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DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement") is made and entered into as
of this 29th day of February 1996 between TECHNICLONE INTERNATIONAL
CORPORATION, a California corporation, having its principal place of business
at 14282 Franklin Avenue, Tustin, California 96250 ("Company") and
BIOTECHNOLOGY DEVELOPMENT, LTD., a Nevada limited partnership, having its
principal place of business at 222 South Rainbow, Suite 218, Las Vegas, Nevada
89128 ("Distributor"). The Company and Distributor are sometimes collectively
referred to as the "Parties."
R E C I T A L S
A. On October 28, 1992, the Company entered into an agreement
("Alpha Contract") with Alpha Therapeutics Corporation ("Alpha"), pursuant to
which Alpha licensed the LYM-1 antibody technology for the United States,
Canada, Mexico, Central America, South America, Asia, the United Kingdom,
Spain, Italy and Germany (the United Kingdom, Spain, Italy and Germany are
collectively referred to herein as the "European Countries") (all of the above
are collectively referred to herein as the "Alpha Territory"). The Alpha
Contract provides that the license is exclusive for the Alpha Territory.
B. On July 23, 1993 Alpha and Company entered into Addendum
Number One to the Alpha Contract ("Addendum") which Addendum modifies the Alpha
Contract by providing that Alpha must, in one or more of the European
Countries, initiate a clinical trial with investigators within six months of
the first patient being enrolled in the clinical trials in the United States
and prepare registration applications for marketing approval in each of the
four countries either through the European community multistate procedure or
individual country applications within one year of Company filing the product
license application ("PLA") with the United States Food and Drug
Administration. Failure to meet these requirements results in Alpha losing the
exclusive marketing rights to the European Countries.
C. While not formally relinquishing the rights, Alpha has stated
that it does not intend to fulfill the conditions necessary for it to retain
the exclusive marketing rights in the European countries).
D. Distributor has indicated an interest in purchasing the
marketing rights for LYM-1 for the European Countries that may be forfeited by
Alpha Therapeutics and for the countries set forth on Exhibit A to this
Agreement. Distributor and Company both understand that Distributor will only
acquire the exclusive marketing rights for the European Countries if Alpha
relinquishes or forfeits such rights.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt of which is acknowledged by the parties, the parties agree as follows:
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ARTICLE 1
DEFINITIONS
In this Agreement the following terms shall have the meanings set
forth below:
1.1 "Affiliate" means any legal entity in whatever country
organized, controlling, controlled by or under common control with Company or
Distributor. The word "control" means possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of an
entity, whether through the ownership of voting securities, by contract or
otherwise.
1.2 "Dose" means a unit of radioactive LYM-1 (or other products)
required for a single therapeutic injection.
1.3 "Effective Date" means the date of full execution of this
Agreement in all its counterparts.
1.4 "Regulatory Meeting" means meetings by Distributor with
appropriate individuals at the agency or unit of government regulating
pharmaceuticals in the countries within the Territory (as that term is defined
below).
1.5 "Antibodies" means:
1.5.1 hybridomas designated LYM-1 (ATCC No. HB 8612) LYM-2
(ATCC No. HB8613), and other hybridomas, and antibodies produced by or derived
from, or similar to, such hybridomas, pursuant to a license agreement dated
June 12, 1985 between Northwestern University and Techniclone International
Corporation except for certain rights which may be held by the United States
Government; or
1.5.2 any monoclonal antibodies or antibody product
indicated for use in Lymphoma that are currently under development or in the
future become research projects in the field of Lymphoma at Company, including,
but not limited to, the proprietary technologies known as Modified Antibodies
and Vasopermeation Enhancement.
1.6 "Patent" means:
1.6.1 United States patent 4,724.213 dated February 9,
1988, entitled "Murine Hybridoma LYM-1 and Diagnostic Antibody Produced
Thereby" and United States patent 4,724,212 dated February 9, 1988, entitled
"Murine, Hybridoma LYM-2 and Diagnostic Antibody Produced Thereby" and any
United States or foreign patents which may issue therefrom; and
1.6.2 any re-issues or extensions of such Patents and any
division and any like protection such as supplementary patent extension
certificates or anything else of similar effect.
