EXHIBIT 10.34
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
PRODUCT MANUFACTURING AND SUPPLY AGREEMENT
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BETWEEN:
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CYTOGEN CORPORATION
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AND
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DRAXIMAGE INC.
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DATED
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DECEMBER 5, 2000
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CONTENTS
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ARTICLE 1 - INTERPRETATION
ARTICLE 2 - MANUFACTURING, SUPPLY AND RELATED SERVICES
ARTICLE 3 - QUALITY ASSURANCE
ARTICLE 4 - PRODUCT SUPPLY AND QUANTITIES
ARTICLE 5 - DELIVERY AND TITLE TO PRODUCTS
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES
ARTICLE 7 - THIRD PARTY LIABILITY
ARTICLE 8 - TERM AND TERMINATION
ARTICLE 9 - DISPUTE RESOLUTION
ARTICLE 10 - CONFIDENTIALITY
ARTICLE 11 - FORCE MAJEURE
ARTICLE 12 - ASSIGNMENT AND SUBLICENSING
ARTICLE 13 - MISCELLANEOUS
PRODUCT MANUFACTURING AND SUPPLY AGREEMENT
THIS AGREEMENT is effective from the 5th day of December, 2000
BETWEEN: CYTOGEN CORPORATION, a corporation incorporated under
the laws of Delaware, having its head office at 600
College Road East - CN 5308, Xxxxxxxxx, Xxx Xxxxxx
00000-0000
("Cytogen")
AND: DRAXIMAGE INC., a corporation incorporated under the
laws of Canada having its principal place of business
at 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxx,
X0X 0X0
("DRAXIMAGE");
WHEREAS concurrent with the execution of this Agreement, the Parties shall enter
into a license and distribution agreement wherein DRAXIMAGE will license to
Cytogen the Products for distribution and sale within the Territory in
accordance with the terms therein (the "License Agreement");
AND WHEREAS Cytogen desires to have DRAXIMAGE manufacture and supply the
Products;
AND WHEREAS DRAXIMAGE desires to manufacture and supply such Products;
AND WHEREAS the Parties are willing to carry out the foregoing pursuant to the
terms and conditions set forth in this Agreement;
NOW THEREFORE in consideration of the mutual covenants and agreements in this
Agreement, Cytogen and DRAXIMAGE agree with each other as follows:
ARTICLE 1 - INTERPRETATION
1.1 Defined Terms. As used in this Agreement, the following terms have
the following meanings unless the context clearly requires otherwise:
"Affiliate(s)" as applied to DRAXIMAGE or Cytogen shall mean any legal
entity other than DRAXIMAGE or Cytogen, as the case may be, in whatever
country organized, controlled by or under common control with DRAXIMAGE
or Cytogen. "Affiliate" shall also mean any company which owns or
controls at least fifty per cent (50%) of the voting stock of Cytogen
or DRAXIMAGE, or any other company at least fifty per cent (50%) of
whose voting stock is owned by or controlled by such company. The term
"control" means possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such entity,
whether pursuant to the ownership of voting securities, by contract or
otherwise.
"Agreement" means this Product Manufacturing and Supply Agreement and
all schedules and instruments supplemental to or amending or confirming
it.
"Batch" means a production batch of Products as specified in Schedule
"A".
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"Business Day(s)" means a day other than a Saturday or Sunday, on which
Canadian chartered banks are open for the transaction of domestic
business in the City of Montreal, Province of Quebec.
"Calendar Year" means January 1 to December 31 of any given year.
"CFR" means the U.S. Code of Federal Regulation.
"cGMP" or "Current Good Manufacturing Practices" means as the case may
be the practices set out in the guidelines published as the Good
Manufacturing Practices for Drug Manufacturers and Importers by the
Health Protection Branch of Health Canada, as amended from time to
time, for the manufacture of pharmaceutical products and the Current
Good Manufacturing Practices as defined in United States 21 CFR - 820,
et seq., as amended from time to time.
"CNSC" means the Canadian Nuclear Safety Commission or any successor to
it.
"Commercially Reasonable Efforts" shall mean reasonable efforts and
resources at least equal to those normally used by a reputable
pharmaceutical or biotechnology company, under similar circumstances as
the Parties to this Agreement, for a compound, formulation or product
owned by it or to which it has rights, which has a similar market
potential to the Products at a similar stage in its product life,
taking into account the formulation of the Products, the
competitiveness of the Products' marketplace, the proprietary position
of the Products, the applicable regulatory structure and requirements
for the Products, the clinical and pre-clinical study results
pertaining to the Products, time and cost of completion of development
of the Products, the profitability of the Products, the size and
location of the subject market of the Products within the Territory,
and any other relevant factors.
"Distribution" means the logistical and financial aspects related to
the shipment of Product from the Facility to Cytogen's customers in
accordance with applicable Laws and includes, without limitation,
arranging and paying for adequate Product insurance, freight and
customs matters.
"Facility" means DRAXIMAGE's facility located at 00000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx including, without limitation, the
hot lab section of same and, subject to Cytogen's prior written
approval, such other facilities used by DRAXIMAGE in the Fabrication of
Products hereunder.
"FDA" means the United States Food and Drug Administration or any
successor to it.
"Fabricate" or "Fabricated" means to effect Fabrication.
"Fabrication" means any operation required in the manufacturing, the
processing, the testing, the packaging and the labelling, as the case
may be, of the Products by DRAXIMAGE at its Facility (but expressly
does not include the Distribution of the Products).
"Force Majeure Event" has the meaning ascribed thereto in Article 11.1.
"Governmental Authority" or "Governmental Authorities" means any court,
tribunal, arbitrator, agency, administration (including the FDA),
commission (including the NRC and CNSC), official or other
instrumentality of the United States, Canada or any foreign country or
any territory, or any domestic or foreign state, province, country,
city or other political subdivision thereof.
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"Indemnitee" means either Party, as the case may be, and that Party's
shareholders, directors, officers, employees, agents and
representatives.
"Initial Capacity" shall have the meaning ascribed thereto in Article
4.2 hereof.
"Law(s)" means any law, statute, rule, regulation, guideline (including
Current Good Manufacturing Practices), ordinance or other pronouncement
of any Governmental Authority having the effect of law in the United
States, Canada, any foreign country or any territory or any domestic or
foreign state, province, county, city or other political subdivision.
