for
this purpose); and
(b) $500,000 upon the First Sale of the I125 Product from DRAXIMAGE
to Cytogen; and
-4-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(c) $1,000,000 upon the First Sale of Pd103 Product from DRAXIMAGE to
Cytogen.
3.2 In consideration of DRAXIMAGE granting the rights described in Article
2, and subject to the provisions of this Article 3, Cytogen also agrees
to pay to DRAXIMAGE royalties based on Cytogen's Net Sales on an
aggregate basis for the Territory calculated as follows:
(a) On Net Sales made during the period commencing on the First Sale
of any Product and ending on December 31, 2001, a royalty of [**]
percent ([**]%) of such Net Sales of the Products in the
Territory;
(b) On Net Sales made during the period commencing January 1, 2002
and ending on the date which is the last day of the Term, a
royalty on such Net Sales of the Products in the Territory as
follows:
(i) Net Sales less than or equal to $[**]: [**]%
(ii) Net Sales greater than $[**] but less than or equal to
$[**]: [**]%
(iii) Net Sales greater than $[**]: [**]%
3.3 Cytogen shall make royalty payments on Net Sales referred to in Article
3.2 within sixty (60) days after the end of each calendar quarter end,
and each payment shall be accompanied by a report identifying the
Products, Net Sales, and any amount(s) payable to DRAXIMAGE, as well as
computation thereof. Such reports shall be kept confidential by
DRAXIMAGE and not disclosed to any other party (other than its
Affiliates and their accountants or the original licensor(s) of the
Products who shall be subject to the same obligations of
confidentiality as those imposed on DRAXIMAGE hereunder) and shall only
be used for the purposes of this Agreement.
3.4 Cytogen shall, and shall cause its Affiliates and permitted
sublicensees to, keep full and accurate books and records setting forth
gross sales, Net Sales, and amounts payable to DRAXIMAGE. Cytogen and
DRAXIMAGE may once every calendar year appoint mutually agreeable
independent qualified public accountants to audit Cytogen's books and
records in order to ensure the accuracy of the DRAXIMAGE royalty
entitlements. Such independent qualified public accountants shall
provide two (2) weeks prior written notice to Cytogen of such an audit
and shall conduct such audit during Cytogen's normal business hours. No
audit shall be permitted later than three (3) years following the
rendering of any such reports, accountings and payments, save and
except in relation to issues arising between the Parties regarding Bad
Debts. The opinion of such independent qualified public accountants
regarding such reports, accountings and payments shall be binding on
the Parties hereto. DRAXIMAGE shall bear the expense of such accounts;
provided, however, that if the audit for any given year establishes an
underpayment of greater than five percent (5%) of the total royalty
entitlements payable to DRAXIMAGE for that calendar year, Cytogen not
DRAXIMAGE shall promptly pay all the reasonable fees and expenses of
such audit.
3.5 Any payments due hereunder which are not paid on or before the due date
shall bear interest at the Canadian prime rate of interest as reported
by the National Post or Globe and Mail newspapers from time to time
plus one percent (1%), or a maximum rate permitted by Ontario law,
whichever is lower.
-5-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.6 Any withholding or other tax required to be withheld by Cytogen under
the laws of the Territory for the account of DRAXIMAGE in respect of
payments to be made by Cytogen hereunder shall be promptly paid by
Cytogen for and on behalf of DRAXIMAGE to the appropriate tax
authorities, and Cytogen shall, within sixty (60) days of making such
payment, furnish DRAXIMAGE with proof of payment of such tax together
with tax receipts or other evidence of payment sufficient to enable
DRAXIMAGE to support a claim in respect of any sum so withheld. Any
such tax required to be withheld shall be borne solely by DRAXIMAGE.
Cytogen shall cooperate with DRAXIMAGE in taking reasonable and legally
authorized steps to reduce or to eliminate such withholding or other
taxes.
ARTICLE 4 - PROMOTIONAL ACTIVITIES; MINIMUM SALES AND NON-EXCLUSIVITY
- ---------------------------------------------------------------------
4.1 Notwithstanding the provisions of Articles 2.1 and 2.2, the granting of
the exclusive license to use the Intellectual Property Rights, Know-How
and the Regulatory Approvals is subject to Cytogen achieving its
Minimum Sales Targets; provided, however, that Cytogen's obligations to
achieve its Minimum Sales Targets shall be waived for as long as, and
to the extent that:
(i) DRAXIMAGE is not able to supply Cytogen's needs of the Products
in accordance with the provisions of the Supply Agreement;
provided, however, that Cytogen's obligations to achieve its
Minimum Sales Targets shall be reduced for the calendar year 2001
in recognition of DRAXIMAGE's production capacity constraints
during the Initial Capacity (as that term is defined in the
Supply Agreement) from [**] Dollars ($[**]) to [**] Dollars
($[**]);
(ii) DRAXIMAGE does not obtain Regulatory Approvals for all the
Products;
(iii)DRAXIMAGE does not make Commercially Reasonable Efforts to
protect its Intellectual Property Rights or Know-How; or
(iv) DRAXIMAGE breaches Articles 10.1(b), (f), (g), (h), (i) or (j).
Other than as provided for above, in the event that Cytogen fails to
meet the applicable Minimum Sales Targets in a given year, the
exclusive license provided pursuant to the provisions of this Agreement
shall, at DRAXIMAGE's sole discretion, become non-exclusive and
DRAXIMAGE may, at its sole discretion, license the use of the
Intellectual Property Rights, Know-How and the Regulatory Approvals for
the Territory to other third parties or to one of its Affiliates;
provided, however, that under such circumstances, the Minimum Sales
Targets shall be waived by DRAXIMAGE and Cytogen shall be under no
obligation to meet such remaining Minimum Sales Targets unless the
license grant is made exclusive again as evidenced in writing signed by
both Parties hereto.
Should the Agreement be non-exclusive immediately before DRAXIMAGE is
ready to ship Pd103 Product to Cytogen for the purposes of the First
Sale of Pd103 Product in the Territory, then Cytogen shall be relieved
from its milestone payment obligations to DRAXIMAGE pursuant to Article
3.1(c); provided, however, that as consideration for such payment
relief, Cytogen shall immediately relinquish any rights it has pursuant
to the Agreement with respect to the Pd103 Product and expressly
acknowledges that DRAXIMAGE may license at that time to other third
parties or to one of its Affiliates (on an exclusive basis or
otherwise) the use of the Intellectual Property Rights, Know-How and
the Regulatory Approvals for the Territory related to the Pd103
Product.
