EXHIBIT 10.47
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
DISTRIBUTION AGREEMENT
----------------------
AGREEMENT dated as of October 18, 2002 between MATRITECH, INC., a Delaware
corporation, having its principal place of business at 330 Nevada Street,
Newton, Massachusetts 02460, U.S.A. ("MATRITECH") and CYTOGEN CORPORATION, a
Delaware corporation having its principal place of business at 650 College Road
East, Princeton, New Jersey 08540 ("CYTOGEN").
INTRODUCTION
------------
1. MATRITECH has developed a version of its NMP22(R)Test Kit for bladder
cancer known as BladderChek(TM).
2. CYTOGEN desires to become the exclusive distributor for
BladderChek(TM)within the Field in the Territory, as defined below.
3. In consideration of the mutual covenants and promises contained in this
Agreement and other good and valuable consideration, MATRITECH and CYTOGEN agree
as follows:
ARTICLE I - DEFINITIONS
-----------------------
As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:
1.1 "Affiliate" means, with respect to any entity, any corporation,
company, partnership, joint venture and/or firm which controls, is controlled by
or is under common control with such entity. For purposes of this Section 1.1,
"control" shall mean (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or shares entitled to
vote for the election of directors; and (b) in the case of non-corporate
entities, direct or indirect ownership of at least fifty percent (50%) of the
equity interest with the power to direct the management and policies of such
non-corporate entities.
1.2 "Effective Date" means the date of execution of this Agreement.
1.3 "FDA" means U.S. Food and Drug Administration.
-2-
1.4 "Field" means the market for the Product comprised of urologists,
oncologists and end users including group purchase and /or managed care
organizations for the diagnosis and management of bladder cancer; provided, such
end users have a relationship with urologists and oncologists with regard to
purchase of the Product by such urologists and oncologists.
1.5 "Product" means MATRITECH's non-instrumented, single test, qualitative
NMP22 (R) test for bladder cancer known as BladderChek(TM) including any
enhanced, improved or modified version of BladderChek. A unit of Product is one
BladderChek test.
1.6 "Technical Information" means all scientific and engineering data owned
by MATRITECH or which MATRITECH has the right to use, patentable or otherwise,
relating to the Product, including without limitation, technology licensed or
sublicensed to MATRITECH; all inventions, cell sources, cultures, strains,
organisms and parts thereof; antibodies, clones, plasmids, vectors, progeny,
derivatives and parts thereof; formulae; classes, sources and clone numbers of
antibodies; methods, procedures and processes; materials and reagents;
components, equipment, equipment design, animal studies, clinical or other
evaluations, analytical results, and quality control or other safety procedures
in each case relating to the production, use or manufacture of the Product.
1.7 "Term" shall have the meaning set forth in Section 8.1
1.8 "Territory" means the United States of America, including the 50
states, Puerto Rico, U.S. Virgin Islands and Washington, D.C., but excluding all
other territories and possessions.
1.9 "CYTOGEN's Net Sales" shall mean amounts invoiced to customers of
CYTOGEN excluding returns and product allowances, free samples, shipping, taxes,
insurance and handling.
ARTICLE II - THE PRODUCT
------------------------
2.1 Commercialization. CYTOGEN shall exert commercially reasonable efforts,
at its own expense, to:
(a) market and promote the Product in the Territory (taken as a whole) on a
diligent commercial basis after the Effective Date;
(b) provide an adequate level of customer service including, without
limitation, rendering prompt and willing service with respect to the Product and
handling all customer inquiries with reasonable assistance of MATRITECH in a
manner consistent with the prevailing practices in the industry;
-3-
(c) obtain approvals from third-party payors for reimbursement, with the
reasonable assistance of MATRITECH, for the use of the Product within the Field;
and
(d) allocate no less than [**]% of its sales force time which shall not be
less than [**] FTEs (full time equivalent employees) , to the ongoing promotion
and sales of the Product for the Term of this Agreement.
2.2 Compliance with Laws. In performing this Agreement, each of the parties
agree that it will comply in all material respects with applicable governmental
laws, rules, regulations and policies and will hold the other party harmless and
indemnify the other party from the failure to do so. Repeated non-compliance by
a party or its employees or Affiliates with this Section 2.2 shall be deemed to
constitute a material, irremediable breach of the terms of this Agreement,
justifying immediate termination under Section 8.2(a)(iii) hereof.
2.3 Clinical Marketing, Technical Services. MATRITECH shall provide
assistance to CYTOGEN with clinical marketing of the Product during the Term of
this Agreement, including, without limitation, those activities that define and
support clinical usage. MATRITECH will provide reasonable technical support
services , at its own expense, in furtherance of CYTOGEN's sales efforts at
CYTOGEN'S request.