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1.7 "Product" means any product or process made, used, sold, hired
out or otherwise disposed of in the Territory, and which:
1.7.1 falls within the scope of any claim of the Patent, or
1.7.2 embodies or utilizes any of the claims of the Patent,
or
1.7.3 falls within the scope of any other right pursuant to
subparagraph (b) of the Patent, as defined,
including any product which, although not necessarily a Product at the time of
manufacture, sale, or other disposal, is capable, by its virtue of its
availability in the marketplace, of being administered or used for any
indication covered by the Patent and whose labelling does not prohibit use for
such indication;
1.8 "Net Selling Price" means the gross amount billed for the
Products sold by Distributor, an Affiliate or a Subdistributor during such
period, less the following:
1.8.1 transportation charges or allowances, if any,
included in such price;
1.8.2 trade, quantity or cash discounts, and broker's or
agent's commissions, if any, allowed or paid;
1.8.3 credits or allowances, if any, given or made on
account of price adjustments, returns, rejections, recalls or destruction
(voluntarily made or requested or made by an appropriate governmental agency,
subdivision or department) of Products; and
1.8.4 any tax, duty, excise or other governmental charge
upon or measured by the production, sale, transportation, delivery or use of
Products included in such amount.
1.9 "Subdistributor" means any sublicense permitted under this
Agreement or any agreement or commitment for the grant of such a Subdistributor
or any commercial arrangement having the effect of a Sublicense.
1.10 "Territory" shall mean those countries set forth on Exhibit A.
ARTICLE 2
APPOINTMENT OF DISTRIBUTOR
2.1 Appointment.
2.1.1 Subject to the terms and conditions of this
Agreement, Company hereby appoints Distributor as Company's sole exclusive
distributor of the Products in the Territory. Company agrees not to establish,
directly or indirectly, any other distributor or distribution channels for the
Products in the Territory. Company hereby grants to Distributor, on an
exclusive basis (except as to Company), all rights to use the Patents in the
Territory which may be necessary or useful to enable Distributor to exercise
its rights and fulfill its obligations under this Agreement.
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2.1.2 Unless otherwise provided herein, Distributor shall
have no right whatsoever to manufacture or have manufactured the Products.
2.1.3 Company reserves the right to discontinue developing,
producing, licensing or distributing any of the Products and to modify, replace
or add to the Products in its discretion at any time.
2.2 Acceptance. Distributor accepts such appointment and agrees
to distribute the Products in the Territory, and promote the Products in the
Territory, pursuant to the Marketing Plan. Distributor shall handle all
aspects of order processing, invoicing and collection for the Products.
ARTICLE 3
PROJECT COMMITTEE AND MARKETING
3.1 Project Committee. The parties shall be responsible jointly
for planning the marketing of the Product(s). The parties shall within thirty
(30) days of the date hereof form a committee composed of two (2)
representatives of Company and two (2) representatives of Distributor (the
"Project Committee"). The representatives of each party shall include a
project manager/leader and a marketing representative. The Project Committee
may seek advice from additional personnel of the parties and outside experts.
The Project Committee shall elect a chairperson who will be responsible for
ensuring the administration of the duties of the Project Committee. The
chairperson shall alternate annually between Company and Distributor in
succeeding years unless otherwise agreed to by the Project Committee. The
Project Committee shall meet at least quarterly and may have other meetings as
required. Such meetings shall be held at mutually convenient locations, to be
determined by the Project Committee. At least ten (10) days before such
meeting, the parties shall agree on an agenda for such meeting.
3.2 Product Launch; Annual Marketing Plan. The Project Committee,
in a timely manner, shall prepare a marketing and sales plan (the "Marketing
Plan") for the Product. The Project Committee, shall update the Marketing Plan
for the Product at least once each year. The Project Committee shall review
all labelling and packaging proposed to be used in connection with the
Products.
3.3 Forecasts. One hundred twenty (120) days prior to the
proposed launch of any Product, the Distributor will prepare and deliver to
Company's manufacturing department a forecast of Product sales and sample
usage, by month, for the first twelve (12) months of sales ("Launch Forecast").
Thereafter, at least thirty (30) days prior to the beginning of each calendar
quarter, the Distributor will prepare and deliver to Company's manufacturing
department an updated monthly rolling forecast for the next twelve months.