"License(s)" means the licenses required or issued to Cytogen or
DRAXIMAGE, as the case may be, by the relevant Governmental Authority
in respect of the Fabrication, marketing and Distribution of the
Products.
"License Agreement" shall have the meaning ascribed thereto in the
recitals to this Agreement, which are incorporated by reference.
"Losses" mean any and all direct damages, recalls (voluntary or
involuntary), fines, fees, settlements, payments, obligations,
penalties, deficiencies, direct losses, costs and expenses (including
without limitation, interest, court costs, reasonable fees of
attorneys, accountants and other experts and other reasonable expenses
of litigation or other Proceedings or of any claim, default or
assessment).
"NRC" means the United States Nuclear Regulatory Commission or any
successor to it.
"Party" means either Cytogen or DRAXIMAGE, individually; "Parties"
means Cytogen and DRAXIMAGE collectively.
"Person(s)" means any natural person, entity, corporation, general
partnership, limited partnership, proprietorship, other business
organization, trust, union, association or Governmental Authority.
"Price(s)" means the prices to be paid by Cytogen to DRAXIMAGE for the
Fabrication of the Products by DRAXIMAGE as listed in the attached
Schedule "B" to this Agreement.
"Proceeding(s)" means applicable action, claim, complaint, suit,
arbitration or Governmental Authority action, notification,
investigation or audit.
"Product" or "Product(s)" means, singularly or collectively,
DRAXIMAGE's titanium-encapsulated brachytherapy seeds
("BrachySeed(TM)") based on the radioisotope Iodine-125 ("I125
Product") or Palladium-103 ("Pd103 Product") as approved in the
Territory, for the indication of cancer of the prostate and as
Fabricated in accordance with the Specifications.
"Proprietary Information" includes, without limitation, compilations,
formulae, processes, plans, blueprints, formulations, technical
information, new product information, methods of product delivery, test
procedures, know-how, software, customer addresses, customer lists,
market plans or strategies, sales information, specifications,
scientific, clinical, commercial and any other information or data
considered confidential in nature, whether communicated in writing or
orally, which is of competitive advantage to either Party in the
conduct of its business.
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"Raw Material Costs" shall mean the direct costs related to the
purchase of raw materials from third party suppliers that are necessary
and allocable to the Fabrication of the Products, as determined in
accordance with generally accepted accounting principles, consistently
applied and expressly includes, without limitation, the costs of
purchasing I125 and Pd103 radioisotopes and titanium and
platinum/iridium components, but expressly excludes indirect costs such
as labour overhead allocations and third party license fees, royalties,
milestone or other payments related to the Products.
"Regulatory Approval(s)" shall mean a 510-K clearance, premarket
approval and/or any similar or successor approval issued from time to
time by the FDA, or any successor agency, and any required approvals
from the NRC or the CNSC, or any successor agency, which is required
for the manufacturing, supply, transportation, marketing and selling
(with the exception of Cytogen's promotional material and other similar
documentation) of the Products in the Territory.
"Specifications" means the procedures, requirements (regulatory or
otherwise), standards and other items necessary to Fabricate the
Products, as described in Schedule "A" to this Agreement, as approved
by the FDA.
"Term" means the term of this Agreement as defined in Article 8.1
hereof.
"Territory" means the United States and its territories.
"Volume Discount" has the meaning ascribed thereto in Schedule "B".
1.2 Incorporation of Schedules. Schedules and other documents attached
or referred to in this Agreement are an integral part of this
Agreement, including the following:
Schedule "A" Existing Product Specifications
Schedule "B" Prices for Fabrication of the Products
1.3 Currency. Except as otherwise expressly stated, all dollar amounts
referred to in this Agreement are in United States ("US") dollars.
1.4 General. Article headings in this Agreement are for convenience only
and shall not be used in interpreting this Agreement. This Agreement
shall be read with such changes in gender or number as the context
requires.
ARTICLE 2 - MANUFACTURING, SUPPLY AND RELATED SERVICES
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2.1 Terms of Supply.
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(a) Subject to early termination of this Agreement in accordance with
the provisions of Article 8 hereof, DRAXIMAGE shall during the
Term exclusively (i) Fabricate the Products in the Facility for
Cytogen and (ii) supply Products to Cytogen's customers (as
requested by Cytogen) in accordance with the terms and conditions
set out in this Agreement.
(b) In consideration of the Fabrication of Products for Cytogen and
supply of Products to Cytogen's customers in accordance with this
Agreement, Cytogen shall purchase all quantities of Products
required for the Territory exclusively from DRAXIMAGE. Subject to
the provisions of the License Agreement, Cytogen shall be the
sole and exclusive distributor of Product in the Territory.
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(c) Subject to the provisions of Article 2.3, all costs required for
the Facility to Fabricate the Products shall be borne by
DRAXIMAGE.
2.2 Consideration.
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(a) Price of Products. Subject to the provisions of Articles 13.6 and
13.7 Cytogen shall purchase the Products in consideration for the
Prices set out in Schedule "B", as amended only by mutual written
consent of the Parties, and shall be entitled to the Volume
Discount set forth on Schedule "B". Cytogen shall solely
determine the price Cytogen charges to its customers for the
Product.
(b) Payment. Cytogen shall pay DRAXIMAGE, within thirty (30) days of
the date of invoice by DRAXIMAGE, for all Products Fabricated for
the Territory and purchased under the terms of this Agreement.
DRAXIMAGE shall invoice Cytogen on a monthly basis. Interest on
late accounts of Cytogen shall be charged at the rate of the
National Bank of Canada prime plus one percent (1%) per annum.
(c) Taxes. The Parties believe that as of the date hereof no use,
consumption, sales or excise taxes or duties will be payable to
any taxing authority in relation to the Fabrication and
Distribution of the Products. In the event that any such taxes
are or become exigible, however, the amount of such taxes will be
added to the Price of the Products in effect at the time of
shipment thereof and will be reflected in the invoices submitted
to Cytogen by DRAXIMAGE pursuant to Article 2.2(b) hereof.