2.4 Loss of Exclusivity. If CYTOGEN only purchases between [**]% and [**]%
of the Minimum Purchase Commitment as specified in Section 4.2 of this Agreement
in any given year, MATRITECH shall, as its sole and exclusive remedy, have the
right to, in its sole discretion and upon written notice to CYTOGEN, renegotiate
the terms of the Agreement with CYTOGEN; provided, both parties must agree to
such renegotiated terms in writing or convert CYTOGEN's Marketing Rights (as
defined below) to non-exclusive for the Product within the Field in the
Territory. In the event MATRITECH converts CYTOGEN's Marketing Rights to
non-exclusive for the Field, it must first offer Cytogen similar deal terms if
it intends to offer said Marketing Rights to another person or entity. Failure
by CYTOGEN to purchase at least [**]% of the Minimum Purchase Commitment of
Product as specified in Section 4.2 of this Agreement in any given year shall
result, after prior written notice to CYTOGEN and at MATRITECH's option as
MATRITECH's sole and exclusive remedy, in a) the termination of the Agreement as
-4-
provided in Section 8.2(b); provided, however, if MATRITECH terminates this
Agreement under such circumstances, CYTOGEN's sole liability to MATRITECH is
listed in Section 8.3 and 8.4 (with CYTOGEN having no liability for breach of
CYTOGEN's Minimum Purchase Commitment under this Agreement), b) a loss of the
exclusivity granted under this Agreement, or c) may attempt to negotiate new
terms of the Agreement with CYTOGEN that may or may not include a loss of
exclusivity. In the event of a loss of exclusivity under this section, CYTOGEN
shall no longer have a Minimum Purchase Commitment for that year and for
subsequent years, if any, as set forth in Section 4.2. If during the Term of
this Agreement, CYTOGEN purchases in excess of [**]% of the Minimum Purchase
Commitment, CYTOGEN shall be deemed in conformance with Section 4.2(a) and shall
retain its exclusivity for such particular period.
2.5 FDA Clearance. Subject to the terms and conditions contained in this
Agreement, MATRITECH agrees to exert commercially reasonable efforts to seek, as
soon as practicable, diagnosis clearance from the FDA for the Product in the
Territory. Diagnosis clearance shall mean approval by the FDA to use the Product
for the diagnosis of bladder cancer on patients other than those with
reoccurring bladder cancer. MATRITECH shall promptly notify CYTOGEN in writing
in the event MATRITECH does not obtain diagnosis clearance from the FDA.
ARTICLE III - MARKETING FEE AND INITIAL PURCHASE ORDER
------------------------------------------------------
3.1 Marketing Fees. In consideration of the grant of the Marketing Rights
set forth in this Agreement, CYTOGEN shall pay to MATRITECH $150,000 as a
marketing fee upon the Effective Date.
3.2 Initial Purchase Order. CYTOGEN shall attach to this Agreement an
irrevocable purchase order for [**]% of the Minimum Purchase Commitment for
calendar years 2002 and 2003 (the "Initial Purchase Order"). The Initial
Purchase Order shall be for [**] units at $[**] per unit. MATRITECH shall
deliver [**] units of the Initial Purchase Order on or before October 31, 2002
and the remainder by no later than December 31, 2002.
ARTICLE IV - MARKETING RIGHTS
-----------------------------
4.1 Marketing Rights. CYTOGEN shall have the exclusive right to sell or
otherwise distribute the Product in the Territory within the Field ("Marketing
Rights"). CYTOGEN shall not sell or otherwise distribute the Product to any
-5-
person or entity in the Territory if CYTOGEN has reason to believe that such
person or entity intends to resell or redistribute the Product outside of the
Territory or the Field. The rights granted herein shall not be construed to
confer any license rights upon CYTOGEN, by implication, estoppel or otherwise,
to use or practice any of MATRITECH's patents or other intellectual property or
use any Technical Information. If and to the extent that CYTOGEN performs its
rights and obligations under this Agreement, including, without limitation, its
Marketing Rights, through an Affiliate, CYTOGEN shall cause such Affiliate to be
bound in writing by all the terms and conditions of this Agreement. MATRITECH
shall not sell or otherwise distribute the Product to any person or entity if
MATRITECH has reason to believe that such person or entity intends to resell or
redistribute the Product within the Field in the Territory. Subject to Section
8.4, MATRITECH and its licensee(s) reserve the right to market and sell other
non-point of care formats of the NMP22 test within the Field in the Territory
solely to professional laboratories, such as automated formats designed for such
professional laboratories.
4.2 Sales Price and Minimum Purchase Commitment.
(a) CYTOGEN shall purchase from MATRITECH during each year of this
Agreement the minimum number of units of the Product set forth under "Minimum
Purchase Commitments" in the table below.
- --------------------- ---------------------------
Minimum Purchase
Commitments
Calendar Year (tests per year)
- --------------------- ---------------------------
- --------------------- ---------------------------
2002
2003 [**]
- --------------------- ---------------------------
- --------------------- ---------------------------
2004 [**]
- --------------------- ---------------------------
- --------------------- ---------------------------
2005 [**]
- --------------------- ---------------------------
- --------------------- ---------------------------
2006 [**]
- --------------------- ---------------------------
- --------------------- ---------------------------
2007 [**]
- --------------------- ---------------------------
The foregoing Minimum Purchase Commitments will be renegotiated by CYTOGEN
and MATRITECH if the FDA does not approve use of the Product for diagnosis by
the end of the second calendar quarter of 2003 as follows: the Minimum Purchase
Commitments will be adjusted downward to reflect any FDA delay in providing
-6-
clearance for the use of the Product for diagnosis. If MATRITECH does not
receive FDA approval for the use of the Product for diagnosis [**] the annual
Minimum Purchase Commitment for the year in which approval is granted and for
previous years shall be immediately reduced by [**]
(b) The base price per unit of Product shall be fixed at $[**] per unit
F.O.B. MATRITECH's place of manufacture or supply (the "Base Price"). Commencing
in 2004 and continuing for the Term of the Agreement, the price per unit of
Product will be the Base Price plus [**]% of CYTOGEN's Net Sales of the Product.