-6-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Should DRAXIMAGE not exercise its discretion and make the exclusive
license non-exclusive in accordance with the above referred failure by
Cytogen to meet the applicable Minimum Sales Targets in a given year,
Cytogen shall be deemed to have met the applicable Minimum Sales
Targets for the given year and not be deemed to be in breach of this
Agreement in this regard. Similarly, should DRAXIMAGE not exercise its
discretion and make the exclusive license non-exclusive and the
Agreement remains exclusive at the time of the First Shipment of Pd103
Product, then Cytogen's milestone payment obligations to Draximage
pursuant to Article 3.1(c) remain.
4.2 Cytogen shall use Commercially Reasonable Efforts to:
(a) promote under the brand name BrachySeed(TM) (or other applicable
DRAXIMAGE brand name(s) as agreed by DRAXIMAGE from time to
time), within the bounds set by any applicable statute or
regulation, the sale and distribution of the Products in the
Territory; and
(b) undertake a launch of the Products and commence marketing of the
Products (either through an Affiliate, a permitted sublicensee or
one or more distributors in accordance with the provisions of
this Agreement) in the Territory as soon as practicable after the
execution of this Agreement and the Supply Agreement but in any
event not later than [**] months after the execution of same
or receipt of the necessary applicable Product Regulatory
Approvals to launch, whichever is later; provided, however,
Cytogen's obligations of undertaking a launch shall be waived for
as long as, and to the extent that, DRAXIMAGE is not able to
supply Cytogen's needs of the Products in accordance with the
provisions of the Supply Agreement; DRAXIMAGE does not make
Commercially Reasonable Efforts to protect its Intellectual
Property Rights or Know-How; or DRAXIMAGE breaches of Articles
10.1(b), (f), (g), (h) or (i).
4.3 Other than as provided for above, if Cytogen fails to undertake a
launch of the Products in the Territory in accordance with the
provisions of Article 4.2(b), Cytogen will within [**] days
reassign or transfer ownership of the license to DRAXIMAGE and all
rights under this Agreement and the Supply Agreement. The Parties agree
that a failure by Cytogen to launch the Products in the Territory
within the specified time period set forth in Article 4.2(b) (as such
time period may be extended by the occurrence of a Force Majeure Event
as set out in Article 14) is deemed to be a material breach of this
Agreement.
ARTICLE 5 - OWNERSHIP AND JOINT DEVELOPMENTS
- --------------------------------------------
5.1 All existing or subsequently developed Proprietary Information of
DRAXIMAGE will be owned by DRAXIMAGE. All existing or subsequently
developed Proprietary Information of Cytogen will be owned by Cytogen.
Subject to Article 6, each Party will have access to Proprietary
Information of the other as is reasonable and appropriate to carry out
the intent of this Agreement.
5.2 In the event that an Improvement is made by either Party, or jointly
under this Agreement, such a development, whether patentable or not
("Invention(s)"), will be owned by the Party making such Invention or
if jointly made by the Parties, the Invention will be jointly owned.
Notwithstanding the foregoing, DRAXIMAGE will own the Invention if such
Invention directly arises from an enhancement or modification to any of
the Products and enhancements or modifications will be deemed to be
Improvements.
-7-
5.3 In case Inventions made pursuant to Article 5.2 are patentable,
DRAXIMAGE and Cytogen each agree to reasonably cooperate with the other
Party and/or its solicitors, at the other Party's expense, in:
(a) preparing, filing and prosecuting patent applications;
(b) vesting title as herein provided; and
(c) providing non-financial assistance as reasonably requested by the
other in enforcing any patents resulting from such patent
applications.
5.4 The cost of patenting an Invention will be borne by the owner of the
Invention. In the event of a jointly-owned Invention, the costs will be
shared equally by both Cytogen and DRAXIMAGE; provided, however, that
if a Party does not pay its share for obtaining the patent, including
but not limited to any renewals thereto, such Party shall no longer
have any rights to the Invention and the Party making the payments
shall be deemed the sole owner of the Invention.
5.5 DRAXIMAGE acknowledges that it shall have sole responsibility for the
development, including but not limited to research and development and
in vivo and in vitro testing, on the Products. DRAXIMAGE shall be
solely responsible for the costs associated with such development;
provided, however, that the Parties agree that DRAXIMAGE is not
compelled by this Article 5.5, or otherwise, to develop any
Improvements for the Products.
ARTICLE 6 - CONFIDENTIALITY
- ---------------------------
6.1 A Party receiving Proprietary Information from the other, directly or
indirectly, will treat such information as confidential and will use
efforts at least equivalent to those used to protect its own
Proprietary Information but in no event shall the receiving Party use
less than Commercially Reasonable Efforts. Except (i) to enable Cytogen
to exercise its rights to appoint distributors as set forth in Article
2.4; and (ii) as set forth in Article 6.2 following, all information or
data communicated from one Party to the other will be deemed and
treated as Proprietary Information unless otherwise agreed to in
writing. All oral communications, whether or not summarized and reduced
to writing, shall also be considered confidential. Access to such
Proprietary Information will be limited to employees, agents, advisors
or consultants of the Party or its Affiliates receiving such
information, who reasonably require such information and who are bound
to said Party by a like obligation of confidentiality. A Party
receiving Proprietary Information will not use such information for its
own benefit or for the benefit of others or in any way not consistent
with the purposes set out in this Agreement.
6.2 Nothing contained herein will in any way restrict or impair each
Party's right to use, disclose or otherwise deal with any Proprietary
Information which:
(a) at the time of disclosure is in the public domain or thereafter
becomes part of the public domain by publication or otherwise
through no act of the Party receiving such information;
(b) the Party receiving such information can conclusively establish
was in its possession prior to the time of the disclosure;
-8-
(c) is independently made available as a matter of right to the Party
receiving such information by a third party who is not in
violation of a confidential relationship with the other Party;
(d) is developed by a Party independently of the Proprietary
Information received from the other Party; or
(e) is information required to be disclosed by legal process or in
connection with a disclosing Party's periodic filings with the
United States Securities and Exchange Commission; provided, in
such case, the disclosing Party timely informs the other and
discloses the minimum amount of information necessary to be in
compliance and maintain confidentiality to the extent possible
and cooperates reasonably with the other Party in attempting to
limit such disclosure.
6.3 The Party receiving Proprietary Information will obtain no right of any
kind, or license under any patent application or patent, except as
expressly stated in this Agreement. All Proprietary Information will
remain the sole property of the Party disclosing such information or
data.