Except for a Launch Forecast, the first three months of each such forecast
shall constitute a firm order and production forecast (the "Production
Forecast").
3.4 Appointment of Subdistributors. Distributor with the consent
of Company, which consent shall not be unreasonably withheld, may grant a
Subdistributorship to one or more third parties and Company shall be furnished
with a copy of every proposed Subdistributorship agreement under this Agreement
prior to execution thereof. Company shall have five (5) days after receipt of
the Subdistributorship Agreement to reject Company's proposed Subdistributor.
Company shall
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receive fifty percent (50%) of all Subdistributorship fees. All
Subdistributorship agreements shall have the following characteristics:
3.4.1 they shall convey no greater rights than Distributor
has under this Agreement;
3.4.2 they shall contain undertakings by the
Subdistributor` to observe and perform terms and conditions similar to those
contained herein so far as the same are applicable to and are capable of
performance by the Subdistributor including, but not limited to, the obligation
to make payments, Company's right to audit and the prohibition against
developing or marketing competing products contained in Section 5.6;
3.4.3 they shall provide that Subdistributor shall purchase
Product from Company or its designee at the same price being paid by
Distributor; and
3.4.4 they shall contain provisions for termination similar
to those hereinafter described and for ipso facto termination or lapse in the
event of and contemporaneously with the termination or lapse of this Agreement.
3.5 Similar Products. During the term of this Agreement and for a
period of two years thereafter, Distributor will not undertake the development
or marketing of any products similar to or in competition with those of
Company.
ARTICLE 4
PAYMENTS TO COMPANY
4.1 Initial Payment. In consideration for Company granting the
distributorship to Distributor, Distributor shall pay Company, on the Effective
Date, the sum of Three Million Dollars ($3,000,000).
4.2 Cost of Product. Distributor, its Affiliate or Subdistributor
shall purchase the Product at a cost per dose for manufactured Product of the
greater of (i) twenty-three percent: (23%) of the net price that Distributor,
its Affiliates or Subdistributors charge to their respective customers during
the preceding month for the delivered Product; or (ii) Nine Hundred Dollars
($900) per Dose.
4.3 Payments.
4.3.1 On or before the tenth day of each month Company
shall submit to Distributor, its Affiliate or Subdistributor an invoice
confirming the number of Doses shipped to Distributor, its affiliate or
Subdistributor for the preceding month.
4.3.2 Within twenty days after the end of each calendar
month Distributor, its Affiliate or Subdistributors shall pay or cause to be
paid to Company the purchase price for the Product delivered during such month
as determined by multiplying the number of such delivered Doses by twenty-three
percent (23%) of the net price for the preceding month or $900 per Dose
whichever is greater. All payments required to be made to Company, its
Affiliates or Subdistributors pursuant to any section of this Agreement
received more than thirty (30) days after the due date are subject to a one and
one-half percent (1 1/2%) per month service charge which shall in no event
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exceed the maximum rate permitted by law. All payments required to be made to
Company pursuant to any section of this Agreement are to be in U.S. Dollars,
unless otherwise agreed by Company.
4.3.3 Distributor shall be responsible for collecting all
of Distributor's accounts receivable. Distributor shall bear the risk of bad
debt on sales of the Products in the Territory. Failure to collect payments
from customers or failure of any Affiliate or Subdistributor to Distributor
will not excuse prompt payment by Distributor to Company. All amounts paid to
Company by Distributor hereunder are non-refundable and shall not be returned
or repaid to Distributor upon termination of this Agreement or for any other
cause except as provided herein.
4.3.4 Company shall have the right to withhold the
provision of any service or shipment of any Product covered by this Agreement
or any other existing contract between Company and Distributor in the event
that Distributor fails to make payment when due under any agreement between
Distributor and Company. Such action on the part of Company shall not release
Distributor from its obligations to pay for such service or Product if and when
provided or shipped by Company.
4.3.5 All payments to be made under this Agreement shall be
accompanied with a report certified by Distributor's or Subdistributors
principal financial officer to be true and accurate describing the number of
Doses sold and in sufficient detail to accurately account for gross sales of
each of the Products and all adjustments used to derive net price.