CYTOGEN shall tender payment to MATRITECH of the [**]% payments of CYTOGEN's Net
Sales on a quarterly basis no more than 30 days after the end of each calendar
quarter. Commencing in 2004, and provided that the prior year's actual purchases
by CYTOGEN exceed that year's Minimum Purchase Commitment, the price per unit of
Product will be calculated as set forth in the table below:
- ------------------------------- --------------------------------------------
Prior year's actual purchases
relative to that year's Minimum
Purchase Commitment Product price
- ------------------------------- --------------------------------------------
- ------------------------------- --------------------------------------------
>[**]% to [**]% [**]% off Base Price plus payment to
Matritech of [**]% of CYTOGEN's Net Sales
of the Product
- ------------------------------ --------------------------------------------
- ------------------------------ --------------------------------------------
>[**]% to [**]% [**]% off Base Price plus payment to
Matritech of [**]% of CYTOGEN's Net Sales
of the Product
- ------------------------------ --------------------------------------------
- ------------------------------ --------------------------------------------
>[**]% [**]% off Base Price plus payment to
Matritech of [**]% of CYTOGEN's Net Sales
of the Product
- ------------------------------ --------------------------------------------
For example, if CYTOGEN purchases [**] units of Product in 2004, then the
Base Price for 2005 shall be $[**] ([**]% discount off $[**]) plus [**]% of
CYTOGEN's Net Sales.
-7-
(c) After 2003, the Base Price may be renegotiated once per calendar year
commencing in 2004, but only if the Council of Medical Services reimbursement to
the end user changes more than [**]% (upward or downward) from the then current
amount.
4.3 Terms and Conditions. All orders of Product by CYTOGEN from MATRITECH
during the term of this Agreement shall be subject to the terms and conditions
of this Agreement and shall be subject to acceptance by MATRITECH, as set forth
in Section 4.4 below, except with respect to orders to satisfy Minimum Purchase
Commitments which MATRITECH shall be obligated to accept. Nothing contained in
any purchase order or similar document submitted by CYTOGEN to MATRITECH shall
in any way modify or add to the terms and conditions contained in this
Agreement. Invoices are payable within [**] after the date of invoice.
4.4 Order and Acceptance.
(a) All orders for Product submitted by CYTOGEN shall be initiated by
written orders sent to MATRITECH and requesting a delivery date during the term
of this Agreement. Any order initially placed orally or by e-mail must be
confirmed in writing.
(b) To facilitate MATRITECH's production scheduling, CYTOGEN shall submit
purchase orders to MATRITECH at least [**] days prior to the requested date of
delivery. Except with respect to orders to fulfill the Minimum Purchase
Commitment requirements set forth above, no order shall be binding upon
MATRITECH until accepted by MATRITECH in writing, and MATRITECH shall have no
liability to CYTOGEN with respect to purchase orders that are not accepted.
MATRITECH reserves the right to allocate the supply of the Product pro rata,
based approximately on the relative numbers of Product ordered, without
incurring any liability to CYTOGEN for commissions, damages or otherwise.
MATRITECH shall notify CYTOGEN of the acceptance or rejection of an order and of
the assigned delivery date for accepted orders within fifteen (15) days of
receipt of an order from CYTOGEN. No partial shipment of an order shall
constitute the acceptance of the entire order, absent the written acceptance of
such entire order. MATRITECH shall use its reasonable efforts to deliver the
Product at the times specified either in its quotation or in its written
acceptance of CYTOGEN's orders.
-8-
4.5 Cancellation of Orders. If MATRITECH accepts any cancellation request
made within ten (10) days of the scheduled ship date, CYTOGEN agrees to bear
MATRITECH's restocking fee of up to [**] percent ([**]%) of the total order.
4.6 F.O.B. Point, Title and Risk of Loss. All prices are F.O.B. either
MATRITECH's distribution facility or place of manufacturing (the "F.O.B.
Point"). Product shall be purchased at the F.O.B. Point. Title and risk of loss
of such Product shall pass to CYTOGEN at said location. MATRITECH shall provide
CYTOGEN with written invoices for all Product when shipped. The foregoing
notwithstanding, however, CYTOGEN shall, as between itself and its customers, be
acting as principal and not as an agent of MATRITECH.
4.7 Returns. CYTOGEN shall have no right of return for Product purchased
hereunder. If, however, any Product fails to perform in accordance with the
labeling provided by MATRITECH as documented by MATRITECH's examination of the
Product pursuant to its formal complaint handling procedure which has been
established in accordance with standard industry practices, CYTOGEN may return
such defective Product but in no case later than one-hundred eighty (180) days
from the original ship date from MATRITECH to CYTOGEN. MATRITECH shall keep
CYTOGEN appraised of its examination of the Product pursuant to its formal
complaint handling procedures and shall provide CYTOGEN with its finding and
shall provide the basis of its determination in the event that MATRITECH finds
that the Product is not defective. CYTOGEN shall have the opportunity to raise
reasonable objections to the methods used during and shall have an opportunity
to verify MATRITECH's findings for a period five (5) business days after
MATRITECH's determination, which MATRITECH shall in good faith consider when
determining if an alternate outcome is warranted.