(d) Distribution Costs. In accordance with the provision of Article
5, Cytogen shall be responsible for and pay all costs related to
the Distribution of the Products from the Facility to Cytogen's
customers. For greater certainty and for clarification purposes,
but without limitation, Cytogen shall be financially and legally
responsible for all applicable logistical services, insurance,
freight and customs fees and levies related to the Distribution
of the Products save and except for License costs referred to in
Article 2.5 which shall be the obligation of DRAXIMAGE. If
requested by Cytogen, DRAXIMAGE will provide such logistical
services to Cytogen on a subcontracted basis, at a price to be
agreed upon in writing by the Parties; provided, however, that if
a price cannot be agreed upon, Cytogen shall be solely
responsible for making its own logistical services arrangements.
Such logistical services shall include but not be limited to
coordinating with carriers and purchasing insurance.
2.3 Packaging. DRAXIMAGE shall package the Products in accordance with the
requirements of Schedule "A" in respect of each Product and all
applicable Laws regarding the labelling on the packaging materials and
containers. All packaging materials for the Products will have the
"DRAXIMAGE" logo; provided, however, that the package inserts for the
Products will have the "Cytogen" logo. Notwithstanding the above, the
determination of packaging formats are solely at the discretion of
DRAXIMAGE. All one-time costs associated with any changes to such
Product and packaging formats reasonably requested by Cytogen and
acceptable to DRAXIMAGE, in its sole discretion, shall be Cytogen's
responsibility.
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2.4 DRAXIMAGE Fabrication Requirements. DRAXIMAGE shall Fabricate the
Products in accordance with the Specifications and applicable Laws
including, without limitation, U.S. Food, Drug and Cosmetic Act, 21
U.S.C. Sec. 201 et seq., and DRAXIMAGE's technical specifications.
DRAXIMAGE shall provide Cytogen with a copy of such technical
specifications and not materially change them without notifying
Cytogen. Each Party shall promptly notify the other of knowledge of
any new instructions or specifications required in order to comply
with applicable Laws, and shall cooperate in agreeing on the best
means to comply with any new requirements.
2.5 Regulatory Matters. DRAXIMAGE shall be responsible for the costs of any
Regulatory Approvals and, subject to the applicable provisions of
Articles 2.2(d) and 5.1(a), Licenses required to Fabricate and
Distribute the Products including, without limitation, changes to the
Specifications and costs associated with Regulatory Approval of
DRAXIMAGE's plant master/site registration file including site license
fees; provided, however, that, subject to the applicable provisions of
the License Agreement, Cytogen shall obtain and maintain in good
standing all other applicable non-regulatory permits and licenses
necessary or advisable for it to market, sell and Distribute the
Product(s) in the Territory.
2.6 Customer Service. DRAXIMAGE shall establish at Cytogen's cost a
1-800-telephone line to be located at the Facility to assist with
customer inquiries regarding the Products. The Parties shall share
equally the costs associated with hiring one (1) customer service clerk
as an employee of DRAXIMAGE to be located at the Facility to handle all
1-800 inquiries regarding the Products for both Canada and the
Territory; provided, however, that it shall be DRAXIMAGE's sole
responsibility to comply with applicable withholding and employment
standards laws in relation to this employee. Although this individual
will be an employee of DRAXIMAGE, Cytogen shall have reasonable input
into the hiring of this individual and replacement if dissatisfied with
his or her services. For greater certainty, but subject to the
provisions of Article 3.1, the customer service clerk shall have
sufficient expertise and understanding of the Products to answer
various general customer questions and shall, where appropriate, direct
customer inquiries to Cytogen's web site or phone center.
ARTICLE 3 - QUALITY ASSURANCE
-----------------------------
3.1 Complaints. DRAXIMAGE agrees to provide all reasonable and customary
assistance to Cytogen in addressing all Cytogen customer and regulatory
complaints related strictly to the quality of the Products and
reporting of adverse events as set forth in Article 7.2; provided,
however, that all other customer and regulatory complaints related to
all other matters in relation to the selling, marketing and
Distribution of the Products in the Territory, shall be the sole
responsibility of Cytogen.
3.2 Recalls. In the event that a Regulatory Authority issues a recall order
or if the Parties determine that a Product recall in the Territory is
necessary, then the Parties shall work together to coordinate all
necessary actions in order to recall the Product. DRAXIMAGE shall
reimburse Cytogen for all out-of-pocket expenses associated with any
such recall caused in whole or in part by DRAXIMAGE's failure to
Fabricate the Product(s) in accordance with the requirements of this
Agreement; provided, however, that if any Product recall or withdrawal
is caused in whole or in part by any act of negligence of a Party or
its agents, or any breach by a Party of the terms of this Agreement, or
non-compliance with applicable Laws by a Party or its agents, such
direct out of pocket expenses shall be apportioned accordingly between
DRAXIMAGE and Cytogen to the extent that such recall is attributable to
a particular Party's acts or omissions.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE 4 - PRODUCT SUPPLY AND QUANTITIES
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4.1 Ordering. Commencing January 21, 2001, Cytogen's customers shall
provide daily orders to DRAXIMAGE on any Business Day during 8:00 A.M.
to 6:00 P.M. EST.
4.2 Capacity. Cytogen shall provide in writing at least [**] advance
warning ("Notice Period") to DRAXIMAGE of any significant increases in
production capacity it anticipates will be required; provided, however,
that DRAXIMAGE will only be obligated to provide up to a maximum of
[**] units of the Product [**] for the [**] Calendar Year 2001 (the
"Initial Capacity"). As used in this Agreement, "significant increases"
shall mean a [**] percent ([**]%) increase of purchase of the Product
by Cytogen over the [**] period immediately prior to the Notice Period.
4.3 Failure to Supply. Subject to Articles 4.1, 4.2, 6.2, 7.3 and 11.2, if
DRAXIMAGE fails to supply the quantities of the Product ordered by
Cytogen's customers, DRAXIMAGE shall undertake all reasonable necessary
steps to cure this failure forthwith to the reasonable satisfaction of
Cytogen. Cytogen shall be DRAXIMAGE's preferred distributor of Product
and DRAXIMAGE shall fulfill Cytogen's orders prior to fulfilling any
order from another licensee or distributor or fulfilling its own needs.
