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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED SEPTEMBER 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________ .
COMMISSION FILE NO. 0-21905
COULTER PHARMACEUTICAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELWARE 94-3219075
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
550 CALIFORNIA AVE., PALO ALTO, CALIFORNIA 94306
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 650-849-7500
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Number of shares outstanding of the issuer's Common Stock, par value $.001
per share, as of November 2, 1998: 16,402,537.
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COULTER PHARMACEUTICAL, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements and Notes................. 3
Consolidated Balance Sheets -- September 30, 1998 and
December 31, 1997......................................... 3
Consolidated Statements of Operations -- for the three
months and nine months ended September 30, 1998 and 1997
and for the period from inception (February 16, 1995) to
September 30, 1998........................................ 4
Consolidated Statements of Cash Flows -- for the three
months and nine months ended September 30, 1998 and 1997
and for the period from inception (February 16, 1995) to
September 30, 1998........................................ 5
Notes to Consolidated Financial Statements.................. 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................ 11
SIGNATURES............................................................ 12
</TABLE>
2
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PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
(UNAUDITED) (NOTE 1)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 49,332 $ 20,451
Short-term investments.................................... 58,967 54,994
Prepaid expenses and other current assets................. 464 269
-------- --------
Total current assets.............................. 108,763 75,714
Property and equipment, net................................. 6,637 2,263
Employee loans receivable................................... 394 323
Other assets................................................ 493 371
-------- --------
$116,287 $ 78,671
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 3,733 $ 1,838
Accrued liabilities....................................... 7,958 7,959
Current portion of equipment financing obligations and
debt facility.......................................... 902 715
-------- --------
Total current liabilities......................... 12,593 10,512
Non current portion of equipment financing obligations and
debt facility............................................. 1,967 2,298
Commitments
Stockholders' equity:
Preferred stock, issuable in series, $.001 par value:
3,000,000 shares authorized; no shares issued and
outstanding at September 30, 1998 or December 31,
1997................................................... -- --
Common stock, $.001 par value: 30,000,000 shares
authorized; 16,396,334 shares and 13,570,224 shares
issued and outstanding at September 30, 1998 and
December 31, l997, respectively........................ 16 14
Additional paid-in capital................................ 174,512 111,598
Accumulated other comprehensive income.................... (12) (7)
Deferred compensation..................................... (695) (1,085)
Deficit accumulated during the development stage.......... (72,094) (44,659)
-------- --------
Total stockholders' equity........................ 101,727 65,861
-------- --------
$116,287 $ 78,671
======== ========
</TABLE>
See accompanying notes.
3
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COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED FOR THE PERIOD
SEPTEMBER 30, SEPTEMBER 30, FROM INCEPTION
------------------- ------------------- (FEBRUARY 16, 1995)
1998 1997 1998 1997 TO SEPTEMBER 30, 1998
-------- -------- -------- -------- ---------------------
<S> <C> <C> <C> <C> <C>
Operating expenses:
Research and development.............. $ 7,347 $ 5,227 $ 22,581 $ 11,810 $ 59,846
Selling, general and administrative... 2,643 2,146 7,721 5,326 18,321
------- ------- -------- -------- --------
Total operating expenses.............. 9,990 7,373 30,302 17,136 78,167
Interest income and other, net........ 1,168 454 2,867 1,417 6,073
------- ------- -------- -------- --------
Net loss.............................. $(8,822) $(6,919) $(27,435) $(15,719) $(72,094)
======= ======= ======== ======== ========
Basic and diluted net loss per
share............................... $ (0.58) $ (0.69) $ (1.96) $ (1.76)
======= ======= ======== ========
Shares used in computing basic and
diluted net loss per share.......... 15,123 10,060 13,982 8,950
======= ======= ======== ========
</TABLE>
See accompanying notes.
4
<PAGE> 5
COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS FOR THE PERIOD
ENDED SEPTEMBER 30, FROM INCEPTION
-------------------- (FEB. 16, 1995)
1998 1997 TO SEPTEMBER 30, 1998
-------- -------- ---------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss........................................... $(27,435) $(15,719) $(72,094)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization................... 454 110 765
Amortization of deferred compensation........... 390 861 1,804
Changes in operating assets and liabilities:
Prepaid expenses and other current assets....... (195) 41 (464)
Employee loans receivable....................... (71) (93) (395)
Other assets.................................... (122) (127) (492)
Accounts payable................................ 1,895 968 3,733
Accrued liabilities............................. (1) (2,606) 8,046
-------- -------- --------
Net cash used in operating activities...... (25,085) (16,565) (59,097)
-------- -------- --------
Cash flows from investing activities:
Purchases of short-term investments................ (68,231) (33,003) (140,635)
Maturities of short-term investments............... 59,180 12,089 74,310
Sales of short-term investments.................... 5,073 -- 7,343
Purchases of property and equipment................ (4,828) (1,038) (7,398)
-------- -------- --------
Net cash used in investing activities...... (8,806) (21,952) (66,380)
-------- -------- --------
Cash flows from financing activities:
Payments of equipment financing obligations and
debt facility................................... (564) (366) (1,139)
Borrowings under equipment financing obligations
and debt facility............................... 420 1,700 3,920
Proceeds from issuance of convertible preferred
stock, net...................................... -- -- 28,355
Proceeds from issuance of common stock, net........ 62,916 34,547 143,673
-------- -------- --------
Net cash provided by financing
activities............................... 62,772 35,881 174,809
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents........................................ 28,881 (2,636) 49,332
Cash and cash equivalents at beginning of period..... 20,451 8,826 --
-------- -------- --------
Cash and cash equivalents at end of period........... $ 49,332 $ 6,190 $ 49,332
======== ======== ========
Supplemental Schedule of Cash Flow Information
Interest Paid........................................ 242 193 525
Schedule of non-cash investing and financing
activities:
Net exercise of warrants to purchase 37,785 shares
of common stock................................. $ -- $ 453 $ 453
Acquisition of equipment pursuant to supplemental
lease obligation................................ $ -- $ -- $ 78
Deferred compensation related to grant of certain
stock options................................... $ 156 $ 157 $ 2,656
</TABLE>
See accompanying notes.
5
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COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The information at September 30, 1998 for the three and nine month periods
ended September 30, 1998 and 1997 and for the period from inception (February
16, 1995) to September 30, 1998 is unaudited but includes all adjustments
(consisting only of normal recurring adjustments) which, in the opinion of
management, are necessary to state fairly the financial information set forth
therein in accordance with generally accepted accounting principles. The
September 30, 1998 interim results are not necessarily indicative of results to
be expected for the full fiscal year. These financial statements should be read
in conjunction with the audited financial statements for the fiscal year ended
December 31, 1997 included in the Company's annual report to security holders
furnished to the Securities and Exchange Commission pursuant to Rule 14a-3(b) in
connection with the Company's 1998 Annual Meeting of Stockholders.
The consolidated balance sheet at December 31, 1997 has been derived from
audited consolidated financial statements at that date but does not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements.
Net Loss Per Share
Effective December 31, 1997 the Company adopted Statement of Financial
Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share," which modifies
the way in which earnings per share are calculated and disclosed.
"Basic" net loss per share (as defined by SFAS 128) is computed using the
weighted average number of common shares outstanding less those shares subject
to the Company's right of repurchase. As the Company reported a loss for all
periods presented, there is no difference between basic and diluted net loss per
share amounts as prescribed by SFAS 128. Loss per share for the three and nine
month periods ended September 30, 1997 have been restated to conform to the
requirements of SFAS 128.
New Accounting Standards
As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130").
SFAS 130 establishes new rules for the reporting and display of comprehensive
income and its components; however, the adoption of SFAS 130 had no impact on
the Company's net income or shareholders' equity. SFAS 130 requires unrealized
gains or losses on the Company's available-for-sale securities which, prior to
adoption, were reported separately in shareholders' equity, to be included in
other comprehensive income. Prior year financial statements have been
reclassified to conform to the requirements of SFAS 130. For the quarters ended
September 30, 1998 and 1997, total comprehensive loss amounted to $8.8 million
and $6.9 million, respectively. For the nine month periods ended September 30,
1998 and 1997, total comprehensive losses were $27.4 million and $15.7 million,
respectively.
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 131, "Disclosures About Segments of an Enterprise and
Related Information" ("SFAS 131"). SFAS 131 superseded SFAS 14, "Financial
Reporting for Segments of a Business Enterprise." SFAS 131 establishes standards
for the way that public business enterprises report selected information about
operating segments in annual financial statements, SFAS 131 also establishes
standards for related disclosures about products and services, geographic areas
and major customers. The adoption of SFAS 131 will have no impact on the
Company's results of operations, or financial position.
6
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COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
2. INVESTMENTS
Management determines the appropriate classification of debt securities at
the time of purchase and re-evaluates such designation as of each balance sheet
date. The Company's debt securities are classified as available-for-sale and are
carried at estimated fair value in cash equivalents and short-term investments.
Unrealized gains and losses are reported as accumulated other comprehensive
income in stockholders' equity. The amortized cost of debt securities in this
category is adjusted for amortization of premiums and accretion of discounts to
maturity. Such amortization is included in interest income. Realized gains and
losses on available-for-sale securities are included in interest income and
expense. The cost of securities sold is based on the specific identification
method. Interest and dividends on securities classified as available-for-sale
are included in interest income. The Company's cash equivalents and short-term
investments as of September 30, 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Money market funds............................ $ 1,157 $-- $ -- $ 1,157
Commercial paper.............................. 76,798 -- (23) 76,775
Corporate bond................................ 9,252 10 -- 9,262
Certificate of Deposits....................... 20,070 1 -- 20,071
-------- --- ---- --------
Total............................... 107,277 11 (23) 107,265
Less amounts classified as cash equivalents... (48,319) -- 21 (48,298)
-------- --- ---- --------
Total short-term investments.................. $ 58,958 $11 $ (2) $ 58,967
======== === ==== ========
</TABLE>
Realized gains or losses on the sale of available-for-sale securities for
the quarters ended September 30, 1998 and September 30, 1997 were not material.
At September 30, 1998 the contractual maturities of short term investments
were as follows (in thousands):
<TABLE>
<CAPTION>
ESTIMATED FAIR
AMORTIZED COST VALUE
-------------- --------------
<S> <C> <C>
Due in one year or less.................................... $37,891 $37,889
Due after one year through two years....................... 21,067 21,078
------- -------
$58,958 $58,967
======= =======
</TABLE>
3. STOCKHOLDER'S EQUITY
On July 31, 1998, the Company completed a public offering of 2,400,000
shares of common stock at a price to the public of $25.00 per share, resulting
in net proceeds to the Company of $56.7 million. Also, in August 1998, the
underwriters of that offering purchased 245,000 additional shares of common
stock upon a partial exercise of their over-allotment option, raising additional
net proceeds of $5.8 million. The total net proceeds from this offering were
$62.5 million.
7
<PAGE> 8
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. Actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, those discussed below and in the Company's Registration
Statement on Form S-3, File No. 333-58829, declared effective on July 30, 1998.
OVERVIEW
Coulter Pharmaceutical is engaged in the development of novel drugs and
therapies for the treatment of people with cancer. The Company currently is
developing a family of cancer therapeutics based upon two drug discovery
programs, therapeutic antibodies and targeted oncologics. Within these broad
discovery programs, the Company is currently concentrating on two distinct
platform technologies: therapeutic antibodies based on conjugated antibody
technology and targeted oncologics based on tumor activated peptide pro-drugs
technology.
The Company's most advanced product candidate, Bexxar(TM) (formerly known
as the "B-1 Therapy"), consists of a monoclonal antibody conjugated with a
radioisotope. The Company intends to seek initial approval of Bexxar for the
treatment of low-grade and transformed low-grade non-Hodgkin's lymphoma ("NHL")
in patients who have relapsed after, or are refractory to, chemotherapy. The
Company intends to seek expedited Biologics License Application ("BLA") review
and marketing approval for Bexxar, while simultaneously pursuing clinical trials
to expand the potential use of Bexxar to other indications. Bexxar is based upon
the antibody therapeutics program which originated at Coulter Corporation. In
1995 Coulter Pharmaceutical was incorporated and acquired worldwide rights to
Bexxar and related intellectual property, know-how and other assets from Coulter
Corporation. In 1997 Beckman Instruments, Inc. acquired Coulter Corporation,
which is now known as Beckman Coulter.
To date, the Company has devoted substantially all of its resources to its
research and development programs, as well as selling, general and
administrative activities needed to support product development and potential
product sales. No revenues have been generated from product sales, and products
resulting from the Company's research and development efforts, if any, are not
expected to be available commercially for at least the next one to two years.
The Company has a limited history of operations and has experienced significant
operating losses to date. The Company expects that losses will fluctuate from
quarter to quarter and that such fluctuations may be substantial. There can be
no assurance that the Company will successfully develop, manufacture and
commercialize its products or ever achieve or sustain product revenues or
profitability. As of September 30, 1998, the Company's accumulated deficit
during the development stage was approximately $72.1 million.
RESULTS OF OPERATIONS
Operating Costs and Expenses
Research and development expenses were $7.3 million for the three months
ended September 30, 1998 compared to $5.2 million for the same period in 1997.
For the nine months ended September 30, 1998, research and development expenses
were $22.6 million compared to $11.8 million for the same period in 1997. These
increases were due primarily to increases in staffing and expenditures
associated with the development of Bexxar, including manufacturing expenses and
costs of clinical trials. These manufacturing expenses included certain expenses
associated with scaled-up production of monoclonal antibodies and the
establishment of a centralized scaled-up radiolabeling capability. The Company
expects its research and development expenses to continue to grow during the
remainder of 1998, reflecting anticipated increased costs related to additions
to staffing, preclinical studies, clinical trials and manufacturing.
Selling, general and administrative expenses were $2.6 million for the
quarter ended September 30, 1998, compared to $2.1 million for the same period
in 1997, and were $7.7 million for the nine months ended
8
<PAGE> 9
September 30, 1998 and $5.3 million for the same period in 1997. These increases
were incurred to support the Company's facilities and staffing expansion,
increased research and development efforts, increased pre-commercialization
activities, increased corporate development activities and related legal and
patent activities. The Company expects its selling, general and administrative
expenses to continue to increase during the remainder of 1998, in support of its
increased research and development, patent and corporate development activities,
as well as increasing commercialization efforts in anticipation of potential
product sales.
Interest Income and Other, Net
Interest income and other was $1.2 million for the quarter ended September
30, 1998, compared to $0.5 million for the same period in 1997, and was $2.9
million for the nine months ended September 30, 1998 and $1.4 million for the
same period in 1997. This increase was due to higher average cash, cash
equivalent and short-term investment balances as a result of the completion of
the Company's two public offerings of common stock in the quarters ended
December 31, 1997 and September 30, 1998. Interest expense is not material for
any period presented.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception through September 30, 1998, the Company has financed
its operations primarily through private placements and public offerings of
equity securities totaling $172.3 million. In addition, the Company entered into
a $3.8 million equipment lease financing and debt facility in December 1996,
none of which is available at September 30, 1998. Cash, cash equivalents and
short-term investments totaled $108.3 million at September 30, 1998.
The negative cash flow from operations results primarily from the Company's
net operating losses and is expected to continue and to accelerate in the next
several years. The Company expects to incur substantial and increasing research
and development expenses, including expenses related to additions to personnel,
preclinical studies, clinical trials, manufacturing and commercialization
efforts. The Company may need to raise substantial additional capital to fund
its operations. The Company may seek such additional funding through public or
private equity or debt financings from time to time, as market conditions permit
or through collaborative arrangements. There can be no assurance that additional
financing will be available on acceptable terms, if at all. If adequate funds
are not available, the Company may be required to delay, reduce the scope of, or
eliminate one or more of its research and development programs or obtain funds
through arrangements with collaborative partners or others that may require the
Company to relinquish rights to certain of its technologies, product candidates
or products that the Company would otherwise seek to develop or commercialize.
Net cash used in operations was $25.1 million for the nine month period
ended September 30, 1998, compared to $16.6 million for the same period in 1997.
This $8.5 million increase is primarily the result of the increased net loss for
the nine month period ended September 30, 1998, partially offset by an increase
in accounts payable. Net cash used in investing activities was $8.8 million for
the nine month period ended September 30, 1998 compared to $22.0 million for the
same period in 1997. This decrease primarily resulted from purchases of
short-term investments exceeding maturities and sales of such investments by
$4.0 million in the 1998 period compared to $21.9 million in 1997. Property and
equipment purchases of $4.8 million in the nine months ended September 30, 1998
were in support of the Company's facilities expansion and staffing growth. Net
cash provided by financing activities increased to $62.8 million for the nine
month period ended September 30, 1998 from $35.9 million for the same period in
1997 primarily resulting from the completion of the Company's public offering of
common stock in the quarter ended September 30, 1998.
The Company expects that its existing capital resources, including the net
proceeds of its public offering of common stock completed in the quarter ended
September 30, 1998 and interest thereon, will be adequate to satisfy the
requirements of its current and planned operations into 2000. At September 30,
1998, the Company had entered into a long-term lease obligation for office and
laboratory space that will require material commitments for capital expenditures
of approximately $5.0 million through the end of 1998 which the Company may
elect to offset by bank or other borrowings. The Company's future capital
requirements will depend on a number of factors, including: the scope and
results of preclinical studies and clinical trials; the cost, timing and outcome
of
9
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regulatory approvals; the expenses of establishing a sales and marketing force;
continued progress of the Company's research and development of potential
products; the timing and cost of establishment or procurement of requisite
production, radiolabeling and other manufacturing capacities; the adequacy of
facilities, the cost involved in preparing, filing, prosecuting, maintaining,
defending and enforcing patent claims; the need to acquire licenses to new
technology; the status of competitive products; the availability of other
financing, and the ability to achieve profitability.
YEAR 2000 READINESS
The Company uses and relies on a wide variety of information technologies,
computer systems and scientific equipment containing computer related
components. Some of the Company's older computer software programs and equipment
use two digit fields rather than four digit fields to define the applicable year
(i.e., "98" in the computer code refers to the year "1998"). As a result,
time-sensitive functions of those software programs and equipment may
misinterpret dates after January 1, 2000, to refer to the twentieth century
rather than the twenty-first century (i.e., "02" could be interpreted as "1902"
rather than "2002"). This could cause system or equipment shutdowns, failures or
miscalculations resulting in inaccuracies in computer output or disruptions of
operations, including, among other things, inaccurate processing of financial
information and/or temporary inability's to process transactions or engage in
other normal business activities.
The Company has developed a strategy to address the potential exposures
related to the impact on its computer systems for the Year 2000 and beyond. An
inventory of key financial, informational and operational systems is being
completed. Detailed plans for implementation and testing of any necessary
modifications to these key computer systems and equipment to ensure they are
Year 2000 compliant are being developed by a cross functional team to address
computer system and equipment problems as required by December 31, 1999. The
Company believes that with these plans and completed modifications, the Year
2000 issue will not pose significant operational problems for its computer
systems and equipment. However, if such modifications and conversions are not
made, or are not completed in a timely fashion, the Year 2000 issue could have a
material impact on the operations of the Company, the precise degree of which
cannot be known at this time. The Company currently has no contingency plans to
deal with major Year 2000 failures, though such plans will be developed over the
coming months.
In addition to risks associated with the Company's own computer systems and
equipment, the Company has relationships with, and is to varying degrees
dependent upon, a large number of third parties that provide information, goods
and services to the Company. These include financial institutions, suppliers,
vendors, research partners and governmental entities. If significant numbers of
these third parties experience failures in their computer systems or equipment
due to Year 2000 non-compliance, it could affect the Company's ability to
process transactions, develop, manufacture and distribute products, or engage in
similar normal business activities. While some of these risks are outside the
control of the Company, the Company has instituted programs, including internal
records review and use of external questionnaires, to identify key third
parties, assess their level of Year 2000 compliance, update contracts and
address any non-compliance issues.
The total cost of the Year 2000 systems assessments and conversions is
funded through operating cash flows, and the Company is expensing these costs.
The financial impact of making the required systems changes cannot be known
precisely at this time, but it is currently expected to be less than $1.0
million. The amount of the cost incurred to date is not material. The actual
financial impact could, however, exceed this estimate. These costs are not
expected to be material to the Company's financial position, results of
operations or cash flows.
BUSINESS RISKS
Except for the historical information contained herein, the matters
discussed in this filing are forward-looking statements that involve risks and
uncertainties, including uncertainties related to product development,
uncertainties related to the need for regulatory and other government approvals,
dependence on proprietary technology, uncertainty of market acceptance of Bexxar
or the Company's other product candidates and other risks, including those
detailed in the Company's other filings with the Securities and
10
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Exchange Commission. In particular, see "Risk Factors," referenced in the
Company's Registration Statement on Form S-3, File No. 333-58829, declared
effective on July 30, 1998.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<S> <C>
10.19+ Supply agreement, dated August 31, 1998 by and between MDS
Nordion, Inc. and the Registrant.
10.20+ Facilities agreement, dated August 31, 1998 by and between
MDS Nordion, Inc. and the Registrant.
27.0 Financial data Schedule
</TABLE>
(b) Reports on Form 8-K
There were no reports on Form 8-K during the quarter ended September 30,
1998.
- ---------------
+ Portions omitted pursuant to a request of confidentiality filed separately
with the Commission.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COULTER PHARMACEUTICAL, INC.
<TABLE>
<S> <C>
Date: November 13, 1998 /s/ MICHAEL F. BIGHAM
----------------------------------------------
Michael F. Bigham
President and Chief Executive Officer
Date: November 13, 1998 /s/ WILLIAM G. HARRIS
----------------------------------------------
William G. Harris
Vice President and Chief Financial Officer
</TABLE>
12
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
10.19+ Supply agreement, dated August 31, 1998 by and between MDS
Nordion, Inc. and the Registrant.
10.20+ Facilities agreement, dated August 31, 1998 by and between
MDS Nordion, Inc. and the Registrant.
27.0 Financial data Schedule
</TABLE>
- ---------------
+ Portions omitted pursuant to a request of confidentiality filed separately
with the Commission.