4.8 Payment. MATRITECH shall provide CYTOGEN with an invoice for each
shipment of Product. Invoices shall be issued and dated on or after the date of
shipment of each order. Under no circumstances will an invoice be issued for
Product that has not been shipped. Invoices shall be paid within [**] days after
the date of invoice.
4.9 Taxes. CYTOGEN's payments for the Product hereunder are payable in full
to MATRITECH without deduction for taxes (including any withholding tax) or
duties. In addition to such amounts, CYTOGEN shall pay sums equal to taxes
(including, without limitation, sales, withholding, value-added and similar
-9-
taxes) based on an end-user's use or possession of the Product under or in
accordance with the provisions of this Agreement, but exclusive of United States
federal, state, and local taxes based on MATRITECH's net income.
4.10 Dollars. All amounts due MATRITECH hereunder shall be calculated and
paid in U.S. dollars.
4.11 Shipping. All Product delivered pursuant to the terms of this
Agreement shall be suitably packed for shipment in MATRITECH's standard shipping
cartons, marked for shipment to CYTOGEN's address set forth above, and delivered
to CYTOGEN or its carrier agent at the F.O.B. Point. If CYTOGEN does not specify
a carrier, MATRITECH shall select the carrier. All freight, insurance, and other
shipping expenses shall be paid by CYTOGEN. CYTOGEN shall also bear all
applicable taxes, duties and similar charges that may be assessed against the
Product after delivery to the carrier at the F.O.B. Point.
4.12 Late Payment. Any amount not paid within the [**] days after the date
of an invoice, except for those amounts that both parties agree are in dispute,
shall bear interest at the rate of 1.5% per month until paid in full.
4.13 Records. To the extent available to it, each party shall maintain
quantity, lot numbers, customer names and addresses, and incident reports for at
least two years beyond expiration date of the Product. Each party shall keep,
and shall require all its Affiliates to keep, full, true and accurate books of
accounts and other records that it generates or obtains containing all
information and data which may be necessary to ascertain and verify the amounts
payable hereunder and to satisfy FDA requirements including recall and to retain
such records for at least five (5) years. During the Term of this Agreement and
for a period of five (5) years following its termination, each party shall have
the right from time to time (but no more than once per calendar year) and upon
ten (10) days prior written notice, to inspect, or have an agent, accountant or
other representative inspect, such books, records and supporting data solely to
verify compliance with the first sentence of this Section 4.14 during normal
business hours. The party being audited may require any of the auditing party's
personnel to execute a confidentiality agreement prior to giving such personnel
access to any materials.
-10-
4.14 Marketing Efforts. CYTOGEN shall be responsible for all marketing,
promotion and distribution of Product within the Territory. In support of this
effort, CYTOGEN and MATRITECH shall develop and CYTOGEN shall implement annual
sales and marketing plans to support and effectively promote the Product. The
marketing plan shall include the commitments outlined on Attachment A to this
Agreement. CYTOGEN shall provide customer and technical services in support of
the Product during the Term of this Agreement. During the Term of this
Agreement, MATRITECH will conduct Product specific marketing campaigns at its
own expense and at such times as it shall reasonably determine.
4.15 Samples. "Samples" are defined as units of the Product that cannot be
and are not sold to end-users and must be distributed within [**] months of
receipt by CYTOGEN. CYTOGEN shall receive [**] free Samples to be delivered
simultaneously with the Initial Purchase Order of the Product.
4.16 [**] Forecasts and Sales and Marketing Reports. To facilitate
MATRITECH'S production scheduling, within [**] days after delivery of the
Initial Purchase Order, and [**] days prior to the beginning of each calendar
[**], CYTOGEN shall furnish MATRITECH with a forecast of its Product purchases,
together with requested delivery dates, for the subsequent [**] month period.
Such forecasts by CYTOGEN are estimates and shall not represent purchase
commitments. Together with these [**] forecasts, CYTOGEN shall provide MATRITECH
with a monthly sales and marketing report that includes, but is not limited to,
unit sales, average selling price per unit of Product, dollar sales for the
entire Territory categorized by either state of zip code and the number of
man-years spent by the sales force.
4.17 Product Inventory. Subject to MATRITECH's fulfillment of its supply
obligations, CYTOGEN shall be responsible for maintaining adequate inventory of
Product to meet consumer demand.
ARTICLE V - INTELLECTUAL PROPERTY RIGHTS
----------------------------------------
5.1 Patent Rights. MATRITECH owns and possesses or will own and possess all
right, title and interest, or holds a valid license, in and to the Product and
all associated Trademarks (as defined below), and has taken all necessary action
to protect these rights with respect to the U.S. patent rights in the Product.
MATRITECH has not received any notice of any infringement or misappropriation
-11-
by, or conflict with the intellectual property rights of, any third party which
would prevent CYTOGEN from using or selling the Product in the Territory.
5.2 Infringement Claims. MATRITECH agrees to indemnify and hold CYTOGEN
harmless against any cost, loss, liability, or expense (including attorneys'
fees) arising out of, resulting from or relating to any claim, suit or
proceeding brought against CYTOGEN or MATRITECH based on a claim that the
Product infringes upon any third party intellectual property right (hereinafter
"Infringement Claims"). CYTOGEN agrees that MATRITECH has the right to defend,
or at its option to settle, and MATRITECH agrees, at its own expense to defend
or at its option to settle any Infringement Claims so long as any such
settlement does not adversely affect CYTOGEN's rights under this Agreement or
requires CYTOGEN to perform any actions; provided that MATRITECH is notified
promptly in writing of an Infringement Claim and has sole control over its
defense or settlement, and CYTOGEN provides reasonable assistance in the defense
of the same.