At any time during such failure, Cytogen may, at its discretion,
purchase the quantities of similar or competitive products to the
Products necessary to meet its requirements without violation of that
certain non-compete provision contained in Article 9.1(a) of the
License Agreement; provided, however, that as soon as DRAXIMAGE is in a
position to supply once again the quantities of the Products ordered by
Cytogen's customers, Cytogen shall recommence purchasing the quantities
of Products exclusively from DRAXIMAGE necessary to meet its
requirements in accordance with the provisions of this Agreement.
4.4 Seed Disposal. Cytogen shall have the sole responsibility to dispose of
any unwanted seeds in the Territory and shall provide acceptable
documentary evidence of any such disposal to DRAXIMAGE forthwith
confirming the safe disposal of such seeds in accordance with
applicable Laws; provided, however, that DRAXIMAGE shall assist Cytogen
with related logistical aspects to such disposal and may at its sole
discretion agree to take possession of such unwanted seeds for its own
purposes at Cytogen's cost.
ARTICLE 5 - DELIVERY AND TITLE TO PRODUCTS
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5.1 Delivery.
(a) Cytogen shall be responsible for all aspects (financial, legal or
otherwise) of the Distribution of the Products to its customers
save and except for License costs referred to in Article 2.5
which shall be the obligation of DRAXIMAGE. The Products shall be
shipped F.O.B. the Facility. DRAXIMAGE is prepared to assist
Cytogen with respect to the Distribution of the Products in
accordance with the provisions of Article 2.2(d); provided,
however, it is expressly understood by the Parties that in so
assisting Cytogen, DRAXIMAGE shall receive customary and adequate
consideration for such assistance (which shall be in addition to
the Prices).
-7-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(b) For the first [**] of shipments of the Products, DRAXIMAGE shall
ensure that the Products are ready for shipment from the Facility
within [**]from the time it receives orders from Cytogen's
customers in accordance with the provisions of Article 4.1. After
this initial [**] period, the Products shall be ready for
shipment from the Facility within [**] from the time of
DRAXIMAGE's receipt of an order from Cytogen's customers in
accordance with the provisions of Article 4.1. [**] after the
initial [**] period, the Products shall be ready for shipment
from the Facility within [**] from its receipt of an order from
Cytogen's customers in accordance with Article 4.1. For greater
certainty and illustration purposes, "Business Day hours" as
referenced in this Article means, for example, that if the
Products are to be ready for shipment from the Facility within
[**] as referred to above, an order for Products placed by a
Cytogen customer on a Friday, would be shipped from the Facility
[**].
(c) Title to and risk for the Products supplied to Cytogen under this
Agreement passes to Cytogen at DRAXIMAGE's Facility at the time
the Products are loaded onto the designated carrier for shipment
to Cytogen's customers. DRAXIMAGE shall not be liable to Cytogen
for loss of any kind arising out of or in relation to damage to
Products, however caused, which occurs after title to and risk
for the Products passes to Cytogen, nor shall any liability of
Cytogen to DRAXIMAGE under this Agreement be diminished or
extinguished by reason of such loss. For greater certainty,
Cytogen shall be liable for all risk of loss while Products are
in transit, and Cytogen is responsible for ensuring that adequate
insurance coverage is obtained and maintained for the Products
from the time title passes to Cytogen. Subject to the provisions
of Article 5.2 hereof, lost or returned shipments of Products are
at the cost of Cytogen.
5.2 Replacement Products. If Cytogen reasonably determines, after
consultation with DRAXIMAGE, where reasonably practicable to do so,
that a Products fails in whole or in part to conform with the
Specifications ("Rejected Products"), DRAXIMAGE agrees to use its
Commercially Reasonable Efforts to deliver replacement Products for the
Rejected Products ("Replacement Products") within [**] of when the
Parties agree that a Product fails to conform. DRAXIMAGE shall be
responsible for all costs associated with the returning of the Rejected
Products and shipment of the Replacement Products and all risk of loss
while the Rejected Products or Replacement Products are in transit.
Should DRAXIMAGE disagree with Cytogen's determination, the provisions
of Article 9 shall apply. Cytogen shall have the right to audit
DRAXIMAGE's Facility once yearly to perform reasonable and customary
quality assurance tests in order to ensure the Product is in accordance
with the Specifications. In addition, upon Cytogen's reasonable request
from time to time, DRAXIMAGE will provide appropriate certificates of
analysis and other customary test results to Cytogen in order to give
effect to this Article.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES
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6.1 DRAXIMAGE Warranties. DRAXIMAGE represents and warrants that:
(a) it shall obtain all necessary Regulatory Approvals and Licenses
required for it to Fabricate the Products and to perform its
obligations to Cytogen under this Agreement and in accordance
with applicable Law(s);
-8-
(b) all Products shipped from the Facility will be in compliance with
the Specifications, all applicable regulatory requirements and
cGMP;
(c) all quantities of Products supplied pursuant to this Agreement
shall be marked by lot number or otherwise in accordance with
DRAXIMAGE's standard marking procedures; and
(d) it has the right to grant Cytogen the exclusive right to
distribute the Products as specified in Section 2.1(b).
The above noted representations and warranties in this Article 6.1 are
in addition to any other representations and warranties of DRAXIMAGE
contained in the License Agreement.
6.2 Cytogen Warranties. Cytogen represents and warrants that:
(a) it shall obtain and maintain all necessary permits, registrations
and Licenses required for it to sell, market and Distribute the
Products in the Territory and to perform its obligations to
DRAXIMAGE under this Agreement and in accordance with applicable
Law(s).
The above noted representation and warranty in this Article 6.2 are in
addition to any other representations and warranties of Cytogen
contained in the License Agreement.
6.3 Government Inspections and Communications. Each Party agrees to
promptly notify the other of any inspections of any Governmental
Authority pending as of the date hereof or as notice of same may arise,
and of any communications to or from any Governmental Authority
(including the reporting of adverse drug experiences or field alerts)
which might (i) reasonably be expected to affect adversely a respective
Party's ability to perform its obligations under this Agreement, or
(ii) result in an inspection of the relevant areas of the Facility.
Further each Party shall keep the other apprised if any Governmental
Authority pursues any actions as specified in subsections (i) or (ii)
above.