4.4 Taxes.
4.4.1 Distributor shall be responsible for and pay any and
all applicable taxes, customs, withholding taxes, duties, assessments and other
governmental impositions resulting from Distributor's activities under this
Agreement, including without limitation, taxes imposed on the sale and
distribution of Products in the Territory, the provision of services to
customers in the Territory, and employment taxes imposed on Distributor's
employees.
4.4.2 Distributor hereby agrees to indemnify and hold
Company harmless from and against any and all loss, damage, expense or
liability, including reasonable legal fees, which arise or result from
Distributor's failure to discharge its obligations above. Distributor shall
provide Company with resale certificates or other appropriate documentation
showing that sales of Products to Distributor hereunder are exempt from any
state or local sales or use tax.
ARTICLE 5
DUTIES OF DISTRIBUTOR
5.1 Distribution. Distributor shall use its best efforts to sell,
market and distribute the Products in the Territory and shall not distribute or
market any competing product.
5.2 Regulatory Matters. If necessary, Distributor shall conduct
any and all preclinical and clinical development necessary for any regulatory
approval and submission to any and all regulatory agencies within the countries
in the Territory. Distributor shall pay all costs of regulatory approval for
countries in the Territory.
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5.3 Purchase Orders.
5.3.1 Distributor shall order Products from Company for
distribution in accordance with this Agreement. Distributor shall submit
written orders for the Products to the Company in accordance with the
procedures established by Company from time to time. Distributor's orders
shall be in writing and shall constitute binding commitments to accept and pay
for the quantity Product stated therein, in accordance with the terms and
conditions hereof.
5.3.2 Any conflict between the terms and conditions of this
Agreement and the terms and conditions of any order or other communication
submitted by Distributor to Company shall be resolved in favor of the terms and
conditions of this Agreement.
5.3.3 No order for Products shall be binding on Company
unless accepted by an authorized officer of Company which acceptance shall not
be unreasonably withheld. Acceptance shall occur only through Company's
written confirmation or shipment. Company will use commercially reasonable
efforts to fill orders for Products and meet Distributor's requests for
shipment dates subject to the availability of Products and consistent with
Company's production and supply schedules.
5.3.4 Risk of loss or damage for the Products shall pass to
Distributor upon release of the Products by the Company for delivery to
carriers or shippers transporting the Products to Distributor's point of
delivery. Distributor shall be responsible for freight, insurance and storage
charges incurred in transit.
5.4 Products Reports. Distributor shall report to the Company
promptly all suspected and actual problems with the Products. Distributor
shall promptly inform Company of any severe hazard or adverse event concerning
any Product, or any other matter requiring notice to any regulatory agency, and
the parties shall consult with each other to determine any actions which need
to be taken with respect therefor.
5.5 Compliance. Distributor shall comply with all laws and
regulations in the Territory with respect to the distribution, promotion and
sale of Products, including without limitation the reporting of adverse events
associated with use of the Products. Distributor shall file any required
reports with the appropriate regulatory agencies.
5.6 Records and Sales Reports.
5.6.1 Distributor shall provide to Company within fifteen
(15) days after the end of each calendar month a sales activity report which
shall contain the following information on each of Distributor's, its
Affiliates' and Subdistributors' sales of Products through the calendar month
certified to be true and correct by Distributor's principal financial officer:
(i) customer name, address, telephone number and contact person; (ii) date of
sale; and (iii) description of Products, including quantity and gross and net
price. The record shall include the information set forth above. Distributor
shall maintain such records for a period of five (5) years and shall assist
Company, upon Company's reasonable request, in tracing a Product. Distributor
shall provide to Company, on request, reports concerning the current inventory,
location and condition of Products, and verification of the status of trained
sales and technical personnel.
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5.6.2 Distributor shall keep or cause to be kept accurate
records and books of account indicating the information and data required to
permit calculation of payments due hereunder. Such books and records shall be
available for audit on an annual basis by an independent third party certified
public accountant selected by Company and reasonably acceptable to Distributor,
during normal business hours, upon at least five (5) business days' prior
written notice, for the purpose of verifying the accuracy of Distributor's
accounting to Company under Section 4.2 above. All fees and expenses in
connection with any such audit shall be the responsibility of Company unless
Distributor's accountings are more than ten percent (10%) at variance with
Distributor's records, the payments due; provided that this right may not be
exercised more than once in any calendar year unless the immediately proceeding
accounting disclosed variances or more than ten percent (10%) from
Distributor's records, and the year or years for which records are requested
must be no earlier than three (3) years prior to the date of request. Said
Accountant shall disclose to Company only information relating to the accuracy
of the reports and payments made according to this Agreement.