5.3 Infringement Cures. Following notice of an Infringement Claim, or if
MATRITECH believes such a claim is likely, MATRITECH may at its sole expense and
option: (a) [**]or (b) [**]or (c) [**]
5.4 Limitation. Notwithstanding any other provision of this Agreement,
MATRITECH assumes no liability for any Infringement Claims with respect to any
product in or with which the Product may be used in combination, but not
covering the Product standing alone, and MATRITECH shall have no liability for
any Infringement Claim based on CYTOGEN's: (a) use or distribution of any
Product after MATRITECH's written notice that CYTOGEN should cease use or
distribution of such Product due to an infringement claim; or (b) modification
of the Product, or any part thereof, at the request of CYTOGEN or to meet any
specifications provided by CYTOGEN; (c) combination by CYTOGEN of a Product with
another product, if such infringement claim would have been avoided by the
exclusive use of the Product alone; or (d) any trademark infringements involving
any marking or branding not applied by MATRITECH or involving any marking or
branding applied at the request of CYTOGEN. For all infringement claims to which
this Section 5.4 is applicable, CYTOGEN agrees to indemnify and defend
-12-
MATRITECH, provided that CYTOGEN is notified promptly in writing of an
infringement claim and has sole control over its defense or settlement, and
MATRITECH provides reasonable assistance in the defense of the same.
5.5 Entire liability. THE FOREGOING PROVISIONS OF THIS SECTION 5 STATE THE
ENTIRE LIABILITY AND OBLIGATIONS OF MATRITECH, AND THE EXCLUSIVE REMEDY OF
CYTOGEN, WITH RESPECT TO ANY ALLEGED INTELLECTUAL PROPERTY INFRINGEMENT BY THE
PRODUCT, OR ANY PART THEREOF.
5.6 Unauthorized Use. During the Term of this Agreement, either party shall
promptly notify the other party in writing upon discovery of any unauthorized
use or infringement of the Product or any MATRITECH patent, copyright, trademark
or other intellectual property rights with respect thereto. MATRITECH shall have
the sole and exclusive right to bring an infringement action or proceeding
against a third party, and, in the event that MATRITECH brings such an action or
proceeding, CYTOGEN shall cooperate and provide full information and assistance
to MATRITECH and its counsel in connection with any such action or proceeding.
MATRITECH may, at its option settle any such action or proceeding so long as any
such settlement does not adversely affect CYTOGEN's rights under this Agreement
or requires CYTOGEN to perform any actions. During the period of any material
unauthorized use or infringement of the Product or any MATRITECH patent,
copyright, trademark or other intellectual property rights with respect thereto
[**]
5.7 Other Third-Party Claims. Except for Infringement Claims which
MATRITECH is obliged to settle or defend under this Section 5, in addition to
the claims for which CYTOGEN will indemnify MATRITECH pursuant to Section 5.4
above, each of the parties agree to indemnify, defend and hold the other party
harmless against any cost, loss, liability, or expense (including attorneys'
fees) arising out of any third party claim, resulting from or relating to any
(i) breach of this Agreement (including, without limitation, a breach by
MATRITECH of its limited warranty set forth in Section 7.1), (ii) each party's
negligent acts or willful misconduct; and (iii) in MATRITECH's case for any
claims arising out of the use of the Product; provided that the indemnifying
party is notified promptly in writing of the claim, has sole control over its
defense or settlement, and the party seeking indemnification provides reasonable
-13-
assistance in the defense of the same. Each party agrees, that it will not
settle any such claims, unless such settlement does not adversely affect the
other party's rights under this Agreement or requires the indemnified party to
perform any actions.
5.8 Insurance. Each of the parties have and shall maintain at least $2
million of insurance with a financially sound carrier subject to availability on
commercially reasonable terms, against any and all losses, claims, damages and
costs which may arise under this Agreement.
5.9 Identification of Proprietary. All packaging and documentation for the
Product shall include a notation acknowledging MATRITECH's patent rights in the
Product.
5.10 Trademarks and Trade Names.
(a) The Product shall be sold in the Territory only under the trademarks,
marks and trade names that MATRITECH may adopt from time to time ("Trademarks").
During the term of this Agreement, CYTOGEN shall have the right to advertise the
Product under the Trademarks. CYTOGEN shall not alter or remove any Trademarks
applied at the factory to the Product, packages, labeling or other materials
contained therein. Nothing herein shall grant to CYTOGEN any right, title or
interest in the Trademarks. If during the terms of this Agreement CYTOGEN
challenges (or assists others to challenge) the validity or ownership of any
Trademarks owned by MATRITECH as of the date of this Agreement, then MATRITECH
may by immediate notice to CYTOGEN terminate this Agreement.
(b) All representations of the Trademarks that CYTOGEN intends to use shall
first be submitted to MATRITECH for approval, which approval shall not be
unreasonably withheld. CYTOGEN shall promptly provide to MATRITECH for its
review and approval a sample copy of all advertising and promotional materials
prepared by CYTOGEN in connection with the sale of the Product. CYTOGEN shall
develop standard marketing materials including descriptions of the use of the
Product for approval by MATRITECH.