<PAGE> 1
Exhibit 10.19
*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUIRED
UNDER 17 C.F.R. SECTIONS 20.80(b)(4),
200.83 AND 240.24b-2
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (the "Agreement") is made this 31st day of August,
1998 (the "Signature Date") between MDS NORDION INC., a Canadian corporation
having a place of business at 447 March Road, Kanata, Ontario, Canada, K2K 1X8
("Nordion") and COULTER PHARMACEUTICAL, INC., a Delaware corporation having a
place of business at 550 California Avenue, Suite 200, Palo Alto, California,
U.S.A. ("Coulter"). Nordion and Coulter are sometimes referenced in this
Agreement individually as a "Party" and collectively as the "Parties".
RECITALS
WHEREAS, Coulter is the owner of certain data, information and
technology related to the B1 Antibody (as such term is defined below) and the
radiolabelling thereof; and
WHEREAS, Nordion has expertise in the development of pharmaceutical
processes for the radiolabelling of pharmaceutical compounds and in the
manufacture and supply of radiolabelled compounds; and
WHEREAS, the Parties have jointly developed a process for radiolabelling
of B1 Antibody with iodine 131I ("131I") pursuant to an Agreement between the
Parties dated November 15, 1995 (the "Development Agreement"); and
WHEREAS, the Parties are, simultaneous with the execution of this
Agreement, entering into an agreement pursuant to which Nordion has installed an
Interim Facility and a Primary Facility, having the capacity to perform
radiolabelling of BI Antibody with 131I (the "Facilities Agreement"); and
WHEREAS, the Parties now desire to set forth the terms under which
Nordion will provide Radiolabelling Services to Coulter.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained in this Agreement, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
set forth below:
1.1 "AFFILIATE" shall mean any entity or person which controls, is
controlled by or is under common control with either Party. For purposes of this
Section 1.1, control shall mean (a) in the case of corporate entities, the
direct or indirect ownership of more than one-half of the stock or participating
shares entitled to vote for the election of directors, and (b) in the case of a
partnership, the power to direct the management and policies of such
partnership.
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1.2 "B1 ANTIBODY" shall mean the IgG2a anti-CD20 murine monoclonal
antibody, as supplied by Coulter to Nordion for purposes of this Agreement.
1.3 "BASE RATE OF EXCHANGE" OR "BRE" shall mean the Canadian dollar
exchange rate against the U.S. dollar (i.e. $1.00 U. S. = X dollars Canadian)
and shall be fixed at $1.00 U.S. = [...***...] Canadian.
1.4 "BATCH" shall mean a production batch of the Labelled Drug
manufactured under this Agreement.
1.5 "BATCH CAPACITY" shall mean the capacity of the Interim Facility or
the Primary Facility, as the case may be, to produce Labelled Drug.
1.6 "BATCH COMPLETION DATE" shall have the meaning set forth in Section
9.2.
1.7 "BLA" shall mean a Biologics License Application, as defined by the
regulations promulgated under the United States FD&C Act and PHS Act and any
supplements thereunder, as amended from time to time.
1.8 "CLINICAL TRIALS" shall mean any trials for clinical development of
pharmaceutical products defined as "Phase I," "Phase II," "Phase III," or
"Treatment IND" in FDA regulations, as amended from time to time.
1.9 "COMMERCIAL SUPPLY" shall mean the supply of Labelled Drug by
Nordion to Coulter for sale after regulatory approval of Labelled Drug has been
received by Coulter from the FDA, in the United States.
1.10 "CURRENT GOOD MANUFACTURING PRACTICES" or "cGMP" shall mean the
good manufacturing practices required by the FDA and set forth in the FD&C Act
or FDA regulations, policies, or guidelines in effect at a particular time for
the manufacture, testing and quality control of pharmaceutical materials as
applied to biologics, except to the extent that Canadian standards for the
manufacture, testing and quality control of pharmaceutical materials as applied
to biologics are higher or more stringent than those required by the FDA, in
which case such Canadian standards will apply. For jurisdictions other than
Canada and the United States, if any higher or more stringent standards for the
manufacture and testing of pharmaceutical materials as applied to biologics are
required, Coulter will notify Nordion and the Parties will discuss in good faith
how to respond to such requirements.
1.11 "CURRENT RATE OF EXCHANGE" OR "CRE" shall mean the average Canadian
dollar exchange rate against the U.S. dollar (i.e. $1.00 U.S. = X dollars
Canadian) as based on the [...***...] as described in Article 9 of this
Agreement.
1.12 "EFFECTIVE DATE" shall mean the date set forth in Section 16.14.
1.13 "FDA" shall mean the United States Food and Drug Administration.
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1.14 "FD&C ACT" shall mean the United States Federal Food, Drug and
Cosmetic Act, as amended.
1.15 "HOT CELLS" shall mean the assets purchased by Nordion by purchase
order on behalf of Coulter pursuant to the letter agreement dated February 23,
1996 and September 30, 1997 (annexed in Exhibit 1.15) between Nordion and
Coulter, as installed [...***...] of Nordion's Kanata production site.
1.16 "IND" shall mean an Investigational New Drug application and any
supplements thereto, as defined in FDA regulations, as amended from time to
time.
1.17 "INSTALLATION" shall have the meanings set forth in Section 1.15 of
the Facilities Agreement.
1.18 "INTERIM FACILITY" shall have the meaning set forth in the Facility
Agreement.
1.19 "ISOTOPE" shall mean (131)I.
1.20 "LABELLED DRUG" shall mean a pharmaceutical product containing the
(131)I-labelled B1 Antibody in either dosimetric or therapeutic final dosage
form for use in Clinical Trials or for commercial sale, which has been, or is
being, processed, compounded, formulated, finished, filled, labeled, packaged
and/or shipped by Nordion pursuant to this Agreement.
1.21 "MAXIMUM BATCH SIZE" shall mean a Batch resulting from the
labelling of [...***...] milligrams of B1 Antibody with [...***...] of Isotope
or such other greater amount as may be validated from time to time.
1.22 "MOVEABLE EQUIPMENT" shall mean the equipment so identified in
Exhibit 1.20 of the Facilities Agreement.
1.23 "NORTH AMERICAN MARKETS" shall mean the United States, Mexico and
Canada.
1.24 "NORTH AMERICAN MARKET REQUIREMENTS" shall mean Coulter's annual
requirements for radiolabelling services for the B1 Antibody with Isotope for
use or sale in the North American Markets, measured in U.S. dollars.
1.25 "PRIMARY FACILITY" shall mean the facility described in Section 2.1
of the Facilities Agreement.
1.26 "PROCESS" shall mean the process of formulation and dispensing
described in Nordion's Standard Operating Procedure #960700.SOP.
1.27 "PROCESS PERFORMANCE QUALIFICATION" shall mean the program by which
it is established that the process equipment, ancillary systems, and the Process
are effective and reproducible.
1.28 "PHS ACT" shall mean the United States Public Health Service Act,
as amended.
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1.29 "QUALIFIED" shall have the meaning set forth in Section 1.26 of the
Facilities Agreement.
1.30 "RADIOLABELLING REVENUES" shall mean payments made hereunder by
Coulter to Nordion for Radiolabelling Services, Readiness Payments, Cancellation
Fees and Facilities Engineering Fees as described in Exhibit 9.1 after
commencement of Commercial Supply.
1.31 "RADIOLABELLING SERVICES" shall mean use of the Process to produce
Labelled Drug that meets the Specifications on Coulter's behalf in accordance
with this Agreement.
1.32 "SPECIFICATIONS" shall mean the procedures, conditions and
characteristics set forth in Exhibit 1.32. Such Exhibit may be amended from time
to time upon mutual written agreement of the Parties.
1.33 "VALIDATION" shall mean the program mutually agreed to by the
Parties by which documented evidence provides a high degree of assurance that
the Process will consistently produce Labelled Drug that meets Specifications
and quality attributes as mutually agreed by the Parties.
ARTICLE 2
GENERAL MANUFACTURE AND SUPPLY OBLIGATIONS OF NORDION
2.1 LABELLED DRUG SUPPLY.
(a) Nordion agrees to use the Process to radiolabel B1 Antibody
with Isotope to produce Labelled Drug that meets the Specifications and is
manufactured in conformity with cGMP requirements and all other applicable laws,
rules and regulations of the United States and Canada and to ship Labelled Drug
as directed by Coulter. Subject to Force Majeure, during the term of this
Agreement and any renewal thereof, Nordion shall manufacture and provide Coulter
with Labelled Drug which may be ordered by Coulter under this Agreement for the
purposes of Clinical Trials of Labelled Drug and commercial sale of Labelled
Drug.
(b) Subject to the terms and conditions of this Agreement,
Nordion shall maintain the Batch Capacity necessary to produce [...***...], at
[...***...], of Labelled Drug per week for Coulter and Nordion hereby agrees to
produce such Batch of Labelled Drug per week if requested in writing by Coulter,
such Batch to be no larger in size than the Maximum Batch Size. It is understood
that Coulter may order a Batch which is smaller than the Maximum Batch Size
provided that Nordion may produce such a Batch size consistent with regulatory
requirements and subject to Process Performance Qualification for such smaller
batch size, the cost of which shall be borne by Coulter.
(c) In addition, Nordion agrees that upon [...***...] weeks
written notice (the "Increased Production Notice") from Coulter, Nordion will
establish and maintain the Batch Capacity necessary to produce up to
[...***...], each at [...***...], of Labelled Drug per week. After Nordion has
established the Batch Capacity to produce [...***...] of Labelled Drug per
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week, each at [...***...], Nordion will produce either [...***...] Batches of
Labelled Drug per week if requested in writing by Coulter, each such Batch to be
no larger in size than the Maximum Batch Size. It is understood that Coulter may
order [...***...] of such Batches to be in an amount smaller than the Maximum
Batch Size provided that Nordion may produce such a Batch size consistent with
regulatory requirements and subject to Process Performance Qualification for
such smaller batch size, the cost of which shall be borne by Coulter.
(d) At any time after Nordion has increased its Batch Capacity to
[...***...] Batches of Labelled Drug per week as set forth in Section 2.1(c),
Coulter may, upon [...***...] weeks written notice, request that Nordion reduce
its Batch Capacity to [...***...] Batch, at [...***...], of Labelled Drug per
week and Nordion will make such a reduction, and then the terms of Section
2.1(b) will again apply.
(e) Except as set forth in Section 3.3, it is understood and
agreed that Coulter has no specific or minimum commitment to purchase any
amounts of Labelled Drug.
2.2 COMPLIANCE WITH LAW; HANDLING OF LABELLED DRUG. While the B1
Antibody, Isotope and Labelled Drug are in its possession or under its control,
Nordion shall be responsible for complying with all applicable statutory and
regulatory requirements of the United States and Canada regarding the
development, manufacture, handling, storage, labelling, packaging,
transportation and shipment of the Labelled Drug. In performing its obligations
under this Agreement, Nordion shall comply with all applicable environmental and
health and safety laws except where such failure to comply would have no
material adverse effect on Nordion's ability to perform hereunder and, except as
otherwise set forth in this Agreement, Nordion shall be solely responsible for
determining how to carry out these obligations. In addition to the foregoing, at
all times Nordion will take all reasonable actions necessary to avoid spills and
other safety concerns to persons, and damage to property or the environment
resulting from the B1 Antibody, Isotope and the Labelled Drug or any
intermediates or raw materials thereof.
2.3 TESTING AND DOCUMENTATION. Nordion shall certify in writing, to
Coulter's reasonable satisfaction, that each Batch of Labelled Drug was produced
and tested in compliance with (i) the Specifications, (ii) cGMP requirements,
(iii) the IND or BLA (whichever is applicable) relevant to the Labelled Drug,
and (iv) all other applicable regulatory documents, in accordance with
procedures agreed between Coulter and Nordion. The tests and analyses provided
in the Specifications and the written certification referenced therein may be
amended from time to time by mutual written consent of the Parties.
2.4 SITE OF MANUFACTURE. Nordion shall manufacture Labelled Drug in the
Interim Facility until the date upon which the Primary Facility is Qualified for
the manufacture of Labelled Drug as provided in the Facilities Agreement.
Thereafter, adhering to a program to be mutually agreed by the Parties, Nordion
shall transfer manufacture of the Labelled Drug to the Primary Facility.
2.5 NO SUBCONTRACTING. Under no circumstances will Nordion subcontract
out to a third party all or any part of the development, manufacturing or
testing of (i) the Labelled Drug, (ii) the Isotope or (iii) the B1 Antibody
without the prior written consent of Coulter. Except as set
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forth in the preceding sentence, Nordion may subcontract out to a third party
the development, manufacturing or testing of any materials used in the
manufacture of the Labelled Drug provided that (i) Nordion provides Coulter with
prior written notice of such subcontracting arrangement and any subsequent
changes thereto, (ii) Coulter may audit Nordion's subcontractor qualification
criteria and review Nordion's subcontractor audits and (iii) Coulter may direct
a replacement of such subcontractor whereupon Coulter shall reimburse Nordion
for all reasonable incremental costs associated with such replacement.
ARTICLE 3
GENERAL COULTER OBLIGATIONS
3.1 B1 ANTIBODY AND ISOTOPE SUPPLY. Coulter or, at Coulter's discretion,
its designee shall provide B1 Antibody, CD-20 antigen cells and Isotope to
Nordion in sufficient quantities and quality to allow Nordion to meet its
obligations hereunder, [...***...]. Nordion shall store B1 Antibody and CD-20
antigen cells in accordance with the Specifications. Coulter shall at all times
own: (i) the B1 Antibody, (ii) the Isotope, (iii) the Labelled Drug in-process,
(iv) the CD-20 antigen cells and (v) the Labelled Drug at Nordion. Nordion
agrees that it will use the Isotope, the CD-20 antigen cells and the B1 Antibody
provided by Coulter only for production of Labelled Drug, unless otherwise
instructed in writing by Coulter. The Parties expect that Coulter will contract
separately with Nordion for the supply of part or all of the amount of Isotope
necessary for Nordion's production of Labelled Drug pursuant to this Agreement.
However, Coulter shall remain free to contract with third parties for the supply
of all or part of the amount of Isotope required for Nordion's production of
Labelled Drug pursuant to this Agreement.
3.2 UNAVAILABILITY OR SCARCITY OF B1 ANTIBODY AND ISOTOPE. It is
understood that Coulter's obligation to supply B1 Antibody, CD-20 antigen cells
and Isotope to Nordion is conditional upon its ability to obtain a sufficient
supply of the B1 Antibody, CD-20 antigen cells and Isotope. Coulter will use
reasonable efforts to notify Nordion upon Coulter's knowledge of a shortage of
the B1 Antibody, CD-20 antigen cells or Isotope if such shortage will impact the
manufacture of the Labelled Drug. Coulter shall not be liable for any delays in
the supply of B1 Antibody, CD-20 antigen cells or Isotope under Section 3.1,
provided however that any such delays in B1 Antibody, CD-20 antigen cells or
Isotope supply will excuse Nordion's performance of actions related to that B1
Antibody, CD-20 antigen cells or Isotope to the extent Nordion's non-performance
was caused by the B1 Antibody, CD-20 anitgen cells or Isotope supply delay. In
the event of a shortage of B1 Antibody and/or CD-20 antigen cells, Coulter shall
supply Nordion with B1 Antibody and/or CD-20 antigen cells in proportion to
[...***...] divided by [...***...] (including Nordion) determined during the 90
day period prior to the shortage.
3.3 PREFERRED SUPPLIER STATUS.
(a) Until [...***...] in cumulative Radiolabelling Revenues have
been received by Nordion during the term of this Agreement, Nordion will be
[...***...] supplier of
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radiolabelling services for the B1 Antibody for [...***...] and Coulter will
purchase Labelled Drug for sale in the [...***...] from Nordion.
(b) For each consecutive twelve-month period commencing after
[...***...] in cumulative Radiolabelling Revenues have been received by Nordion
during the term of this Agreement, Coulter shall be obligated to purchase its
[...***...] from Nordion in such twelve-month period as follows:
(i) If Coulter's [...***...] in such twelve-month period
are less than [...***...], Coulter shall be required to purchase from Nordion
[...***...] of its Radiolabelling Services requirements for such twelve-month
period.
(ii) If Coulter's [...***...] in a given twelve-month
period are more than [...***...], Coulter shall be required to purchase from
Nordion at least [...***...] of its [...***...], or [...***...] of its
[...***...], whichever is [...***...].
(iii) In the event Coulter does not comply with Subsection
3.3(b)(i) or (ii), whichever is applicable, Coulter shall, within thirty (30)
days of the end of such twelve-month period, make a [...***...] payment to
Nordion for the [...***...] (x) what was due under [...***...] or (ii), as
applicable, for such twelve-month period and (y) [...***...] during such
twelve-month period in the form of Radiolabelling Revenues, whereupon Coulter
shall be deemed to have complied with this Section 3.3(b) for such twelve-month
period.
(c) Notwithstanding anything in this Section 3.3, (i)
Coulter shall have the right to qualify one or more alternative sources for
radiolabelling services for the B1 Antibody and Nordion agrees to use
commercially reasonable efforts to assist Coulter in that regard, at Coulter's
expense; (ii) Coulter shall have the right to use third parties for process
development work related to radiolabelling services for the B1 Antibody and any
amounts spent by Coulter on such work shall not be included in the calculations
set forth in Sections 3.3(a) and 3.3(b); and (iii) in the event that Nordion is
unable or unwilling to produce Labelled Drug in accordance with this Agreement,
in quantities sufficient to allow Coulter to comply with its obligations under
this Section 3.3 or to meet Coulter's commercial demand for the Labelled Drug in
the [...***...] (the "Failure to Supply"), then [...***...] of Section 3.3(a)
and the minimum purchase terms of Section 3.3(b), as the case may be, shall no
longer apply to Coulter with respect to the amounts of Labelled Drug which
Nordion is unable to supply for the period of time during which Nordion is
unable to supply Coulter with Labelled Drug. Furthermore, in the event of a
Failure to Supply at any time after [...***...] in cumulative Radiolabelling
Revenues have been received by Nordion hereunder, then the percentages set forth
in Section 3.3(b)(i) or the percentages and dollar purchase commitments under
Section 3.3(b)(ii), as the case may be, will be pro rated for the twelve-month
period during which the Failure to Supply occurred by multiplying such
percentage and dollar purchase commitment amounts, as the case may be, by a
fraction, the numerator of which is the number of days in the applicable
twelve-month period during which the Failure to Supply did not occur and the
denominator of which is 365.
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(d) Nordion, at its sole expense and through an independent
certified public accountant reasonably acceptable to Coulter, shall have the
right to access the books and records of Coulter for the sole purpose of
verifying whether Coulter is complying with its obligations under this Section
3.3. Such audit shall be conducted upon six (6) weeks prior written notice to
Coulter during ordinary business hours and may be conducted only once for each
calendar year, commencing no earlier than ninety (90) days following the end of
such calendar year and no later than three (3) years following the end of such
calendar year. Nordion agrees to keep in strict confidence all information
learned in the course of such audit, except when it is necessary to reveal such
information in order to enforce its rights under this Agreement. Nordion's right
to have such records examined shall survive termination or expiry of this
Agreement for a period of two (2) years. In the event that Coulter did not
comply with Section 3.3, Coulter shall promptly remit to Nordion any amount
Coulter would have owed Nordion had Coulter complied in full with Section 3.3.
Nordion shall bear the full cost of such audit unless such audit discloses an
underpayment by Coulter during the calendar year in question of more than
[...***...] of the amount actually due (provided that such underpayment is at
least [...***...] during such year), in which event Coulter shall reimburse
Nordion for the costs of such audit.
ARTICLE 4
TERM
4.1 INITIAL TERM. The term of this Agreement shall commence upon the
Effective Date and, unless terminated earlier pursuant to Article 11, or
extended pursuant to Section 4.2, shall expire upon the [...***...]
anniversary of the Effective Date (the "Initial Term"). However, notwithstanding
the foregoing, if, by [...***...], Commercial Supply has not commenced, Nordion
may, upon written notice to Coulter, extend the Agreement for [...***...] for
each [...***...] delay of Commercial Supply, or part thereof incurred thereafter
by Coulter, for a total maximum of [...***...] ("Adjusted Initial Term"). In the
event Nordion is entitled to extend the Initial Term of the Agreement under this
Section 4.1, Nordion shall provide written notice to Coulter of Nordion's intent
to extend the Initial Term at least [...***...] prior to the expiry of the
Initial Term.
4.2 EXTENSION OF TERM. The term of this Agreement shall be automatically
extended for an additional [...***...] after expiration of the Initial Term, or
Adjusted Initial Term, whichever is later, unless, at least [...***...] prior to
expiration of the Initial Term or Adjusted Initial Term, whichever is later (the
"Notice Date"), either Party notifies, in writing, the other Party it does not
desire to extend the term of the Agreement. At least [...***...] prior to the
Notice Date, the Parties agree to meet to discuss, in good faith, their
intentions with respect to whether to extend the term of this Agreement.
ARTICLE 5
ORDERS AND SHIPMENTS
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5.1 PRODUCTION PLANNING FOR CLINICAL TRIAL SUPPLY. During the first
[...***...] business days of each month, Nordion and Coulter will establish a
schedule of Batch runs for Clinical Trial supply for the next [...***...]. In
addition, Coulter will provide an estimate of requirements for the [...***...]
following the date upon which such schedule is established. This approach to
Clinical Trial production planning may be modified as mutually agreed to by the
Parties based upon Coulter's experience in conducting Clinical Trials and
Nordion's experience in supplying for Clinical Trials. Subject to Section 9.2
and notwithstanding anything else in this Section 5.1, Coulter may cancel any
Batch ordered under the schedule required by this Section.
5.2 PRODUCTION PLANNING FOR COMMERCIAL SUPPLY. During the first
[...***...] business days of each month, Nordion and Coulter will establish a
schedule of Batch runs and anticipated Batch sizes for Commercial Supply for the
next [...***...]. Coulter shall provide Nordion with confirmation of Batch size
no later than [...***...] prior to a Scheduled Batch Completion Date as such
term is defined in Section 9.2. This approach to production planning may be
modified as mutually agreed to by the Parties based upon Coulter's and Nordion's
experience in Commercial Supply. Subject to Section 9.2 and notwithstanding
anything else in this Section 5.2, Coulter may cancel any Batch ordered under
the schedule required by this Section.