ARTICLE 7 - THIRD PARTY LIABILITY
---------------------------------
7.1 Each Party shall indemnify, defend and hold the other, and their
respective employees, directors, representatives and advisors, harmless
from and against any and all non-Affiliate third party liabilities,
actions, suits, claims, demands, prosecutions, damages, costs, expenses
or money judgements (including reasonable solicitors' fees) which arise
out of:
(a) the intentional misconduct or negligence of the indemnifying
Party with respect to its acts or omissions under this Agreement
or pertaining to the Products; or
(b) the breach by the indemnifying Party of its representations and
warranties contained in this Agreement;
except to the extent of an indemnity obligation on the part of the
other Party under this Article. In the event of a claim which may give
rise to a right of indemnity under this Article, the Party intending to
claim indemnity shall give the indemnifying Party notice in writing as
soon as practicable of any such claim or lawsuit.
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In any such claim or lawsuit:
(i) The Party claiming indemnity will give the indemnifying
Party full opportunity to control the response thereto and
the defense thereof, including any agreement relating to the
settlement thereof, provided that the indemnifying Party
shall not settle any such claim or action without the prior
written consent of the Party claiming indemnity (which shall
not be unreasonably withheld or delayed);
(ii) the Party claiming indemnity will, at the indemnifying
Party's expense, cooperate reasonably in the defense of the
non-Affiliate third party's claim, and shall have the right
to participate in such defense to the extent that in its
judgement the Party claiming indemnity may be prejudiced
thereby;
(iii)the Party claiming indemnity shall not settle, offer to
settle or admit liability in any claim or suit without the
written consent of an officer of the indemnifying Party,
which consent shall not be unreasonably withheld.
The Party claiming indemnity may participate, at its own expense, in
such defense and in any settlement discussions directly or through
counsel of its choice on a monitoring, non-controlling basis but such
participation shall not be deemed a waiver by that Party of any rights
or recourse, for indemnification or otherwise, it might have against
the indemnifying Party.
7.2 Cytogen and DRAXIMAGE shall advise each other immediately, to be
confirmed in writing, of any occurrence which involves a claim for
death or injury following administration of the Products supplied
hereunder, or any matter arising out of this Agreement which is
required to be reported other than in a routine manner to the
regulatory authorities by either Party. The Parties will cooperate
reasonably to facilitate and develop written procedures for the
reporting of adverse events for the Products to appropriate regulatory
agencies within the Territory. It is understood that DRAXIMAGE will be
responsible for the reporting to the applicable regulatory agency of
adverse events within the Territory and that Cytogen will render
assistance as reasonably requested.
7.3 Neither Party shall be liable to the other for any indirect,
incidental, special, or consequential damages in connection with this
Agreement, however caused, whether based on contract, tort, warranty,
or other legal theory, and even if such Party has been informed in
advance of the possibility of such damages or such damages could have
been reasonably foreseen by such Party. The limitation set forth in
this Article 7.3 shall not apply with respect to the obligations of
either Party to indemnify the other Party under Article 7 in connection
with a liability to a non-Affiliate third party.
ARTICLE 8 - TERM AND TERMINATION
--------------------------------
8.1 This Agreement shall become effective on the Effective Date and shall
terminate on December 31, 2010, unless earlier terminated in accordance
with the provisions of this Agreement (the "Term"). Beginning no later
than one (1) year and ending not later than six (6) months prior to
such expiration, the Parties will enter into good faith discussions,
without obligation, about possible renewal of this Agreement and the
terms of any such renewal.
8.2 This Agreement shall automatically terminate in the event that the
License Agreement terminates.
8.3 Subject to the provisions of Article 11.2, either Party hereto may, at
its option, terminate this Agreement by giving to the other Party prior
notice in writing to that effect of not less than ninety (90) days in
the event the other Party commits a material breach of either this
Agreement or the License Agreement (thirty (30) days, in the case of
any payment default), and has failed to cure such breach during the
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ninety (90) day period or thirty (30) day period, as applicable,
following receipt of said notice from the non-breaching Party, or such
longer period as may reasonably be necessary, provided the breaching
Party continues its diligent efforts to cure. Any such cancellation and
termination pursuant to this Article 8.3 shall not release the
breaching Party from any obligations hereunder incurred prior thereto.
8.4 Either Party hereto may terminate this Agreement immediately if the
other Party becomes insolvent, or voluntary or involuntary proceedings
are instituted against the other Party under any federal, state or
local bankruptcy or insolvency laws, or a receiver or trustee of the
Party's property shall be appointed or the Party makes an assignment
for the benefit of its creditors. In such a circumstance, the Parties
acknowledge, without limitation, that it is their intent to provide the
maximum protection available under applicable law for an exclusive
licensor and licensee under the circumstances referred to in this
Article 8.4; provided, however, that the Parties in so acknowledging
are not obligated to incur any costs in order to give legal force and
effect to such an intention.
8.5 In the event of expiration of this Agreement, or the termination of any
rights granted hereunder with respect to a given Product prior to the
expiration or termination of this Agreement in its entirety, Cytogen
shall have no further rights in the affected Intellectual Property
Rights or Trademarks (as those terms are defined in the License
Agreement), Regulatory Approvals or Products. Any expiration or partial
or complete termination of this Agreement shall not affect the rights,
obligations and remedies of either Party accrued as of such expiration
or termination.
ARTICLE 9 - DISPUTE RESOLUTION
------------------------------
9.1 The Parties will attempt in good faith, in accordance with the
provisions of Article 7.3 of the License Agreement, to resolve any
dispute or claim arising out of or relating to this Agreement.
9.2 Should the Parties fail to settle a dispute pursuant to the provisions
of Article 7.3 of the License Agreement, the matter shall be finally
settled by arbitration in accordance with the provisions of the
Arbitration Act, 1991, Ontario and any amendments thereto. The
following rules shall apply to the arbitration:
(a) The arbitration tribunal shall consist of one arbitrator who is
not affiliated with either of Cytogen or DRAXIMAGE, who has
relevant industry knowledge, expertise and credibility and who is
appointed by mutual agreement of Cytogen and DRAXIMAGE or, in the
event of failure to reach an agreement within ten (10) days after
the Settlement Date, either Party may request the Co-ordinator,
ADR Xxxxxxxx, 00 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx X0X
0X0 (or any successor thereto) to provide a list of five
arbitrators from amongst its members outlining their
qualifications. Within three (3) Business Days of the receipt of
the list, Cytogen and DRAXIMAGE shall independently rank the
proposed candidates, shall simultaneously exchange rankings, and
shall select as the arbitrator the individual receiving the
highest combined ranking who is available to serve. If either
Party does not rank and provide a copy of the ranking to the
other Party, the Party who does rank the arbitrator will be able
to select the arbitrator.