6.4 Upon termination of this Agreement, the Party to which Proprietary
Information has been disclosed will upon request, return within thirty
(30) days all such information, including any hard and electronic
copies thereof, and cease its use, or at the request of the Party
transmitting such Proprietary Information, will promptly destroy the
same and certify such destruction to the transmitting Party, provided
that each Party may retain one copy of the Proprietary Information in a
secure location for compliance and record keeping purposes only.
6.5 Termination of this Agreement shall not relieve the Parties of their
obligations under this Article 6. The confidentiality obligations
pursuant to this Article 6 shall remain in full force and effect
throughout the Term of this Agreement plus five (5) years thereafter.
ARTICLE 7 - LIAISON COMMITTEE
- -----------------------------
7.1 Within sixty (60) days of the execution of this Agreement, the Parties
hereto shall establish a Liaison Committee which shall consist of three
(3) representatives from each Party as designated by each of them from
time to time. Unless otherwise agreed to by the Parties, the Liaison
Committee shall meet at least once every year. Either Party shall have
the unilateral right to call a meeting of the Liaison Committee;
provided, however, that the Liaison Committee shall not meet more than
four (4) times in any calendar year. The Liaison Committee, or a Party,
as the case may be, must provide thirty (30) days written notice to the
Parties (or other Party) of any requested meeting. The Liaison
Committee shall meet during regular business hours alternatively at the
offices of Cytogen and DRAXIMAGE, or as otherwise agreed, each Party
bearing its own expenses in preparing for and attending such meetings.
Meetings shall be chaired by one of the Cytogen representatives who it
selects. Between meetings of the Liaison Committee each Party shall
keep the other generally informed as to its progress with its
respective obligations under this Agreement and the Supply Agreement.
Each Party will provide the other Party's Liaison Committee members
with advance written reports and agenda items as the Liaison Committee
reasonably determines are appropriate, including without limitation,
reasonable current production, sales and marketing updates for each of
the Products, any research and development being conducted on the
Products and any Improvements that have been made to the Products.
-9-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
7.2 The Liaison Committee shall provide strategic advice for the
development and commercialization of the Products in the Territory. In
particular, the Liaison Committee shall have the following specific
responsibilities:
(a) to review (with no right to modify) an annual budget, timeline,
forecasts, production and business plans for the Products in the
Territory and any updates or amendments thereto;
(b) to approve the annual marketing plans for the Products in the
Territory and any updates or amendments thereto;
(c) to review the Products' performance against such plans and budget
at each meeting of the Liaison Committee; and
(d) to review and comment on copies of publications submitted by the
other Party which pertain to the Products.
7.3 The Liaison Committee shall attempt to operate by consensus, and all
decisions of the Liaison Committee shall require majority support. In
the event of a dispute among the Liaison Committee which cannot be
resolved by consensus, after further informal discussion, such dispute
shall be referred to the Presidents of DRAXIS Health Inc. ("DRAXIS")
and Cytogen (collectively the "Negotiators"), who shall discuss the
matter and attempt to reach an amicable solution. Should the
Negotiators fail to reach an amicable solution within ten (10) days of
the first meeting of the Negotiators to resolve the dispute (the
"Settlement Date"), the matter shall proceed to arbitration in
accordance with the provisions of Article 16.
ARTICLE 8 - SUPPLY
- ------------------
8.1 Supply of the Products shall be in accordance with the provisions of
the Supply Agreement.
ARTICLE 9 - NON-COMPETITION AND NON-SOLICITATION
- ------------------------------------------------
9.1 (a) Subject to the below provisions and Article 4.3 of the Supply
Agreement, during the Term of this Agreement, Cytogen and its
Affiliates will not, unless approved in advance by DRAXIMAGE
acting reasonably, directly or indirectly, manufacture, market or
distribute in the Territory any product which is competitive and
similar (a product which uses a radioisotope to treat prostate
cancer) with the Products;
(b) In the event DRAXIMAGE terminates this Agreement because of a
material breach by Cytogen pursuant to Articles 15.3 or 15.4,
Cytogen and its Affiliates will not, unless approved in advance
by DRAXIMAGE acting reasonably, directly or indirectly,
manufacture, market, distribute or sell in the Territory any
product which is competitive and similar (a product which uses a
radioisotope to treat prostate cancer) with the Products for a
[**] period commencing upon the termination date of this
Agreement;
-10-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(c) Notwithstanding the provisions of Article 9.1(a), for as long as
the exclusive license granted to Cytogen as provided for in
Article 2 has been made non-exclusive as provided for in Article
4.1, Cytogen shall not, unless approved in advance by DRAXIMAGE
acting reasonably, directly or indirectly, manufacture, market or
distribute in the Territory any product which is competitive and
similar (a product which uses a radioisotope to treat prostate
cancer) with the Products for a [**] period commencing from when
the license is made non-exclusive; provided, however, that should
the license be made exclusive once again as agreed to by the
Parties in accordance with the provisions of Article 4.1, the
provisions of Article 9.1(a) shall apply;
(d) During and after the Term of this Agreement, Cytogen and its
Affiliates will not seek customers or sales of the Products
outside the Territory, unless approved in advance by DRAXIMAGE,
acting reasonably. Upon expiration or termination of this
Agreement, save and except if terminated by DRAXIMAGE pursuant to
Articles 14.2, 15.3 and 15.4, DRAXIMAGE will not, for a period of
[**], sell any Products to Cytogen's customers to whom DRAXIMAGE
has shipped Product during the Term unless DRAXIMAGE pays to
Cytogen a royalty of [**] percent ([**]%) of the net selling
price of such Products sold to such customers; provided, however,
that if Cytogen relinquishes its right to the PD103 Product
pursuant to the provisions of Article 4.1, then DRAXIMAGE's [**]
percent ([**]%) royalty obligation to Cytogen referred to in this
Article shall not apply for shipments of Pd103 Product to Cytogen
customers after termination or expiry of this Agreement, or
otherwise.