5.3 PRODUCTION PLANNING SCHEDULED MAINTENANCE. Nordion shall be entitled
to shutdown the Interim and/or Primary Facility(ies) for scheduled maintenance
for a maximum period not to exceed [...***...]. The scheduling of the shutdown
shall be mutually agreed by both Parties.
ARTICLE 6
SHIPPING AND CLAIMS
6.1 AUTHORIZATION TO SHIP LABELLED DRUG. Prior to shipment of Labeled
Drug Nordion will request, and Coulter will provide (or deny, as appropriate to
the circumstances) approval for Nordion to ship each lot of Labelled Drug.
Nordion reserves the right to refuse to ship, for human use, any Batch of
Labelled Drug which fails to meet Specifications.
6.2 PERMISSION TO RECEIVE. Coulter will provide Nordion with a list of
destinations to which Nordion will be requested to ship Labelled Drug, prior to
the first shipment of Labelled Drug to such site(s). Nordion will promptly
review each site's license with respect to its ability to receive Isotope such
list and advise Coulter of any regulatory requirements for documentation
establishing the legal authority of such sites to receive and possess Isotope.
Coulter shall promptly provide Nordion with such documentation. No later than
[...***...] prior to Nordion's shipment of Labelled Drug to any new site
requested by Coulter, Coulter shall provide Nordion with documentation
establishing the legal authority of such new site to receive and possess
Labelled Drug.
6.3 DELIVERY; SHIPMENT. The Labelled Drug supplied under this Agreement
will be shipped FOB Nordion's facility. Nordion shall make shipping arrangements
with the carriers mutually agreed upon by the Parties, such agreement not to be
unreasonably withheld, and designated in writing by Coulter from the FOB point.
All direct shipping costs reasonably
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incurred shall be borne by Coulter. Nordion will use all reasonable efforts to
trace any shipments not delivered as ordered.
6.4 LATENT DEFECTS. After Coulter provides its approval to ship, if
either Party discovers that, for whatever reason, the Labelled Drug is not
produced in accordance with the Specifications, does not meet the Specifications
or is shipped improperly, then the discovering Party shall promptly communicate
with the other Party to determine a mutually agreed course of action. If Coulter
determines that the failure to meet the Specifications or improper shipment
results from an act, failure to act, or other fault of Nordion or any agent of
Nordion, whether or not deliberate or willful, then Nordion will promptly fully
reimburse Coulter for actual, direct damages sustained as a result of the
failure(s) of the affected Batch(es) or part or parts thereof, as appropriate.
Such costs shall include the following: [...***...]. In the event that Nordion
disputes Coulter's determination that the fault is due to Nordion and/or to its
agent, the Parties will select a mutually agreeable outside consulting firm
which will be instructed to review the applicable information and data and to
confirm or dissent from Coulter's determination. If the consulting firm confirms
Coulter's determination, Nordion will have the obligations set forth above in
this Section 6.4 and Nordion will pay the fees of such consulting firm. If the
consulting firm dissents from Coulter's determination, Nordion will not have the
obligations set forth above in this Section 6.4 with respect to the disputed
Batch, or portion thereof, of Labelled Drug and Coulter will pay the fees of
such consulting firm.
ARTICLE 7
PERFORMANCE STANDARDS
Among Nordion's obligations under this Agreement, Nordion has agreed:
(i) to maintain Batch Capacity to produce, upon the request of Coulter,
[...***...] Batch per week of [...***...]; (ii) upon [...***...] written notice
from Coulter, to maintain Batch Capacity to produce, upon the request of
Coulter, [...***...] per week of [...***...]; (iii) to produce Labelled Drug and
ship such Labelled Drug as directed by Coulter in an accurate and timely manner;
(iv) to maintain appropriate documentation of all production and shipping
activities under this Agreement, (v) to use all reasonable commercial efforts to
trace shipments not delivered as ordered, (vi) to comply with all regulatory
requirements, including, but not limited to, cGMP and (vii) to comply on a
timely basis with all requests from any governmental entity regarding
inspections and other activities associated with obtaining and maintaining
registration of the Labelled Drug (collectively, the "Performance Standards")
and the manufacturing site. In the event that, for whatever reason other than
Force Majeure or other delays caused solely by an act or failure to act by
Coulter, Nordion fails to meet one or more of the Performance Standards or
determines that it will not be able to meet one or more of the Performance
Standards, Nordion and Coulter shall immediately meet to discuss the matter in
good faith. At such meeting, Nordion shall provide Coulter with its best
estimate as to when it will be able to meet all the Performance Standards.
Unless Nordion is able to provide Coulter with reasonable assurances that all
Performance Standards will be met [...***...] of the date of such meeting, then
(i) during the period of time in which Nordion estimates it will be unable to
meet the Performance Standards and during any period when Nordion is unable to
actually meet such Performance Standards and (ii) for
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[...***...] thereafter, Coulter's obligations as set forth in Section 3.3(a) (if
applicable at the time) will be suspended and Coulter's obligations as set forth
in Section 3.3(b) (if applicable at the time) will be reduced on the same pro
rata basis as is set forth in Section 3.3(c).
ARTICLE 8
REGULATORY MATTERS
8.1 INFORMATION REGARDING REGULATORY APPROVALS. Upon Nordion's
reasonable request, Coulter shall provide updates to Nordion of (i) the progress
of clinical development of the Labelled Drug and (ii) the fact of any IND or BLA
submissions to the FDA relating to the Labelled Drug and (iii) copies of the
applicable sections of any regulatory filings which reference Nordion or Nordion
activities. In addition, Coulter shall promptly advise Nordion, at Nordion's
request, in matters pertaining to U.S. regulatory requirements relating to
Nordion's activities hereunder. Coulter shall also provide to Nordion reasonable
advance notice of any regulatory submission containing information or data
provided by Nordion to Coulter, which Coulter intends and is permitted to
disclose to regulatory agencies under this Agreement. Nordion shall also provide
to Coulter reasonable advance notice of any regulatory submission containing
information or data provided by Coulter to Nordion which Nordion intends and is
permitted to disclose to regulatory agencies under this Agreement.
8.2 COULTER LICENSES, REGISTRATIONS, LISTINGS, AUTHORIZATIONS AND
APPROVALS.
(a) COULTER RESPONSIBILITIES. Coulter or its designee shall be
responsible for obtaining and maintaining such drug licenses, registrations,
listings, authorizations and approvals as the FDA or any other applicable
governmental entity may require to enable use of Labelled Drug in Clinical
Trials and marketing of Labelled Drug wherever such activities will occur.
Nordion shall take all reasonable actions necessary to assist Coulter in
obtaining and maintaining all licenses, registrations, listings, authorizations
and approvals of any governmental entities necessary for the use of Labelled
Drug in Clinical Trials and marketing of Labelled Drug wherever such activities
will occur. Coulter and/or its designee shall serve as the point of contact with
the FDA and any other applicable governmental entity concerning licenses,
registration, authorizations or approvals required to use the Labelled Drug in
Clinical Trials or market the Labelled Drug, but may, as appropriate, request
Nordion's assistance with FDA and/or other applicable governmental entity
communications.
(b) NORDION PRODUCT APPROVAL EFFORTS. Nordion shall use its best
efforts, at [...***...] expense, to update its (131)I bulk chemical or facility
description Drug Master File ("DMF") with the FDA, as may be required for the
chemistry, manufacture, and control ("CMC") section for the IND or BLA for the
Labelled Drug, or corresponding portions of any submission for a license,
registration, authorization, or approval required by other applicable
governmental entities in Canada for Clinical Trials or for marketing the
Labelled Drug ("Canadian DMF"). Nordion hereby grants to Coulter a right of
reference to such DMF and Canadian DMF. Upon Coulter's request, Nordion shall
provide for Coulter:
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(i) a letter of access to the DMF and the Canadian DMF
allowing regulatory review of the DMF and the Canadian DMF by the FDA in
conjunction with Coulter's Labelled Drug regulatory submission, and
(ii) any information related to the Process required for
CMC purposes or for comparable purposes in Canada. In the event that Nordion is
contacted by the FDA regarding the DMF or Canadian DMF, Nordion shall promptly
provide Coulter with notice of such contact and provide written confirmation to
Coulter within [...***...] that Nordion received inquiries from the FDA and
shall advise Coulter of the estimated time of response. Nordion shall respond
promptly to any and all such FDA inquiries.
8.3 NORDION LICENSES, REGISTRATIONS, AUTHORIZATIONS AND APPROVALS.
Nordion shall be responsible for obtaining and maintaining all necessary
licenses, registrations, authorizations, and approvals other than those required
to market the Labelled Drug or use it in Clinical Trials which are necessary to
develop, manufacture, handle, store, label, package, transport and ship Labelled
Drug under cGMP conditions and other regulatory requirements including, but not
limited to, the use and handling of radioactive materials. Except with respect
to correspondence relating directly to the DMF or Canadian DMF, Nordion shall
provide Coulter with copies of any correspondence sent from Nordion to
governmental entities relating to Labelled Drug at the time such correspondence
is sent by Nordion, purged of Nordion proprietary and/or confidential
information and trade secrets. Nordion shall provide Coulter with copies of any
comments, responses, notices or other correspondence received by Nordion from
any governmental entity relating to Labelled Drug within [...***...] of receipt
of such correspondence by Nordion purged of any Nordion proprietary information
and/or trade secrets.
8.4 GOVERNMENT INSPECTIONS, COMPLIANCE REVIEWS AND INQUIRIES.
(a) Upon the request of any governmental entity or any third
party entity authorized by a governmental entity, such entity shall have access
to observe and inspect Nordion's facilities and procedures used for the storage
of B1 Antibody and the manufacture, testing, storage or shipment of Labelled
Drug, including process development and manufacturing operations, and to audit
such facilities for compliance with cGMP and/or other applicable regulatory
standards. To the extent that it has advance notice, Nordion shall give Coulter
prompt notice of any upcoming inspections or audits by a governmental entity (or
a third party authorized by a governmental entity) of the above-mentioned
facilities or procedures and shall provide Coulter an opportunity to have a
representative of Coulter on-site, but not in attendance with officials during
such inspection or audit. During the FDA's pre-approval inspection, Coulter
shall have a representative in attendance as an observer. In all events, Nordion
shall provide Coulter with (i) a verbal summary of such inspection or audit at
the end of each day in which inspection activity occurs and (ii) a written
report promptly thereafter.
(b) Nordion also agrees to notify Coulter within [...***...] of
any written or oral inquiries, notifications, or inspection activity by any
governmental entity (or any third party authorized by a governmental entity) on
matters which could adversely affect, whether directly or indirectly, Nordion's
ability to perform under this Agreement. Nordion shall provide a
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reasonable description to Coulter of any such governmental inquiries,
notifications or inspections promptly (but in no event later than [...***...])
after such visit or inquiry. Nordion shall furnish to Coulter (i) within
[...***...] after receipt, a summary of any report or correspondence issued by
the governmental entity (or a third party authorized by a governmental entity)
in connection with such visit or inquiry, including but not limited to, any FDA
Form 483 (List of Inspectional Observations) or warning letter and (ii) not
later than [...***...] after the time it provides such to a governmental entity,
summaries of any and all proposed responses or explanations relating to items
set forth above (each, a "Proposed Response"), in each case purged only of trade
secrets or other confidential or proprietary information of Nordion. After the
filing of a response with the appropriate governmental entity, Nordion will
notify Coulter of any further oral and/or written contacts with a governmental
entity (or a third party authorized by a governmental entity) relating to
Nordion's production of the Labelled Drug.
(c) Nordion shall notify Coulter of any other production issues
or other information of which Nordion becomes aware which may affect the
regulatory status of the Labelled Drug or the ability of Nordion to supply
Labelled Drug in accordance with Coulter's needs.
(d) Nordion agrees to promptly rectify or resolve any
deficiencies noted by a governmental entity (or a third party authorized by a
governmental entity) in a report or correspondence issued to Nordion, provided
such deficiency is not related to any new or amended regulatory requirement as
described in Section 8.13, in which case Section 8.13 would apply instead.
8.5 NORDION FACILITIES AND RECORDS.
(a) Coulter shall have reasonable access to Nordion's Interim and
Primary Facilities and related procedures:
(i) at least [...***...], for the purpose of observing
process development relating to the Labelled Drug, and
(ii) [...***...], for the purpose of auditing such
facilities for compliance with Specifications, cGMP and other applicable
regulatory requirements and standards relating to the Labelled Drug.
(b) Employees of Coulter who visit Nordion's facilities shall at
all times comply with Nordion's rules and regulations.
8.6 RECORDS AND REPORTS. Nordion shall maintain all records necessary to
evidence compliance with (i) all applicable laws, regulations and other
requirements of applicable governmental entities in the United States and Canada
relating to the manufacture of the Labelled Drug; (ii) relevant sections of the
IND or BLA (whichever is applicable) relevant to the Labelled Drug, and
corresponding licenses, registrations, authorizations or approvals for foreign
jurisdiction(s) as advised by Coulter and agreed between the Parties; and (iii)
the Specifications. Nordion shall also maintain records with respect to its
obligations and performance under this
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Agreement. All such records shall be maintained at Nordion for at least that
amount of time as required by law, regulation or cGMP. Prior to destruction of
any record after such time, Nordion shall give written notice to Coulter upon
which Coulter shall have the right to request that Nordion maintain such records
in an off-site storage facility for such longer period as Coulter requests,
provided that Coulter pays all reasonable costs associated with such off-site
storage. Upon Coulter's prior written request and at Coulter's sole expense,
Nordion agrees to provide Coulter with access to such records which are stored
at an off-site facility. Coulter will also receive monthly activity reports
accompanying Nordion's monthly invoices. Upon request from Coulter, Nordion
agrees to provide reports on production activity, yields, assay results, and
deviations from any procedure or process which impinges on Labelled Drug all
according to formats requested by Coulter, as developed initially and as
modified over time, at compensation to be determined.
8.7 QUALITY CONTROL PROGRAM; ADDITIONAL TESTING PROGRAMS. Nordion shall
maintain a quality control program consistent with cGMP, as required by the FDA
and/or any other governmental entity in the United States and Canada, with
respect to Nordion's manufacture of Labelled Drugs hereunder. In addition,
Nordion will perform such additional testing programs, and provide Coulter with
documentation arising from such testing programs, as may be specified in the
Specifications.
8.8 RETENTION OF SAMPLES. Subject to agreement between the Parties,
Nordion shall retain such quantities of Labelled Drug from each Batch as Coulter
shall reasonably request. Retained samples shall be maintained in a suitable
storage facility (under conditions set forth in the Specifications) for such
time as Coulter may reasonably require. All such samples shall be available for
inspection and testing by Coulter at reasonable times and upon reasonable
notice.
8.9 SAFETY AND HANDLING INFORMATION. Each Party will provide the other
Party with periodic reports of any information such Party has regarding the safe
handling and processing of Labelled Drug.
8.10 COMPLAINTS AND ADVERSE REACTIONS. Nordion shall, within
[...***...], advise Coulter of any complaints that materially affect the
Labelled Drug adverse reaction reports, safety issues or toxicity issues
relating to the Labelled Drug of which it becomes aware, regardless of the
origin of such information. Nordion shall provide a summary to Coulter of any
other complaints at least [...***...]. Coulter's obligation to notify Nordion
promptly of such complaints shall extend only to those complaints which may have
a relevance to the manufacturing activities conducted by Nordion and shall not
extend to complaints or adverse reactions due to inherent Labelled Drug
characteristics or to those arising from the activities of third parties
unrelated to Nordion. Nordion agrees to cooperate with Coulter and any
governmental entity in evaluating any complaint, claim, or adverse reaction
report related to the manufacture of the Labelled Drug.
8.11 RECALLS. Coulter shall notify Nordion promptly if the Labelled Drug
is the subject of a recall, market withdrawal or correction (a "Recall"), and
Coulter and/or its designee shall have sole responsibility for the handling and
disposition of such Recall. Coulter and/or its
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designee shall bear the costs of all Recalls of Labelled Drug unless such Recall
shall have been solely the result of Nordion's breach of any of the warranties
set forth in Section 13.2 hereof, or any latent defects for which Nordion is
responsible under Section 6.4, in which case Nordion will promptly fully
reimburse Coulter for actual, direct costs sustained as a result of the Recall.
Such costs shall include the following: [...***...]. In the event that Nordion
disputes Coulter's determination that the fault is due to Nordion and/or to its
agent, the Parties will select a mutually agreeable outside consulting firm
which will be instructed to review the applicable information and data and to
confirm or dissent from Coulter's determination. If the consulting firm confirms
Coulter's determination, Nordion will pay the fees of such consulting firm. If
the consulting firm dissents from Coulter's determination, Nordion will not have
the obligations set forth above in this Section 8.11 with respect to the Recall
and Coulter will pay the fees of such consulting firm. Coulter and/or its
designee shall maintain records of all sales of Labelled Drug and customers
sufficient to adequately administer a Recall, market withdrawal or correction
for a period of [...***...] after termination or expiration of this Agreement.
Except as required by law, Coulter and/or its designee shall serve as the sole
point of contact with the FDA or other applicable governmental entity concerning
any Recalls, market withdrawals or corrections with respect to the Labelled
Drug. In the event that Nordion is required to communicate with the FDA with
respect to Recall of the Labelled Drug, Nordion shall within one business day
notify Coulter of such communication.
8.12 APPROVAL FOR MANUFACTURING CHANGES. Nordion agrees that no changes
will be made to any materials, Specifications, equipment or methods of
production or testing of any Labelled Drug, without Coulter's prior written
approval, not to be unreasonably withheld. Subsequent to such approval of
Coulter, Nordion may then make such approved changes in manufacturing
procedures, so long as, in any event, (i) such changes are permitted by
applicable government regulations and the terms of any licenses, registrations,
authorizations, or approvals previously granted by the applicable governmental
entity in the United States or Canada with respect to such Labelled Drug and
(ii) Coulter receives copies of all documentation relating to such approved
changes. If the changes require the additional license, registration,
authorization, or approval of any applicable governmental entity in the United
States or Canada, Nordion may not implement the changes until it receives
written notice from Coulter that the governmental entity in the United States or
Canada has authorized or approved the change. Nordion shall cooperate fully with
Coulter in preparing, and will provide all necessary data and information for, a
submission requesting authorization or approval of a change in materials,
specifications, equipment or methods of production or testing of the Labelled
Drug.
8.13 NEW REGULATORY REQUIREMENTS. Each Party shall promptly notify the
other of new or amended regulatory requirements of which it becomes aware which
are relevant to the manufacture of Labelled Drug under this Agreement and which
are required by the FDA, other applicable governmental entity in the United
States or Canada, or other applicable laws or governmental regulations and shall
confer with each other with respect to the best means to comply with such
requirements.
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ARTICLE 9
PAYMENTS
9.1 PURCHASE PRICE.
(a) GENERAL. [...***...], Nordion will provide Coulter with an
invoice for the Purchase Price (as defined in subsections (b) and (c) of this
Section 9.1) for each Batch of the Labelled Drug shipped to Coulter or Coulter's
designees and not previously invoiced. Such invoices will be due and payable
within thirty (30) days of receipt by Coulter. All amounts due to Nordion
pursuant to this Agreement shall be payable in U.S. dollars.
(b) PURCHASE PRICE FOR CLINICAL TRIAL SUPPLY. The purchase price
for each Batch of the Labelled Drug that is produced by Nordion upon request of
Coulter and that meets Specifications for use in Clinical Trials shall be equal
to [...***...].
(c) PURCHASE PRICE FOR COMMERCIAL SUPPLY. For each Batch of
Labelled Drug produced by Nordion upon request of Coulter and that meets
Specifications for Commercial Supply, the purchase price shall be that amount
set forth on Exhibit 9.1 (as adjusted pursuant to the terms of this Agreement)
or such other price as is set forth and accepted on the purchase order for a
specified Batch. In addition, Coulter shall pay to Nordion a Facilities
Engineering Fee as set forth in Exhibit 9.1.
(d) CURRENCY ADJUSTMENT. (i) The price related to Batches and the
incremental price of additional vials of Labelled Drug to be supplied,
Facilities Engineering Fee, Readiness Payments and Cancellation Fees may be
currency exchange adjusted by Nordion on January 1 of each year, starting
[...***...] if the CRE is lower than the BRE by more than [...***...]. The
applicable currency exchange adjusted $US Price shall be that amount by which
the CRE is lower than the BRE in excess of [...***...] and shall be calculated
as follows:
Price ($US) X [...***...] = Exchange Adjusted $US price
(ii) The price related to Batches and incremental price for
additional vials of Labelled Drug to be supplied, Facilities Engineering Fee,
Readiness Payments and Cancellation Fees may be currency adjusted by Nordion
upon the request of Coulter on January 1 of each year, starting [...***...]. The
applicable currency exchange adjusted $US Price shall be that amount by which
the CRE is higher than the BRE in excess of [...***...] and shall be calculated
as follows:
Price ($US) X [...***...] = Exchange Adjusted $US price
(iii) Nordion or Coulter as the case may be shall, on or before
November 15th prior to any given year in which currency adjustment is
applicable, provide the other with written notice of any currency exchange
adjustment applicable for the following year commencing January 1.
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(e) The Batch incremental price for additional vials for Clinical
Trials and Commercial Supply, Cancellation Fees, Readiness Payments and Facility
Engineering Fees set out in this Agreement shall be subject to increase
[...***...] in accordance with the increase in the [...***...] for the twelve
(12) months period commencing three (3) months prior to the anniversary of each
consecutive twelve (12) month period during the term of this Agreement; provided
however that any price increase shall not exceed [...***...] of the then current
price or fee. If the increase in the [...***...] is greater than [...***...] in
a given twelve (12) month period, Nordion may add the difference between
[...***...] and the actual percent increase to the amount of any percent
increase in the following twelve (12) month period, subject to the [...***...]
described in this section. For purposes of clarity, the first escalation, if
any, should occur on January 1, 2000.
9.2 CANCELLATION FEES AND READINESS PAYMENTS. Each date on which Nordion
is scheduled to complete production of a new Batch pursuant to Coulter's orders
under this Agreement shall be deemed to be a "Scheduled Batch Completion Date."