(b) The arbitrator shall be instructed that time is of the essence in
proceeding with his or her determination of any dispute, claim,
question or difference. The arbitration tribunal shall determine
the time, date and place of arbitration, taking into
consideration the Parties' convenience and the other
circumstances of the case.
-11-
(c) Cytogen and DRAXIMAGE will agree, in consultation with the
arbitrator, on the rules for the arbitration. Absent agreement to
the contrary, the following rules, designed to save time and
expense for the Parties, will apply:
(i) Statements shall be in writing and shall be no more
than five (5) pages in length; and shall be submitted
to the arbitration tribunal and to the other Party two
(2) days prior to the arbitration;
(ii) Each Party will provide to the other access to any
documents that may be relevant to the arbitration. Each
Party will also provide to the other a list and copies
of up to (but not exceeding) twenty (20) documents that
the Party intends to rely on at the arbitration. Such
access will be during normal business hours and will
commence one day after the appointment of the
arbitration tribunal and shall terminate one day prior
to submission of the statements;
(iii)Each Party will be entitled to oral discovery of one
representative of the other Party if it deems it
appropriate at a mutually agreed upon date, time and
location. Each Party may only discover the other
Party's representative for a maximum of one (1) eight
(8) hour day. Any questions refused will be put to the
arbitrator for the arbitrator's determination as to
whether the questions are appropriate and relevant;
(iv) At the hearing, opening argument will be limited to
one-half (1/2) hour per Party;
(v) Each Party may produce up to two (2) witnesses for
direct examination. The total time permitted for direct
examination will be two (2) hours for each witness.
Total time for cross-examination will also be two (2)
hours for each witness;
(vi) A Party may introduce any of its twenty (20) documents
through either of its witnesses. The other Party may,
if appropriate, challenge the authenticity of any
document produced through those witnesses;
(vii)Closing arguments will be limited to one (1) hour for
each Party; and
(viii) The arbitrator will attempt to produce a decision
within seven (7) calendar days of the conclusion of the
arbitration, and written reasons within two (2) months
of the arbitration.
(d) The arbitration shall be conducted in English and shall take
place in Xxxxxxx, Xxxxxxx.
(e) The arbitration awards shall be given in writing and shall be
final, and binding on Cytogen and DRAXIMAGE, not subject to any
appeal whatsoever, and shall deal with the question of costs of
the arbitration and all matters related thereto. In his or her
award of costs, the arbitrator may consider each Party's effort
to resolve the dispute through bona fide good faith negotiation
efforts and has the authority, if he or she deems advisable, to
award solicitor and client costs against a Party that fails to
demonstrate such bona fide good faith efforts.
(f) Judgement upon the award rendered may be entered into any court
having jurisdiction, or application may be made to such court for
judicial recognition of the award or an order for enforcement
thereof, as the case may be.
-12-
(g) The arbitrator will not be empowered to and shall not award
punitive, exemplary, special, consequential or incidental
damages.
(h) Notwithstanding the foregoing, either Party shall be entitled to
pursue equitable remedies in a court of competent jurisdiction,
including, without limitation, injunctive relief in any court in
the event that legal or monetary damages are inadequate.
ARTICLE 10 - CONFIDENTIALITY
----------------------------
10.1 A Party receiving Proprietary Information from the other, directly or
indirectly, will treat such information as confidential and will use
efforts at least equivalent to those used to protect its own
Proprietary Information but in no event shall the receiving Party use
less than reasonable efforts. Except (i) to enable Cytogen to exercise
its rights to grant sublicenses as set forth in Article 2.4 of the
License Agreement; and (ii) as set forth in Article 10.2 following, all
information or data communicated from one Party to the other will be
deemed and treated as Proprietary Information unless otherwise agreed
to in writing. All oral communications, whether or not summarized and
reduced to writing, shall also be considered confidential. Access to
such Proprietary Information will be limited to employees, agents,
advisors or consultants of the Party or its Affiliates receiving such
information, who reasonably require such information and who are bound
to said Party by a like obligation of confidentiality. A Party
receiving Proprietary Information will not use such information for its
own benefit or for the benefit of others or in any way not consistent
with the purposes set out in this Agreement.
10.2 Nothing contained herein will in any way restrict or impair each
Party's right to use, disclose or otherwise deal with any Proprietary
Information which:
(a) at the time of disclosure is in the public domain or thereafter
becomes part of the public domain by publication or otherwise
through no act of the Party receiving such information;
(b) the Party receiving such information can conclusively establish
was in its possession prior to the time of the disclosure;
(c) is independently made available as a matter of right to the Party
receiving such information by a third party who is not in
violation of a confidential relationship with the other Party;
(d) is developed by a Party independently of the Proprietary
Information received from the other Party; or
(e) is information required to be disclosed by legal process or in
connection with a disclosing Party's periodic filings with the
United States Securities and Exchange Commission; provided, in
such case, the disclosing Party timely informs the other and
discloses the minimum amount of information necessary to be in
compliance and maintain confidentiality to the extent possible
and cooperates reasonably with the other Party in attempting to
limit such disclosure.
-13-
10.3 The Party receiving Proprietary Information will obtain no right of any
kind, or license under any patent application or patent, except as
expressly stated in the License Agreement. All Proprietary Information
will remain the sole property of the Party disclosing such information
or data.
10.4 Upon termination of this Agreement, the Party to which Proprietary
Information has been disclosed will upon request, return within thirty
(30) days all such information, including any hard and electronic
copies thereof, and cease its use, or at the request of the Party
transmitting such Proprietary Information, will promptly destroy the
same and certify such destruction to the transmitting Party, provided
that each Party may retain one copy of the Proprietary Information in a
secure location for compliance and record keeping purposes only.
10.5 Termination of this Agreement shall not relieve the Parties of their
obligations under this Article 10. The confidentiality obligations
pursuant to this Article 10 shall remain in full force and effect
throughout the Term of this Agreement plus five (5) years thereafter.