5.7 Financial Condition. Distributor agrees to maintain good
financial standing with Company and agrees to provide Company with such
financial and credit information reasonably requested by the Company from time
to time. In addition, Distribution shall provide Company with quarterly
financial reports within thirty (30) days of the end of each of the first three
fiscal quarters of each year and annual audited financial reports, audited by
an accounting firm mutually agreed to by both parties, within seventy-five (75)
days of the end of the fiscal year.
5.8 Indemnification. Distributor agrees to indemnify and hold
harmless Company, its shareholders, affiliates, directors, officers, employees
and agents against any and all losses, damages, liabilities, including
reasonable attorneys' fees and costs, which arise directly out of Distributor's
sole negligence or willful misconduct in its performance of this Agreement.
5.9 Sales, Orders. All terms of sale of Products to customers,
including, without limitation, policies concerning pricing, credit terms, cash
discounts and returns and allowances shall be set by Distributor. All customer
orders for Products shall be received and executed by Distributor. Distributor
shall process such orders in a manner consistent with that used for products of
comparable commercial value.
ARTICLE 6
TERM
6.1 Initial Term. This Agreement shall be effective as of the
effective date of this Agreement and shall continue in full force and effect
for a period of fifteen (15) years unless sooner terminated pursuant to the
provisions of this Agreement. After the initial term of fifteen (15) years,
this Agreement shall be extended automatically from year to year unless one
party shall notify the other party in writing of termination at least three (3)
months prior to the anniversary date hereof.
ARTICLE 7
WARRANTY/EXCLUSION OF LIABILITY/INDEMNITY
7.1 Company Representations. Company hereby represents and
warrants that:
7.1.1 It is the assignee of the Patent from Northwestern
University.
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7.1.2 So far as it is aware, Alan I. Epstein is the sole
inventor of the invention, which is the subject of the Patent.
7.1.3 Other than has already been disclosed to Distributor,
as of the Effective Date, Company has not been informed of any foreign or
United States Patent and Trademark Office administrative or Judicial
proceedings contesting the inventorship, ownership, validity or enforceability
of the Patent or its corresponding foreign applications.
7.1.4 Company is not aware of other information, which
might affect the validity or enforceability of the Patent, including
information arising from prior patent searches conducted by or on behalf of
Company.
7.1.5 Company is not, as at the date hereof, aware of any
third party rights, domestic-or-foreign, which would be infringed by
Distributor in practicing the invention covered by the Patent.
7.2 Infringement. Company shall indemnify and hold harmless
Distributor, its shareholders, affiliates, directors, officers, employees and
agents against any and all losses, damages, liabilities, including reasonable
attorneys' fees and costs which arise out of claims or lawsuits asserting that
the Product infringes upon a patent or copyright, or violates the trade secret
or other proprietary right of any third party.
7.3 Lawsuit. In the event that Distributor shall be sued for such
infringement or violation of a third party patent copyright, trade secret or
other proprietary right, solely for reason of Distributor's exercise of its
rights to sell or use the Products, Distributor agrees to promptly notify
Company in writing of the institution of such suit. Company shall control the
defense of such suit at Company's own cost and expense. Distributor shall have
the right to be represented by advisory counsel of its own selection at its own
expense and shall cooperate fully in the defense of any such suit and to that
end shall furnish all evidence and reasonable assistance in its control.
Company shall satisfy all judgments and decrees against Distributor in such
action or suit. In the event Distributor is required to take a royalty-
bearing license under a third party right in order to continue to use or sell
the Product during the term of this Agreement, Distributor shall have the right
to deduct payments paid to the third party from the payments thereafter payable
to Company under this Agreement. In the event of a successful defense
resulting in an award of damages to Distributor, the monetary amount of such
damages will first be applied to reimburse Company for the expenses incurred in
the suit, then to reimburse Distributor for any of its own expenses. Any
remaining monies will be split equally between Company and Distributor.