ARTICLE 10 - REPRESENTATIONS AND WARRANTIES
- -------------------------------------------
10.1 DRAXIMAGE hereby represents and warrants to Cytogen as follows:
(a) DRAXIMAGE has the full legal right to enter into this Agreement
and to perform its obligations hereunder. This Agreement is duly
executed and delivered by DRAXIMAGE and constitutes a legal,
valid and binding obligation, enforceable against DRAXIMAGE in
accordance with its terms;
(b) prior to the supply of the Products, DRAXIMAGE will have obtained
and will maintain all Regulatory Approvals and all other
necessary notices, consents, licenses, approvals and
authorizations of all governmental authorities and other third
parties required in connection with entering into and permitting
the Parties to perform their respective obligations under this
Agreement;
(c) it has provided to Cytogen a summary of all adverse events known
to it relating to the Products;
(d) it has disclosed to Cytogen all relevant Intellectual Property
Rights, Know-How and Regulatory Approvals relating to the
Products;
(e) the execution and delivery of this Agreement and the performance
of DRAXIMAGE's obligations hereunder (i) to the best of
DRAXIMAGE's knowledge do not conflict with or violate any
requirement of applicable laws, rules or regulations, and (ii) do
not conflict with, or constitute a default under, any contractual
obligation of DRAXIMAGE;
-11-
(f) DRAXIMAGE either owns or has exclusive license in the Territory
to the Intellectual Property Rights and Know-How and has not
granted to any third party any license or other interest of any
kind (including any charge, lien or encumbrance) under the
Intellectual Property Rights and Know-How in the Territory which
would affect Cytogen's rights under this Agreement and the
Intellectual Property Rights and Know-How will permit Cytogen to
practice and exercise the rights granted to it under Article 2;
(g) to the best of its knowledge, there are no third party patents or
trademarks or pending applications which, if issued, may cover
the manufacture, use, distribution, promotion, marketing or sale
of the Products in the Territory;
(h) there are no claims, actions, judgements or settlements against
or owed by DRAXIMAGE or to the best of its knowledge pending or
threatened claims or litigation relating to the Products,
Intellectual Property Rights and Know-How;
(i) to the best of its knowledge the manufacture, use, distribution,
promotion, marketing or sale of the Products in the Territory
will not infringe the Intellectual Property Rights of any third
party; and
(j) DRAXIMAGE shall exercise, as soon as reasonably practicable but
in no event later than March 1, 2001, its contractual option to
obtain from its sublicensor the exclusive rights to the Pd103
Product (which shall be granted pursuant to U.S. Patent Number
6,099,458) for the Territory.
10.2 Cytogen hereby represents and warrants to DRAXIMAGE as follows:
(a) Cytogen has the full legal right to enter into this Agreement and
to perform its obligations hereunder. This Agreement is duly
executed and delivered by Cytogen and constitutes a legal, valid
and binding obligation, enforceable against Cytogen in accordance
with its terms;
(b) subject to DRAXIMAGE's obligations to obtain all Regulatory
Approvals as set forth in Article 10.1 Cytogen will have
obtained, prior to the First Sale, all necessary notices,
consents, approvals and authorizations of all governmental
authorities and other third parties required from it in
connection with entering into and performing this Agreement;
(c) the execution and delivery of this Agreement and the performance
of Cytogen's obligations hereunder (i) to the best of Cytogen's
knowledge, do not conflict with or violate any requirement of
applicable laws, rules or regulations, and (ii) do not conflict
with, or constitute a default under, any contractual obligation
of Cytogen;
(d) Cytogen shall institute and maintain adequate internal procedures
to screen and monitor the credit status of potential and existing
customers of the Products in the Territory and shall use
Commercially Reasonable Efforts to reduce customer credit risk
where reasonably possible and shall pursue unpaid customer
receivables and, if necessary, to the full extent of the law;
(e) Cytogen shall disclose reasonably promptly to DRAXIMAGE, the
written details of any chargeback payments and rebates referred
to in Article 1.16; and
-12-
(f) Cytogen shall ensure that DRAXIMAGE is made a third party
beneficiary to any agreements entered into between Cytogen and
independent third party distributors pursuant to the provisions
of Article 2.4 and agrees to undertake Commercially Reasonable
Efforts to ensure that each independent third party distributor
conforms to the spirit and intent of this Agreement.
ARTICLE 11 - LIABILITY AND INSURANCE
- ------------------------------------
11.1 Each Party shall indemnify, defend and hold the other, and their
respective employees, directors, representatives and advisors, harmless
from and against any and all non-Affiliate third party liabilities,
actions, suits, claims, demands, prosecutions, damages, costs, expenses
or money judgements (including reasonable solicitors' fees) which arise
out of:
(a) the intentional misconduct or negligence of the indemnifying
Party with respect to its acts or omissions under this Agreement
or pertaining to the Products; or
(b) the breach by the indemnifying Party of its representations and
warranties contained in this Agreement;
except to the extent of an indemnity obligation on the part of the
other Party under this Article. In the event of a claim which may give
rise to a right of indemnity under this Article, the Party intending to
claim indemnity shall give the indemnifying Party notice in writing as
soon as practicable of any such claim or lawsuit.
In any such claim or lawsuit:
(i) The Party claiming indemnity will give the indemnifying
Party full opportunity to control the response thereto and
the defense thereof, including any agreement relating to the
settlement thereof, provided that the indemnifying Party
shall not settle any such claim or action without the prior
written consent of the Party claiming indemnity (which shall
not be unreasonably withheld or delayed);
(ii) the Party claiming indemnity will, at the indemnifying
Party's expense, cooperate reasonably in the defense of the
non-Affiliate third party's claim, and shall have the right
to participate in such defense to the extent that in its
judgement the Party claiming indemnity may be prejudiced
thereby;
(iii)the Party claiming indemnity shall not settle, offer to
settle or admit liability in any claim or suit without the
written consent of an officer of the indemnifying Party,
which consent shall not be unreasonably withheld.
The Party claiming indemnity may participate, at its own expense, in
such defense and in any settlement discussions directly or through
counsel of its choice on a monitoring, non-controlling basis but such
participation shall not be deemed a waiver by that Party of any rights
or recourse, for indemnification or otherwise, it might have against
the indemnifying Party.
-13-
11.2 Cytogen and DRAXIMAGE shall advise each other immediately, to be
confirmed in writing, of any occurrence which involves a claim for
death or injury following administration of the Products supplied
hereunder, or any matter arising out of this Agreement which is
required to be reported other than in a routine manner to the
regulatory authorities by either Party. The Parties will cooperate
reasonably to facilitate and develop written procedures for the
reporting of adverse events for the Products to appropriate regulatory
agencies within the Territory. It is understood that DRAXIMAGE will be
responsible for the reporting to the applicable regulatory agency of
adverse events within the Territory and that Cytogen will render
assistance as reasonably requested.
11.3 Each Party will maintain throughout the Term, and for at least three
(3) years thereafter, comprehensive general liability insurance,
including blanket contractual liability insurance covering the
indemnification, defense and other obligations of that Party under this
Agreement which insurance affords limits of not less than Five Million
Dollars ($5,000,000) for each person, and Five Million Dollars
($5,000,000) for each occurrence, for bodily injury, liability,
personal injury liability, products liability, property damage
liability, contractual liability, and completed operations liability.