Each date on which Nordion actually completes production of a new Batch pursuant
to Coulter's orders under this Agreement shall be deemed to be a "Batch
Completion Date." At any point in time under this Agreement, the most recent
date upon which Nordion has completed production of a new Batch pursuant to
Coulter's orders under this Agreement shall be deemed to be the "Last Batch
Completion Date. Subject to any additional payments set forth in this Section
9.2, Coulter may cancel a scheduled Batch at any time prior to the Scheduled
Batch Completion Date for such Batch run.
(a) In the event that Coulter cancels a scheduled Batch run
[...***...] prior to the Scheduled Batch Completion Date for such run and such
Batch was to be used in Clinical Trials or for Commercial Supply, Coulter shall
pay Nordion a [...***...] cancellation fee ("Cancellation Fee") for each
canceled or for Commercial Supply Batch. Such fee shall be Nordion's sole remedy
in the event of such cancellation.
(b) Until such time as Commercial Supply has commenced, if,
during a [...***...] period commencing on the Last Batch Completion Date,
Nordion has not produced any Labelled Drug due to a failure by Coulter to place
an order for Labelled Drug with a Scheduled Completion Date which occurs during
such [...***...] period, Coulter shall pay Nordion [...***...] for each
consecutive full [...***...] period commencing after the Last Batch Completion
Date, until such time as the next Batch Completion Date occurs. Each such
payment shall be deemed a "Readiness Payment". For the avoidance of doubt, this
Section 9.2(b) shall no longer apply after commencement of Commercial Supply.
(c) This Section 9.2(c) shall only apply if the following
conditions are met (i) Nordion has established the Batch Capacity to produce
[...***...] pursuant to Section 2.1(c); and (ii) Nordion has not reduced its
Batch Capacity to [...***...] per week pursuant to Section 2.1(d). If the
foregoing conditions are met at any time, and if Coulter has not purchased at
least [...***...] Batches of Labelled Drug for delivery in each [...***...]
period (a "Triggering Event"), Coulter shall pay Nordion [...***...] for each
week during such [...***...] period in which Coulter purchased one Batch or
less. Each payment made under this Section 9.2(c) shall
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be deemed a "Readiness Payment". This provision shall not apply during scheduled
maintenance which has been agreed by both Parties.
For purposes of this Section 9.2 only, if Coulter places an order and
subsequently cancels such order, Coulter will not be deemed to have "placed an
order". In the event any Cancellation Fee(s) are incurred hereunder during a
period of time in which any Readiness Payment(s) are incurred hereunder, the
payment of the Cancellation Fee(s) for such period of time shall be independent
of any obligations of Coulter to pay Readiness Payments during such period of
time. Readiness Payments and Cancellation Fees shall not be deemed to be
Radiolabelling Revenues or North American Market Requirements.
9.3 RECORDS. Nordion shall keep accurate books and accounts of record in
connection with the manufacture by it of the Labelled Drug in sufficient detail
to permit accurate determination of all figures necessary for verification of
all compensation required to be paid pursuant to Section 9.1. Nordion shall
maintain such records for a period of three (3) years after the end of the year
in which they were generated.
ARTICLE 10
LICENSES, PATENTS AND TECHNOLOGY
10.1 LICENSE. Coulter hereby grants Nordion [...***...] license during
the term of this Agreement to use the data, information and technology provided
by Coulter to Nordion which relates to B1 Antibody radiolabelling, for the
limited purpose of assisting Nordion in carrying out its obligations under this
Agreement.
10.2 OWNERSHIP OF WORK PERFORMED.
(a) For purposes of this section, "Background Technology" shall
mean all Nordion proprietary technology, including patents, know-how,
techniques, methods, processes and trade secrets which Nordion owns or which is
licensed to Nordion by a party other than Coulter and which is in existence in
the form of a writing, prototype or can otherwise be demonstrated to be the
property of Nordion, prior to the effective date of the Development Agreement.
The Background Technology shall remain the sole property of Nordion.
(b) Nordion agrees and Coulter acknowledges, that any and all
ideas, improvements, inventions and works of authorship conceived, written,
created or first reduced to practice in the performance of this Agreement,
except to the extent that it relates to or embodies the Background Technology or
improvements to the Background Technology, shall be the sole and exclusive
property of Coulter. Except as set forth in this Section 10.2, Coulter is and
shall be vested with all right, title and interest, including patent, copyright
and trade secret rights, in such ideas, improvements, inventions and works of
authorship. Nordion hereby assigns to Coulter all right, title and interest in
and to any and all such ideas, improvements, inventions and works of authorship.
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(c) Coulter hereby grants to Nordion [...***...] license to
exploit all ideas, improvements, inventions and works of authorship assigned to
or vested in Coulter as described in Sections 10.2(b) or 10.2(c) for any
application, except the manufacture of any pharmaceutical for the treatment of
hematological malignancy.
10.3 COULTER PROPRIETARY INFORMATION. All data, information, or
technology supplied to Nordion by Coulter to assist Nordion in carrying out its
obligations hereunder shall remain the property of Coulter and shall be returned
by Nordion to Coulter upon termination of this Agreement.
10.4 PATENT APPLICATIONS.
(a) Nordion shall execute all papers, including patent
applications, invention assignments and copyright assignments, and otherwise
shall assist Coulter as reasonably required to perfect in Coulter the rights,
title and other interests in Nordion's work product expressly granted to Coulter
under this Agreement. Reasonable costs related to such assistance, if required,
shall be paid by Coulter.
(b) Notwithstanding any other provision of this Agreement, in the
event that Nordion requests in writing that Coulter file, maintain and prosecute
a patent application pertaining to rights granted to Nordion pursuant to Section
10.2(c) hereof, then Coulter shall have thirty (30) days to inform Nordion
whether or not such application will be made. In the event that Coulter fails to
inform Nordion of its intent to proceed with the requested patent application
within such thirty (30) day period, then Nordion shall have the sole right to
proceed with the filing, prosecution and maintenance of such patent application,
at its sole expense. Any patent resulting therefrom shall be the sole property
of Nordion, subject only to Coulter's [...***...] right to use and sublicense
the use of such patent in connection with products based on the (131)I-labelled
B1 Antibody. Coulter shall execute all papers, including patent applications and
invention assignments, and otherwise shall assist Nordion as reasonably required
to perfect in Nordion the patent rights described in this Section 10.4(b).
ARTICLE 11
TERMINATION
11.1 TERMINATION FOR BREACH. This Agreement may be terminated by either
Party in the event of the material breach by the other Party of the terms and
conditions hereof; provided, however, the other Party shall first give to the
breaching Party written notice of the proposed termination of this Agreement (a
"Breach Notice"), specifying the grounds therefor. An "event of material breach"
by Nordion shall include, but not be limited to, a failure by Nordion to meet
the Performance Standards as set forth in Article 7 of this Agreement. Upon
receipt of the Breach Notice, the breaching Party shall have [...***...] with
respect to a failure by Coulter to pay any amounts hereunder when due, other
than with respect to amounts which Coulter, in good faith, disputes are due to
Nordion) to respond by curing such breach within such cure period. If the
breaching Party does not cure such breach, the other Party may terminate this
Agreement.
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Subject to Section 16.4, termination of this Agreement and the Facilities
Agreement pursuant to this section shall not affect any other rights or remedies
which may be available to the non-breaching Party.
11.2 REMEDIES UPON TERMINATION OF THE FACILITIES AGREEMENT AND THIS
AGREEMENT BY NORDION. If Nordion terminates the Facilities Agreement and the
Supply Agreement for any reason permitted by Section 6.1, 6.3 or 11.4 of the
Facilities Agreement or Section 11.1, 11.7 or 16.5 of this Agreement, Nordion
shall (i) retain all amounts paid by Coulter to Nordion prior to such
termination, (ii) except for [...***...], return all assets which are owned by
Coulter and in Nordion's possession and for which Coulter has paid all amounts
due to Nordion pursuant to the Facilities Agreement (iii) be entitled to
reimbursement from Coulter for the [...***...], and (iv) terminate all
activities under this Agreement and the Facilities Agreement expeditiously so as
to minimize costs incurred by Coulter therefor. In addition to any amounts
otherwise due, Coulter shall further reimburse Nordion for all costs incurred
but not invoiced prior to the effective date of any such termination by Nordion,
including uncancellable third party contracts entered into pursuant to Nordion's
performance under the Facilities Agreement or this Agreement. In addition,
Coulter will [...***...], whereupon Coulter shall have no further obligations
under [...***...] of the Facilities Agreement. In addition to the foregoing, if
Nordion terminates the Facilities Agreement and this Agreement under Section 6.1
and 6.5 of the Facilities Agreement or if Nordion terminates the Facilities
Agreement and this Agreement under Section 11.1 and 11.10 of this Agreement,
Coulter shall pay to Nordion, in addition to any amounts otherwise due, within
thirty (30) days of termination, an amount equal to [...***...] multiplied by a
fraction, the numerator of which is the difference between sixty (60) and the
number of complete calendar months between commencement of Commercial Supply and
the date of breach, and the denominator of which is sixty (60); provided,
however, in no event shall such fraction be greater than 1.0. Such payment shall
be in recognition of the fact that Nordion performed work under the Facilities
Agreement on [...***...] prior to Coulter's breach, and shall fully compensate
Nordion for such work. In addition to any amounts otherwise due, Coulter shall
further reimburse Nordion for the reasonable cost of all materials purchased by
Nordion for purposes of its manufacturing obligations hereunder, provided that,
at Coulter's option and expense, Nordion either ships such materials to Coulter
or destroys such materials. If the basis for termination by Nordion pursuant to
Section 11.1 and 11.10 is a solely as a result of failure to pay by Coulter
under this Agreement or the Facilities Agreement, this Section 11.2 contains the
[...***...] remedies available to Nordion hereunder upon such termination.
11.3 REMEDIES UPON TERMINATION OF THE FACILITIES AGREEMENT AND THIS
AGREEMENT BY COULTER. If Coulter terminates the Facilities Agreement and the
Supply Agreement for any reason permitted by Section 6.1 or 6.3 of the
Facilities Agreement or Section 11.1 or 11.7 of this Agreement:
(a) within thirty (30) days of such termination, Nordion shall
deliver to Coulter all Moveable Equipment in its then current condition, subject
to any regulatory requirements to the contrary, at Nordion's expense; and
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(b) during the six (6) months following termination, if requested
by Coulter Nordion shall provide at least 80 peson-hours of the time of Nordion
employees, at no cost to Coulter, to assist Coulter in establishing a third
party facility for radiolabelling of B1 Antibody; and
(c) within thirty (30) days of such termination, Nordion shall,
at Nordion's expense, transfer to Coulter all remaining B1 Antibody and data,
documentation and other information directly relating to the Process subject to
any regulatory requirement to the contrary; and
(d) Nordion shall immediately deliver to Coulter [...***...];
provided, however, that Coulter shall [...***...]. Upon receipt of such
[...***...], Coulter will [...***...] , whereupon Coulter shall have no further
obligations under [...***...] of the Facilities Agreement. In the event that
Nordion fails to deliver the [...***...] under this Section 11.3(d), then,
notwithstanding Section 16.4 of this Agreement and Section 11.3 of the
Facilities Agreement, Nordion shall be liable to Coulter for [...***...],
including, but not limited to, [...***...]; and
(e) immediately upon such termination, all licenses granted to
Nordion under the Development Agreement, the Facilities Agreement and this
Agreement shall revert back to Coulter; provided, however, the licenses granted
by Coulter to Nordion pursuant to Section 10.2(c) of this Agreement, Section
5.2(c) of the Facility Agreement and Section 7(d) of the Development Agreement
shall survive termination or expiration; and
(f) Nordion shall refund (i) all amounts [...***...], plus
(ii) all amounts [...***...], provided, however, in no event shall [...***...].
The parties will first update Exhibit 11.3 for [...***...] and [...***...]
thereafter for [...***...], if applicable. For purposes of updating Exhibit
11.3, Nordion will provide the draft exhibit and the parties will mutually
agree. The parties wish to establish the general premise upon which the parties
will mutually determine amounts payable by Nordion (if any) as described in this
Section 11.3(f) with respect to updating Exhibit 11.3. Such determination will
include any actual amounts paid [...***...], for which [...***...]. More
specifically, and for the purpose of updating Exhibit 11.3, any update thereof
shall not include: (A) amounts paid by [...***...] and for which [...***...] has
[...***...] (i) received [...***...], or (ii) could receive [...***...] having
regard to the [...***...]; (B) amounts paid by [...***...] to be added from time
to time to [...***...], provided, [...***...]; (C) amounts paid by [...***...]
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[...***...], such [...***...] to be used in the [...***...]; and (D) the amount
determined based on the amounts paid by [...***...] multiplied by a fraction the
numerator of which is [...***...] and the denominator of [...***...] provided in
no event shall the value of such fraction be greater than 1.0. In the event that
only the amount payable is in dispute under this Section 11.3(f), the parties
will select a mutually agreed external auditor who will be instructed to audit
the appropriate accounting records in order to determine the amounts payable.
Determination by such auditor of the amount payable will be binding on the
parties. The cost of such auditor shall be equally borne by each party; and
(g) Nordion will, to the extent it is able to do so, continue to
supply Labelled Drug as may be requested by Coulter, at the prices set forth
herein until the earlier of (i) [...***...] from the date of such termination or
(ii) the date upon which Coulter has established an alternative source of
radiolabelling services which source is capable of performing at levels
satisfactory to Coulter and has received all requisite regulatory and legal
approvals to perform such radiolabelling services.
11.4 ADDITIONAL REMEDIES UPON TERMINATION OF THE FACILITIES AGREEMENT
AND THIS AGREEMENT BY COULTER.
(a) If Coulter terminates this Agreement and the Facilities
Agreement under Section 11.1 or 11.7 of this Agreement or Section 6.1 or 6.3 of
the Facilities Agreement, then, no later than [...***...] days following the
date of such termination, Nordion shall submit to Coulter a commercially
reasonable plan to transition manufacture of radiolabelled B1 Antibody to either
another Nordion facility or to a third party manufacturer (the "Transition
Plan"). Promptly after Coulter's receipt of the Transition Plan, the Parties
shall meet to discuss in good faith the Transition Plan and any alternative
transition plans which either Party may propose. Coulter will be responsible for
implementation of the Transition Plan. [...***...] be responsible for
capital expenditures or expenses relating to the implementation of the
Transition Plan. Nordion's expenses [...***...] will be borne by Nordion.
(b) In the event Nordion fails to offer a commercially reasonable
Transition Plan to Coulter as required by the first sentence of Section 11.4(a),
then within sixty (60) days after termination of this Agreement, as [...***...],
Nordion shall pay to Coulter [...***...].
(c) In the event Nordion offers a commercially reasonable
Transition Plan to Coulter as required by the first sentence of Section 11.4(a),
the foregoing Section 11.4(b) shall not apply, regardless of whether Coulter
accepts or rejects such Transition Plan.
11.5 ELECTION BY COULTER IN THE EVENT PRIMARY FACILITY WILL NOT BE USED
FOR LABELLED DRUG.
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(a) If Coulter elects not to pursue regulatory approval of
Labelled Drug for use in treatment of non-Hodgkin's lymphoma, or (ii) if Coulter
is unable to obtain such regulatory approval for Labelled Drug in the United
States by [...***...], or (iii) if Coulter elects to discontinue
commercialization of Labelled Drug in the United States, the Parties will meet
within [...***...] of such event. At such meeting, Coulter may make a proposal
to Nordion for the use of the Primary Facility (including the Hot Cells and the
Moveable Equipment) for the radiolabelling of an alternative drug being
developed or commercialized by Coulter or a third party designated by Coulter,
provided that such radiolabelling is reasonably expected to commence no later
than the one (1) year anniversary of such meeting date. Nordion shall consider
such proposal in good faith and the Parties shall discuss in good faith an
amendment to this Agreement to accommodate such alternative use, it being
understood that Nordion shall have no obligation to do business with or rely on
the performance of a third party designated by Coulter to which Nordion has an
objection. In the event Coulter does not put forward such a proposal at such
meeting or the Parties are unable to agree on an amendment to this Agreement as
set forth in the preceding sentence within thirty days of the meeting, Coulter
or Nordion may terminate this Agreement and Nordion may find an alternative use
for the Primary Facility.
(b) In the event that Coulter or Nordion terminates this
Agreement under Section 11.5(a) or Article 14, Nordion shall return to Coulter:
(i) the Moveable Equipment in its then current state; (ii) all remaining B1
Antibody; and (iii) all data, documentation and other information directly
relating to the Process, as reasonably requested by Coulter. In addition, in the
event that Coulter or Nordion terminates this Agreement under Section 11.5(a),
Coulter promptly will [...***...], whereupon Coulter shall have no further
obligation to Nordion under [...***...] of the Facilities Agreement.
(c) In addition, in the event that Coulter or Nordion terminates
this Agreement under Section 11.5(a) because (i) Coulter elects not to pursue
regulatory approval of Labelled Drug for use in treatment of non-Hodgkin's
lymphoma, or (ii) Coulter is unable to obtain such regulatory approval for
Labelled Drug in the United States by [...***...], or (iii) Coulter elects to
discontinue commercialization of Labelled Drug in the United States, Coulter
will pay Nordion [...***...] within thirty (30) days of such termination, in
recognition of the fact that Nordion performed work on a [...***...] prior to
such termination. In addition, in the event that Coulter or Nordion terminates
this Agreement under Section 11.5(a)(iii), Coulter will pay Nordion an amount
equal to [...***...] prorated in accordance with Section 11.2. In no event will
Coulter be required to pay Nordion both the [...***...] set forth in this
section and the [...***...].
11.6 RELATED NORDION ACTIVITIES. In the event Nordion or an Affiliate of
Nordion (a) is conducting clinical trials for a drug for the treatment of
hematological malignancies or (b) has filed for or has received regulatory
approval anywhere in the world to market a drug for the treatment of
hematological malignancies, Nordion shall immediately notify Coulter of such
event. Immediately after such notification, Coulter's obligations under Section
3.3 of this Agreement shall terminate. This Section 11.6 shall not apply if
Nordion or an Affiliate of Nordion is only acting as a supplier to a third party
engaged in the development or marketing of a drug for treatment of hematological
malignancies.
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11.7 BANKRUPTCY; INSOLVENCY. Either Party may terminate this Agreement
upon the occurrence of either of the following:
(a) The other Party is subject to the entry of a decree or order
for relief by a court having jurisdiction in the premises in respect of such
Party in an involuntary case under the Federal Bankruptcy Code in the United
States or the Bankruptcy and Insolvency Act in Canada, as now constituted or
hereafter amended, or any other applicable national, federal or state insolvency
or other similar law and the continuance of any such decree or order unstayed
and in effect for a period of sixty (60) consecutive days; or
(b) The filing by the other Party of a petition for relief under
the Federal Bankruptcy Code in the United States or the Bankruptcy and
Insolvency Act in Canada, as now constituted or hereafter amended, or any other
applicable federal or state insolvency or other similar law.
11.8 RETURN OF B1 ANTIBODY. If this Agreement is terminated or expires
for any reason, Nordion shall return all B1 Antibody to Coulter, except for
those amounts of B1 Antibody which are necessary for Nordion to fulfill its
post-expiration or post-termination obligations hereunder. The cost of returning
the B1 Antibody shall be borne by Coulter, unless the termination is by Coulter
pursuant to Section 11.1, in which case Nordion shall bear such cost.
11.9 CONSEQUENCES OF TERMINATION OR EXPIRATION.
(a) Upon expiration or termination of this Agreement, whichever
is sooner (but in the case of termination, only if directed by the terminating
Party in the notice of termination), Nordion shall manufacture and ship, and
Coulter shall purchase in accordance with the provisions hereof, any and all
amounts of the Labelled Drug ordered by Coulter hereunder prior to the date on
which such notice is given.
(b) Upon expiration or termination of this Agreement, the
obligations of the Parties under Sections 3.3(d), 8.11, 8.6, 9.3, 10.2, 10.4,
11.2, 11.3, 11.4, 11.5, 11.8, 16.4, 16.5 and Articles 12 and 15 hereof, and any
other section which by its nature is to survive, shall survive such expiration
or termination.
11.10 SIMULTANEOUS TERMINATION OF THIS AGREEMENT AND FACILITIES
AGREEMENT. If either Party terminates the Supply or Facilities Agreement for any
reason, both Agreements shall be deemed to be terminated on the same day and
Article 11 of this Agreement shall govern the effect and consequences of the
termination with respect to both agreements.
ARTICLE 12
INDEMNITY
12.1 INDEMNIFICATION BY COULTER. Subject to Nordion's compliance with
Section 12.4, Coulter agrees to indemnify, defend and hold Nordion and its
Affiliates, and their
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respective directors, officers, employees and agents harmless from and against
any damages, claims, liabilities and expenses (including, but not limited to,
reasonable attorneys' fees) resulting from any third party claims or suits
("General Claims against Nordion") arising out of (a) the use, handling,
shipment, marketing or sale of the Labelled Drug, (b) Coulter's breach of any of
its warranties or representations hereunder or (c) Coulter's negligent acts or
omissions or willful misconduct. Notwithstanding the foregoing, Coulter will not
be required to indemnify, defend and hold Nordion or its Affiliates, and their
respective directors, officers, employees and agents harmless from and against
any General Claims against Nordion arising out of (i) Nordion's breach of any of
its warranties or representations hereunder; (ii) Nordion's negligent acts or
omissions or willful misconduct; (iii) any failure of the Labelled Drug to meet
the Specifications; (iv) any failure of Nordion to manufacture, handle, store,
label, package, transport or ship the Labelled Drug in accordance with cGMP or
any other applicable laws, regulations, or other requirements of any applicable
governmental entity in the United States and Canada; or (v) any failure of
Nordion to manufacture the Labelled Drug consistent with the applicable sections
of the IND or BLA (whichever is applicable) and any corresponding licenses,
registrations, authorizations or approvals in Canada. Notwithstanding anything
in this Section 12.1, General Claims against Nordion shall not include IP Claims
Against Nordion (as such term is defined below).