7.4 Third Party Infringement. Company agrees promptly to take all
reasonable legal action necessary to protect the patent(s) on the Products
against infringement by third parties. Distributor agrees to provide such
reasonable assistance as Company deems, in its sole discretion, as necessary or
desirable. The parties shall immediately report to each other any infringement
of the Patent by a third party, providing in such report details of the
character, and the place and date, of such infringement which has come to its
notice, and any other pertinent information.
7.5 Protection of Patent. Company further agrees to take all
reasonable legal action necessary to protect the validity of the Patents,
including but not limited to payment of patent fees, taxes, and all other fees
required by law.
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ARTICLE 8
COMPANY'S DUTIES
8.1 Inquiries. If Company receives any inquiries regarding the
purchase of Products in the Territory, it shall refer such inquiries to
Distributor.
8.2 Manufacturing. Company shall be responsible for manufacturing
an FDA approved product for clinical and commercial use. Company will have
said product available to meet the Distributor's requirements. Company is also
responsible for distributing said product to such addresses as shall be
directed by Distributor, its Affiliates or Subdistributors.
8.3 Recall. Company shall consult with Distributor prior to
initiating any Product recall and the parties shall cooperate in carrying out
such recall. The parties shall share equally the costs of any such recall.
ARTICLE 9
CONFIDENTIALITY
9.1 Information. Except for literature and information intended
for disclosure to customers, and except as may be required to obtain government
approval to manufacture, sell or use the Products, each party will treat as
confidential all technical and commercial information acquired from the other
party under this Agreement and designated as confidential by the disclosing
party, and will take all necessary precautions to assure the confidentiality of
such information.
9.2 Return. Each party agrees to return to the other party upon
the expiration or termination of this Agreement all confidential technical and
commercial literature, data, and information acquired from such other party,
except as to such information it may be required to retain under applicable law
or regulation, and except for one copy of such information to be retained by
such party's legal department.
9.3 Duration. Neither party shall, during the period of this
Agreement or for ten (10) years thereafter, without the other party's express
prior written consent use or disclose any such confidential information for any
purpose other than to carry out its obligations hereunder. Each party, prior
to disclosure of such confidential information to any employee, consultant or
advisor shall ensure that such person is bound in writing to observe the
confidentiality provisions of this Agreement.
The obligations of confidentiality shall not apply to:
9.3.1 information that is known by the receiving party
prior to its disclosure;
9.3.2 information that becomes known to the receiving party
(a) from a third party under no obligation of nondisclosure with respect to
such information or (b) through independent discovery by the receiving party
without use of such information;
9.3.3 information that is or becomes public knowledge other
than through acts of the receiving party; or
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9.3.4 information that the receiving party is required by
law or regulation to disclose, provided however that the receiving party shall
so notify the disclosing party of its intent and cooperate with the disclosing
party on reasonable measures to protect the confidentiality of the information.
ARTICLE 10
TERMINATION
10.1 Default. Default either party may terminate this Agreement
for default by the other party by the giving of ninety (90) days prior written
notice to the defaulting party, provided that such default remains uncured at
the expiration of said ninety (90) day period.
10.2 Failure to Perform. Company may terminate this Agreement if
Distributor fails to use all reasonable efforts to achieve the following
milestones:
10.2.1 Use commercially reasonable efforts to obtain
official regulatory approval for LYM-1 in the countries within the Territory.
10.2.2 Commercially launch LYM-1 in each country in the
Territory within 12 months of receipt of the official regulatory approval for
LYM-1 in a country; and
10.2.3 Use commercially reasonable efforts to sell and
distribute the Products within the Territory.
10.3 Certain Events. Company shall have the right to terminate
this Agreement at any time by giving due notice in the event that the
Distributor shall be adjudicated bankrupt or shall petition for or consent to
any relief under any bankruptcy, reorganization, receivership, liquidation,
compromise, or any moratorium statute, whether now or hereafter in effect, or
shall make an assignment for the benefit of its creditors, or shall petition
for the appointment of a receiver, liquidator, trustee, or custodian for all or
a substantial part of its assets, or if a receiver, liquidator, trustee or
custodian is appointed for all or a substantial part of its assets and is not
discharged within thirty (30) days after the date of such appointment.