11.4 Each Party will provide to the other a Certificate of Insurance
evidencing the above coverage, this Certificate to be provided to the
other Party within sixty (60) days after the execution of this
Agreement. This Certificate of Insurance shall show the name of the
Party, the name of the issuing company, the type of insurance, the
policy number, the effective date, the expiration date, and the limits
of liability. The insurance shall provide for a minimum of thirty (30)
days written notice to the recipient of the Certificate of Cancellation
or material change in the insurance.
11.5 A Party's liability to the other is in no way limited to the extent of
the other Party's insurance coverage.
ARTICLE 12 - LIMITATION OF LIABILITY
- ------------------------------------
12.1 Neither Party shall be liable to the other for any indirect,
incidental, special, or consequential damages in connection with this
Agreement, however caused, whether based on contract, tort, warranty,
or other legal theory, and even if such Party has been informed in
advance of the possibility of such damages or such damages could have
been reasonably foreseen by such Party. The limitation set forth in
this Article 12.1 shall not apply with respect to the obligations of
either Party to indemnify the other Party under Article 11 in
connection with a liability to a non-Affiliate third party.
ARTICLE 13 - INTELLECTUAL PROPERTY AND REGULATORY APPROVALS
- -----------------------------------------------------------
13.1 DRAXIMAGE shall, at its expense, use its Commercially Reasonable
Efforts to prepare, file, prosecute and maintain the Intellectual
Property Rights in the Territory; provided, however, that Cytogen
shall, at DRAXIMAGE's expense, provide all reasonable and customary
assistance and cooperation to DRAXIMAGE and its agents expected of a
licensee under similar circumstances. DRAXIMAGE shall keep Cytogen
advised of the status of the actual and prospective filings and shall
as soon as practicable provide Cytogen copies of all substantive
documents related to the filing, prosecution and maintenance of any
such filing. At all times during the Term of this Agreement and
thereafter, DRAXIMAGE shall be the owner and holder of the Intellectual
Property Rights and nothing in this Agreement conveys any right, title
or interest in same to either Cytogen or its Affiliates.
-14-
13.2 DRAXIMAGE shall advise Cytogen as soon as possible of any intention to
cease prosecution and/or maintenance of a particular filing in relation
to the Intellectual Property Rights and, to the extent that it has
legal authority to do so, shall permit Cytogen, if it so wishes, to
continue prosecution and/or maintenance of such filing at DRAXIMAGE's
expense; provided, however, that Cytogen shall not acquire any
additional rights other than as specified in this Agreement. DRAXIMAGE
shall execute such documents and perform such acts as it has legal
authority to do and as may be reasonably necessary to prosecute and/or
maintain the filing. Notwithstanding the above, the Parties recognize
that DRAXIMAGE's ability to prosecute and/or maintain the Intellectual
Property Rights may be limited by restrictions imposed on it as a
sublicensee of the Products. Any filings performed by Cytogen shall not
be considered part of the Intellectual Property Rights for the purpose
of determining royalties payable to DRAXIMAGE based on Cytogen's Net
Sales pursuant to the provisions of Article 3.2.
13.3 If, at any time during the Term of this Agreement, either Party shall
become aware of any third party infringement or threatened infringement
of any Intellectual Property Rights in the Territory, the following
provisions shall apply:
(i) The Party becoming aware shall promptly give written notice
to the other and include evidence to support an allegation
of infringement by such third party.
(ii) If there is disagreement as to whether the act complained of
is in fact an infringement, as described above, the Parties
shall refer such issue to a mutually acceptable independent
United States patent counsel (such acceptance not to be
unreasonably withheld), and the reasonable costs of such
patent counsel incurred in this regard shall be borne by the
Party whose view does not prevail.
(iii)If patent counsel pursuant to Article 13.3(ii) determines
there is infringement or if DRAXIMAGE, in its sole
discretion decides there is infringement, DRAXIMAGE shall
use Commercially Reasonable Efforts to obtain a
discontinuance of such infringement or bring suit against
the third party infringer within two (2) months from the
date of said notice. In no event shall DRAXIMAGE enter into
any settlement, consent judgement or other voluntary final
disposition of such suit that would in any way adversely
affect Cytogen's rights under this Agreement without first
obtaining Cytogen's written consent. Any recovery or damages
derived from any suit under this Article shall be used first
to reimburse each Party for its documented out of pocket
legal expenses relating to the suit, secondly, shall be used
to reimburse each Party for the royalties lost (in the case
of DRAXIMAGE) and lost profits (in the case of Cytogen) and
last shall be shared equally by the Parties.
-15-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(iv) If independent counsel determines pursuant to Article
13.3(ii) that there is infringement and DRAXIMAGE has not
overcome the allegation of infringement or obtained a
discontinuance of such infringement or filed a suit to
obtain a discontinuance of infringement in accordance with
the provisions of Article 13.3(iii), then Cytogen shall have
the right, but not the obligation, to bring suit against any
infringer, provided that Cytogen shall bear all the expenses
of such suit. During the period which the action is pending,
Cytogen shall have the right to offset the royalties due
DRAXIMAGE on sales of the allegedly infringing Product
against its litigation expenses. DRAXIMAGE will reasonably
cooperate with Cytogen in any suit for infringement of any
Intellectual Property Rights or Know-How brought by Cytogen
against a third party. Cytogen shall incur no liability to
DRAXIMAGE as a consequence of such litigation or any
unfavorable decision resulting therefrom, including any
decision holding any of the Intellectual Property Rights or
Know-How invalid or unenforceable. Any recovery or damages
derived from any suit under this Article shall be used first
to reimburse each Party for its documented out of pocket
legal expenses relating to the suit, secondly, shall be used
to reimburse DRAXIMAGE for [**] percent ([**]%) of royalties
lost (including the royalties offset against Cytogen's
litigation expenses as referred to above) and, last, shall
be retained by Cytogen.
13.4 In the event that Cytogen's importing, using, distributing, marketing,
promoting, offering for sale or selling the Products in the Territory
infringes, will infringe or is alleged by a third party to infringe a
third party's patent or other Intellectual Property Rights, the Party
becoming aware of same shall promptly notify the other Party. DRAXIMAGE
shall have the sole responsibility for dealing with such allegation of
infringement at its own cost and expense by seeking a license from such
third party. If DRAXIMAGE is not able to obtain a license from such
third party, DRAXIMAGE shall have the responsibility for the defense of
such litigation using Commercially Reasonable Efforts to defend such
third party infringement suit. If DRAXIMAGE does not defend Cytogen
against any such action, Cytogen shall have the right, but not the
obligation, to defend such action at its sole cost and during the
period which the action is pending, Cytogen shall have the right to
offset the royalties due DRAXIMAGE on sales of the allegedly infringing
Product against its litigation expenses. DRAXIMAGE shall provide
Cytogen reasonable and customary assistance in this regard. Any
recovery or damages payable or owed to a third party as a result of a
suit under this Article shall be fully paid and covered by DRAXIMAGE,
including Cytogen's reasonable solicitor's fees, if applicable.