ARTICLE 11 - FORCE MAJEURE
--------------------------
11.1 Neither Party shall be liable in damages for, nor shall this Agreement
be terminable or cancellable by reason of, any delay or default in such
Party's performance hereunder if such default or delay is caused by
events beyond such Party's reasonable control including, but not
limited to, acts of God, regulation or law or other action or failure
to act of any government or agency thereof, war or insurrection, civil
disturbance, destruction of production facilities or materials by
earthquake, fire, ice, flood or storm, labour disturbances, epidemic,
or failure of public utilities or common carriers to act for the
reasons listed above (collectively or individually "Force Majeure
Event"); provided, however, that the Party seeking relief hereunder
shall immediately notify the other Party of such cause(s) beyond such
Party's reasonable control. The Party which may invoke this Article
11.1 shall use all reasonable efforts to reinstate its ongoing
obligations to the other as quickly as possible and the other Party
should provide all reasonable assistance to help the invoking Party in
this respect.
11.2 The Parties shall have any Force Majeure Event dealt with on an
expedited basis by the Liaison Committee (as that term is defined in
the License Agreement) in accordance with the provisions of Article 7.3
of the License Agreement. Notwithstanding the above, if a Party fails
to perform any of its obligations under this Agreement for one hundred
and twenty (120) consecutive Business Days due to a Force Majeure
Event, unless within such period the non-performing Party has begun to
remedy substantially its inability to perform, the other Party may, if
itself is not in material breach under this Agreement, terminate this
Agreement by providing written notice to the non-performing Party. In
the event of such termination, both Parties' respective rights and
obligations under this Agreement shall terminate except for any amounts
previously due and owing by one Party to the other and except for any
obligations which this Agreement expressly provides shall survive the
termination such as, without limitation, the provisions of Articles
2.2(b), 7, 10, 13.2 and 13.4
ARTICLE 12 - ASSIGNMENT AND SUBLICENSING
----------------------------------------
12.1 Neither Party may without written approval of the other Party (and such
approval shall not be unreasonably withheld):
(a) assign or sublicense this Agreement or transfer its rights,
obligations or interest or any part thereof under this Agreement
to any third party which is not an Affiliate; or
-14-
(b) designate or cause any third party not an Affiliate to perform
all or part of its activities hereunder, or to have the benefit
of all or part of its rights hereunder.
12.2 Either Party may, upon written notice to the other, assign all or a
part of its rights or obligations hereunder to an Affiliate, provided
that such assignment shall not lessen or release the prior or ongoing
obligations of the assignor to the other Party to this Agreement and
that the applicable Affiliate shall agree, in writing, to be bound by
the terms and conditions of this Agreement.
ARTICLE 13 - MISCELLANEOUS
--------------------------
13.1 Relationship of the Parties. The relationship between DRAXIMAGE and
Cytogen created pursuant to this Agreement is intended to be that of
independent contractors.
13.2 Insurance. Each Party will maintain throughout the Term, and for at
least three (3) years thereafter, comprehensive general liability
insurance, including blanket contractual liability insurance covering
the indemnification, defense and other obligations of that Party under
this Agreement, which insurance affords limits of not less than Five
Million Dollars ($5,000,000) for each person, and Five Million Dollars
($5,000,000) for each occurrence, for bodily injury, liability,
personal injury liability, products liability, property damage
liability, contractual liability, and completed operations liability.
Each Party will provide to the other a Certificate of Insurance
evidencing the above coverage, this Certificate to be provided to the
other Party within sixty (60) days after the execution of this
Agreement. This Certificate of Insurance shall show the name of the
Party, the name of the issuing company, the type of insurance, the
policy number, the effective date, the expiration date, and the limits
of liability. The insurance shall provide for a minimum of thirty (30)
days written notice to the recipient of the Certificate of Cancellation
or material change in the insurance.
A Party's liability to the other is in no way limited to the extent of
the other Party's insurance coverage.
13.3 Further Assurances. Each Party will at any time and from time to time,
upon the reasonable request of the other Party and at the other Party's
expense, execute and deliver such further documents and do such further
acts and things as the other Party may reasonably request to evidence,
carry out and give full effect to the terms, conditions, intent and
meaning of this Agreement.
13.4 Non-Competition and Non-Solicitation. The Parties acknowledge that the
License Agreement contains non-competition and non-solicitation
provisions in Article 9.
13.5 Notices. Any notice or other communication made under this Agreement
(other than routine business communication) shall be in writing and
shall be properly given: (i) when delivered if sent by personal
delivery; (ii) when transmitted if sent by facsimile with confirmation
of transmission; or (iii) three days after being posted if sent by
registered mail return receipt requested, addressed:
If to Cytogen: Xxxxxxx Xxxxxxxxxxx
000 Xxxxxxx Xxxx Xxxx - XX 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Xxxxxx Xxxxxx of America
Attention: President
---------------------
Facsimile: 000-000-0000
-15-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
If to DRAXIMAGE : DRAXIMAGE Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Xxxxxx
Attention: President
---------------------
Facsimile: 000-000-0000
With a copy to: DRAXIS Health Inc.
2nd Floor, 0000 Xxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: General Counsel
---------------------------
Facsimile: 000-000-0000
A Party may change its address for notice by notifying the other Party
at any time.
13.6 Hardship Clause. Notwithstanding any other provision contained in this
Agreement, should:
(a) the standard market selling price in the Territory for I125
Product at any time during the Term falls to or below $[**] per
seed on a weighted average basis, as demonstrated by Cytogen by
competent proof; or
(b) if the Raw Material Costs for the Products increases at any time
during the Term by greater than [**]percent ([**]%) from the
average 2001 Raw Material Costs for the Products; or
(c) the standard market selling price on a weighted average basis in
the Territory for Pd103 Product at any time during the Term falls
below [**] percent ([**]%) of the 2000 weighted average selling
price for the PD103 Product in the Territory, as demonstrated by
Cytogen by competent proof,
the Parties shall meet at the request of the disadvantaged Party for
the purpose of discussing methods of addressing (a), (b) or (c) above.