(c) Upon termination of this Agreement for any reason, CYTOGEN shall
discontinue the use of MATRITECH's Trademarks.
ARTICLE VI - CONFIDENTIAL INFORMATION
-------------------------------------
6.1 Treatment of Confidential Information. Each party hereto shall maintain
all confidential or proprietary information of the other party including,
without limitation, all confidential or proprietary Technical Information,
customer lists, pricing, payment amounts, marketing and business plans and
-14-
marketing and business strategies ("Confidential Information") in confidence,
and shall not disclose, divulge or otherwise communicate such Confidential
Information to others, or use it for any purpose, except pursuant to, and in
order to carry out, the terms and objectives of this Agreement, and hereby
agrees to exercise every reasonable precaution to prevent and restrain the
unauthorized disclosure of such Confidential Information by any of its
directors, officers, employees, consultants, subcontractors, sublicensees,
agents, or Affiliates. The Confidential Information of each party includes
information about third parties disclosed by one party to this Agreement to the
other party to this Agreement.
6.2 Release from Restrictions. The provisions of Section 6.1 shall not
apply to any Confidential Information disclosed hereunder which:
(a) was known or used by the receiving party prior to its date of
disclosure to the receiving party, as evidenced by the prior written records of
the receiving party; or
(b) either before or after the date of disclosure to the receiving party is
lawfully disclosed to the receiving party by an independent, unaffiliated third
party rightfully in possession of the Confidential Information; or
(c) either before or after the date of the disclosure to the receiving
party becomes published or generally known to the public through no fault or
omission on the part of the receiving party or its Affiliates and under no
obligation of confidentiality; or
(d) is required to be disclosed by the receiving party to comply with
applicable laws, to defend or prosecute litigation or, as provided herein, to
comply with governmental regulations, provided that the receiving party provides
prior written notice of such disclosure to the other party and takes reasonable
and lawful actions to avoid and/or minimize the degree of such disclosure.
ARTICLE VII - WARRANTIES
------------------------
7.1 Warranty to End-Users. MATRITECH gives a limited warranty to CYTOGEN
and to the end-users of the Product that the Product conforms to the labeling
supplied by MATRITECH until the date of expiration of the Product. MATRITECH
specifically disclaims (on the part of MATRITECH and its suppliers) all other
conditions, warranties and other terms relating to the Product. CYTOGEN shall
not give (or purport to give) or enter into (or purport to enter into) on behalf
of MATRITECH any representation, condition, warranty or other term in relation
-15-
to the Product. CYTOGEN will indemnify MATRITECH against all liabilities
relating to the Product and against all costs and expenses associated with
claims in respect of such liabilities to the extent that the liabilities result
from a breach by CYTOGEN of the terms of the preceding sentence of this Section
7.1.
7.2 Disclaimer of Warranty. EXCEPT FOR THE WARRANTY PROVIDED FOR IN
SECTIONS 5.1 AND 7.1 ABOVE, MATRITECH DISCLAIMS ANY AND ALL WARRANTIES OR
CONDITIONS OF ANY KIND WHATSOEVER, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE,
INCLUDING THOSE FOR MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A
PARTICULAR PURPOSE AND/OR AGAINST INFRINGEMENT, WHICH ARE EXPRESSLY EXCLUDED.
ARTICLE VIII - TERMINATION
--------------------------
8.1 Term. This Agreement shall remain in effect until December 15, 2007,
unless earlier terminated in accordance with the provisions of this Article VIII
or pursuant to Section 2.4. The term of this Agreement shall be renewed for one
(1)-year terms upon mutual written consent provided at least ninety (90) days
prior to the end of the term (including any renewal thereof) of this Agreement.
8.2 Termination for Breach, etc.
(a) Any party not then in default under this Agreement shall be entitled to
terminate this Agreement by written notice to the other party in the event that
the other party shall be in default of any money payment or other material
obligations hereunder, (i) thirty (30) days after notice of any money payment
default if the defaulting party shall have failed to remedy such default within
such 30-day period, (ii) sixty (60) days after notice of any other default
capable of cure, if the defaulting party shall have failed to remedy such
default within such 60-day period, and (iii) immediately upon any breach that is
incapable of cure.
(b) In addition, this Agreement may be terminated immediately upon written
notice (i) as provided in Sections 2.2, 2.4 and 8.2(a)(iii) hereof, or (ii) in
case of either party's insolvency, dissolution, termination of existence or the
appointment of a custodian or receiver for such party if such appointment is not
dismissed within thirty (30) days or the institution by such party of a
proceeding in bankruptcy, reorganization, receivership, insolvency or other
-16-
similar law affecting the right of creditors proceeding in bankruptcy,
reorganization, receivership, insolvency or other similar law, and if such
proceeding is not dismissed within thirty (30) days of filing.
8.3 Duties Upon Termination.
(a) In the event of the expiration or termination of this Agreement
pursuant to this Article VIII for any reason whatsoever:
(i) CYTOGEN shall cease, as soon as is practicable from acting as
distributor of the Product and abstain from making further sales of the
Product;
(ii) Both parties shall cooperate with each other in completing all
outstanding obligations to the other, including the fulfillment of each
warranty term and condition under this Agreement; and
(iii) Upon expiration of the three (3) month period after termination
of this Agreement, CYTOGEN shall not dispose of any Product purchased from
MATRITECH except to MATRITECH or to a company appointed by MATRITECH.