13.5 Subject to Cytogen's rights pursuant to Article 13.2, DRAXIMAGE shall
at the earliest known date give notice to Cytogen of the grant lapse,
revocation, surrender, invalidation of, or abandonment of any
Intellectual Property Rights or Know-How.
13.6 DRAXIMAGE is solely responsible, at its expense, for the preparation,
filing and pursuit of the application of Regulatory Approvals of the
Products in the Territory. Pursuant to Article 10.1(b), DRAXIMAGE will
use Commercially Reasonable Efforts to maintain the Regulatory
Approvals. At all times during the Term of this Agreement and
thereafter DRAXIMAGE shall be the owner and holder of the Regulatory
Approvals; provided, however, Cytogen shall have access to and a right
to use all Regulatory Approvals pursuant to the provisions of Article
2.1. DRAXIMAGE shall keep Cytogen advised of the status of the actual
and prospective applications and shall as soon as practicable provide
Cytogen copies of all Regulatory Approvals . DRAXIMAGE will be
-16-
responsible for the payment of any third party costs, if any, of
generating any additional data required by the FDA, NRC, or other
applicable regulatory body in the Territory to obtain Regulatory
Approvals for any of the Products. Cytogen shall, at DRAXIMAGE's
expense, provide DRAXIMAGE with such assistance as DRAXIMAGE may
reasonably request from time to time in obtaining or maintaining such
Regulatory Approvals, including without limitation providing DRAXIMAGE
with a copy of such documentation or information within Cytogen's
possession or control as DRAXIMAGE may reasonably require for the
purposes of fulfilling its obligations hereunder.
13.7 Should the Parties mutually agree to undertake post-marketing studies
or further research and development of the Products for the indication
of prostate cancer, the costs of any such research programs and/or
studies shall be shared equally by the Parties.
ARTICLE 14 - FORCE MAJEURE
- --------------------------
14.1 Neither Party shall be liable in damages for, nor shall this Agreement
be terminable or cancellable by reason of, any delay or default in such
Party's performance hereunder if such default or delay is caused by
events beyond such Party's reasonable control including, but not
limited to, acts of God, regulation or law or other action or failure
to act of any government or agency thereof, war or insurrection, civil
disturbance, destruction of production facilities or materials by
earthquake, fire, ice, flood or storm, labour disturbances, epidemic,
or failure of public utilities or common carriers to act for the
reasons listed above (collectively or individually "Force Majeure
Event"); provided, however, that the Party seeking relief hereunder
shall immediately notify the other Party of such cause(s) beyond such
Party's reasonable control. The Party which may invoke this Article
14.1 shall use all reasonable efforts to reinstate its ongoing
obligations to the other as quickly as possible and the other Party
shall provide all reasonable assistance to help the invoking Party in
this respect.
14.2 The Parties shall have any Force Majeure Event dealt with on an
expedited basis by the Liaison Committee in accordance with the
provisions of Article 7.3. Notwithstanding the above, however, if a
Party fails to perform any of its obligations under this Agreement for
one hundred and twenty (120) consecutive business days due to a Force
Majeure Event, unless within such period the non-performing Party has
begun to remedy substantially its inability to perform, the other Party
may, if itself is not in material breach under this Agreement,
terminate this Agreement by providing written notice to the
non-performing Party. In the event of such termination, both Parties'
respective rights and obligations under this Agreement shall terminate
except for any amounts previously due and owing by one Party to the
other and except for any obligations which this Agreement expressly
provides shall survive the termination such as, without limitation, the
provisions of Articles 3.5, 5, 6, 9, 10 and 11.1.
ARTICLE 15 - TERM AND TERMINATION
- ---------------------------------
15.1 This Agreement shall become effective on the Effective Date and shall
terminate on December 31, 2010, unless earlier terminated in accordance
with the provisions of this Agreement (the "Term"). Beginning no later
than one (1) year and ending not later than six (6) months prior to
such expiration, the Parties will enter into good faith discussions,
without obligation, about possible renewal of this Agreement and the
terms of any such renewal.
15.2 This Agreement shall automatically terminate in the event that the
Supply Agreement terminates.
-17-
15.3 Subject to the provisions of Article 14.2, either Party hereto may, at
its option, terminate this Agreement by giving to the other Party prior
notice in writing to that effect of not less than ninety (90) days in
the event the other Party commits a material breach of either this
Agreement or the Supply Agreement (thirty (30) days, in the case of any
payment default), and has failed to cure such breach during the ninety
(90) day period or thirty (30) day period, as applicable, following
receipt of said notice from the non-breaching Party, or such longer
period as may reasonably be necessary, provided the breaching Party
continues its diligent efforts to cure. Any such cancellation and
termination pursuant to this Article 15.3 shall not release the
breaching Party from any obligations hereunder incurred prior thereto.
For greater certainty and without limitation, breach by Cytogen of the
provisions in Article 4.2(b) shall be deemed a material breach of this
Agreement.
15.4 Either Party hereto may terminate this Agreement immediately if the
other Party becomes insolvent, or voluntary or involuntary proceedings
are instituted against the other Party under any federal, state or
local bankruptcy or insolvency laws, or a receiver or trustee of the
Party's property shall be appointed or the Party makes an assignment
for the benefit of its creditors. In such a circumstance, the Parties
acknowledge, without limitation, that it is their intent to provide the
maximum protection available under applicable law for an exclusive
licensor and licensee under the circumstances referred to in this
Article 15.4; provided, however, that the Parties in so acknowledging
are not obligated to incur any costs in order to give legal force and
effect to such an intention.
15.5 In the event of expiration of this Agreement, or the termination of any
rights granted hereunder with respect to a given Product prior to the
expiration or termination of this Agreement in its entirety, Cytogen
shall have no further rights in the affected Intellectual Property
Rights, Regulatory Approvals, Trademarks or Products. Any expiration or
partial or complete termination of this Agreement shall not affect the
rights, obligations and remedies of either Party accrued as of such
expiration or termination.
ARTICLE 16 - DISPUTE RESOLUTION
- -------------------------------
16.1 The Parties will attempt in good faith, in accordance with the
provisions of Article 7.3 above, to resolve any dispute or claim
arising out of or relating to this Agreement.