If, within a period of [**], the Parties are unable to agree on
amendments to this Agreement which would resolve such concerns, the
disadvantaged Party may at its sole option upon giving a [**] written
notice to the other Party submit the matter to arbitration in
accordance with Article 9.2 herein. In rendering their decision
pursuant to the provisions of this Article 13.6, the arbitrator(s), in
addition to all other jurisdiction they may have pursuant to the
provisions of Article 9.2 herein, shall also be entitled to order
amendments to this Agreement which in their opinion will remedy the
inequality of either (a), (b) or (c) above and the Parties shall be
bound thereby by such amendments. The Parties acknowledge and agree
that the intent of this Article 13.6 is to address situations where the
occurrence of event (a), (b) or (c) above results in a significant and
material impairment or disadvantage to the business of the
disadvantaged Party. The Parties also acknowledge and agree that they
shall make all reasonable and necessary good faith efforts to resolve
any issues arising under this Article 13.6 to their commercial mutual
benefit prior to referring the matter to arbitration.
-16-
13.7 Waiver and Amendment. No delay or failure on the part of a Party in
exercising any rights under this Agreement shall affect any of such
Party's rights. This Agreement may not be modified or amended except by
further written statement signed by both Parties.
13.8 Severability. Any provision of this Agreement that is held to be
inoperative, unenforceable or invalid in any jurisdiction shall be
inoperative, unenforceable or invalid in that jurisdiction without
affecting any other provision hereof in that jurisdiction or the
operation, enforceability or validity of that provision in any other
jurisdiction, and to this end the provisions hereof are declared to be
severable.
13.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties and cancels and supersedes any prior
understandings and agreements between the Parties with respect to the
matters contained herein.
13.10 Incorporation of Schedules. The schedules attached to this Agreement
are incorporated by reference herein and made a part hereof.
13.11 Governing Law. This Agreement has been made in the Province of Ontario
and shall be governed by and construed in accordance with the laws of
the Province of Ontario and Canada applicable thereto, without regard
to its choice of law principles.
13.12 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and which together shall
constitute one and the same agreement.
13.13 English Language. The Parties declare that they have required that this
Agreement and any documents relating thereto be drawn up in the English
language. Les parties aux presentes declarent qu'elles ont exige que
cette entente et tous les documents y afferant soient rediges en langue
anglaise.
13.14 Public Disclosure. Subject to applicable securities regulatory
disclosure requirements, a Party may not disclose the non-general
details of this Agreement to a non-Affiliate without first obtaining
the consent of the other Party, such consent not to be unreasonably
withheld. Upon execution of this Agreement, the Parties will issue a
joint press release which is mutually satisfactory to the Parties and
full consideration and representation of the respective roles and
contributions of both Parties shall be given in any such press release.
Other than as specified in the immediately preceding sentence and
subject to applicable securities regulatory disclosure requirements,
neither Party will issue any press release regarding this Agreement
without the prior written consent of the other Party, such consent not
to be unreasonably withheld. In the event that a Party is required to
disclose publicly any information directly or indirectly relating to
this Agreement to comply with applicable regulatory disclosure
requirements, it shall in good faith, wherever reasonable and
practicable to do so, confer with the other Party on the content of
such disclosure before it is publicly released.
[Left Intentionally Blank]
-17-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be entered into by
their duly authorized officers as of the day and year first set forth above.
DRAXIMAGE INC.
/s/Xxxxxxx Xxxx
-----------------------------------
By: Xxxxxxx Xxxx
Title: President
Date: December 5, 2000
--------------------------------------------
CYTOGEN CORPORATION
/s/ H. Xxxxxx Xxxxxx
--------------------------------------------
By: H. Xxxxxx Xxxxxx, PhD
Title: President & CEO
Date: January 5, 2001
--------------------------------------------
-19-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SCHEDULE "A"
EXISTING PRODUCT SPECIFICATIONS
BRACHYSEED(TM) [**]
Product number: 502050
Issue Date: 31/OC/00
Superseded Date: 11/AU/00
Revision number: 1
Analytical Specifications:
Colour Metallic (titanium).
Form Capsular in shape.
Appearance Clean, free from visible defects.
A clean, smooth weld is visible
around the circumference at the
centerline of each seed. The vial
and seeds are in good condition.
The labeled name, lot number and
expiry date correspond to the
information on the batch
manufacturing record.
Radioisotopic Identity [**]
Total Radioactivity Labelled radioactivity [**]
Radioactivity per Seed No seed may be more than [**] of
the target activity.
Leak Test [**] per seed.
Delivered Quantity Confirm Labelled quantity.
-19-
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SCHEDULE "B"
PRICES FOR FABRICATION OF THE PRODUCTS
--------------------------------------------------------------------------------
I125 Product unit cost price *: $[**] per seed, F.O.B., DRAXIMAGE 's
loading dock.
--------------------------------------------------------------------------------
Pd103 Product unit cost price: Initial price to be determined by the
Parties at the time the Pd103
Product is launched in the
Territory; provided, however, that
such price is not to exceed [**]
percent ([**]%) of the I125
Product seed unit cost price
existing at the time of the launch
of the Pd103 Product into the
Territory.
--------------------------------------------------------------------------------
Volume Discount Cytogen will be eligible for an annual
volume rebate ("Volume Discount") from
DRAXIMAGE equal to the sum of:
1. $[**] per seed of Product sold in a
Calendar Year in excess of [**]seeds,
to a limit of [**] seeds; and
2. $[**] per seed of Product sold in a
Calendar Year in excess of [**]
seeds.
--------------------------------------------------------------------------------
* All above quoted Product unit cost prices include all materials (cartons,
styrofoam, fibre, drums, lead pots and glass vials) and labour related to
the Fabricating and packaging of the Product at the Facility; but expressly
exclude payments of all applicable taxes in accordance with the provisions
of Article 2.2(c) of this Agreement, Distribution costs to be incurred by
Cytogen in accordance with the provisions of Articles 2.2(d) and 5.1(a) of
this Agreement, any interest on late accounts payable by Cytogen in
accordance with the provisions of Article 2.2(b) of this Agreement, and any
other monies owed to DRAXIMAGE by Cytogen pursuant to any other applicable
terms of this Agreement and/or the License Agreement. For greater certainty
and clarification, no Bad Debts (as that term is defined in the License
Agreement) may be deducted from the above quoted Product unit cost prices.
-20-