10.4 Termination on Breach. In the event of any material breach of
this Agreement by either party, the other party shall give the breaching party
written notice thereof. The breaching party shall have sixty (60) days after
receipt of written notice to cure said breach. If cure is not effected within
the sixty (60) day period, the nonbreaching party shall have the right to
terminate this Agreement.
10.5 Effects of Termination. On termination of this Agreement for
any reason, Distributor shall have the right, unless otherwise agreed to by the
parties, to continue to distribute Products which it has in inventory for a
period not to exceed six (6) months from the date of termination. In the event
of Distributor's termination of this Agreement, then at the end of the
aforementioned six (6) month period, Company shall either (i) purchase any
remaining inventory at Company's standard cost or (ii) instruct Distributor to
destroy such inventory and reimburse Distributor one-half Company's standard
costs of such inventory.
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ARTICLE 11
ARBITRATION
11.1 General. Distributor and Company agree that except for
disputes or claims arising under or in connection with this Agreement,
including the interpretation or application of this Agreement, shall be settled
by arbitration in accordance with the rules of the American Arbitration
Association then in force. If the parties cannot agree upon a single
arbitrator within ten (10) days after demand by either of them for arbitration,
then each party shall select one arbitrator from a list of arbitrators supplied
by the American Arbitration Association. The two arbitrators so selected shall
then choose a third arbitrator in order that the dispute may be finally
resolved by a majority of the panel of three arbitrators so selected. The
decision of the arbitrator or arbitrators shall be final and binding upon the
parties both as to law and fact. The expense of the arbitration shall be
shared equally by the parties, unless the arbitration award states that the
expense shall be otherwise assessed. Any such arbitration shall take place in
Los Angeles, California.
11.2 Patents. Any controversy or claim arising out of or related
to this Agreement which involves a question of infringement of any of the
Patents shall be settled by arbitration pursuant to the procedures set forth
hereinabove and in accordance with the Patent Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 Force Majeure. Neither party shall be responsible or liable,
in any way, for any default in performance of this Agreement arising, directly
or indirectly, from any cause beyond such party's control, including, without
limiting the generality of this provision, fire, flood, tornado, cyclone,
earthquake, war, enemy action, embargo, strike, lockout, labor trouble,
transportation difficulties, governmental order, proclamation or regulation,
accident, explosion, riot, insurrection or expropriation of the plants by
governmental authority. In the event that the force majeure condition persists
for six (6) months, the parties agree to meet to determine appropriate
resolution of the situation.
12.2 Relationship Between the Parties. Each party is acting as an
independent contractor for its own account in connection with this Agreement
and this Agreement does not establish a joint venture, agency or partnership
relationship between the parties. Neither party shall have authority to
conclude contracts or otherwise to act for or bind the other party in any
manner, whatsoever, as agent or otherwise. Any and all contracts and
agreements entered into by either party shall be for that party's sole account
and risk and shall not bind the other party in any respect.
12.3 Governing Law. This Agreement shall be governed under the
internal law, and not the law pertaining to conflicts or choice of laws, of the
State of California, including all matters of validity, interpretation,
construction and performance.
12.4 Entire Agreement. This Agreement and the schedules and
exhibits hereto constitute the entire agreement of the parties and supersede
all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations between the parties with respect to the subject
matter hereof.
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12.5 Severability. If any provision or portion of this Agreement
is invalid or unenforceable for any reason, there shall be deemed to be made
such minor changes (and only such minor changes) in such provision or portion
as are necessary to make it valid and enforceable. The invalidity or
unenforceability of any provision or portion of this Agreement shall not affect
the validity or enforceability of the other provisions or portions of this
Agreement. If any such unenforceable or invalid provision or provisions are
rendered enforceable and valid by changes in applicable law, then such
provision or provisions shall be deemed to read as they presently do in this
Agreement without change.
12.6 Successors and Assigns. This Agreement shall be binding upon
and shall insure to the benefit of the permitted successors, licensees,
assignees and transferees of the parties hereto whether by license, sale,
merger, reverse merger, consolidation, sale of stock or assets, will or other
testamentary disposition, operation of law or, without limitation, otherwise.