16.2 Should the Negotiators fail to settle a dispute pursuant to the
provisions of Article 7.3, the matter shall be finally settled by
arbitration in accordance with the provisions of the Arbitration Act,
1991, Ontario and any amendments thereto. The following rules shall
apply to the arbitration:
(a) The arbitration tribunal shall consist of one arbitrator who is
not affiliated with either of Cytogen or DRAXIMAGE, who has
relevant industry knowledge, expertise and credibility and who is
appointed by mutual agreement of Cytogen and DRAXIMAGE or, in the
event of failure to reach an agreement within ten (10) days after
the Settlement Date, either Party may request the Co-ordinator,
ADR Chambers, 48 Yonge Street, Suite 1100, Toronto, Ontario M5E
1G6 (or any successor thereto) to provide a list of five
arbitrators from amongst its members outlining their
qualifications. Within three (3) business days of the receipt of
the list, Cytogen and DRAXIMAGE shall independently rank the
proposed candidates, shall simultaneously exchange rankings, and
shall select as the arbitrator the individual receiving the
highest combined ranking who is available to serve. If either
Party does not rank and provide a copy of the ranking to the
other Party, the Party who does rank the arbitrator will be able
to select the arbitrator.
-18-
(b) The arbitrator shall be instructed that time is of the essence in
proceeding with his or her determination of any dispute, claim,
question or difference. The arbitration tribunal shall determine
the time, date and place of arbitration, taking into
consideration the Parties' convenience and the other
circumstances of the case.
(c) Cytogen and DRAXIMAGE will agree, in consultation with the
arbitrator, on the rules for the arbitration. Absent agreement to
the contrary, the following rules, designed to save time and
expense for the Parties, will apply:
(i) Statements shall be in writing and shall be no more than
five (5) pages in length; and shall be submitted to the
arbitration tribunal and to the other Party two (2) days
prior to the arbitration;
(ii) Each Party will provide to the other access to any documents
that may be relevant to the arbitration. Each Party will
also provide to the other a list and copies of up to (but
not exceeding) twenty (20) documents that the Party intends
to rely on at the arbitration. Such access will be during
normal business hours and will commence one day after the
appointment of the arbitration tribunal and shall terminate
one day prior to submission of the statements;
(iii)Each Party will be entitled to oral discovery of one
representative of the other Party if it deems it appropriate
at a mutually agreed upon date, time and location. Each
Party may only discover the other Party's representative for
a maximum of one (1) eight (8) hour day. Any questions
refused will be put to the arbitrator for the arbitrator's
determination as to whether the questions are appropriate
and relevant;
(iv) At the hearing, opening argument will be limited to one-half
(1/2) hour per Party;
(v) Each Party may produce up to two (2) witnesses for direct
examination. The total time permitted for direct examination
will be two (2) hours for each witness. Total time for
cross-examination will also be two (2) hours for each
witness;
(vi) A Party may introduce any of its twenty (20) documents
through either of its witnesses. The other Party may, if
appropriate, challenge the authenticity of any document
produced through those witnesses;
(vii)Closing arguments will be limited to one (1) hour for each
Party; and
(viii) The arbitrator will attempt to produce a decision within
seven (7) calendar days of the conclusion of the
arbitration, and written reasons within two (2) months of
the arbitration.
(d) The arbitration shall be conducted in English and shall take
place in Toronto, Ontario.
(e) The arbitration awards shall be given in writing and shall be
final, and binding on Cytogen and DRAXIMAGE, not subject to any
appeal whatsoever, and shall deal with the question of costs of
the arbitration and all matters related thereto. In his or her
award of costs, the arbitrator may consider each Party's effort
to resolve the dispute through bona fide good faith negotiation
efforts and has the authority, if he or she deems advisable, to
-19-
award solicitor and client costs against a Party that fails to
demonstrate such bona fide good faith efforts.
(f) Judgement upon the award rendered may be entered into any court
having jurisdiction, or application may be made to such court for
judicial recognition of the award or an order for enforcement
thereof, as the case may be.
(g) The arbitrator will not be empowered to and shall not award
punitive, exemplary, special, consequential or incidental
damages.
(h) Notwithstanding the foregoing, either Party shall be entitled to
pursue equitable remedies in a court of competent jurisdiction,
including, without limitation, injunctive relief in any court in
the event that legal or monetary damages are inadequate.
ARTICLE 17 - INDEPENDENT CONTRACTOR
- -----------------------------------
17.1 It is understood that both Parties hereto are independent contractors
and engage in the operation of their own respective businesses and
neither Party hereto is to be considered the agent of the other Party
for any purpose whatsoever and neither Party has any authority to enter
into any contract or assume any obligation for the other Party or to
make any warranty or representation on behalf of the other Party. Each
Party shall be fully responsible for its own employees and consultants,
and the employees of one Party shall not be deemed to be employees of
the other Party for any purpose whatsoever.
ARTICLE 18 - ASSIGNMENT AND SUBLICENSING
- ----------------------------------------
18.1 Subject to Article 2.4, neither Party may without written approval
of the other Party (and such approval shall not be unreasonably
withheld):
(a) assign or sublicense this Agreement or transfer its rights,
obligations or interest or any part thereof under this Agreement
to any third party which is not an Affiliate; or
(b) designate or cause any third party not an Affiliate to perform
all or part of its activities hereunder, or to have the benefit
of all or part of its rights hereunder.
18.2 Either Party may, upon written notice to the other, assign all or a
part of its rights or obligations hereunder to an Affiliate, provided
that such assignment shall not lessen or release the prior or ongoing
obligations of the assignor to the other Party to this Agreement and
that the applicable Affiliate shall agree, in writing, to be bound by
the terms and conditions of this Agreement.
ARTICLE 19 - MISCELLANEOUS
- --------------------------
19.1 This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and Canada applicable thereto,
without regard to its choice of law principles.
19.2 Any notice or other communication made under this Agreement (other than
routine business communication) shall be in writing and shall be
properly given: (i) when delivered if sent by personal delivery; (ii)
when transmitted if sent by facsimile with confirmation of
transmission; or (iii) three days after being posted if sent by
registered mail return receipt requested, addressed:
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If to Cytogen: Cytogen Corporation
600 College Road East - CN 5308
Princeton, New Jersey 08540-5308
United States of America
Attention: President
-----------------------
Facsimile: 609-750-8124
If to DRAXIMAGE: DRAXIMAGE Inc.
16751 Trans Canada Highway
Kirkland, Quebec H9H 4J4
Canada
Attention: President
-----------------------
Facsimile: 514-630-7201
With a copy to: DRAXIS Health Inc.