12.2 INDEMNIFICATION BY NORDION. Subject to Coulter's compliance with
Section 12.4, Nordion agrees to indemnify, defend and hold Coulter and its
Affiliates, and their respective directors, officers, employees and agents
harmless from and against any damages, claims, liabilities and expenses
(including, but not limited to, reasonable attorneys' fees) resulting from any
third party claims or suits ("General Claims against Coulter") arising out of
(a) Nordion's manufacture, handling, storage, labelling, packaging or delivery
of the Labelled Drug; (b) Nordion's breach of any of its warranties or
representations hereunder; (c) Nordion's negligent acts or omissions or willful
misconduct; (d) any failure of the Labelled Drug to meet the Specifications; (e)
any failure of Nordion to manufacture, handle, store, label, package, transport
or ship the Labelled Drug in accordance with cGMP or any other applicable laws,
regulations, or other requirements of any applicable governmental entity in the
United States and Canada; or (f) any failure of Nordion to manufacture the
Labelled Drug consistent with the applicable sections of the IND or BLA
(whichever is applicable) and any corresponding licenses, registrations,
authorizations or approvals in Canada. Notwithstanding the foregoing, Nordion
will not be required to indemnify, defend and hold Coulter or its Affiliates,
and their respective directors, officers, employees and agents harmless from and
against any General Claims against Coulter arising out of (i) Coulter's breach
of any of its warranties or representations hereunder or (ii) Coulter's
negligent acts or omissions or willful misconduct. Notwithstanding anything in
this Section 12.2, General Claims against Coulter shall not include IP Claims
Against Coulter (as such term is defined below).
12.3 INTELLECTUAL PROPERTY CLAIMS.
(a) Subject to Coulter's compliance with Section 12.4, Nordion
agrees to indemnify, defend and hold Coulter and its Affiliates, and their
respective directors, officers, employees and agents harmless from and against
any damages, claims, liabilities and expenses
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(including, but not limited to, reasonable attorneys' fees) resulting from any
third party claims or suits arising out of any proceeding instituted by or on
behalf of a third party based upon a claim that the process used in
manufacturing the Labelled Drug infringes a United States or Canadian patent or
any other proprietary rights of a third party ("IP Claims Against Coulter").
Notwithstanding the foregoing, Nordion will not be required to indemnify, defend
and hold Coulter or its Affiliates, and their respective directors, officers,
employees and agents harmless for and against any IP Claims Against Coulter
arising out the infringement of any third party intellectual property right by
any manufacturing processes developed in whole or in part by Coulter.
(b) Subject to Nordion's compliance with Section 12.4, Coulter
agrees to indemnify, defend and hold Nordion and its Affiliates, and their
respective directors, officers, employees and agents harmless from and against
any damages, claims, liabilities and expenses (including, but not limited to,
reasonable attorneys' fees) resulting from any third party claims or suits
arising out of any proceeding instituted by or on behalf of a third party based
upon a claim that the manufacture, use or sale of the Labelled Drug infringes a
United States or Canadian patent or any other proprietary rights of a third
party ("IP Claims against Nordion"). Notwithstanding the foregoing, Coulter will
not be required to indemnify, defend and hold Nordion or its Affiliates, and
their respective directors, officers, employees and agents harmless from and
against any IP Claims Against Nordion arising out of the infringement of any
third party intellectual property right by any manufacturing processes (i)
developed by Nordion, either alone or with one or more third parties (ii)
developed by one or more third parties or (iii) jointly developed by Coulter and
Nordion.
12.4 INDEMNIFICATION PROCEDURES. A Party (the "Indemnitee") which
intends to claim indemnification under this Article 12 shall promptly notify the
other Party (the "Indemnitor") in writing of any action, claim or other matter
in respect of which the Indemnitee or any of its Affiliates, or any of their
respective directors, officers, employees or agents intend to claim such
indemnification; provided, however, the failure to provide such notice within a
reasonable period of time shall not relieve the Indemnitor of any of its
obligations hereunder except to the extent the Indemnitor is prejudiced by such
failure. The Indemnitee shall permit, and shall cause its Affiliates, and their
respective directors, officers, employees and agents to permit, the Indemnitor,
at its discretion, to settle any such action, claim or other matter. The
Indemnitee agrees to the complete control of such defense or settlement by the
Indemnitor; provided, however, such settlement does not adversely affect the
Indemnitee's rights hereunder or impose any obligations on the Indemnitee in
addition to those set forth herein in order for it to exercise such rights. No
such action, claim or other matter shall be settled without the prior written
consent of the Indemnitor, and the Indemnitor shall not be responsible for any
attorneys' fees or other costs incurred other than as provided herein. The
Indemnitee, its Affiliates, and their respective directors, officers, employees
and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any action, claim or other
matter covered by this indemnification. The Indemnitee shall have the right, but
not the obligation, to be represented by counsel of its own selection and at its
own expense.
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12.5 INSURANCE. Nordion agrees, at Nordion's expense, to maintain
general liability insurance and property insurance covering loss or damage to
the B1 Antibody while it is on Nordion's premises. Such insurance policy shall
designate Coulter as payee in the event of any loss or damage involving the B1
Antibody. Nordion agrees that such insurance shall be replacement value
insurance. Nordion shall provide to Coulter a certificate of insurance
designating Coulter as payee in event of any loss or damage covered by the first
sentence of this Section 12.5. Any insurance policy held by Nordion pursuant to
this Section 12.5 will provide that the insurer shall give Coulter thirty (30)
days advance notice of any termination or cancellation by the insurer of such
coverage. Nordion shall provide Coulter with thirty (30) days written notice
prior to Nordion's termination or cancellation of such coverage. Nothing
contained in this section shall be deemed to limit in any way the
indemnification provisions in this Agreement. This Section 12.5 shall survive
termination of this Agreement so long as Coulter's B-1 Antibody is on Nordion's
premises.
12.6 PRODUCT LIABILITY. Coulter, at its own expense, shall provide and
maintain during the term of this Agreement, a products liability insurance
policy, covering Labelled Drug, issued by a reputable insurance company, with a
limit of liability of not less than [...***...] U.S. per occurrence or an
aggregate of [...***...] U.S. Coulter will furnish Nordion with a certificate of
insurance evidencing Nordion's inclusion as an additional insured and loss payee
on said insurance policy or policies. Any insurance policy held by Coulter
pursuant to this Section 12.6 will provide that the insurer shall give Nordion
thirty (30) days advance notice of any termination or cancellation by the
insurer of such coverage. Coulter shall provide Nordion with 30 days written
notice prior to Coulter's termination or cancellation of such coverage. Nothing
contained in this section shall be deemed to limit in any way the
indemnification provisions in this Agreement.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES
13.1 COULTER WARRANTIES. Coulter warrants that:
(a) all activities of Coulter under this Agreement will be
accomplished in accordance with the terms of this Agreement;
(b) the B1 Antibody when supplied to Nordion shall (i) be
manufactured in accordance with cGMP and all applicable FDA regulations,
including but not limited to the submission of appropriate regulatory documents
and (ii) not be misbranded or otherwise of a nature that may not be introduced
in United States interstate commerce; and (iii) meet the specifications as set
forth in Exhibit 13.1;
(c) (i) to Coulter's best information and belief, it is the owner
or licensee of all data, information and technology supplied to Nordion by
Coulter to assist Nordion in carrying out its obligations hereunder (the
"Coulter IP"), (ii) to Coulter's best information and belief, the Coulter IP
does not, infringe any patents, copyright or other industrial or intellectual
property rights of third parties, (iii) it has the right to grant the license
set forth in Section 10.1 and the
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right to permit Nordion to use the Coulter IP to carry out Nordion's obligations
as contemplated herein, and (iv) it has not received any notice of adverse claim
or infringement of any patent contained in the Coulter IP; and
(d) to the best of its knowledge, there are no intellectual
property rights, such as, but not limited to valid United States patents, that
would be infringed by the manufacture, use or sale of Labelled Drug.
Notwithstanding the preceding sentence, Coulter makes no warranty with respect
to intellectual property rights relating to any processes performed by Nordion
hereunder except for that portion of any process contributed by Coulter.
13.2 NORDION WARRANTIES.
(a) Except to the extent Coulter has breached its warranty under
Section 13.1(b), Nordion warrants that the Labelled Drug delivered to Coulter,
including any labelling and other packaging for the Labelled Drug, will (a)
conform to the Specifications; (b) have been manufactured, handled, stored,
labelled, packaged, transported, and shipped in accordance with the
Specifications; (c) have been manufactured, handled, stored, labelled, packaged,
transported and shipped in accordance with cGMP and all other applicable laws,
regulations, and other requirements of all applicable governmental entities in
the United States and Canada; (d) have been manufactured consistent with
relevant sections of the IND or BLA (whichever is applicable), and corresponding
licenses, registrations, authorizations, or approvals for the Labelled Drug for
each foreign jurisdiction, as previously advised by Coulter and agreed by the
Parties; (e) not be [(i) misbranded by Nordion within the meaning of the FD&C
Act, or] of a nature that may not be introduced into interstate commerce.
(b) In addition, Nordion warrants
(i) except for the Coulter IP, to Nordion's best
information and belief, it is the owner of all data, information and
technology to be used by Nordion in carrying out its obligations
hereunder (the "Nordion IP"), (ii) to Nordion's best information and
belief, the Nordion IP does not, infringe any patents, copyright or
other industrial or intellectual property rights of third parties, (iii)
it has the right to use the Nordion IP to carry out its obligations as
contemplated herein, and (iv) it has not received any notice of adverse
claim or infringement of any patent relating to the Nordion IP; and
13.3 MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party hereby represents
and warrants to the other Party that this Agreement is legal and valid and the
obligations binding upon such Party are enforceable in accordance with their
terms, and that the execution, delivery and performance of this Agreement does
not conflict with any agreement, instrument or understanding, oral or written,
to which such Party may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having jurisdiction
over it.
13.4 FAILURE OF LABELLED DRUG TO MEET WARRANTIES. In the event that
Nordion ships Labelled Drug that does not meet warranties set forth in Section
13.2(a), Nordion will, in addition to any obligations it may have under this
Agreement, [...***...]
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[...***...]
13.5 FAILURE TO PROVIDE TIMELY SHIPMENT. Subject to Force Majeure, in
the event Nordion fails to ship Labelled Drug accurately or on a timely basis
with the result that Labelled Drug is not able to be administered in accordance
with Coulter's therapeutic protocol, Nordion will [...***...].
13.6 BATCH FAILURE. In the event that prior to shipment of a Batch it is
determined that (i) the Batch does not or will not meet the Specifications (a
"Batch Failure"), then the Parties will meet promptly to discuss the reasons for
such Batch Failure. If (i) it is mutually determined in good faith that Batch
Failure resulted from Nordion's error (a "Nordion-Caused Batch Failure"), not
limited to its failure to follow established Standard Operating Procedures
Nordion will be responsible for [...***...] and will [...***...]; (ii) it is
mutually determined in good faith that the Batch Failure resulted from problems
with the B1 Antibody or CO-20 antigen cells as received by Nordion and/or with
the Isotope as received by Nordion (a "Coulter-Caused Batch Failure")(unless
such Isotope was supplied by Nordion), Coulter will be obligated to pay for
[...***...]. If the cause of Batch Failure cannot be determined or if the
Parties cannot agree on the cause based on good faith negotiations, the Parties
will select a mutually agreeable outside consulting firm which will be
instructed to review the applicable information and data and to determine the
cause of Batch Failure. If the consulting firm finds a Nordion-Caused Batch
Failure, Nordion will [...***...]. If the consulting firm finds a Coulter-Caused
Batch Failure, Coulter will [...***...]. It is agreed that for determining
Nordion's liability to [...***...], Coulter's [...***...] shall not exceed
[...***...].
ARTICLE 14
FORCE MAJEURE
Neither Party shall be liable to the other for any delay or failure in
performance of its obligations under this Agreement by virtue of the occurrence
of an event of Force Majeure (as defined in this Article 14). In the event of
Force Majeure, the Party affected shall promptly notify the other and shall
exert commercially reasonable efforts to eliminate, cure or overcome such event
and to resume performance of its obligations. Coulter acknowledges that if
Nordion is the Party affected by the Force Majeure event, Nordion shall first
restore the production of its core products at Nordion's facility prior to
resuming production of Coulter's Labelled Drug, but Nordion agrees that it will
resume production of Coulter's Labelled Drug as soon as is practicable
thereafter. For such time as Nordion is affected by an event of Force Majeure,
Coulter is relieved from its obligations under Section 3.3 of this Agreement.
"Force Majeure" shall mean an occurrence which prevents, delays or interferes
with the performance by a Party of
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any of its obligations hereunder, if such event occurs by reason of any act of
God, flood, fire, explosion, casualty or accident, or war, revolution, civil
commotion, acts of public enemies, blockage or embargo, or any law, order or
proclamation of any government, failure of suppliers to provide materials,
equipment or machinery, interruption of or delay in transportation, strike or
labor disruption, or any other cause whatsoever, whether similar or dissimilar
to those above enumerated, beyond the commercially reasonable control of such
Party. In the event that the Force Majeure is longer than one hundred eighty
(180) days on the part of Nordion, Section 3.3(a) will terminate and Section
3.3(b) will apply commencing at the end of the Force Majeure. In the event that
the Force Majeure is longer than one hundred eighty (180) days on the part of
Coulter, Coulter shall make [...***...] payments of [...***...] until the end of
the Force Majeure. In the event that a Party has a Force Majeure of greater than
one year, then the other Party may terminate this Agreement and only Section
11.5(b) will apply to the termination.
ARTICLE 15
CONFIDENTIALITY
15.1 CONFIDENTIALITY AND EXCEPTIONS. Except as set forth below, all
information disclosed by one Party to the other Party in connection with the
work performed hereunder shall be deemed to be the disclosing Party's
"Confidential Information". Confidential Information shall include, but not be
limited to, information relating to the B1 Antibody and the structure of
Labelled Drug, any know-how relating to the Process for the production of
Labelled Drug, and the manufacturing cost and other financial arrangements made
pursuant to this Agreement. Each Party agrees that it will take the same steps
to protect the confidentiality of the other Party's Confidential Information as
it takes to protect its own proprietary and confidential information, which
shall in no event be less than reasonable steps. Each Party, and its employees
and agents shall protect and keep confidential and shall not use, publish or
otherwise disclose to any third party, except as permitted by this Agreement, or
with the other Party's written consent, the other Party's Confidential
Information. For the purposes of this Agreement, Confidential Information shall
not include such information that:
(a) was already known to the receiving Party at the time of
disclosure by the other Party, other than under an obligation of
confidentiality; or
(b) was generally available to the public or was otherwise part
of the public domain at the time of disclosure or became generally available to
the public or otherwise part of the public domain after disclosure other than
through any act or omission of the receiving Party in breach of this Agreement;
or
(c) was lawfully disclosed to the receiving Party, other than
under an obligation of confidentiality, by a third party who had no obligation
not to disclose such information to others; or
(d) was independently developed by or for the receiving Party
without the aid, application or use of Confidential Information; or
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(e) was disclosed to a third party by the disclosing Party
without an obligation of confidentiality; or
(f) was independently developed by persons who did not have
access to the Confidential Information.
15.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential
Information hereunder to the extent such disclosure is reasonably necessary for
prosecuting or defending litigation, complying with applicable government laws
or regulations or conducting preclinical or Clinical Trials, provided that if a
Party is required by law or regulation to make any such disclosure of the other
Party's Confidential Information it will, except where impracticable for
necessary disclosures, for example in the event of medical emergency, give
reasonable advance notice to the other Party of such disclosure requirement and
will use its reasonable efforts to secure a protective order or confidential
treatment of such Confidential Information required to be disclosed. In
addition, upon prior written approval of Nordion, which will not be unreasonably
withheld, Coulter may disclose, under a comparable binder of confidentiality,
and on a need-to-know basis, information received under this Agreement to its
other partners for the development or commercialization of Labelled Drug.
Neither Party shall disclose Confidential Information of the other Party in any
patent filings without the prior written consent of the other Party.
15.3 CONFIDENTIALITY AND PUBLICITY. The Parties agree that, except as
may otherwise be required by applicable laws, regulations, rules, or orders, and
except as may be authorized elsewhere in this Section 15, no information
concerning this Agreement and the transactions contemplated herein shall be made
public by either Party without the prior written consent of the other. In the
event either Party decides to issue a press release announcing the execution of
this Agreement, it shall not do so without the prior written approval of the
other Party of the text of such press release, such approval not to be
unreasonably withheld.
15.4 SURVIVAL OF CONFIDENTIALITY. All obligations of confidentiality and
non-use imposed upon the Parties under this Agreement shall expire ten (10)
years after the expiration or termination of this Agreement.
ARTICLE 16
GENERAL PROVISIONS
16.1 NOTICE. All notices under this Agreement must be made in writing
and mailed or delivered to the following:
Coulter: Coulter Pharmaceutical, Inc.
550 California Avenue, Suite 200
Palo Alto, CA, U.S.A.
Attention: Chief Financial Officer
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Nordion: MDS Nordion Inc.
447 March Road
Kanata, Ontario, CANADA
Attention: Vice President, Technology
and Business Development
16.2 NO IMPLIED LICENSE. It is agreed that disclosure of data,
information or technology by Nordion or Coulter, during the term of this
Agreement shall not, except to the extent granted herein, constitute any grant,
option or license under any patent, technology or other rights, held by Nordion
or Coulter.
16.4 DISCLAIMER OF CONSEQUENTIAL DAMAGES. Except as set forth in Section
11.3(d) of this Agreement, in no event shall either Party be liable to the other
Party or its Affiliates for indirect, contingent, incidental, special or
consequential damages, including, but not limited to, any claim for damages
based on lost profits, cost of capital, loss of business opportunity or loss of
time.
16.5 ASSIGNMENT. Neither Party may assign its rights and/or delegate its
obligations under this Agreement to any third party without the other Party's
prior written consent. Notwithstanding the preceding sentence, a Party may
assign its rights and/or delegate its obligations under this Agreement, without
the other Party's prior written consent, to an Affiliate or to a third party
solely in connection with the sale, merger or transfer of substantially all of
the assets to which this Agreement relates, providing such assignee or delegate
agrees to be bound by the terms of this Agreement, and provided that such action
would not in any way impair or jeopardize any pending or actual regulatory
approval for the manufacture of Labelled Drug or affect the regulatory status of
Labelled Drug. In the event Coulter assigns its rights and/or delegates its
obligations under the circumstances described in the preceding sentence, Nordion
may terminate this Agreement upon twelve (12) months written notice, if Nordion
makes a good faith determination that such assignment would materially adversely
affect Nordion's business or economic interests. Such notice shall contain the
reasons for Nordion's determination. In the event that Nordion terminates this
Agreement as provided in this section, the Facilities Agreement shall
simultaneously be deemed to be terminated pursuant to Section 11.10 of this
Agreement and the terms of Section 11.2 of this Agreement shall apply. In
addition, during such the twelve (12) month period following receipt by Coulter
of the notice of termination, the Parties will work together in good faith to
develop a Transition Plan, as that term is defined in Section 11.4 above, to
transition manufacture of radio labelled B1 Antibody to a third party
manufacturer. Coulter will be responsible for implementation of the Transition
Plan. Nordion will [...***...] or, except as set for in this Section 16.5,
[...***...] relating to the implementation of the Transition Plan. Nordion's
expenses [...***...] will be borne by [...***...]. For purposes or clarity,
Section 11.4(b) shall not apply with respect to a Transition Plan offered under
this Section 16.5. Nordion shall also provide [...***...] of the time of Nordion
employees, [...***...], to assist Coulter in establishing a third party facility
for radiolabelling of B1 Antibody. Thereafter, Coulter shall reimburse Nordion
for any further assistance provided to Coulter by Nordion employees at Nordion's
internal rate and shall reimburse Nordion any out of pocket expenses for
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<PAGE> 33
Nordion's assistance in such Transition Plan. Nordion shall not be required to
provide Coulter with proprietary information related to (131)I. At Coulter's
request, Nordion will continue to manufacture Labelled Drug during the
[...***...] written notice and for an additional [...***...] ("Extended
Period"). Coulter shall, within ninety (90) days of receipt of Nordion's notice
of termination, provide written notice to Nordion of whether it desires that
Nordion continue to manufacture and supply Labelled Drug, during the Extended
Period.
Nordion shall be entitled to sub-contract to third parties any of its
obligations set forth in this Agreement; provided, however, that Nordion may not
sub-contract any portion of this Agreement unless such sub-contractor shall
agree to be bound by the provisions hereof pertaining to ownership of work
performed and confidentiality. This Agreement shall inure to the benefit of and
be binding upon the respective successors and permitted assigns of the Parties.
16.6 APPLICABLE LAW. This Agreement will be governed by the laws of the
State of New York as applied to contracts executed and performed in New York by
New York residents.
16.7 DISPUTE RESOLUTION.
(a) In the event that, at any time during the term of this
Agreement, a disagreement, dispute, controversy or claim should arise relating
to scientific or technical issues in connection with Nordion's performance under
this Agreement, the Parties will attempt in good faith to resolve their
differences for sixty (60) days. If, after sixty (60) days, the Parties are
unable to resolve such dispute, the Parties shall refer the matter to a third
party consultant with expertise in the scientific or technical area of dispute
for sixty (60) days. In the event such consultant is unable to work out a
resolution of the issue with the Parties, either Party shall be free to take any
action and seek any remedy it may have at law or in equity, including specific
performance and injunctive relief.
(b) In the event that, at any time during the term of this
Agreement, a disagreement, dispute, controversy or claim should arise out of or
relating to the interpretation of or performance under this Agreement, or the
breach or invalidity thereof other than a dispute relating to scientific or
technical issues in connection with Nordion's performance under this Agreement,
the Parties will attempt in good faith to resolve their differences by referring
the matter to the Chief Executive Officers of the Parties (or their designees)
for sixty (60) days, following which either Party shall be free to take any
action and seek any remedy it may have at law or in equity, including specific
performance and injunctive relief.
16.8 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby, unless the absence of the invalidated provision(s) adversely affect the
substantive rights of the Parties. The Parties agree to replace any invalid
provision or parts thereof by new provision(s) which closely approximate the
economic and proprietary results intended by the Parties.
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16.9 ENTIRE AGREEMENT. This Agreement, together with the attached
Exhibits and the Facilities Agreement and Development Agreement, contains the
sole and entire understanding of the Parties related to its subject matter and
supersedes all prior or contemporaneous oral or written agreements concerning
the subject matter.