(b) No termination or expiration of this Agreement shall relieve either
party of any then-accrued payment, offset or obligation. Any and all such
payments, offsets or other obligations accrued hereunder as of the date of
termination or expiration shall remain due and payable in accordance with the
terms hereof.
(c) Notwithstanding any termination or expiration of this Agreement, the
obligations of the parties contained in Articles V, VI, VII, IX and X and in
Sections 3.1, 4.13, and 8.4, and this Section 8.3 with respect to events
occurring prior to the effective date of such termination or expiration, shall
survive and continue to be enforceable.
(d) Upon any termination of this Agreement each party shall promptly return
to the other party all written Confidential Information, and all copies thereof,
of the other party or at the discretion of the requested party, certify that all
such Confidential Information has been destroyed. In addition, if MATRITECH
terminates this Agreement due to a material breach by CYTOGEN, pursuant to the
terms in Section 8.2(b), or in the event of termination due to failure by the
parties to consent pursuant to Section 10.2, CYTOGEN shall deliver to MATRITECH
a list of its customers complete with full addresses and contact information who
have purchased the Product within the preceding 24 months and the quantities
purchased by them by no later than ten (10) working days from the date of notice
of such termination.
-17-
8.4 Non-Competition. CYTOGEN will be precluded from, directly or
indirectly, selling or marketing a device or product that is competitive with
the Product during the Term of this Agreement and for a period of [**] years
following termination of the Agreement. During the Term of this Agreement,
MATRITECH shall not, directly or indirectly, sell or market a non-instrumented
single test device or product that is competitive with the Product in the Field.
ARTICLE IX - LIMITATION OF LIABILITY
------------------------------------
9.1 Liability Upon Termination. Except as otherwise expressly provided in
this Agreement, in the event of (a) the expiration of this Agreement in
accordance with its terms or (b) the termination by either party in accordance
with any of the provisions of this Agreement, neither party shall be liable to
the other, because of such expiration or termination, for compensation,
reimbursement or damages on account of the loss of prospective profits or
anticipated sales or on account of expenditures, inventory, investments, leases
or commitments in connection with the business or goodwill of MATRITECH or
CYTOGEN. Expiration or termination shall not, however, relieve either party of
obligations incurred prior to the expiration or termination.
9.2 Liability for Breach. Except as provided in Article V or Section 6.1,
in the event of any breach by MATRITECH of any of its obligations hereunder,
CYTOGEN's sole and exclusive remedy shall be (i) an equitable adjustment in
price of Product subsequently purchased by CYTOGEN, as may be agreed to by the
parties, or (ii) failing any agreement, return to Matritech, at MATRITECH's
expense, of all or any portion of the Product remaining in CYTOGEN's possession
for a refund of the purchase price paid by CYTOGEN, plus all applicable shipping
expenses.
9.3 Liability for Other Damages. MATRITECH'S TOTAL LIABILITY ARISING OUT OF
THIS AGREEMENT, THE TERMINATION THEREOF, AND/OR SALE OF THE PRODUCT HEREUNDER,
SHALL BE LIMITED TO THE AMOUNT HAVING THEN ACTUALLY BEEN PAID BY CYTOGEN TO
MATRITECH FOR THE PURCHASE OF PRODUCT UNDER THIS AGREEMENT. EXCEPT FOR PRODUCT
SUPPLIED TO CYTOGEN TO REPLACE PRODUCT THAT DOES NOT CONFORM TO MATRITECH'S
LIMITED WARRANTY UNDER SECTION 7.1, IN NO EVENT SHALL MATRITECH BE LIABLE FOR
COSTS OF SUBSTITUTE PRODUCTS. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
-18-
OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, MULTIPLE OR PUNITIVE
DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, AND WHETHER OR NOT FOR
BREACH OF CONTRACT, NEGLIGENCE OR OTHERWISE, AND WHETHER OR NOT SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THESE LIMITATIONS WILL APPLY
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED
HEREIN. MATRITECH'S LIMITATION OF LIABILITY IS CUMULATIVE, WITH ALL MATRITECH'S
EXPENDITURES BEING AGGREGATED TO DETERMINE SATISFACTION OF THE LIMIT. IN NO
EVENT SHALL ANY SUPPLIERS OF MATRITECH BE LIABLE TO CYTOGEN FOR ANY DIRECT,
INDIRECT, CONSEQUENTIAL OR OTHER DAMAGES ARISING OUT OF THIS AGREEMENT, AND
CYTOGEN AGREES TO PURSUE ANY CLAIMS THAT IT MAY HAVE SOLELY AGAINST MATRITECH.
ARTICLE X - MISCELLANEOUS
-------------------------
10.1 Publicity. Either party may publicize or announce this Agreement and
the existence of an arrangement between the parties, provided that such party
shall provide the other party with a copy of any written materials to be used
therefor sufficiently prior to publication for the other party to comment on and
make reasonable changes thereto. Except as permitted under Section 5.10 hereof,
neither party shall use the other party's name, trademarks or service marks
without the other party's prior written consent.
10.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by either party without the prior written
consent of the other party; provided however, such restriction shall not apply
in event of a merger, acquisition or sale of substantially all the assets of the
party that are required to perform such party's obligations under this
Agreement.