2nd Floor, 6870 Goreway Drive
Mississauga, Ontario L4V 1P1
Canada
Attention: General Counsel
-----------------------------
Facsimile: 905-677-5494
A Party may change its address for notice by notifying the other Party
at any time.
19.3 Each Party agrees to comply with all applicable laws, rules and
regulations of any government agency or authority in the performance of
its obligations under this Agreement. In the event one or more terms of
this Agreement are found to violate the provisions of any applicable
law, rule or regulation, the Parties hereto shall negotiate in good
faith to modify this Agreement, but only to the extent necessary to
make the terms of this Agreement valid and enforceable, having full
regard for all applicable laws and the intent and purposes of the
Parties entering into this Agreement.
19.4 This Agreement, including the Schedules, whether annexed at the time of
execution of this Agreement or later, as provided herein, constitutes
the entire Agreement between the Parties hereto relating to the subject
matter hereof, and this Agreement may not be varied except by an
instrument in writing signed by each Party hereto by a duly authorized
officer.
19.5 Should any part of this Agreement be held unenforceable or in conflict
with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provision shall be replaced with a
provision which accomplishes, to the extent possible, the original
business purpose of such invalid or unenforceable part or provision in
a commercially reasonable, valid and enforceable manner, and the
remainder of this Agreement shall remain binding upon the Parties
hereto.
19.6 The captions of this Agreement are solely for the convenience of
reference and shall not affect its interpretation. This Agreement may
be executed in one or more counterparts, all of which shall comprise
the original instrument.
19.7 The following Articles shall survive termination of this Agreement for
any reason: Articles 3.4, 3.5, 5, 6, 9, 10 and 11.1. Termination of
this Agreement shall not affect any rights previously accrued by either
Party.
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19.8 The Parties agree to take all further actions after the Effective Date
as may be reasonably necessary or appropriate to carry out the intent
of this Agreement, including, without limitation, the execution and
delivery of ancillary documents.
19.9 Subject to applicable securities regulatory disclosure requirements, a
Party may not disclose the non-general details of this Agreement to a
non-Affiliate without first obtaining the consent of the other Party,
such consent not to be unreasonably withheld. Upon execution of this
Agreement, the Parties will issue a joint press release which is
mutually satisfactory to the Parties and full consideration and
representation of the respective roles and contributions of both
Parties shall be given in any such press release. Other than as
specified in the immediately preceding sentence and subject to
applicable securities regulatory disclosure requirements, neither Party
will issue any press release regarding this Agreement without the prior
written consent of the other Party, such consent not to be unreasonably
withheld. In the event that a Party is required to disclose publicly
any information directly or indirectly relating to this Agreement to
comply with applicable regulatory disclosure requirements, it shall in
good faith, wherever reasonable and practicable to do so, confer with
the other Party on the content of such disclosure before it is publicly
released.
19.10 Except as otherwise expressly stated, all dollar amounts referred to in
this Agreement are in United States ("US") dollars.
19.11 The Parties declare that they have required that this Agreement and any
documents relating thereto be drawn up in the English language. Les
parties aux presentes declarent qu'elles ont exige que cette entente et
tous les documents y afferant soient rediges en langue anglaise.
[Left Intentionally Blank]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be entered into by
their duly authorized officers as of the day and year first set forth above.
DRAXIMAGE INC.
/s/ Raymond Dore
-----------------------------------
By: Raymond Dore
Title: President
Date: December 5, 2000
--------------------------------------------
CYTOGEN CORPORATION
/s/H. Joseph Reiser
--------------------------------------------
By: H. Joseph Reiser, PhD
Title: President & CEO
Date: January 5, 2001
--------------------------------------------
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SCHEDULE "A"
------------
SUMMARY OF INITIAL U.S. MARKETING PLAN FOR BRACHYSEED(TM)
---------------------------------------------------------
Phase I ([**] - [**])
1. [**] announcing [**] - ([**])
2. [**](TM)inclusion on Cytogen web page - ([**])
3. Review [**] ([**] & [**], [**], etc.) - [**]
4. Develop initial [**] - ([**]-[**])
5. Create, and place, [**] in [**] (e.g., [**], [**], etc.)
6. [**] - ([**])
7. [**] to key [**] (e.g., [**], [**], [**] groups) to introduce [**]
and [**]
8. Finalize [**] & [**] - ([**]-[**])
9. [**] presentation to [**] (e.g., [**], [**], [**], etc.) - ([**]-[**])
10. Develop [**](TM)[**] for [**] - ([**])
11. Extensive [**] - ([**])
(a) BrachySeed(TM)[**] at [**]
(b) [**] to discuss [**]
(c) Market research [**]
(d) Potential for [**] with BrachySeed(TM)logo
12. Market research to [**], and [**], [**]
13. [**] - ([**] as tentative dates)
(a) Main objective is to [**](TM)to [**] and [**] ([**], [**] & [**]) and
[**] Cytogen [**]
(b) [**] surrounding the [**] of [**](TM)
(c) [**] experience with [**](TM)
(d) [**] sessions
(e) Determine [**]
(f) Identify & establish [**]
(g) Develop [**] from [**] (i.e., [**], [**] and [**], etc.)
14. [**] at Western AUA - ([**])
15. [**] - ([**])
16. [**](TM)lunch & dinner meetings with [**] - ([**])
17. [**] & [**] of [**] - ([**]-[**])
-24-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Phase II (**])
- --------------
1. [**] announcement - [**])
2. Determine, and implement, [**]
3. Determine [**]
4. [**] meeting - ([**])
5. [**]l materials - ([**])
6. [**] programs
7. Conduct [**] meetings ([**])
8. [**] research - ([**])
(a) [**] as needed
9. Establish [**] Programs - ([**])
General
- -------
1. Personnel: Hiring of dedicated marketing manager by October 31, 2000
2. Position in Detail: BrachySeed(TM)to be in first position in Cytogen
sales force detail through, at least, 12/31/02
3. Sales Force: Minimum [**] person Cytogen U.S. sales force
4. Target Volumes: Target sales volumes of US$[**], US$[**] and US$[**]
in 2000, 2001 and 2002, respectively
5. Minimum Sales Targets: 2000 - n/a; 2001 - US$[**]; 2002 - US$[**]
-25-
SCHEDULE "B"
------------
Trademarks
----------
1. U.S. Trademark Application Serial Number: 76097706
Word Mark: BRACHYSEED
Filing Date: July 27, 2000
2. U.S. Trademark Application Serial Number: 76097705
Word Mark: BRACHYSEED
Filing Date: July 27, 2000
Patents
-------
3. U.S. Patent Number: 6,099,458 (issued August 8, 2000)
- Encapsulated low-energy brachytherapy sources
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