16.10 MODIFICATION. This Agreement cannot be changed orally and no
modification of this Agreement will be recognized or have any effect, unless the
writing in which it is set forth is signed by Nordion and Coulter, nor will any
waiver of any of the provisions of this agreement be effective unless in writing
and signed by the Party to be charged therewith.
16.11 COMPLIANCE. This Agreement shall be carried out in compliance with
all applicable laws, by-laws, rules, regulations and orders of federal, state,
provincial or municipal governments.
16.12 NON-WAIVER. Failure by either Party to enforce at any time any of
the provisions of this Agreement shall not be construed as a waiver of its
rights hereunder. Any waiver of a breach of any provision hereof shall not
affect either Party's rights in the event of any additional breach.
16.13 HEADINGS. The headings herein are for the purpose of convenience
of reference only and are not intended to define or limit the contents of this
Agreement.
16.14 EFFECTIVE DATE. This Agreement shall be deemed effective as of
[...***...].
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<PAGE> 35
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by the respective duly authorized officers as of the date first written
above.
MDS NORDION INC.
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
COULTER PHARMACEUTICAL, INC.
By:
-------------------------------------
William G. Harris
Vice President and Chief Financial Officer
35.
<PAGE> 36
EXHIBIT 1.32
SPECIFICATIONS (DRAFT)
STORAGE SPECIFICATIONS
[...***...]
PROCESS SPECIFICATIONS
[...***...]
ACTIVITY CONCENTRATION AT CALIBRATION AS LISTED BELOW IN LABELLED DRUG
SPECIFICATIONS
LABELLED DRUG SPECIFICATIONS
<TABLE>
<CAPTION>
Test Specification Analytical Method
---- ------------- -----------------
<S> <C> <C>
Radioactive Aggregates [...***...] [...***...]
[...***...]
Monamer [...***...] [...***...]
[...***...]
Free Iodine [...***...] [...***...]
[...***...]
[...***...]
pH [...***...] [...***...]
[...***...]
Sterility [...***...] [...***...]
[...***...]
Endotoxin [...***...] [...***...]
[...***...]
Visual Inspection Clear and particulate free [...***...]
[...***...]
Total Activity [...***...] [...***...]
[...***...]
[...***...]
Povidone [...***...] [...***...]
</TABLE>
1.
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<TABLE>
<CAPTION>
Test Specification Analytical Method
---- ------------- -----------------
<S> <C> <C>
[...***...]
[...***...]
IRF [...***...] [...***...]
[...***...]
Protein Concentration [...***...]
[...***...]
[...***...]
Activity Concentration [...***...] [...***...]
[...***...]
[...***...]
</TABLE>
PACKAGING AND SHIPPING SPECIFICATIONS
[...***...]
BATCH RELEASE DOCUMENTATION
MDS Nordion [...***...]
Coulter [...***...]
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EXHIBIT 9.1
PRICING SCHEDULE
For production in each consecutive twelve (12) month period, where the twelve
(12) month-period begins on the Monday of the week of the first Batch produced
commencement of Commercial Supply, prices are as follows:
BASED ON VIALS OF LABELLED DRUG SHIPPED
Batch price for:
[...***...]
[...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
The pricing schedules contemplate manufacture on one day and shipment the next
day. If these are incremental costs incurred by Nordion to manufacture and ship
on the same day as required by Coulter and agreed by the Parties, the Parties
will meet and negotiate in good faith which Party will bear those costs.
Price includes packaging and handling but not the costs of third-party carriers,
which are for Coulter's account. Price is based on processes as defined by the
following documents:
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
FACILITIES ENGINEERING FEE: In addition, for facilities engineering work,
Coulter will pay to Nordion [...***...] (a "Facilities Engineering Fee") per
twelve (12) month period during the term of Agreement, payable to Nordion
[...***...] beginning with the commencement of Commercial Supply. Such payment
will be made quarterly in advance.
The Batch and per vial prices, as well as the Facilities Engineering Fee,
Readiness Payments and Cancellation Fees, are subject to currency adjustment and
price escalation as set forth in this Agreement.
1.
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<PAGE> 39
EXHIBIT 1.15
LETTER AGREEMENTS DATED
FEBRUARY 23, 1996 AND SEPTEMBER 30, 1997
<PAGE> 40
Nordion International Inc.
447 March Road
Kanata, Ontario
Canada
K2K-1X8
Attention: David Evans, V.P. Technology and Business Development
Dear Sir,
1. In preparation for the carrying out of the Facility Phase and
commercial supply of radiolabelled B-1 antibody with 1-131 as set out in the
agreement between Nordion International Inc. ("Nordion") and Coulter
Pharmaceutical, Inc. ("Coulter"), dated the 15th day of November, 1995 (the
"Agreement"), we hereby instruct Nordion and Nordion, in reliance on said
instruction, agrees to proceed with the purchase of the hot cells as Nordion
deems appropriate to carry out the Facility Phase and commercial supply of
radiolabelled B-1 antibody with I-131. Coulter acknowledges that Nordion shall
be entering into a purchase agreement (the "Purchase Agreement") with its
supplier Von Gahlen International Inc. (`Won Gahlen") for the purchase and
supply of such hot cells.
2. In consideration of the purchase of the hot cells by Nordion, Coulter
hereby agrees to reimburse to Nordion the purchase price of [...***...], plus an
administration fee of [...***...] calculated thereon (hereafter the "Aggregate
Purchase Price"), payable as follows: Coulter shall pay to Nordion, due within
five (5) business days of execution of this letter agreement, [...***...]. In
addition Coulter shall make interim payments (the "Interim Payments") to
Nordion, (i) on a monthly basis within 15 days of receipt of Nordion's invoice,
and (ii) within 15 days of receipt of Nordion's invoice after
inspection/acceptance of the hot cells by Nordion at Von Gahlen's site, such
Interim Payments corresponding to the contract value of work performed to such
date by Von Gahlen, increased by the above mentioned [...***...] administration
fee. Coulter shall make a final payment (the "Final Payment") to Nordion within
30 days of receipt of Nordion's invoice after installation/acceptance of the hot
cells by Nordion at Nordion's facility. The [...***...] shall be retained by
Nordion and applied to the Final Payment when due, provided, for greater
certainty, that in the event of cancellation of the Purchase Agreement by
Nordion prior to Final Payment due to the acts or omissions of Coulter, such sum
shall be deemed forfeited by Coulter.
3. Without the prior written consent of Coulter, under no circumstances
shall Coulter's payment obligations through the Interim Payment immediately
following inspection/acceptance by Nordion at Von Gahlen's site in the aggregate
exceed [...***...] nor shall Coulter's total payment obligations under this
agreement, subject to the indemnity provisions contained herein, exceed the
Aggregate Purchase Price. Notwithstanding the immediately preceding sentence and
without regard to the limitations set out therein, in the event of cancellation
of the Purchase Agreement due to the acts or omissions of Coulter the
cancellation payment terms set forth in paragraphs 5 and 8 shall govern.
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4. Accompanying each of Nordion's invoices shall be a report issued by
Von Gahlen setting out work performed and the contract value of such work
performed during the relevant period. With respect to the Interim Payment
following inspection/acceptance at Von Gahlen's site and with respect to the
Final Payment, Nordion's invoice shall be accompanied by its written
representation that Nordion has paid the amounts due to Von Gahlen following
Nordion's inspection/acceptance, pursuant to the terms of the Purchase
Agreement. Within 30 days of installation/acceptance of the hot cells at
Nordion's facility, Nordion shall provide to Coulter a report stipulating that
the work performed by Von Gahlen substantially conforms to specification (which
may be amended from time to time) as set out in the Purchase Agreement and that
the hot cells may be used for the purpose for which they are intended.
5. In the event of termination by Nordion of the purchase of the hot
cells from Von Gahlen, due to the acts or omissions of Coulter, including but
not limited to Coulter's failure to pay any sums due Nordion or Coulter's
discontinuation of the project, Coulter shall indemnify and hold harmless
Nordion for all losses, costs, expenses (including reasonable attorneys fees)
and damages that Nordion may incur as a result of any claim, action or suit
instituted by Von Gahlen against Nordion. Such indemnification on the pan of
Coulter does not extend to claims arising out of Nordion's gross negligence,
recklessness, or intentional wrongdoing.
6. In addition, Nordion shall stipulate in the Purchase Agreement with
Von Gahlen that if Von Gahlen shall fail to complete installation of the hot
cells within one week of the installation date specified in the Purchase
Agreement, for reason other than an act or omission of Nordion or force majeure,
in addition to any other remedies Nordion may have, a late charge by way of
liquidated damages shall be payable by Von Gahlen to Nordion in the amount of
[...***...] per week of the total purchase price of the hot cells, for
[...***...]. Any such amounts collected by Nordion, provided Coulter is not in
default under this agreement, shall be paid over to Coulter.
7. Nordion and Coulter shall use good faith efforts to negotiate and
enter into an agreement to carry out the Facility Phase and manufacturing
obligations for clinical trials and commercial supply of radiolabelled B-1
antibody with 1-131 which negotiations, notwithstanding the provision of right
of first negotiation set out in the Agreement, shall be completed prior to April
30, 1996. In the event that such good faith negotiations and an agreement are
not concluded by April 30, 1996, or such other date as agreed between the
parties, Nordion shall cancel the Purchase Agreement without recourse by
Coulter.
8. Upon cancellation of the Purchase Agreement due to the acts or
omissions of Coulter or failure by the parties to reach the agreement
contemplated in paragraph 7, within 15 days after receipt of Nordion's final
invoice, Coulter shall pay to Nordion the remaining unpaid contract value owing
by Nordion to Von Gahlen to the date of cancellation, as determined under
provisions of the Purchase Agreement, plus Nordion's [...***...] administration
fee to the extent not previously paid. At Coulter's request provided to Nordion
within 20 days of the effective date of termination and at Coulter's expense,
Nordion shall take possession of and/or assign such work performed, to Coulter.
All shipping costs incurred by Nordion for delivery to Coulter shall be borne by
Coulter.
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9. Prior to installation of the hot cells at Nordion's facility, so long
as all payments then due have been received by Nordion from Coulter, title in
and to the work performed by Von Gahlen (including hot cells, components or
parts thereof, as between Nordion and Coulter, shall belong to Coulter. For
greater certainty, work performed by Von Gahlen shall not include Nordion
drawings or other Nordion proprietary information provided to Von Gahlen.
This letter agreement shall be governed and construed in accordance with
the laws of the Province of Ontario, Canada, without reference to its conflict
of laws.
Yours truly,
COULTER PHARMACEUTICAL, INC. We acknowledge and concur with the
foregoing this 23rd day of February, 1996.
By: NORDION INTERNATIONAL INC.
-------------------------
By:
--------------------------
<PAGE> 43
[COULTER PHARMACEUTICAL LOGO]
To: Graham Duncan - MDS- Nordion
From: M. Buckley
Subject: Authorization of Expenditure for Third Hot Cell in Primary Facility
Date: 9/30/97
cc: D. Shock, K. Iverson, B. Harris and C. David - MDS-Nordion
This letter is authorization for the expenditure of approximately [...***...]
for the design, construction and installation of a third hot cell in the primary
facility to house the automated QC, inspection, labelling and packaging
operations. This price includes the following general categories:
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
Installation is targeted to commence [...***...] with shipment from Von Gahlen
- -- Netherlands on or before [...***...].
The terms of payment would be as follows:
[...***...]
[...***...]
[...***...]
The hot cell will be inspected at the Netherlands facility by Nordion and CPI
personnel and accepted [...***...].
This should be sufficient to allow the work to being on this project. Please
keep me apprised of any development that will effect either price or meeting
project timelines.
Best regards,
Michael Buckley -- Manager Product Development
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<PAGE> 44
EXHIBIT 13.1
BI ANTIBODY SPECIFICATIONS
Immunoreactive Fraction [...***...]
Otherwise in compliance with the Certificate of Analysis
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EXHIBIT 11.3
AMOUNTS DESCRIBED IN SECTION 11.3(F)
<TABLE>
<S> <C>
As of May 31, 1998
Amounts invoiced to Coulter under PS# 10004 due to Coulter
(Facility Development) [...***...]
All other invoices [...***...]
Total to be paid under Section 11.3(f)(i) [...***...]
Hot cell total used in calculation
described in Section 11.3(f)(ii) [...***...]
</TABLE>
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EXHIBIT 9.1(d)
CURRENCY ADJUSTMENT EXAMPLE
1. The CRE is set at $2.00 US = [...***...]
2. Using Readiness Payments of [...***...] as an example.
3. If the BRE is less than the CRE by more than [...***...], then the
following formula would apply and Nordion may adjust prices as per Section 9.1d.
Price ($US) X [...***...] = Exchange Adjusted $US price
Example: BRE = [...***...]
[...***...] X [...***...] = [...***...]
Example: BRE = [...***...]
[...***...] X [...***...] = [...***...]
Example: BRE = [...***...]
[...***...] X [...***...] = [...***...]
4. If the BRE is greater than the CRE by more than [...***...] the
following formula would apply and Coulter may adjust prices as per Section 9.1d.
Price ($US) X [...***...] = Exchange Adjusted $US price
Example: BRE = [...***...]
[...***...] X [...***...] = [...***...]
Example: BRE = [...***...]
[...***...] X [...***...] = [...***...]
Example: BRE = [...***...]
[...***...] X [...***...] = [...***...]
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Exhibit 10.20
*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUIRED
UNDER 17 C.F.R. SECTIONS 20.80(b)(4),
200.83 AND 240.24b-2
FACILITIES AGREEMENT
THIS FACILITIES AGREEMENT (the "Agreement") is made this 31st day of
August, 1998 between MDS NORDION INC., a Canadian corporation having a place of
business at 447 March Road, Kanata, Ontario, Canada, K2K 1X8 ("Nordion") and
COULTER PHARMACEUTICAL, INC., a Delaware corporation having a place of business
at 550 California Avenue, Suite 200, Palo Alto, California, U.S.A. ("Coulter").
Nordion and Coulter are sometimes referenced in this Agreement individually as a
"Party" and collectively as the "Parties".
RECITALS
WHEREAS, Coulter is the owner of certain data, information and
technology related to the B1 Antibody (as such term is defined below) and the
radiolabelling thereof; and
WHEREAS, Nordion has expertise in designing and overseeing the
construction of facilities for the radiolabelling of pharmaceutical compounds;
and
WHEREAS, the Parties have jointly developed a process for radiolabelling
of B1 Antibody with iodine ("131I") pursuant to an Agreement between the Parties
dated November 15, 1995 (the "Development Agreement"); and
WHEREAS, the Parties are, simultaneous with the execution of this
Agreement, entering into a supply agreement pursuant to which Nordion will
radiolabel B1 Antibody with 131I on behalf of Coulter for clinical trials and
for commercialization of such product (the "Supply Agreement"); and
WHEREAS, the Parties now desire to set forth the terms under which
Nordion will install and qualify an interim facility and a primary facility to
be used for the manufacture of such 131I-labelled B1 Antibody.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained in this Agreement, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
set forth below:
1.1 "AFFILIATE" shall mean any entity or person which controls, is
controlled by or is under common control with either Party. For purposes of this
Section 1.1, "control" shall mean (a) in the case of corporate entities, the
direct or indirect ownership of more than one-half of the stock or participating
shares entitled to vote for the election of directors, and (b) in the case of a
partnership, the power to direct the management and policies of such
partnership.
1.
<PAGE> 2
1.2 "B1 ANTIBODY" shall mean the IgG2a anti-CD20 murine monoclonal
antibody, as supplied by Coulter to Nordion for purposes of this Agreement or
the Supply Agreement.
1.3 "BATCH" shall mean a production batch of the Labelled Drug
manufactured under the Supply Agreement.
1.4 "BATCH CAPACITY" shall mean the capacity of the Interim Facility or
the Primary Facility, as the case may be, to produce Labelled Drug.
1.5 "CLASS 100 INSERT" shall mean both of the assets purchased by
Nordion by purchase order on behalf of Coulter as described in [...***...]
1.6 "CLINICAL TRIALS" shall mean any trials for clinical development of
pharmaceutical products defined as "Phase I," "Phase II," "Phase III," or
"Treatment IND" in FDA regulations, as amended from time to time.
1.7 "CURRENT GOOD MANUFACTURING PRACTICES" OR "CGMP" shall mean the good
manufacturing practices required by the FDA and set forth in the FD&C Act or FDA
regulations, policies, or guidelines in effect at a particular time for the
manufacture, testing and quality control of pharmaceutical materials as applied
to biologics, except to the extent that Canadian standards for the manufacture,
testing and quality control of pharmaceutical materials as applied to biologics
are higher or more stringent than those required by the FDA, in which case such
Canadian standards will apply. For Mexico, if any higher or more stringent
standards for the manufacture and testing of pharmaceutical materials as applied
to biologics are required, Coulter will notify Nordion and the Parties will
discuss in good faith how to respond to such requirements.
1.8 "DECOMMISSION" OR "DECOMMISSIONING" shall mean to remove the
facility safely from service and render the facility environmentally safe and in
so doing reduce residual radioactivity to a level that permits release of the
facility for unrestricted use.
1.9 "EFFECTIVE DATE" shall be the date set forth in Section 11.13.
1.10 "FACILITY PROGRAM" shall mean the program for the construction of
the Interim Facility and the Primary Facility as described in Article 2 of this
Agreement.
1.11 "FDA" shall mean the United States Food and Drug Administration.
1.12 "FD&C ACT" shall mean the United States Federal Food, Drug and
Cosmetic Act, as amended.
1.13 "HOT CELLS" shall mean the assets purchased by Nordion by purchase
order on behalf of Coulter pursuant to the letter agreement dated February 23,
1996 between Nordion and Coulter dated February 23, 1996 and September 30, 1997
(annexed as Exhibit 1.13), as installed [...***...] of Nordion's Kanata
production site.
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1.14 "IND" shall mean an Investigational New Drug application and any
supplements thereto, as defined in FDA regulations, as amended from time to
time.
1.15 "INSTALLATION" of the Interim Facility shall mean the point in time
when the Interim Facility is ready for the first dry run and Nordion's Nuclear
Safety Committee has approved the use of such facility for the radiolabelling of
B1 Antibody with 131I.
"Installation" of the Primary Facility shall mean the point in time when the
Primary Facility is erected and ready to receive the Moveable Equipment and
Nordion's Nuclear Safety Committee has approved the use of such facility for
radiolabeling of B1 Antibody with 131I.
Once a facility has undergone Installation, it shall be deemed to be
"Installed".
1.16 "INSTALLATION QUALIFICATION" shall mean the program employed by
Nordion by which it is established that the process equipment in question and
ancillary systems are capable of consistently operating within established
limits and tolerances.
1.17 "INTERIM FACILITY" shall mean the facility described in Section 2.1
which has been Installed for the production of Labelled Drug, pursuant to
Article 2.
1.18 "LABELLED DRUG" shall mean a pharmaceutical product containing the
131I-labelled B1 Antibody in either dosimetric or therapeutic final dosage form
for use in Clinical Trials or for commercial sale, which has been, or is being,
processed, compounded, formulated, finished, filled, labeled, packaged and/or
shipped by Nordion pursuant to the Supply Agreement.
1.19 "MAXIMUM ACTUAL CAPITAL COST" shall have the meaning set forth in
Section 2.6(b).
1.20 "MOVEABLE EQUIPMENT" shall mean the equipment so identified in
Exhibit 1.20.
1.21 "OPERATION QUALIFICATION" shall mean the program employed by
Nordion by which it is established that the process equipment in question and
ancillary systems are capable of producing Labelled Drug that consistently meets
Specifications.
1.22 "PRIMARY FACILITY" shall mean the facility described in Section 2.1
which has been Installed for the production of Labelled Drug pursuant to Article
2.
1.23 "PRIMARY FACILITY QUALIFICATION PLAN" shall have the meaning set
forth in Section 2.5(b).
1.24 "PROCESS" shall mean the process of formulation and dispensing
described in Nordion's Standard Operating Procedure #960700.SOP.
1.25 "PROCESS PERFORMANCE QUALIFICATION" shall mean the program by which
it is established that the process equipment, ancillary systems, and the Process
are effective and reproducible.
3.
<PAGE> 4
1.26 "QUALIFIED" shall mean the condition of having passed standards for
Installation Qualification, Operation Qualification and Process Performance
Qualification.
1.27 "SPECIFICATIONS" shall have the meaning set forth in Section 1.31
of the Supply Agreement.
1.28 "VALIDATION" shall mean the program mutually agreed to by the
Parties by which documented evidence provides a high degree of assurance that
the Process will consistently produce Labelled Drug that meets Specifications
and quality attributes as mutually agreed by the Parties.
ARTICLE 2
FACILITY PROGRAM
2.1 PURPOSE. The purpose of this Agreement is to provide for the
establishment of a facility at Nordion's manufacturing site in Kanata, Ontario,
Canada which Nordion will use to supply Labelled Drug to Coulter for Clinical
Trials and commercialization pursuant to the Supply Agreement. The facility to
be used for the foregoing activities initially will be [...***...] of Nordion's
plant located at Kanata, Ontario (the "Interim Facility"). Thereafter, the
foregoing activities will be conducted in [...***...] of Nordion's plant located
at Kanata, Ontario, in which will be installed or used (as appropriate) on
Coulter's behalf, the Hot Cells and the Moveable Equipment (the "Primary
Facility").
2.2 PERFORMANCE CHARACTERISTICS. The Interim Facility and the Primary
Facility shall have the capacity to use the Process to radiolabel B1 Antibody in
accordance with cGMP and all other requirements set forth in this Agreement and
the Supply Agreement in those Batch Capacity amounts set forth in Section 2.1 of
the Supply Agreement.
(a) It is acknowledged by the Parties that Installation of the
Interim Facility was completed on [...***...].
(b) It is further acknowledged by the Parties that Installation
of the Primary Facility was completed by [...***...] (the "Primary Facility
Installation Date").
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2.3 FACILITY EXCLUSIVITY; REMOVAL OF INTERIM FACILITY FROM SERVICE.