10.3 Governing Law and Jurisdiction. This Agreement shall be governed by
and interpreted in accordance with the laws of the Commonwealth of Massachusetts
without regard to its conflict of law principles. Any lawsuit shall be brought
in the federal district court in Boston, Massachusetts and MATRITECH and CYTOGEN
consent to personal jurisdiction and venue in such courts. Process may be served
on either party by using the notice provisions of Section 10.6 below. The
-19-
prevailing party in any legal action brought by one party against the other and
arising out of this Agreement shall be entitled, in addition to any other rights
and remedies it may have, to reimbursement for its expenses, including court
costs and reasonable attorneys' fees.
10.4 Force Majeure. In the event that either party is prevented from
performing or is unable to perform any of its obligations under this Agreement
due to any act of God; fire; casualty; flood; war; strike; lockout; failure of
public utilities; injunction or any act, exercise, assertion or requirement of
governmental authority, including any governmental law, order or regulation
permanently or temporarily prohibiting or reducing the manufacture, use or sale
of Product; epidemic; destruction of production facilities; riots; insurrection;
inability to procure or use materials, labor, equipment, transportation or
energy sufficient to meet manufacturing needs; or any other cause beyond the
reasonable control of the party invoking this Section 10.4 if such party shall
have used its reasonable best efforts to avoid such occurrence, such party shall
give notice to the other party in writing promptly, and thereupon the affected
party's performance shall be excused and the time for performance shall be
extended for the period of delay or inability to perform due to such occurrence
not to exceed a period of sixty (60) days.
10.5 Waiver. The waiver by either party of a breach or a default of any
provision of this Agreement by the other party shall not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of either party to exercise or avail itself of
any right, power or privilege that it has or may have hereunder operate as a
waiver of any right, power or privilege by such party.
10.6 Notices. Any notice or other communication in connection with this
Agreement must be in writing by mail, certified, return receipt requested, by
electronic facsimile transmission or by courier service and shall be effective
when delivered to the addressee at the address listed below or such other
address as the addressee shall have specified in a notice actually received by
the addressor.
If to MATRITECH:
330 Nevada Street
Newton, MA 02460
Attention: David L. Corbet, President & COO
-20-
If to CYTOGEN:
650 College Road East
Princeton, New Jersey 08540
Attention: H. Joseph Reiser, CEO
With a copy to:
Hale and Dorr, LLP
650 College Road, East
Princeton, New Jersey 08540
Attention: David J. Sorin, Esq.
10.7 Independent Contractors. The relationship of MATRITECH and CYTOGEN
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to (a) give either party the
power to direct and control the day-to-day activities of the other, (b)
constitute the parties as partners, joint venturers, co-owners or otherwise as
participants in a joint or common undertaking, or (c) allow the parties to
create or assume any obligation on behalf of the other party for any purpose
whatsoever. All financial obligations associated with either party's business
are the sole responsibility of that party. Each party shall be solely
responsible for, and shall indemnify and hold the other party free and harmless
from, any and all claims, damages or lawsuits (including the other party's
reasonable attorneys' fees) arising out of the first party's negligent acts and
the negligent acts of its employees or agents.
10.8 Entire Agreement. This Agreement contains the full understanding of
the parties with respect to the subject matter hereof and supersedes all prior
understandings and writings relating thereto. In the event of a conflict between
the terms of this Agreement and any attachment, the terms of this Agreement
shall govern. No waiver, alteration or modification of any of the provisions
hereof shall be binding unless made in writing and signed by the parties by
their respective officers thereunto duly authorized. The terms and conditions on
any CYTOGEN purchase orders shall not apply. Any restrictive endorsement on any
check or any instrument of payment to MATRITECH which purports to alter this
-21-
Agreement or any of the parties' rights shall be of no force and effect, and the
payee party shall be free to negotiate such checks notwithstanding such void
endorsement.
10.9 Headings. The headings contained in this Agreement are for convenience
of reference only and shall not be considered in construing this Agreement.
10.10 Severability. In the event that any provision of this Agreement is
held by a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, the validity
of the remaining provisions shall not be affected. MATRITECH and CYTOGEN agree
to replace any invalid provision with a valid provision which most closely
approximates the intent and economic effect of the invalid provision.
10.11 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and permitted
assigns.
10.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
10.13 Recalls. MATRITECH will be party to effect a recall if ordered to by
the government.
IN WITNESS WHEREOF, the parties hereto have caused this Distribution
Agreement to be executed as a sealed instrument in their names by their properly
and duly authorized officers or representatives as of the date first above
written.
MATRITECH, INC.
By: /s/ David L. Corbet
-------------------
Title: President
----------------
CYTOGEN CORPORATION
By: H. Joseph Reiser
-------------------
Title: President and Chief Executive Officer
-------------------------------------
-22-
ATTACHMENT A
MARKETING PLAN
CYTOGEN & MATRITECH RESPONSIBILITIES
------------------------------------
Responsibilities of CYTOGEN:
- - All marketing, promotion and distribution of Products within the Territory
- - Sampling
- - Maintaining adequate Products inventories
- - Customer and technical service
Responsibilities of MATRITECH:
- - Assure Products comply with all claims in its labeling
- - Assistance in technical service, clinical marketing and registration
- - Securing both a monitoring and diagnoses regulatory approval in the
United States
- - Assistance with securing necessary reimbursement for the Products
- - [**]
- - Assist in the performance of an outcome study for the Products.