No assignment or other transfer will relieve Distributor of its obligations and
liabilities under this Agreement.
12.7 Modifications; Amendments. Except as otherwise provided
herein, provisions of this Agreement may be modified, amended or waived only by
a written document specifically identifying this Agreement and executed by a
duly authorized representative of the party whose rights may be adversely
affected by such modification, amendment or waiver.
12.8 Agreement Controlling. Without limitation, to the extent the
terms and conditions or spirit of this Agreement conflict with the terms and
conditions on any purchase order form, shipping order form, bill of lading,
receipt or the like, the terms and conditions of this Agreement shall be
controlling.
12.9 Article and Section Headings. The article, section and
paragraph headings included in this Agreement are for the convenience of the
parties only and shall not affect the construction or interpretation of this
Agreement.
12.10 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute one and the same document.
12.11 Attorneys' Fees. If any litigation or any other proceeding is
commenced in connection with or related to this Agreement, the losing party
shall pay the expenses, including without limitation the attorneys' fees and
expenses of investigation, of the prevailing party.
12.12 Notices. All notices, requests, waivers and other
communications made pursuant to this Agreement shall specifically reference
this Agreement, be in writing and be personally delivered or mailed with
postage prepaid, certified, return receipt requested, to the address set forth
below or such other address for itself as a party may from time to time specify
in writing to each of the other parties. If so mailed and also sent by telex
or telegram, the notice, request, waiver or other communication will
conclusively be deemed to have been received on the business day next occurring
24 hours after the latest to occur of such mailing and telex or telegraphic
communication; otherwise, no notice, request, waiver or other communication
shall be deemed given until it is actually received. The addresses to which
notices, requests, waivers and other communications are to be sent are as
follows:
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In the case of Distributor,
Biotechnology Development, Ltd.
c/o Tom Hartley
222 South Rainbow, Suite 218
Las Vegas, Nevada 89128
Attention: Edward Legere
In the case of Company,
Techniclone International Corporation
14282 Franklin Avenue
Tustin, California 96280
Attention: Lon H. Stone
Chairman and Chief Executive Officer
or at such other address designated by the party after the Effective Date, by
written notice to the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
BIOTECHNOLOGY DEVELOPMENT, LTD.
By: Buen Hermanos, Inc., General Partner
Dated: February 29, 1996
-----------------
By: /s/ EDWARD LEGERE
-------------------------------------
Edward Legere, President
TECHNICLONE INTERNATIONAL CORPORATION
Dated: February 29, 1996 By: /s/ LON H. STONE
----------------- -------------------------------------
Title: Lon H. Stone, President
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EXHIBIT "A"
The countries of Africa (as set forth below), Europe (as set forth
below), Australia and New Zealand.
AFRICA EUROPE
------ ------
Algeria Libya Albania Liechtenstein
Angola Madagascar Andorra Lithuania
Benin Malawi Austria Luxembourg
Botswana Mali Azerbaljan Macedonia
Burkina Faso Mauritania Belarus Malta
Burundi Mauritius Belgium Moldova
Cameroon Morocco Bosnia-Herzegovina Monaco
Cape Verde Mozambique Bulgaria Netherlands
Central African Namibia Croatia Norway
Republic Niger Czech Republic Poland
Chad Nigeria Denmark Portugal
Comoros Rwanda Estonia Romania
Congo Sao Tome and Principe Finland Russia (European)
Djibouti Senegal France San Marino
Egypt (African) Seychelles Georgia (European) Slovakia
Equatorial Guinea Sierra Leone Germany* Slovenia
Eritrea Somalia Greece Spain*
Ethiopia South Africa Hungary Sweden
Gabon Sudan Iceland Switzerland
Gambia Swaziland Ireland Turkey (European)
Ghana Tanzania Italy* Ukraine
Guinea Togo Kazakhstan (European) United Kingdom*
Gunea-Bissau Tunisia Latvia Vatican City
Ivory Coast Uganda Yugoslavia
(Cote d'Ivoire) Zaire
Kenya Zambia
Lesotho Zimbabwe
Liberia
- ------------------
* Presently licensed to Alpha; if Alpha forfeits its rights to market in
this country, then this country is made a part of this Agreement.
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