(a) Until the date on which the Primary Facility is Qualified,
Nordion may not use the Interim Facility for any purpose other than producing
Labelled Drug for Coulter or for conducting additional experiments per the
instructions of Coulter and with the approval of Nordion. Additionally, for the
term of the Supply Agreement and any renewals thereof, Nordion may not use the
Primary Facility for any purpose other than producing Labelled Drug for Coulter
or for conducting additional experiments per the instructions of Coulter and
with the approval of Nordion.
(b) The Interim Facility shall not be removed from service until
the later of (i) ten (10) weeks after the Primary Facility is Qualified or (ii)
the date upon which a fifth Batch of Labelled Drug which meets the
Specifications has been produced in the Primary Facility. Notwithstanding the
foregoing, Nordion may remove the Interim Facility from service if Coulter has
not requested Nordion to produce a fifth Batch of Labelled Drug by the ten (10)
week anniversary of the date on which the Primary Facility is Qualified.
2.4 CHANGE ORDERS. If Coulter requests any modifications ("Change
Orders") to the Facility Program, Nordion will use reasonable efforts to carry
out such Change Orders. As set forth in Section 2.6, whether the Change Orders
affect the Interim Facility, the Primary Facility, or both, the Maximum Actual
Capital Cost will be increased, on the same basis for time and materials as is
set forth in Section 2.6(a).
2.5 QUALIFICATION PLANS AND EXPENSES.
(a) INTERIM FACILITY. It is acknowledged by the Parties that the
Interim Facility was Qualified by Nordion on or about [...***...].
(b) PRIMARY FACILITY. Preparation and approval of Primary
Facility Qualification Plans shall be carried out by Nordion in collaboration
with Coulter as set forth in this Section 2.5(b). Nordion will prepare and
Coulter will approve, such approval not to be unreasonably withheld, a
qualification plan for the Primary Facility (the "Primary Facility Qualification
Plan") which will set forth the steps to be followed by Nordion in causing the
Primary Facility to be Qualified. The Parties will prepare a budget for
performance of the Primary Facility Qualification Plan in a manner consistent
with Nordion's current estimation process. Upon receipt of supporting
documentation from Nordion, Coulter shall pay in full, pursuant to Section
2.5(d), all amounts actually incurred by Nordion which are less than or equal to
the amounts budgeted for performance of the Primary Facility Qualification Plan.
(c) EXCESS EXPENSES. Any reasonable expenses of performance under
the Primary Facility Qualification Plan which exceed the amounts budgeted
therefor ("Excess Expenses") shall be allocated as set forth in this Section
2.5(c). Excess Expenses related to performance under the Primary Facility
Qualification Plan derived primarily from errors committed by Nordion in
carrying out the Primary Facility Qualification Plan shall be borne solely by
Nordion. All other Excess Expenses related to performance under the Primary
Facility Qualification Plan shall be borne by Coulter, subject to Coulter's
prior written authorization.
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(d) PAYMENTS. All payments due to Nordion under this Section 2.5
shall be paid by Coulter within thirty (30) days of Coulter's receipt of invoice
therefor, except that the final payment due to Nordion for performance of the
Primary Facility Qualification Plan shall be made by the later of (i) fifteen
(15) days after Coulter's acceptance of the Primary Facility Qualification
Report or (ii) thirty (30) days after Coulter's receipt of an invoice therefor.
(e) PRIMARY FACILITY QUALIFICATION REPORT. At such time or times
as are set forth in the Primary Facilities Qualification Plan, and at such time
as the Primary Facility is Qualified, Nordion shall prepare and submit to
Coulter a report (the "Primary Facility Qualifications Report") summarizing the
activities performed pursuant to the Primary Facility Qualification Plan,
including but not limited to facility qualification, media fills, and the full
activity run contemplated by the Primary Facility Qualification Plan.
2.6 CAPITAL COSTS OF THE FACILITY PROGRAM.
(a) ACTUAL CAPITAL COST. The actual capital cost ("Actual Capital
Cost") of the Facility Program will be calculated on a time and materials basis
as follows: in performing the Facility Program, Nordion will provide labor at
the rate of [...***...] per hour ([...***...] per hour after November 1, 1997),
and will provide materials and equipment at Nordion's cost plus an additional
[...***...] administrative fee; provided, however, that no such
administrative fee shall be charged on any travel expenses Nordion incurs
pursuant to the Facility Program.
(b) MAXIMUM ACTUAL CAPITAL COST. Except as set forth in Section
2.4, in no event will the Actual Capital Cost invoiced to Coulter exceed
[...***...] (the "Maximum Actual Capital Cost") without the prior written
authorization of Coulter. The Maximum Actual Capital Cost was derived from a
preliminary engineering estimate for a manually operated facility with capacity
to process [...***...] vials per Batch. Upon request of Coulter and as agreed by
Nordion, the scope of the Primary Facility shall be expanded to be capable of
processing [...***...] vials per Batch ("Scope Change"). The Scope Change shall
include the installation of a third Hot Cell, as well as the addition of
automated systems for dispensing, QC testing and packaging. Nordion shall obtain
the prior written authorization of Coulter, as set forth in Section 2.4 for all
incremental expenses resulting from the Scope Change.
(c) AUDITS. Except as provided below, Coulter, at its sole
expense and through an independent certified public accountant reasonably
acceptable to Nordion, shall have the right to access the books and records of
Nordion relating to compensation due hereunder for the sole purpose of verifying
such statements. Such access shall be conducted after six (6) weeks prior
written notice to Nordion during ordinary business hours, shall not be more
frequent than once during each calendar year and shall not include books and
records which predate the date of the audit by more than three (3) years.
Coulter agrees to keep in strict confidence all information learned in the
course of such audit, except when it is necessary to reveal such information in
order to enforce its rights under this Agreement. Coulter's right to have such
records examined shall survive termination or expiry of this Agreement for a
period of two (2) years. In all events, Nordion shall promptly remit to Coulter
the amount of any overpayment. Coulter shall bear the
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full cost of such audit unless such audit discloses an overpayment by Coulter
during the audit period in question (the "Audit Period") of more than
[...***...] of the amount actually due (provided that such overpayment is at
least [...***...] during such Audit Period), in which event Nordion shall
reimburse Coulter for the costs of such audit. In the event a given Audit Period
is more than one year, the [...***...] threshold amount set forth in the
preceding sentence shall be pro rated for such Audit Period by multiplying
[...***...] by a fraction, the numerator of which is the number of days in the
Audit Period and the denominator of which is 365.
2.7 SCALE-UP AND VALIDATION PLAN. After the Primary Facility is
Installed, Nordion agrees, upon request from and in conjunction with Coulter, to
work diligently to develop a Primary Facility Scale-Up and Validation Plan
("Plan") that will allow the expansion of Batch Capacity in the Primary Facility
under cGMP to those amounts set forth in Section 2.1 of the Supply Agreement.
The costs of development and implementation of the Plan will be borne by Coulter
on a time and materials basis.
2.8 REPAIRS AND MAINTENANCE OF FACILITIES. After each of the Interim
Facility and the Primary Facility are Installed, Nordion shall maintain each
such facility in satisfactory operating condition as required by the
Specifications, Process and cGMP and all other applicable laws, regulations,
rules or orders of the United States and Canada. In the event of any conflict
between the applicable laws, regulations, rules or orders of the United States
and the applicable laws, regulations, rules or orders of Canada, Nordion will
notify Coulter of such conflict and the Parties shall act in good faith to
resolve such conflict or to determine which laws, regulations, rules or orders
take precedence; provided, however, that at all times the Parties shall comply
with the requirements of cGMP. The cost of routine repairs, preventative
maintenance and service contracts for [...***...] shall be borne by [...***...].
[...***...] will bear all reasonable expenses for any Major Repairs to or
replacement of the Moveable Equipment. "Major Repair(s)" shall mean a repair to
a given asset entailing expenditures in excess of the lesser of (a) [...***...]
of the subject asset's purchase price as determined at the time of purchase by
the invoice price less any discounts received and (b) [...***...]. The maximum
amount [...***...] will be required to pay in any calendar year for routine
repairs, preventative maintenance and service contracts for the [...***...]
shall be [...***...]. Any reasonable amounts for routine repairs, preventative
maintenance and service contracts for the [...***...] in excess of [...***...]
in any calendar year will be borne by [...***...]. Preventative maintenance and
service contracts for the [...***...] in excess of [...***...] per year which
are approved in advance by [...***...] will be borne by [...***...]. All amounts
set forth in this Section 2.8 shall be based on Nordion's out-of-pocket costs
and Nordion's standard internal labor rates. Nordion shall coordinate with and
advise Coulter regarding the advisability of any Major Repair or replacement.
Notwithstanding anything in this Agreement, [...***...] shall be responsible for
bearing the costs for [...***...]. The only repairs, if any, to the [...***...]
which shall be borne by [...***...] are those [...***...].
2.9 REPORTS. Nordion shall provide monthly written reports to Coulter
summarizing Nordion's progress under the Facility Program.
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ARTICLE 3
ASSET OWNERSHIP
3.1 HOT CELLS.
(a) Nordion has purchased, on behalf of Coulter, the Hot Cells,
which will be/have been installed in the Primary Facility as described above.
Subject to its obligations to [...***...] under circumstances as set forth in
this Agreement, Coulter shall [...***...]; provided, however, that usage thereof
shall belong exclusively to Nordion for the purpose of producing Labelled Drug
for Coulter. Coulter represents and warrants that the Hot Cells are not
encumbered, and shall, during the term of this Agreement, remain free and clear
of any and all encumbrances including, but not limited to, mortgages, charges
and liens and that no effective financing statement or other instrument similar
in effect covering all or any part of the Hot Cells is on file in any recording
office.
(b) In partial consideration of the services to be performed
hereunder by Nordion, on or before the earlier of the natural expiration of the
Supply Agreement or the tenth (10th) anniversary of the Effective Date of this
Agreement, Coulter promises without further notice or demand to either:
(i) pay Nordion [...***...]; or
(ii) [...***...]
If at any time Coulter pays to Nordion the sum set out in (i) above and removes
the Hot Cells, Coulter shall be responsible for all costs associated with such
Decommissioning and removal and shall return the area at Nordion's facility
housing the Hot Cells to substantially its condition and state prior to the
removal of the Hot Cells.
(c) Until such time as Coulter has made [...***...] as set out
elsewhere in this Agreement (the [...***...]), Nordion shall have, and is hereby
granted, [...***...]. The [...***...] shall [...***...] as of the Effective Date
and be [...***...] by Nordion, and shall [...***...] (notwithstanding any
material breach, founded or unfounded, alleged or attributable to Nordion).
Until the [...***...], Nordion at all times shall be entitled to the [...***...]
in accordance with the provisions set out in this Agreement.
(d) Notwithstanding the applicable law set out in this Agreement,
the laws of Ontario shall govern the security interest set out in this Section
3.1.
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3.2 CLASS 100 INSERT. Nordion has purchased, on behalf of Coulter, one
or more Class 100 Insert(s). Coulter shall at all times hold all right, title
and interest in the Class 100 Insert(s). When the Interim Facility is removed
from service, Nordion shall Decommission and store the Class 100 Insert(s)
contained in the Interim Facility at its Kanata site in a manner which would
allow Nordion to use the Class 100 Insert(s) as an available backup to the
Primary Facility for manufacturing Labelled Drug, subject to the availability of
a suitable hot cell, until such time as the Parties mutually agree that the
Class 100 Insert(s) is (are) no longer useful for such purpose. Thereafter,
Nordion, at its option, will either purchase the Class 100 Insert(s) from
Coulter for a commercially reasonable price or deliver it (them) to a site
designated by Coulter, at Coulter's expense.
3.3 OTHER ASSETS. Nordion shall own all assets purchased for
installation in the Interim Facility and the Primary Facility except as set
forth in Sections 3.1 and 3.2 and in the following sentence. In all events,
however, the Moveable Equipment will remain the property of Coulter. The parties
agree that certain backup equipment should be procured for use in the Interim
Facility and the Primary Facility and that such backup equipment may be used by
Nordion for purposes outside this Agreement, subject to the prior written
approval of Coulter.
ARTICLE 4
PAYMENTS
Except as otherwise expressly provided, all payments due to Nordion
hereunder shall be paid within thirty (30) days of receipt of invoice by Coulter
therefor. All payment amounts set forth in this Agreement are in U.S. dollars
and all amounts due under this Agreement shall be paid in U.S. dollars.
ARTICLE 5
LICENSES, PATENTS AND TECHNOLOGY
5.1 LICENSE. Coulter hereby grants Nordion a [...***...] license during
the term of this Agreement to use the data, information and technology provided
by Coulter to Nordion which relates to B1 Antibody radiolabelling, for the
limited purpose of assisting Nordion in carrying out its obligations under this
Agreement.
5.2 OWNERSHIP OF WORK PERFORMED.
(a) For purposes of this section, "Background Technology" shall
mean all Nordion proprietary technology, including patents, know-how,
techniques, methods, processes and trade secrets which Nordion owns or which is
licensed to Nordion by a party other than Coulter and which is in existence in
the form of a writing, prototype or can otherwise be demonstrated to be the
property of Nordion, prior to the effective date of the Development Agreement.
The Background Technology shall remain the sole property of Nordion.
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(b) Nordion agrees and Coulter acknowledges, that any and all
ideas, improvements, inventions and works of authorship conceived, written,
created or first reduced to practice in the performance of this Agreement,
except to the extent that it relates to or embodies the Background Technology or
improvements to the Background Technology, shall be the sole and exclusive
property of Coulter. Except as otherwise set out in this Section 5.2, Coulter is
and shall be vested with all right, title and interest, including patent,
copyright and trade secret rights, in such ideas, improvements, inventions and
works of authorship. Nordion hereby assigns to Coulter all right, title and
interest in and to any and all such ideas, improvements, inventions and works of
authorship.
(c) Coulter hereby grants to Nordion a [...***...] license to
exploit all ideas, improvements, inventions and works of authorship assigned to
or vested in Coulter as described in Section 5.2(b) for any application, except
the manufacture of any pharmaceutical for the treatment of hematological
malignancy.
5.3 COULTER PROPRIETARY INFORMATION. All data, information, or
technology supplied to Nordion by Coulter to assist Nordion in carrying out its
obligations hereunder shall remain the property of Coulter and shall be returned
by Nordion to Coulter upon termination of this Agreement.
5.4 PATENT APPLICATIONS.
(a) Nordion shall execute all papers, including patent
applications, invention assignments and copyright assignments, and otherwise
shall assist Coulter as reasonably required to perfect in Coulter the rights,
title and other interests in Nordion's work product expressly granted to Coulter
under this Agreement. Reasonable costs related to such assistance, if required,
shall be paid by Coulter.
(b) Notwithstanding any other provision of this Agreement, in the
event that Nordion requests in writing that Coulter file, maintain and prosecute
a patent application pertaining to rights granted to Nordion pursuant to Section
5.2(c) hereof, then Coulter shall have thirty (30) days to inform Nordion
whether or not such application will be made. In the event that Coulter fails to
inform Nordion of its intent to proceed with the requested patent application
within such thirty (30) day period, then Nordion shall have the sole right to
proceed with the filing, prosecution and maintenance of such patent application,
at its sole expense. Any patent resulting therefrom shall be the sole property
of Nordion, subject only to Coulter's [...***...] right to use and sublicense
the use of such patent in connection with products based on the 131I-labelled B1
Antibody. Coulter shall execute all papers, including patent applications and
invention assignments, and otherwise shall assist Nordion as reasonably required
to perfect in Nordion the patent rights described in this Section 5.4(b).
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ARTICLE 6
TERMINATION
6.1 TERMINATION FOR BREACH. This Agreement may be terminated by either
Party in the event of the material breach by the other Party of the terms and
conditions hereof; provided, however, the other Party shall first give to the
breaching Party written notice of the proposed termination of this Agreement (a
"Breach Notice"), specifying the grounds therefor. Upon receipt of such Breach
Notice, the breaching Party shall have [...***...] or [...***...] with respect
to a failure by Coulter to pay any amounts hereunder when due, other than with
respect to amounts which Coulter, in good faith, disputes are due to Nordion) to
respond by curing such breach. If the breaching Party does not cure such breach
within such cure period, the other Party may terminate the Agreement. Subject to
Section 11.3, termination of this Agreement pursuant to this Section shall not
affect any other rights or remedies which may be available to the non-breaching
Party.
6.2 REMEDIES UPON TERMINATION. The remedies available to the Parties
upon early termination of this Agreement are set forth in Article 11 of the
Supply Agreement.
6.3 BANKRUPTCY; INSOLVENCY. A Party may terminate this Agreement upon
the occurrence of either of the following:
(a) The other Party is subject to the entry of a decree or order
for relief by a court having jurisdiction in the premises in respect of such
Party in an involuntary case under the Federal Bankruptcy Code in the United
States or the Bankruptcy and Insolvency Act in Canada, as now constituted or
hereafter amended, or any other applicable national federal or state insolvency
or other similar law and the continuance of any such decree or order unstayed
and in effect for a period of sixty (60) consecutive days; or
(b) The filing by the other Party of a petition for relief under
the Federal Bankruptcy Code in the United States or the Bankruptcy and
Insolvency Act in Canada, as now constituted or hereafter amended, or any other
applicable federal or state insolvency or other similar law.
6.4 CONSEQUENCES OF TERMINATION OR EXPIRATION. Upon expiration or
termination of this Agreement, the obligations of the Parties under Sections
2.6(c), 5.2, 5.4, 11.3 and Articles 3, 7 and 10 hereof, and any other article
which by its nature is to survive shall survive such expiration or termination.
6.5 SIMULTANEOUS TERMINATION OF SUPPLY AGREEMENT AND THIS AGREEMENT. If
either Party terminates the Supply Agreement or Facilities Agreement for any
reason, both Agreements shall be deemed to be terminated on the same day and
Article 11 of the Supply Agreement shall govern the effect and consequences of
the termination with respect to both agreements.
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ARTICLE 7
INDEMNITY
7.1 INDEMNIFICATION BY COULTER. Subject to Nordion's compliance with
Section 7.4, Coulter agrees to indemnify, defend and hold Nordion and its
Affiliates, and their respective directors, officers, employees and agents
harmless from and against any damages, claims, liabilities and expenses
(including, but not limited to, reasonable attorneys' fees) resulting from any
third party claims or suits ("General Claims Against Nordion") arising out of
(a) Coulter's breach of any of its warranties or representations hereunder or
(b) Coulter's negligent acts or omissions or willful misconduct. Notwithstanding
the foregoing, Coulter will not be required to indemnify, defend and hold
Nordion or its Affiliates, and their respective directors, officers, employees
and agents harmless from and against any General Claims Against Nordion arising
out of (i) Nordion's breach of any of its warranties or representations
hereunder; (ii) Nordion's negligent acts or omissions or willful misconduct; or
(iii) except as otherwise directed by Coulter, any failure of Nordion to
construct the Interim Facility and/or the Primary Facility in accordance with
Sections 2.1 and 2.2 hereof and in accordance with cGMP and any other applicable
laws, regulations or other requirements of any applicable governmental entity in
the United States or Canada. Notwithstanding anything in this Section 7.1,
General Claims Against Nordion shall not include IP Claims Against Nordion (as
such term is defined below).
7.2 INDEMNIFICATION BY NORDION. Subject to Coulter's compliance with
Section 7.4, Nordion agrees to indemnify, defend and hold Coulter and its
Affiliates, and their respective directors, officers, employees and agents
harmless from and against any damages, claims, liabilities and expenses
(including, but not limited to, reasonable attorneys' fees) resulting from any
third party claims or suits ("General Claims Against Coulter") arising out of
(a) Nordion's construction and/or use of the Interim Facility and the Primary
Facility; (b) Nordion's breach of any of its warranties or representations
hereunder; or (c) Nordion's negligent acts or omissions or willful misconduct.
Notwithstanding the foregoing, Nordion will not be required to indemnify, defend
and hold Coulter or its Affiliates, and their respective directors, officers,
employees and agents harmless from and against any General Claims Against
Coulter arising out of (i) Coulter's breach of any of its warranties or
representations hereunder or (ii) Coulter's negligent acts or omissions or
willful misconduct. Notwithstanding anything in this Section 7.2, General Claims
against Coulter shall not include IP Claims against Coulter (as such term is
defined below).
7.3 INTELLECTUAL PROPERTY CLAIMS.
(a) Subject to Coulter's compliance with Section 7.4, Nordion
agrees to indemnify, defend and hold Coulter and its Affiliates, and their
respective directors, officers, employees and agents harmless from and against
any damages, claims, liabilities and expenses (including, but not limited to,
reasonable attorneys' fees) resulting from any third party claims or suits
arising out of any proceeding instituted by or on behalf of a third party based
upon a claim that the construction or use of the Interim Facility or the Primary
Facility infringes a United States or Canadian patent or any other proprietary
rights of a third party ("IP Claims against Coulter"). Notwithstanding the
foregoing, Nordion will not be required to indemnify, defend
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and hold Coulter or its Affiliates, and their respective directors, officers,
employees and agents harmless for and against any IP Claims Against Coulter
arising out of any data, information or technology provided by Coulter to
Nordion for purposes of this Agreement.
(b) Subject to Nordion's compliance with Section 7.4, Coulter
agrees to indemnify, defend and hold Nordion and its Affiliates, and their
respective directors, officers, employees and agents harmless from and against
any damages, claims, liabilities and expenses (including, but not limited to,
reasonable attorneys' fees) resulting from any third party claims or suits
arising out of any proceeding instituted by or on behalf of a third party based
upon a claim that the use of any data, information or technology provided by
Coulter to Nordion for purposes of this Agreement infringes a United States or
Canadian patent or any other proprietary rights of a third party ("IP Claims
against Nordion").
7.4 INDEMNIFICATION PROCEDURES. A Party (the "Indemnitee") which intends
to claim indemnification under this Article 7 shall promptly notify the other
Party (the "Indemnitor") in writing of any action, claim or other matter in
respect of which the Indemnitee or any of its Affiliates, or any of their
respective directors, officers, employees or agents intend to claim such
indemnification; provided, however, the failure to provide such notice within a
reasonable period of time shall not relieve the Indemnitor of any of its
obligations hereunder except to the extent the Indemnitor is prejudiced by such
failure. The Indemnitee shall permit, and shall cause its Affiliates, and their
respective directors, officers, employees and agents to permit, the Indemnitor,
at its discretion, to settle any such action, claim or other matter. The
Indemnitee agrees to the complete control of such defense or settlement by the
Indemnitor; provided, however, such settlement does not adversely affect the
Indemnitee's rights hereunder or impose any obligations on the Indemnitee in
addition to those set forth herein in order for it to exercise such rights. No
such action, claim or other matter shall be settled without the prior written
consent of the Indemnitor, and the Indemnitor shall not be responsible for any
attorneys' fees or other costs incurred other than as provided herein. The
Indemnitee, its Affiliates, and their respective directors, officers, employees
and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any action, claim or other
matter covered by this indemnification. The Indemnitee shall have the right, but
not the obligation, to be represented by counsel of its own selection and at its
own expense.
7.5 INSURANCE. Nordion agrees, at Nordion's expense, to maintain general
liability insurance and property insurance covering loss or damage to (i) the
Interim Facility and the Primary Facility, (ii) any asset owned by Coulter in
the possession of Nordion under this Agreement, including, but not limited to,
[...***...], and (iii) Nordion's facility located at Kanata, Ontario. Such
insurance policy shall designate Coulter as payee in the event of any loss or
damage specifically as it relates to any asset owned by Coulter. Nordion agrees
that such insurance shall be replacement value insurance for all property owned
by Coulter. Nordion shall provide to Coulter a certificate of insurance
designating Coulter as payee in event of any loss or damage covered by clause
(ii) of the first sentence of this Section 7.5, provided that any proceeds so
received shall be used to repair or replace such damaged or destroyed assets,
including, but not limited to, [...***...]. Any insurance policy held by Nordion
pursuant to this Section 7.5 will provide that
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the insurer shall give Coulter thirty (30) days advance notice of any
termination or cancellation of such coverage by the insurer. Nordion shall
provide Coulter with thirty (30) days written notice prior to termination or
cancellation of such coverage by Nordion. Any proceeds received by Nordion for
the damage or destruction of the Primary Facility shall be used to repair or
replace such facility. This Section 7.5 shall survive termination of this
Agreement with respect to clause (ii) of the first sentence of this Section 7.5.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1 COULTER WARRANTIES. Coulter warrants that:
(a) all activities of Coulter under this Agreement will be
accomplished in accordance with the terms of this Agreement;
(b) (i) to Coulter's best information and belief, it is the owner
or licensee of all data, information and technology supplied to Nordion by
Coulter to assist Nordion in carrying out its obligations hereunder (the
"Coulter IP"), (ii) to Coulter's best information and belief, the Coulter IP
does not infringe any patents, copyright or other industrial or intellectual
property rights of third parties, (iii) it has the right to grant the license
set forth in Section 5.1 and the right to permit Nordion to use the Coulter IP
to carry out Nordion's obligations as contemplated herein, and (iv) it has not
received any notice of adverse claim or infringement of any patent contained in
the Coulter IP; and
(c) to Coulter's best information and belief, there are no
intellectual property rights, such as, but not limited to valid United States
patents, that would be infringed by the manufacture, use or sale of Labelled
Drug. Notwithstanding the preceding sentence, Coulter makes no warranty with
respect to intellectual property rights relating to (i) any processes performed
by Nordion hereunder, except for that portion of any process contributed by
Coulter, or (ii) the construction or maintenance of the Interim Facility or the
Primary Facility by Nordion.
8.2 NORDION WARRANTIES. Nordion warrants that:
(a) all activities of Nordion under this Agreement will be
accomplished in accordance with the terms of this Agreement;
(b) (i) except for the Coulter IP, to Nordion's best information
and belief, it is the owner of all data, information and technology to be used
by Nordion in carrying out its obligations hereunder (the "Nordion IP"), (ii) to
Nordion's best information and belief, the Nordion IP does not infringe any
patents, copyright or other industrial or intellectual property rights of third
parties, (iii) it has the right to use the Nordion IP to carry out its
obligations as contemplated herein, and (iv) it has not received any notice of
adverse claim or infringement of any patent relating to the Nordion IP; and
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(c) to Nordion's best information and belief, there are no
intellectual property rights, such as, but not limited to valid United States
patents, that would be infringed by (i) any processes performed by Nordion
hereunder, except for that portion of any process contributed by Coulter, or
(ii) the construction or maintenance of the Interim Facility or the Primary
Facility by Nordion.
8.3 MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party hereby
represents and warrants to the other Party that this Agreement is legal and
valid and the obligations binding upon such Party are enforceable in accordance
with their terms, and that the execution, delivery and performance of this
Agreement does not conflict with any agreement, instrument or understanding,
oral or written, to which such Party may be bound, nor violate any law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.
ARTICLE 9
FORCE MAJEURE
Neither Party shall be liable to the other for loss or damage by virtue
of the occurrence of an event of Force Majeure (as defined in this Article 9).
In the event of Force Majeure, the Party affected shall promptly notify the
other and shall exert commercially reasonable efforts to eliminate, cure or
overcome such event and to resume performance of its obligations. Coulter
acknowledges that if Nordion is the Party affected by the Force Majeure event,
Nordion may first restore the production of its core products at Nordion's
facility prior to resuming its obligations under this Agreement, but Nordion
agrees that it will resume its obligations under this Agreement as soon as is
practicable thereafter. "Force Majeure" shall mean an occurrence which prevents,
delays or interferes with the performance by a Party of any of its obligations
hereunder, if such event occurs by reason of any act of God, flood, fire,
explosion, casualty or accident, or war, revolution, civil commotion, acts of
public enemies, blockage or embargo, or any law, order or proclamation of any
government, failure of suppliers to provide materials, equipment or machinery,
interruption of or delay in transportation, strike or labor disruption, or any
other cause whatsoever, whether similar or dissimilar to those above enumerated,
beyond the commercially reasonable control of such Party.
ARTICLE 10
CONFIDENTIALITY
10.1 CONFIDENTIALITY AND EXCEPTIONS. Except as set forth below, all
information disclosed by one Party to the other Party in connection with the
work performed hereunder shall be deemed to be the disclosing Party's
"Confidential Information". Confidential Information shall include, but not be
limited to, information relating to the B1 Antibody and the structure of
Labelled Drug, any know-how relating to the manufacture of facilities for the
production of Labelled Drug, and the manufacturing cost and other financial
arrangements made pursuant to this Agreement. Each Party agrees that it will
take the same steps to protect the confidentiality of
15.
<PAGE> 16
the other Party's Confidential Information as it takes to protect its own
proprietary and confidential information, which shall in no event be less than
reasonable steps. Each Party, and its employees and agents, shall protect and
keep confidential and shall not use, publish or otherwise disclose to any third
party, except as permitted by this Agreement, or with the other Party's written
consent, the other Party's Confidential Information. For the purposes of this
Agreement, Confidential Information shall not include such information that:
(a) was already known to the receiving Party at the time of
disclosure by the other Party, other than under an obligation of
confidentiality; or
(b) was generally available to the public or was otherwise part
of the public domain at the time of disclosure or became generally available to
the public or otherwise part of the public domain after disclosure other than
through any act or omission of the receiving party in breach of this Agreement;
or
(c) was lawfully disclosed to the receiving Party, other than
under an obligation of confidentiality, by a third party who had no obligation
not to disclose such information to others; or
(d) was independently developed by or for the receiving Party
without the aid, application or use of Confidential Information; or
(e) was disclosed to a third party by the disclosing Party
without an obligation of confidentiality; or
(f) was independently developed by persons who did not have
access to the Confidential Information.
10.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential
Information hereunder to the extent such disclosure is reasonably necessary for
prosecuting or defending litigation, complying with applicable government laws
or regulations or conducting preclinical or Clinical Trials, provided that if a
Party is required by law or regulation to make any such disclosure of the other
Party's Confidential Information it will, except where impracticable for
necessary disclosures, for example in the event of medical emergency, give
reasonable advance notice to the other Party of such disclosure requirement and
will use its reasonable efforts to secure a protective order or confidential
treatment of such Confidential Information required to be disclosed. In
addition, upon prior approval of Nordion, which will not be unreasonably
withheld, Coulter may disclose, under a comparable binder of confidentiality,
and on a need-to-know basis, information received under this Agreement to its
other partners for the development or commercialization of Labelled Drug.
Neither Party shall disclose Confidential Information of the other Party in any
patent filings without the prior written consent of the other Party.
10.3 CONFIDENTIALITY AND PUBLICITY. The Parties agree that, except as
may otherwise be required by applicable laws, regulations, rules, or orders, and
except as may be authorized elsewhere in this Article 10, no information
concerning this Agreement and the transactions contemplated herein shall be made
public by either Party without the prior written consent of the
16.
<PAGE> 17
other. In the event either Party decides to issue a press release announcing the
execution of this Agreement, it shall not do so without the prior written
approval of the other Party of the text of such press release, such approval not
to be unreasonably withheld..
10.4 SURVIVAL OF CONFIDENTIALITY. All obligations of confidentiality and
non-use imposed upon the Parties under this Article 10 shall expire ten (10)
years after the expiration or termination of this Agreement.
ARTICLE 11
GENERAL PROVISIONS
11.1 NOTICE. All notices under this Agreement must be made in writing
and mailed or delivered to the following:
Coulter: Coulter Pharmaceutical, Inc.
550 California Avenue, Suite 200
Palo Alto, CA, U.S.A.
Attention: Chief Financial Officer
Nordion: MDS Nordion Inc.
447 March Road
Kanata, Ontario, CANADA
Attention: Vice President, Technology and
Business Development
11.2 NO IMPLIED LICENSE. It is agreed that disclosure of data,
information or technology by Nordion or Coulter during the term of this
Agreement shall not, except to the extent granted herein, constitute any grant,
option or license under any patent, technology or other rights held by Nordion
or Coulter.
11.3 DISCLAIMER OF CONSEQUENTIAL DAMAGES. Except as set forth in the
Supply Agreement, in no event shall either Party be liable to the other Party or
its Affiliate for indirect, contingent, incidental, special or consequential
damages, including, but not limited to, any claim for damages based on lost
profits, cost of capital, loss of business opportunity or loss of time.
11.4 ASSIGNMENT. Assignment of this Agreement may only be carried out in
conjunction with the Supply Agreement and for the purposes of assignment the
terms and conditions contained in Section 16.5 of the Supply Agreement shall
govern.
11.5 APPLICABLE LAW. Except as set forth in Section 3.1(d), this
Agreement will be governed by the laws of the State of New York as applied to
contracts executed and performed in New York by New York residents.
17.
<PAGE> 18
11.6 DISPUTE RESOLUTION.
(a) In the event that at any time during the term of this
Agreement a disagreement, dispute, controversy or claim should arise relating to
scientific or technical issues in connection with Nordion's performance under
this Agreement, the Parties will attempt in good faith to resolve their
differences for [...***...]. If, after [...***...], the Parties are unable to
resolve such dispute, the Parties shall refer the matter to a third party
consultant with expertise in the scientific or technical area of dispute for
[...***...]. In the event such consultant is unable to work out a resolution of
the issue with the Parties, either Party shall be free to take any action and
seek any remedy it may have at law or in equity, including specific performance
and injunctive relief.
(b) In the event that at any time during the term of this
Agreement a disagreement, dispute, controversy or claim should arise out of or
relating to the interpretation of or performance under this Agreement, or the
breach, or invalidity thereof other than a dispute relating to scientific or
technical issues in connection with Nordion's performance under this Agreement,
the Parties will attempt in good faith to resolve their differences by referring
the matter to the Chief Executive Officers of the Parties (or their designees)
for [...***...], following which either Party shall be free to take any action
and seek any remedy it may have at law or in equity, including specific
performance and injunctive relief.
11.7 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby, unless the absence of the invalidated provision(s) adversely affect the
substantive rights of the Parties. The Parties agree to replace any invalid
provision or parts thereof by new provision(s) which closely approximate the
economic and proprietary results intended by the Parties.
11.8 ENTIRE AGREEMENT. This Agreement, together with the attached
Exhibits and the Supply Agreement and the Development Agreement, contains the
sole and entire understanding of the Parties related to its subject matter and
supersedes all prior or contemporaneous oral or written agreements concerning
the subject matter.
11.9 MODIFICATION. This Agreement cannot be changed orally and no
modification of this Agreement will be recognized or have any effect, unless the
writing in which it is set forth is signed by Nordion and Coulter, nor will any
waiver of any of the provisions of this agreement be effective unless in writing
and signed by the Party to be charged therewith.
11.10 COMPLIANCE. This Agreement shall be carried out in compliance with
all applicable laws, by-laws, rules, regulations and orders of federal, state,
provincial or municipal governments.
18.
[*] Confidential Treatment Requested
<PAGE> 19
11.11 NON-WAIVER. Failure by either Party to enforce at any time any of
the provisions of this Agreement shall not be construed as a waiver of its
rights hereunder. Any waiver of a breach of any provision hereof shall not
affect either Party's rights in the event of any additional breach.
11.12 HEADINGS. The headings herein are for the purpose of convenience
of reference only and are not intended to define or limit the contents of this
Agreement.
11.13 EFFECTIVE DATE. This Agreement shall be deemed effective as of
[...***...].
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by the respective duly authorized officers as of the date first written
above.
MDS NORDION INC.
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
COULTER PHARMACEUTICAL, INC.
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
19.
[*] Confidential Treatment Requested
<PAGE> 20
EXHIBIT 1.13
LETTER AGREEMENTS DATED
FEBRUARY 23, 1996 AND SEPTEMBER 30, 1997
<PAGE> 21
Nordion International Inc.
447 March Road
Kanata, Ontario
Canada
K2K-1X8
Attention: David Evans, V.P. Technology and Business Development
Dear Sir,
1. In preparation for the carrying out of the Facility Phase and
commercial supply of radiolabelled B-1 antibody with 1-131 as set out in the
agreement between Nordion International Inc. ("Nordion") and Coulter
Pharmaceutical, Inc. ("Coulter"), dated the 15th day of November, 1995 (the
"Agreement"), we hereby instruct Nordion and Nordion, in reliance on said
instruction, agrees to proceed with the purchase of the hot cells as Nordion
deems appropriate to carry out the Facility Phase and commercial supply of
radiolabelled B-1 antibody with I-131. Coulter acknowledges that Nordion shall
be entering into a purchase agreement (the "Purchase Agreement") with its
supplier Von Gahlen International Inc. ("Won Gahlen") for the purchase and
supply of such hot cells.
2. In consideration of the purchase of the hot cells by Nordion,
Coulter hereby agrees to reimburse to Nordion the purchase price of [...***...],
plus an administration fee of [...***...] calculated thereon (hereafter the
"Aggregate Purchase Price"), payable as follows: Coulter shall pay to Nordion,
due within five (5) business days of execution of this letter agreement,
[...***...]. In addition Coulter shall make interim payments (the "Interim
Payments") to Nordion, (i) on a monthly basis within 15 days of receipt of
Nordion's invoice, and (ii) within 15 days of receipt of Nordion's invoice after
inspection/acceptance of the hot cells by Nordion at Von Gahlen's site, such
Interim Payments corresponding to the contract value of work performed to such
date by Von Gahlen, increased by the above mentioned [...***...] administration
fee. Coulter shall make a final payment (the "Final Payment") to Nordion within
30 days of receipt of Nordion's invoice after installation/acceptance of the hot
cells by Nordion at Nordion's facility. The [...***...] shall be retained by
Nordion and applied to the Final Payment when due, provided, for greater
certainty, that in the event of cancellation of the Purchase Agreement by
Nordion prior to Final Payment due to the acts or omissions of Coulter, such sum
shall be deemed forfeited by Coulter.
3. Without the prior written consent of Coulter, under no circumstances
shall Coulter's payment obligations through the Interim Payment immediately
following inspection/acceptance by Nordion at Von Gahlen's site in the aggregate
exceed [...***...] nor shall Coulter's total payment obligations under this
agreement, subject to the indemnity provisions contained herein, exceed the
Aggregate Purchase Price. Notwithstanding the immediately preceding sentence and
without regard to the limitations set out therein, in the event of cancellation
of the Purchase Agreement due to the acts or omissions of Coulter the
cancellation payment terms set forth in paragraphs 5 and 8 shall govern.
[*] Confidential Treatment Requested
<PAGE> 22
4. Accompanying each of Nordion's invoices shall be a report issued by Von
Gahlen setting out work performed and the contract value of such work performed
during the relevant period. With respect to the Interim Payment following
inspection/acceptance at Von Gahlen's site and with respect to the Final
Payment, Nordion's invoice shall be accompanied by its written representation
that Nordion has paid the amounts due to Von Gahlen following Nordion's
inspection/acceptance, pursuant to the terms of the Purchase Agreement. Within
30 days of installation/acceptance of the hot cells at Nordion's facility,
Nordion shall provide to Coulter a report stipulating that the work performed by
Von Gahlen substantially conforms to specification (which may be amended from
time to time) as set out in the Purchase Agreement and that the hot cells may be
used for the purpose for which they are intended.
5. In the event of termination by Nordion of the purchase of the hot cells
from Von Gahlen, due to the acts or omissions of Coulter, including but not
limited to Coulter's failure to pay any sums due Nordion or Coulter's
discontinuation of the project, Coulter shall indemnify and hold harmless
Nordion for all losses, costs, expenses (including reasonable attorneys fees)
and damages that Nordion may incur as a result of any claim, action or suit
instituted by Von Gahlen against Nordion. Such indemnification on the pan of
Coulter does not extend to claims arising out of Nordion's gross negligence,
recklessness, or intentional wrongdoing.
6. In addition, Nordion shall stipulate in the Purchase Agreement with Von
Gahlen that if Von Gahlen shall fail to complete installation of the hot cells
within one week of the installation date specified in the Purchase Agreement,
for reason other than an act or omission of Nordion or force majeure, in
addition to any other remedies Nordion may have, a late charge by way of
liquidated damages shall be payable by Von Gahlen to Nordion in the amount of
[...***...] per week of the total purchase price of the hot cells, for
[...***...]. Any such amounts collected by Nordion, provided Coulter is not in
default under this agreement, shall be paid over to Coulter.
7. Nordion and Coulter shall use good faith efforts to negotiate and enter
into an agreement to carry out the Facility Phase and manufacturing obligations
for clinical trials and commercial supply of radiolabelled B-1 antibody with
1-131 which negotiations, notwithstanding the provision of right of first
negotiation set out in the Agreement, shall be completed prior to April 30,
1996. In the event that such good faith negotiations and an agreement are not
concluded by April 30, 1996, or such other date as agreed between the parties,
Nordion shall cancel the Purchase Agreement without recourse by Coulter.
8. Upon cancellation of the Purchase Agreement due to the acts or omissions
of Coulter or failure by the parties to reach the agreement contemplated in
paragraph 7, within 15 days after receipt of Nordion's final invoice, Coulter
shall pay to Nordion the remaining unpaid contract value owing by Nordion to Von
Gahlen to the date of cancellation, as determined under provisions of the
Purchase Agreement, plus Nordion's [...***...] administration fee to the extent
not previously paid. At Coulter's request provided to Nordion within 20 days of
the effective date of termination and at Coulter's expense, Nordion shall take
possession of and/or assign such work performed, to Coulter. All shipping costs
incurred by Nordion for delivery to Coulter shall be borne by Coulter.
[*] Confidential Treatment Requested
<PAGE> 23
9. Prior to installation of the hot cells at Nordion's facility, so long as
all payments then due have been received by Nordion from Coulter, title in and
to the work performed by Von Gahlen (including hot cells, components or parts
thereof, as between Nordion and Coulter, shall belong to Coulter. For greater
certainty, work performed by Von Gahlen shall not include Nordion drawings or
other Nordion proprietary information provided to Von Gahlen.
This letter agreement shall be governed and construed in accordance with the
laws of the Province of Ontario, Canada, without reference to its conflict of
laws.
Yours truly,
COULTER PHARMACEUTICAL, INC. We acknowledge and concur with the
foregoing this 23rd day of February, 1996.
By: NORDION INTERNATIONAL INC.
--------------------------
By:
--------------------------
[*] Confidential Treatment Requested
<PAGE> 24
[COULTER PHARMACEUTICAL LOGO]
To: Graham Duncan - MDS- Nordion
From: M. Buckley
Subject: Authorization of Expenditure for Third Hot Cell in Primary Facility
Date: 9/30/97
cc: D. Shock, K. Iverson, B. Harris and C. David - MDS-Nordion
This letter is authorization for the expenditure of approximately [...***...]
for the design, construction and installation of a third hot cell in the primary
facility to house the automated QC, inspection, labelling and packaging
operations. This price includes the following general categories:
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
Installation is targeted to commence [...***...] with shipment from Von Gahlen
- -- Netherlands on or before [...***...].
The terms of payment would be as follows:
[...***...]
[...***...]
[...***...]
The hot cell will be inspected at the Netherlands facility by Nordion and CPI
personnel and accepted [...***...].
This should be sufficient to allow the work to being on this project. Please
keep me apprised of any development that will effect either price or meeting
project timelines.
Best regards,
Michael Buckley -- Manager Product Development
[*] Confidential Treatment Requested
<PAGE> 25
EXHIBIT 1.20
MOVEABLE EQUIPMENT
131 1 ANTI-B1 FACILITY
AS OF DECEMBER 31, 1997
MOVEABLE FIXED ASSETS
[...***...]
[*] Confidential Treatment Requested
<PAGE> 26
[...***...]
[*] Confidential Treatment Requested
<PAGE> 27
[...***...]
[*] Confidential Treatment Requested
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 49,332
<SECURITIES> 58,967
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 108,763
<PP&E> 7,398
<DEPRECIATION> 761
<TOTAL-ASSETS> 116,287
<CURRENT-LIABILITIES> 12,593
<BONDS> 1,967
0
0
<COMMON> 16
<OTHER-SE> 101,711
<TOTAL-LIABILITY-AND-EQUITY> 116,287
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 30,302
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 242
<INCOME-PRETAX> (27,435)
<INCOME-TAX> 0
<INCOME-CONTINUING> (27,435)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,435)
<EPS-PRIMARY> (1.96)
<EPS-DILUTED> (1.96)
</TABLE>
